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EXHIBIT 4.3.2
REGISTRATION RIGHTS AGREEMENT
Dated as of May 27, 1999
by and among
STATE COMMUNICATIONS, INC.
and
NORTEL NETWORKS INC.
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of May 27, 1999, by and among STATE COMMUNICATIONS, INC., a
South Carolina corporation (the "Company") and NORTEL NETWORKS INC., a Delaware
corporation ("Nortel Networks").
WHEREAS, the Company has agreed to issue Common Stock warrants (the
"Warrants") to Nortel Networks, representing the right to purchase an aggregate
amount of 652,089 shares of the Common Stock, par value $.001 per share, of the
Company (the "Common Stock").
WHEREAS, the Warrants have been issued pursuant to the Warrant
Agreement dated as of the date hereof by and between the Company and Nortel
Networks (the "Warrant Agreement").
WHEREAS, the Company has issued to Nortel Networks its Series 1999A
Note (the "Series 1999A Note") in the original principal amount of $4,000,000,
which Series 1999A Note provides, upon the happening of certain conditions, for
the issuance of Common Stock upon the conversion thereof.
NOW, THEREFORE, in consideration of the foregoing and the premises and
mutual agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Definitions. Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings given to those terms in the
Warrant Agreement. As used in this Agreement, the following terms shall have the
following respective meanings:
"Business Day" shall mean a day that is not a Legal Holiday.
"Common Stock" has the meaning ascribed to such term in the preamble
hereof.
"Demand Registration" has the meaning ascribed to such term in Section
2.1(a) hereof.
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"DTC" has the meaning ascribed to such term in Section 4(i) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations
promulgated thereunder.
"Expiration Date" has the meaning ascribed to such term in the Warrant
Agreement.
"Holder" shall mean a Person who is the owner as shown on the Warrant
register maintained by the Company.
"Included Securities" has the meaning ascribed to such term in Section
2.1(a) hereof.
"Indemnified Party" has the meaning ascribed to such term in Section
5(c) hereof.
"Indemnifying Party" has the meaning ascribed to such term in Section
5(c) hereof.
"Inspectors" has the meaning ascribed to such term in Section 4(n)
hereof.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized or required by law,
regulation or executive order to remain closed.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Piggy-Back Registration" has the meaning ascribed to such term in
Section 2.2 hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon
Rule 430A under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means any of (i) the Warrant Shares, (ii) any
shares of Common Stock issued upon the conversion of a Series 1999A Note, and
(iii) any other securities issued or issuable with respect to any Warrant Shares
or any conversion shares referred to in clause (ii) above, by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise,
unless, in each case, such Warrant Shares and securities, if any, have been
offered and sold to the Holder pursuant to an effective Registration Statement
under the Securities Act declared effective prior to the exercisability of the
Warrants or such Warrant Shares and securities, if any, may be sold to the
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public pursuant to Rule 144 without any restriction on the amount of securities
which may be sold by such Holder or the satisfaction of any condition. As to any
particular Registrable Securities held by a Holder, such securities shall cease
to be Registrable Securities when (i) a Registration Statement with respect to
the exercise or offering of such securities by the Holder thereof shall have
been declared effective under the Securities Act and such securities shall have
been exercised and/or disposed of by such Holder pursuant to such Registration
Statement, (ii) such securities may at the time of determination be sold to the
public pursuant to Rule 144 without any restriction on the amount of securities
which may be sold by such Holder (or any similar provision then in force, but
not Rule 144A) promulgated under the Securities Act without the lapse of any
further time or the satisfaction of any condition, (iii) such securities shall
have been otherwise transferred by such Holder and new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Company or its transfer agent and subsequent disposition of
such securities shall not require registration or qualification under the
Securities Act or any similar state securities or blue sky laws then in force or
(iv) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all SEC and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and expenses, fees and expenses of
compliance with state securities or blue sky laws (including, without
limitation, reasonable fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities), printing
expenses, messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants, the
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of Registrable Securities) and
other reasonable out-of-pocket expenses of Holders (including the reasonable
fees and expenses of one counsel for the Holders to be selected by a majority of
such Holders).
"Registration Statement" shall mean any appropriate registration
statement of the Company filed with the SEC pursuant to the Securities Act which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Requisite Securities" shall mean a number of Registrable Securities
equal to not less than twenty-five percent ((25%) of the Registrable Securities
held in the aggregate by all Holders; provided, however, that with respect to
any action to be taken at the request of the Holders of the Registrable
Securities prior to such time as the Warrants have expired pursuant to the terms
thereof and of the Warrant Agreement, each Warrant outstanding shall be deemed
to represent that number of Registrable Securities for which such Warrant would
be then exercisable (without giving effect to the cashless (net) exercise
feature referred to in the Warrant Agreement).
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"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent Holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
"Rule 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, or any successor statute, and the rules and regulations
promulgated thereunder.
"Selling Holder" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of Section 2.1 or 2.2 hereof.
"Warrants" has the meaning ascribed to such term in the preamble
hereof.
"Warrant Agreement" has the meaning ascribed to such term in the
preamble hereof.
"Warrant Shares" means the shares of Common Stock delivered or
deliverable upon exercise of the Warrants.
Section 2. Registration Rights.
Section 2.1. Demand Registration.
(a) General. At any time and from time to time from and after the date
of the Warrant Agreement, Holders owning, individually or in the aggregate, not
less than the Requisite Securities may make a written request, on (subject to
Sections 2.1(b), 2.1(e) and 2.3(a)) no more than two occasions (each, a "Demand
Registration"), that the Company register the resale of the Warrant Shares,
under the Securities Act. The Company shall file with the SEC and use
commercially reasonable efforts to cause to become effective under the
Securities Act a Registration Statement with respect to such Registrable
Securities within (i) sixty (60) days of receipt of such written request for a
Demand Registration if the Company is then eligible to register an offering
pursuant to Form S-3 under the Securities Act or (ii) ninety (90) days of
receipt of such written request for a Demand Registration if the Company is not
then eligible to register an offering pursuant to Form S-3 under the Securities
Act but is then qualified as a reporting company under the Exchange Act.
Notwithstanding anything to the contrary herein, no Demand Registration may be
made earlier than (A) 30 days after the Company becomes a reporting company
under Section 12(b) or 12(g) or Section 15(c) of the Exchange Act, or (B) in the
event that the Company becomes a reporting
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company under the Exchange Act through an underwritten initial public offering
of securities, 180 days after the closing of the initial public offering. Any
such request will specify the number of Registrable Securities proposed to be
sold and will also specify the intended method of disposition thereof. The
Company shall give written notice of such registration request to all other
Holders of Registrable Securities within fifteen (15) Business Days after the
receipt thereof. Within ten (10) days after receipt by any Holder of Registrable
Securities of such notice from the Company, such Holder may request in writing
that such Holder's Registrable Securities be included in such Registration
Statement and the Company shall include in such Registration Statement the
Registrable Securities of any such Holder requested to be so included (the
"Included Securities"). Each such request by such other Holders shall specify
the number of Included Securities proposed to be sold and the intended method of
disposition thereof. Subject to Sections 2.1(b), 2.1(e) and 2.3(a) hereof, the
Company shall be required to register Registrable Securities pursuant to this
Section 2.1(a) on a maximum of two separate occasions.
Subject to Section 2.1(e) hereof, no other securities of the Company
except (i) Registrable Securities held by any Holder, (ii) equity securities to
be offered and sold for the account of the Company and (iii) any equity
securities of the Company held by any Person having "piggy-back" registration
rights pursuant to any contractual obligation of the Company shall be included
in a Demand Registration. The inclusion of any such securities for the account
of the Company or any other Person shall be on the same terms as that of the
Registrable Securities.
(b) Effective Registration. A Registration Statement will not be deemed
to have been effected as a Demand Registration unless it has been declared
effective by the SEC and the Company has complied in all material respects with
all of its obligations under this Agreement with respect thereto; provided,
however, that if, after such Registration Statement has become effective, the
offering of Registrable Securities pursuant to such Registration Statement is or
becomes the subject of any stop order, injunction or other order or requirement
of the SEC order, injunction or other order or requirement of the SEC or any
other governmental or administrative agency or court that prevents, restrains or
otherwise limits the sale of Registrable Securities pursuant to such
Registration Statement for any reason not attributable to any Holder
participating in such registration and such restraint is not lifted within sixty
(60) days after being imposed, such Registration Statement will be deemed not to
have been effected. If (i) a registration requested pursuant to this Section 2.1
is deemed not to have been effected or (ii) a Demand Registration does not
remain effective under the Securities Act until at least the earlier of (A) an
aggregate of six months after the effective date thereof or (B) the consummation
of the distribution by the Holders of all of the Registrable Securities covered
thereby, then such registration shall not count towards determining if the
Company has satisfied its obligation to effect two Demand Registrations pursuant
to this Section 2.1. For purposes of calculating the six month period referred
to in the preceding sentence, any period of time during which such Registration
Statement was not in effect shall be excluded. The Holders of Registrable
Securities shall be permitted to withdraw all or any part of the Registrable
Securities from a Demand Registration at any time prior to the effective date of
such Demand Registration; provided, however, that should the Holders of
Registrable Securities remaining after such withdrawal own, individually or in
the aggregate, less than the
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Requisite Securities, the Company shall have the right to terminate or withdraw
any registration initiated by it under Section 2.1 prior to the effectiveness of
such registration.
(c) Restrictions on Sale by Holders. Each Holder of Registrable
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to Section 2.1 agrees, if and to the extent reasonably requested
by the managing underwriter or underwriters in an underwritten offering of
Common Stock or common equivalents the gross proceeds of which equal at least
$30,000,000, not to effect any public sale or distribution of Registrable
Securities of the Company of the same class as any securities included in such
Registration Statement, including a sale pursuant to Rule 144 (except as part of
such underwritten offering), during the 10-day period prior to, and during the
180-day period beginning on, the commencement of each underwritten offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or such managing underwriter or underwriters.
The foregoing provisions of Section 2.1(c) shall not apply to any
Holder of Registrable Securities if such Holder is prevented by an applicable
statute or regulation from entering into any such agreement; provided, however,
that any such Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
Registrable Securities commencing on the date of sale of such Registrable
Securities unless it has provided forty-five (45) days' prior written notice of
such sale or distribution to the underwriter or underwriters.
(d) Underwritten Registrations. If any of the Registrable Securities
covered by a Demand Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Company and will be reasonably acceptable
to the Holders of not less than a majority of the Registrable Securities to be
sold thereunder.
No Holder of Registrable Securities may participate in any underwritten
registration pursuant to a Registration Statement filed under this Agreement
unless such Holder (a) agrees to (i) sell such Holder's Registrable Securities
on the basis provided in and in compliance with the underwriting arrangements
and (ii) comply with Rules 101, 102 and 104 of Regulation M promulgated under
the Exchange Act and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required by the Company or the investment bankers under the terms of such
underwriting arrangements.
(e) Priority in Demand Registration. In a registration pursuant to
Section 2.1 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders who have requested such Demand
Registration or who have sought inclusion therein that in such underwriter's or
underwriters' opinion the total number of securities which the Selling Holders
and any other Person entitled to participate in such registration pursuant to
Section 2.1(a) hereof intend to include in such offering is such as to adversely
affect the success of such offering,
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including the price at which such securities can be sold, then the Company will
be required to include in such registration only the amount of securities which
it is so advised should be included in such registration. In such event,
securities shall be registered in such registration in the following order of
priority: (i) first, the securities which have been requested to be included in
such registration by the Holders of Registrable Securities and the securities of
other Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities sought to be included in the registration by the Holders of
Registrable Securities and such Persons), and (ii) second, provided that no
securities sought to be included by the Holders or any other Person sought to be
included therein have been excluded from such registration, securities to be
offered and sold for the account of the Company.
If twenty-five percent (25%) or more of the Registrable Securities
which the Holders have requested to be included in a Registration Statement
pursuant to Section 2.1 hereof have been excluded from such Registration
Statement pursuant to the provisions of the foregoing paragraph, then such
registration shall not count towards determining whether the Company has
satisfied its obligation to effect two Demand Registrations pursuant to Section
2.1 hereof.
Section 2.2. Piggy-Back Registration.
(a) General. If at any time the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account of any of its common equity securities which are either the
same class as the Registrable Securities or securities of a class into which
Registrable Securities are convertible (other than (i) a Registration Statement
on Form S-4 or S-8 (or any substitute form that may be adopted by the SEC or
other form of limited purpose), (ii) a Registration Statement filed in
connection with an exchange offer or offering of securities solely to the
Company's existing security holders, (iii) a Registration Statement filed
pursuant to the exercise of "demand" registration rights of existing security
holders pursuant to a contractual commitment of the Company, or (iv) a
registration relating to the sale of indebtedness of the Company in which case
the Company may issue equity (or rights to acquire equity) in the Company in the
same transaction constituting no more than 10% of its outstanding equity on a
fully-diluted basis) then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event fewer than fifteen (15) days before the anticipated filing date of ten
(10) days if the Company is subject to filing reports under the Exchange Act and
able to use Form S-3 under the Securities Act), and such notice shall offer such
Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request in writing not later than five (5)
days prior to the anticipated filing date of the Registration Statement (so long
as the Holder has received such written notice in accordance with the foregoing
time periods from the Company) (which request shall specify the Registrable
Securities intended to be disposed of by such Selling Holder and the intended
method of distribution thereof) (a "Piggy-Back Registration"). The Company shall
use commercially reasonable efforts to keep such Piggy-Back Registration
continuously effective under the Securities Act until at least the earlier of
(A) ninety (90) days after the effective date thereof
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or (B) the consummation of the distribution by the Holders of all of the
Registrable Securities covered thereby. The Company shall use its commercially
reasonable efforts to cause the managing underwriter or underwriters, if any, of
such proposed offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other security holder
included therein, subject to the restrictions set forth in Section 2.2(b), and
to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Selling Holder
shall have the right to withdraw its request for inclusion of its Registrable
Securities in any Registration Statement pursuant to this Section 2.2 by giving
timely written notice to the Company of its request to withdraw. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it becomes
effective or the Company may elect to delay the registration; provided, however,
that the Company shall give prompt written notice thereof to participating
Selling Holders. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2.2, and each Holder of Registrable Securities shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to a
Registration Statement effected pursuant to this Section 2.2.
No Registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration pursuant to Section 2.1 hereof, and no
failure to effect a registration under this Section 2.2 and to complete the sale
of securities registered thereunder in connection therewith shall relieve the
Company of any other obligation under this Agreement.
(b) Priority in Piggy-Back Registration. In a registration pursuant to
Section 2.2 hereof involving an underwritten offering, if the managing
underwriter of underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders requesting inclusion in such
offering that in such underwriter's or underwriters' opinion the total number of
securities which the Company, the Selling Holders and any other Persons desiring
to participate in such registration intend to include in such offering is such
as to adversely affect the success of such offering, including the price at
which such securities can be sold, then the Company will be required to include
in such registration only the amount of securities which it is so advised should
be included in such registration. In such event, securities shall be registered
in such offering in the following order of priority: (i) first, the securities
which the Company proposes to register, and (ii) second, provided that no
securities sought to be included by the Company has been excluded from such
registration, the securities which have been requested to be included in such
registration by the Holders of Registrable Securities and other Persons entitled
to exercise "piggy-back" registration rights pursuant to contractual commitments
of the Company (pro rata based on the amount of securities held by the Holders
of Registrable Securities requesting such inclusion and such Persons); provided,
however, that the Holders of Registrable Securities shall be subject to a prior
rights of Seruus Telecom Fund, L.P., Richland Ventures II, L.P. and First Union
Capital Partners and their permitted successors and assigns, existing on the
date hereof to be
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included prior to the Holders of Registrable Securities in a piggy-back
registration that is curtailed in size at the direction of the managing
underwriter.
If, as a result of the provisions of this Section 2.2(b), any Selling
Holder shall not be entitled to include all Registrable Securities in a
Piggy-Back Registration that such Selling Holder has requested to be included,
such Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration.
Section 2.3. Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants. The obligations of the Company set forth in
Sections 2.1 and 2.2 hereof are subject to each of the following limitations,
conditions and qualifications:
(a) Subject to the next sentence of this paragraph, the Company shall
be entitled to postpone, for a reasonable period of time, the filing or
effectiveness of, or suspend the rights of any Holders to make sales pursuant
to, any Registration Statement otherwise required to be prepared, filed and made
and kept effective by it pursuant to Section 2.1 or 2.2 thereunder; provided,
however, that the duration of such postponement or suspension may not exceed the
earlier to occur of (A) fifteen (15) days after the cessation of the
circumstances described in the next sentence of this paragraph on which such
postponement or suspension is based or (B) ninety (90) days after the date of
the determination of the Board of Directors referred to in the next sentence,
and the duration of postponement or suspension shall be excluded from the
calculation of the six month period described in Section 2.1(b). Such
postponement or suspension may be effected only if the Board of Directors of the
Company makes a reasonable and good faith determination that the filing or
effectiveness of, or sale pursuant to, such Registration Statement would
materially impede, delay or interfere with any material financing, offer or sale
of securities, acquisition, corporate reorganization or other significant
transaction involving the Company or any of its Subsidiaries which material
financing, offer or sale of securities, acquisition, corporate reorganization or
other significant transaction is under active consideration at the time of such
postponement or suspension; provided, however, that the Company shall not be
entitled to such postponement or suspension more than twice in any twelve-month
period. If the Company shall so postpone the filing of a Registration Statement
it shall, as promptly as possible, deliver a certificate signed by the Chief
Executive Officer or President of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the case of
a postponement of the filing or effectiveness of a Registration Statement, upon
the affirmative vote of the Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement, to
withdraw the request for registration by giving written notice to the Company
within ten (10) days after the receipt of such notice or (z) in the case of a
suspension of the right to make sales, receive an extension of the registration
period equal to the number of days of the suspension. Any Demand Registration as
to which the withdrawal election referred to in the preceding sentence has been
effected shall not be counted for purposes of the two Demand Registrations the
Company is required to effect pursuant to Section 2.1 hereof.
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(b) The Company shall not be required by this Agreement to file a
registration statement with respect to a Demand Registration during the period
starting with the date of filing of, and within one-hundred eighty (180) days
immediately following, the effective date of any Registration Statement under
the Securities Act pertaining to a firmly underwritten offering of equity
securities of the Company for its own account.
(c) The Company shall not be required by this Agreement to file a
Registration Statement with respect to a Demand Registration during the period
starting with the date of notice of a proper demand for the registration of
Common Stock of the Company, pursuant to a firmly underwritten offering, for the
account of any security holder of the Company in accordance with the terms of
the contractual arrangements governing such registration, and ending at the
earlier of:
(i) the withdrawal of any such registration statement or the
withdrawal of the request to file such Registration Statement by the security
holder requesting such registration; or
(ii) ninety (90) days after the effective date of any such
Registration Statement; provided, however, that the Company shall not be
entitled to invoke this clause (c) more than once during any 12-month period.
(d) The Company's obligations shall be subject to the obligations of
the Selling Holders, which the Selling Holders acknowledge, to furnish all
information and materials required of such Selling Holders and to take any and
all actions required of such Selling Holders as may be required under such
applicable federal and state securities laws and regulations to permit the
Company to comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such Registration Statement; and
(e) The Company shall not be obligated to cause any special audit to be
undertaken in connection with any registration pursuant to this Agreement unless
such audit is required by the SEC or requested by the underwriters with respect
to such registration.
Section 2.4. Restrictions on Sale by the Company and Others. The
Company covenants and agrees that (i) during the 10-day period prior to, and
during the 60-day period beginning on, the commencement of any underwritten
offering or Registrable Securities pursuant to a Demand Registration which has
been requested pursuant to this Agreement, it shall use its reasonable efforts
not to effect any public sale or distribution of any securities of the same
class as any of the Registrable Securities or any securities convertible into or
exchangeable or exercisable for such securities (or any option or other right
for such securities), other than any Common Stock and/or options, Warrants or
other Common Stock purchase rights, and the Common Stock issued pursuant to such
option, Warrants or other rights, to employees, officers or directors of, or
consultants or advisors to the Company or any Subsidiary pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board of Directors of the Company, prior to the Company or any of its
Subsidiaries publicly announcing its intention to effect any such
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public sale or distribution; and (ii) the Company will not, and the Company will
not cause or permit any of its Subsidiaries to, after the date hereof, enter
into any agreement or contract that conflicts with or limits or prohibits the
full and timely exercise by the Holders of Registrable Securities of the rights
herein to request a Demand Registration or to join in any Piggy-Back
Registration subject to the other terms and provisions hereof; provided,
however, that the Company's "reasonable efforts" undertaking under clause (i)
above shall not be construed to limit or prohibit the Company from making a
public sale or distribution that the Board of Directors believes is material to
the interests of the Company during such period.
Section 2.5. Rule 144 and Rule 144A. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder or beneficial owner of
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule 144A under the Securities Act. The Company further
covenants that it will take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a) Rule
144(k) and Rule 144A under the Securities Act, as such Rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the SEC
(it being expressly understood that the foregoing shall not create any
obligation on the part of the Company to file periodic reports or other reports
under the Exchange Act at any time that it is not then required to file such
reports pursuant to the Exchange Act). Upon the reasonable request of any Holder
of Registrable Securities, the Company will in a timely manner deliver to such
Holder a written statement as to whether it has complied with such information
requirements.
Section 3. "Market Stand-Off" Agreement.
(a) Each Holder hereby agrees that it shall not, to the extent
requested by a managing underwriter of Common Stock or common equivalents of the
Company, sell or otherwise transfer or dispose of any Registrable Securities of
the Company then owned by such Holder (other than to donees or partners of the
Holder who agree to be similarly bound) for up to one-hundred eighty (180) days
following the date of the final Prospectus in connection with each Registration
Statement of the Company filed under the Securities Act; provided, however, that
such agreement (i) shall not be applicable to Registrable Securities sold
pursuant to such registration, and (ii) shall only be applicable if the managing
underwriters request such agreement from each Holder.
(b) In order to enforce the foregoing covenant, the Company shall have
the right to impose stop transfer instructions with respect to the Registrable
Securities (and the Registrable Securities of every other Person subject to the
foregoing restriction) until the end of such period. The provisions of this
Section 3 shall be binding upon any transferee of any Registrable Securities.
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Section 4. Registration Procedures. In connection with the obligations
of the Company with respect to any Registration Statement pursuant to Sections
2.1, 2.2 and 2.5 hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each
Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and use commercially reasonable efforts
to cause such Registration Statement to become effective and remain effective as
provided herein; provided, however, that before filing any such Registration
Statement or any Prospectus (for registrations pursuant to Sections 2.1 and 2.2
hereof) or any amendments or supplements thereto (only for registrations
pursuant to Section 2.1 hereof), the Company shall make available to the Holders
of the Registrable Securities covered by such Registration Statement, and the
managing underwriter or underwriters, if any, copies of all such documents
proposed to be filed, which documents will be subject to the review and comment
of such Holders and underwriters in connection with such sale, if any, for a
period of at least five (5) Business Days, and the Company will not file any
such Registration Statement or amendment or supplement to any such Registration
Statement (including all such documents incorporated by reference) to which the
Holders of the Registrable Securities covered by such Registration Statement or
the underwriters in connection with such sale, if any, shall reasonably object
within five (5) Business Days after the receipt thereof. A participating Holder
or underwriter, if any, shall be deemed to have reasonably objected to such
filing if such Registration Statement, amendment or supplement, as applicable,
as proposed to be filed, contains a material misstatement or omission or fails
to comply with the applicable requirements of the Securities Act;
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods prescribed
hereby; cause the related Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
and comply with the provisions of the Securities Act, the Exchange Act and the
rules and regulations of the SEC promulgated thereunder applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities, their counsel and the
managing underwriter or underwriters, if any, promptly (but in any event within
two (2) Business Days), and confirm such notice in writing, (i) when a
Prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules and exhibits), (ii) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or any preliminary prospectus or the initiation or threatening of any
proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to (A) the suspension of the qualification or
exemption from qualification of the Registration
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Statement or any of the Registrable Securities covered thereby for offer or sale
in any jurisdiction, or (B) the initiation of any proceeding for such purpose,
(iv) of the happening of any event, the existence of any condition or
information becoming known to the Company that requires the making of any
changes in such Registration Statement, Prospectus or documents so that, in the
case of such Registration Statement, it will conform in all material respects
with the requirements of the Securities Act and it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, not misleading, and
that in the case of the Prospectus, it will conform in all material respects
with the requirements of the Securities Act and it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, not misleading, and
(v) of the Company's reasonable determination that a post-effective amendment to
such Registration Statement would be appropriate.
(d) Use commercially reasonable efforts to prevent the issuance of any
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities covered
thereby for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest practicable moment.
(e) If requested by the managing underwriter or underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold in
connection with an underwritten offering (only for registrations pursuant to
Section 2.1 hereof), (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters, if any, or such Holders reasonably request to be included therein
to comply with applicable law, (ii) make all effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post effective amendment, and
(iii) supplement or make amendments to such Registration Statements.
(f) Furnish to each Holder of Registrable Securities who so requests
and to counsel for the Holders of Registrable Securities and each managing
underwriter, if any, without charge, upon request, one conformed copy of the
Registration Statement and each post effective amendment thereto, including
financial statements and schedules, and of all documents incorporated or deemed
to be incorporated therein by reference and all exhibits (including exhibits
incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their counsel and
each underwriter, if any, without charge, as many copies of each Prospectus
(including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request; and, subject to the last paragraph of this
Section 4, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the Holders of Registrable Securities
and the underwriter or underwriters or agents, if any in connection with the
offering and
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sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto.
(h) Prior to any offering of Registrable Securities, to register or
qualify, and cooperate with the Holders of Registrable Securities, the
underwriter or underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of, such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
the managing underwriter or underwriters reasonably request in writing, or, in
the event of a non-underwritten offering, as the Holders of a majority of the
Registrable Securities may request; provided, however, that where Registrable
Securities are offered other than through an underwritten offering, the Company
agrees to cause its counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this Section
4(h); keep such registration or qualification (or exemption therefrom) effective
during the effectiveness period and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
securities covered thereby; provided, however, that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
has not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) become subject to taxation in any jurisdiction where it is not then so
subject.
(i) Cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, which certificates shall not bear any restrictive legends whatsoever
and shall be in a form eligible for deposit with The Depository Trust Company
("DTC"); and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request at least two (2) Business Days prior to any sale
of Registrable Securities in a firm commitment underwritten public offering.
(j) Pay all Registration Expenses in connection with the registrations
requested pursuant to Sections 2.1 and 2.2 hereof. Each Holder of Registrable
Securities shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to a Registration Statement requested pursuant to Section
2.1.
(k) Upon the occurrence of any event contemplated by Section 4(c)(iv)
or 4(c)(v) above, as promptly as practicable prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and, subject to Section 4(a) hereof, file such with the
SEC so that, as thereafter delivered to the purchasers of Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
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(l) Prior to the effective date of a Registration Statement, (i)
provide the registrar for the Registrable Securities with certificates for such
securities in a form eligible for deposit with DTC and (ii) provide a CUSIP
number for such securities.
(m) If the offering provided for herein is conducted by means of an
underwriting, enter into an underwriting agreement in form, scope and substance
as is customary in underwritten offerings and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to
expedite or facilitate the registration or disposition of such Registrable
Securities in any underwritten offering to be made of the Registrable Securities
in accordance with this Agreement, and in such connection, (i) make such
representations and warranties to the underwriter or underwriters, with respect
to the business of the Company and its Subsidiaries, and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) use reasonable efforts to obtain an
opinion of counsel to the Company, addressed to the underwriter or underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters;
(iii) use reasonable efforts to obtain "cold comfort" letters from the
independent certified public accountants of the Company (and, if applicable, the
Subsidiaries of the Company) and, if necessary, any other independent certified
public accountants of any Subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement, addressed to each of the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by the
managing underwriter or underwriters and as permitted by the underwriting
agreement is entered into, the same shall contain customary indemnification
provisions and procedures with respect to all parties to be indemnified pursuant
to said Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(n) Make available for inspection by a representative of the Holders of
Registrable Securities being sold, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney or account
retained by such representative of the Holders or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, at the Inspector's expense, all financial and other records, pertinent
corporate documents and properties of the Company and its Subsidiaries as
reasonably requested by the Inspector, and cause the officers, directors and
employees of the Company and its Subsidiaries to supply all information in each
case reasonably requested by any such Inspector in connection with such
Registration Statement; provided, however, that all such information shall be
kept confidential by such Inspector and shall not be used for any purpose other
than as contemplated hereby, except to the extent that (i) the disclosure of
such information is necessary or advisable to avoid or correct a misstatement or
omission in the Registration Statement or in any Prospectus; provided, however,
that prior notice is given to the Company, and the Company's legal counsel
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and such Holder's legal counsel concur that disclosure is required, (ii) the
release of such information is ordered pursuant to a subpoena or other order
from court of competent jurisdiction, (iii) disclosure of such information is
necessary or advisable in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such Inspector and
arising out of, based upon, relating to or involving this Agreement or any of
the transactions contemplated hereby or arising hereunder; provided, however,
that prior notice shall be provided as soon as practicable to the Company of the
potential disclosure of any information by such Inspector pursuant to clauses
(ii) or (iii) of this sentence to permit the Company to obtain a protective
order (or waive the provisions of this paragraph (n)) and that such Inspector
shall take all actions as are reasonably necessary to protect the
confidentiality of such information (if practicable) to the extent such action
is otherwise not inconsistent with, an impairment of or in derogation of the
rights and interests of the Holder or any Inspector, or (iv) such information
has been made generally available to the public.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than
forty-five (45) days after the end of any 12-month period (or ninety (90) days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are
sold to an underwriter or to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to an underwriter or to underwriters
in such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of the relevant Registration Statement,
which statements shall cover said 12-month periods.
(p) Use commercially reasonable efforts to cause all Registrable
Securities relating to such Registration Statement to be listed on each
securities exchange, if any, on which similar securities issued by the Company
are then listed.
(q) Cooperate with the Selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and
registered in such names as the Selling Holders may reasonably request at least
two (2) Business Days prior to the closing of any sale of Registrable
Securities.
Each seller of Registrable Securities as to which any registration is
being effected agrees, as a condition to the registration obligations with
respect to such seller provided herein, to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing
to comply with the Securities Act and other applicable law. The Company may
exclude from such registration the Registrable Securities of any seller for so
long as such seller fails to furnish such information within a reasonable time
after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in the Registration Statement, such seller shall
be permitted to include all information regarding such seller as it shall
reasonably request.
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Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(iv), or 4(c)(v) hereof, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by the Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(k) hereof, or until it is advised
in writing by the Company that the use of the applicable prospectus may be
resumed, and has received copies of any amendments or supplements thereto, and,
if so directed by the Company, such Holder will, at the Company's expense,
deliver to the Company all copies, other than permanent file copies, then in
such Holder's actual possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice; provided, however,
that nothing herein shall create any obligation on the part of any Holder to
undertake unreasonable efforts to retrieve or return any such Prospectus not
within the actual possession or control of such Holder. In the event the Company
shall give any such notice, the period of time for which a Registration
Statement is required thereunder to be effective shall be extended by the number
of days during such periods from and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have (x) received the copies of the
supplemented or amended Prospectus contemplated by Section 4(k) hereof or (y)
been in advised in writing by the Company that the use of the applicable
prospectus may be resumed.
Section 5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Holder, its
officers and directors, and each Person, if any, who controls such Holder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, such Holder,
from and against all losses, claims, damages and liabilities (including, without
limitation, and subject to clause (c) of this Section 5 below, the reasonable
legal fees and other reasonable out-of-pocket expenses actually incurred by any
Holder or any such controlling or affiliated Person in connection with any suit,
action or proceeding or any claim asserted), caused by, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which Registrable Securities were registered under the Securities Act, or caused
by any omission or alleged omission to state in any such Registration Statement
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state in any such preliminary prospectus or Prospectus a material
fact required to be stated in any such preliminary prospectus or Prospectus or
necessary to make the statements in any such preliminary prospectus or
Prospectus in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omissions made in reliance upon and in conformity with information relating to
any Holder furnished to the Company in writing by such
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Holder expressly for use in any such Registration Statement, Preliminary
Prospectus or Prospectus; provided, however, that the Company shall not be
required to indemnify any such Person if such untrue statement or omission or
alleged untrue statement or omission was contained or made in any preliminary
prospectus and corrected in the Prospectus, or any amendment or supplement
thereto and the Prospectus does not contain any other untrue statement or
omission or alleged untrue statement or omission of a material fact that was the
subject matter of the related proceeding and any such loss, liability, claim,
damage or expense suffered or incurred by such indemnified Person resulted from
any action, claim or suit by any Person who purchased Registrable Securities
which are the subject thereof from such indemnified Person and it is established
in the related proceeding that such indemnified Person failed to deliver or
provide a copy of the Prospectus (as amended or supplemented) to such Person
with or prior to the confirmation of the sale of such Registrable Securities
sold to such Person if required by applicable law, unless such failure to
deliver or provide a copy of the Prospectus (as amended or supplemented) was a
result of noncompliance by the Company with Section 4 hereof or as a result of
the failure of the Company to provide such Prospectus.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign any Registration
Statement, and each Person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Holder, but
only with reference to information furnished by such Holder to the Company
expressly for use in any Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto). The liability of any
Holder under this paragraph shall in no event exceed the proceeds received by
such Holder from sales of Registrable Securities giving rise to such
obligations.
(c) In case any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) above, such Person (the "Indemnified Party") shall promptly notify
the Person against which such indemnity may be sought (the "Indemnifying Party")
in writing and the Indemnifying Party, upon request of the Indemnified Party,
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may
reasonably designate in such proceeding and shall pay the reasonable fees and
expenses actually incurred of such counsel relating to such proceeding;
provided, however, that the failure to so notify the Indemnifying Party shall
not relieve it of any obligation or liability which it may have thereunder or
otherwise unless the Indemnifying Party has been materially prejudiced by such
failure. In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the contrary, (ii) the
Indemnifying Party shall have failed to retain within a reasonable period of
time counsel reasonably satisfactory to such Indemnified Party or parties or
(iii) the named parties to any such proceeding (including any impleaded parties)
include both such Indemnified Party or parties and the Indemnifying Parties or
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any affiliate of the Indemnifying Parties or such Indemnified Parties and
counsel for the Indemnifying Parties or Indemnified Parties shall have concluded
such written opinion that representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
the Indemnifying Party or parties and the Indemnified Party or parties. It is
understood that the Indemnifying Parties shall not, in connection with any one
such proceeding or separate but substantially similar or related proceedings in
the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm or attorneys (together with appropriate local counsel) at any time for such
Indemnified Party or parties and that all such fees and expenses shall be
reimbursed within reasonable time of the request after the incurrence thereof.
Any such separate firm for the Holders and such control Persons of the Holders
shall be designated in writing by Holders who sold a majority in interest of
Registrable Securities sold by all such Holders and shall be reasonably
acceptable to the Company and any such separate firm for the Company, its
directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its prior written consent
(which consent shall not be unreasonably withheld or delayed) but if settled
with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify and hold harmless the Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld), effect any
settlement or compliance of any pending or threatened proceeding in respect of
which any Indemnified Party is or could have been a party, or indemnity could
have been sought thereunder by such Indemnified Party, unless such settlement or
compliance involves only the payment of money damages that are actually paid by
the Indemnifying Party or includes an unconditional written release of such
Indemnified Party in form and substance reasonably satisfactory to such
Indemnified Party of such Indemnified Party from all liability or claims that
are the subject matter of such proceeding.
(d) To the extent the indemnification provided for a paragraph (a) or
(b) of this Section 5 is unavailable to, or insufficient to hold harmless, an
Indemnified Party in respect of any losses, claims, damages or liabilities, then
each Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities in such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Company on the one hand and the
Holders on the other hand from the offering of such Registrable Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the Company on the one hand and the Holders on the other hand in connection with
the statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Holders on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of discounts and commissions but before the deducting expenses)
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received by the Company bears to the total proceeds received by such Holder from
the sale of Registrable Securities, as the case may be. The relative fault of
the Company on the one hand and the Holders on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 5(d) above. The amount paid
or payable by an Indemnified Party is a result of the losses, claims, damages
and liabilities referred to in Section 5(d) above shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expense actually incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, in no event shall a Holder be required to
contribute any amount in excess of the amount by which proceeds received by such
Holder from sales of Registrable Securities exceeds the amount of any damages
that such Holder has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 5 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or in
equity.
(f) Any losses, claims, damages, liabilities or expenses for which an
Indemnified Party is entitled to indemnification or contribution under this
Section 5 shall be paid by the Indemnifying Party to the Indemnified Party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Holder or any Person who controls a
Holder, the Company, their respective directors or officers or any Person
controlling the Company and (ii) any termination of this Agreement.
Section 6. Miscellaneous.
(a) No Inconsistent Agreements. Except as specifically set forth in
Section 2.2(b) above, the Company represents and warrants to the Holders that it
has not entered into nor will the Company on or after the date of this Agreement
enter into, or cause or permit any of its Subsidiaries to enter into, any
agreement which conflicts with or limits or prohibits the exercise of the rights
granted to the Holders of Registrable Securities in this Agreement. The rights
granted to the Holders hereunder do not in any way conflict with or limit or
prohibit the exercise
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of any rights granted to the holders of the Company's other issued and
outstanding securities, if any, under such agreements.
(b) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the consent of the Company and
the prior written consent of Holders of not less than a majority in number of
the then outstanding Warrants and Registrable Securities not resold to the
public for the purpose of adding any provision to or changing in any manner or
eliminating any of the provisions of the Agreement or modifying in any manner
the rights of the Holders of the outstanding Warrants; provided, however, that
Section 5 hereof and this Section 6(b) may not be amended, modified or
supplemented without the prior written consent of each Holder (including any
Person who was a Holder of Registrable Securities disposed of pursuant to any
Registration Statement) affected by such amendment, modification of supplement.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable Securities may be
given the Company by the Holders of not less than a majority of the Registrable
Securities proposed to be sold by such Holders pursuant to such Registration
Statement.
(c) Notices. All notices and other communications provided for or
permitted thereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, (i) if to a Holder, at the most current address of Holder as set forth
in the register for the Warrants or the Warrant Shares, which address initially
is, with respect to Nortel Networks, the addresses set forth below; and (ii) if
to the Company, initially at the address set forth below the Company name on the
signature pages hereto and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
agreement, subsequent Holders and subsequent holders of a Series 1999A Note;
provided, however, that this Agreement shall not, without the written consent of
the Company, inure to the benefit of a transferee of Warrants, Warrant Shares or
conversion shares under the Series 1999A Note, if such transferee acquires
rights related to less than an aggregate amount of 100,000 shares of Common
Stock. If any transferee of any Holder shall acquire Warrants and/or Registrable
Securities, or any Holder of the Series 1999A Note shall acquire conversion
shares, in any manner which entitles such transferee to the benefits of this
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Agreement, whether by operation of law or otherwise, such Warrants and/or
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Warrants and/or Registrable Securities
or such conversion shares such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The heading in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Each of the parties hereto hereby irrevocably and unconditionally: (i)
submits itself and its property in any legal action or proceeding relating to
this Agreement or for recognition and enforcement of any judgment in respect
hereof, to the non-exclusive jurisdiction of the courts of the State of New York
and the courts of the United States of America for the Southern District of New
York, and appellate courts thereof, and consents and agrees to such action or
proceeding being brought in such courts; and (ii) waives any objection that it
may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in any inconvenient
court and agrees not to plead or claim the same.
(h) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(i) Entire Agreement. This Agreement, together with the Warrant
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. This Agreement, together with the Warrant Agreement,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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(j) Attorneys' Fees. As between the parties to this Agreement, in any
action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
(k) Securities Held by the Company or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities or Warrants is required thereunder, Registrable Securities or
Warrants held by the Company or any of its affiliates (as such term is defined
in Rule 405 under the Securities Act) shall not be counted (in either the
numerator or the denominator) in determining whether such consent or approval
was given by the Holders of such required percentage.
(l) Remedies. In the event of a breach by the Company of any of its
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights provided herein, or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement.
The Holders are the third-party beneficiaries of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other than
the Company and the Holders any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company and the Holders from time to time.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STATE COMMUNICATIONS, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
Address for Notices:
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NORTEL NETWORKS INC.
By:
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director, Customer Finance
Address for Notices:
Nortel Networks Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Finance
Carrier Packet Solutions
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
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Nortel Networks Inc.
GMS 991 04 B30
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President,
Customer Finance North America
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Nortel Networks Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mail Stop 04D/02/A40
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇,
Loan Administration
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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