Exhibit 10.1
SHELF REGISTRATION RIGHTS AGREEMENT
-----------------------------------
29 January, 1998
To The Purchasers listed on
the signature pages hereof
Gentlemen:
Xxxxxx Communications, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell to Xx. X. Xxxxxx, Xxxx &
Company International Trustees Limited (as trustee of The X. Xxxxxx
Settlement), Xxxxxxx Xxxxx & Co and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (collectively, the "Purchasers"), upon the terms set
forth in an agreement of even date herewith for the sale and purchase
of all of the issued share capital of Xxxxxx Retail Operation Services
Limited (the "Purchase Agreement"), in aggregate 1,131,828 shares of
Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"). Pursuant to the terms of this Agreement, the Company has
agreed to cause a Shelf Registration Statement (as defined below) to be
filed covering 199,002 of the shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement (such number of the
shares of Common Stock being referred to herein as the "Securities").
As an inducement to the Purchasers to enter into the Purchase Agreement
and in accordance with the terms thereof, the Company agrees with the
Purchasers, (i) for the benefit of the Purchasers and (ii) for the
benefit of the holders of the Securities from time to time until such
time as such Securities have been sold pursuant to a Shelf Registration
Statement (each of the foregoing a "Holder" and together the
"Holders"), as follows:
1. Shelf Registration. The Company shall take
the following actions:
(a) The Company shall, at its cost, prepare and, as
promptly as practicable but in any case within 90 days of the
Completion Date under the Purchase Agreement, file with the United
States Securities and Exchange Commission (the "Commission") and
thereafter shall use its best efforts to cause to be declared effective
as soon as practicable, a registration statement on Form S-3 (the
"Shelf Registration Statement") covering the offer and sale of the
Transfer Restricted Securities (as defined below) by the Holders
thereof from time to time in
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accordance with the methods of distribution elected by such Holders and
set forth in the Shelf Registration Statement and Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act") (hereinafter,
the "Shelf Registration"); provided, however, that no Holder (other
than a Purchaser) shall be entitled to have the Securities held by it
covered by such Shelf Registration Statement unless such Holder agrees
in writing to be bound by all the provisions of this Agreement
applicable to such Holder. "Transfer Restricted Securities" means each
Security until (i) the date on which such Security has been effectively
registered under the Securities Act and disposed of in accordance with
the Shelf Registration Statement or (ii) the date on which such
Security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act.
(b) The Company shall use its best efforts to keep
the Shelf Registration Statement continuously effective, in order to
permit the prospectus included therein to be lawfully delivered by the
Holders of the relevant Securities, until the earlier of such time as
all the Securities covered by the Shelf Registration Statement have
been sold pursuant thereto or the first anniversary of the Completion
Date under the Purchase Agreement, provided, however, that such period
shall be extended beyond such date by the number of days (if any) use
of the prospectus was suspended during such period pursuant to Section
2(h) (in any case, such period being called the "Shelf Registration
Period"). The Company shall be deemed not to have used its best efforts
to keep the Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in Holders
of Securities covered thereby not being able to offer and sell such
Securities during that period, unless (i) such action is required by
applicable law or (ii) upon the occurrence of any event contemplated by
paragraph 2(b)(v) below, such action is taken by the Company in good
faith and for valid business reasons (not including avoidance of the
Company's obligations hereunder) and the Company thereafter complies
with the requirements of paragraph 2(h) below.
(c) Notwithstanding any other provisions of this
Agreement to the contrary, the Company shall cause (other than
information required to be supplied by the selling Holders pursuant to
this Agreement) (i) the Shelf Registration Statement and the related
prospectus and any amendment or supplement thereto comply in all
material respects with the applicable requirements of the Securities
Act and the rules and regulations of the Commission thereunder, (ii)
the Shelf Registration Statement and any amendment thereto not to
contain, when it becomes effective, 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 not misleading and (iii) any
prospectus forming a part of the Shelf Registration Statement, and any
amendment or supplement to such prospectus, not to contain, as
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of the date of such prospectus or amendment or supplement, any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
2. Registration Procedures. In connection with the
Shelf Registration contemplated by Section 1 hereof the following
provisions shall apply:
(a) The Company shall (i) furnish to each Purchaser,
prior to the filing thereof with the Commission, a copy of the Shelf
Registration Statement and each amendment thereof and each amendment or
supplement, if any, to the prospectus included therein and (ii) include
the names of the Holders who propose to sell Securities pursuant to the
Shelf Registration Statement, as selling security holders, and the
manner of distribution they have elected.
(b) The Company shall give written notice to the
Purchasers and the Holders (which notice pursuant to clauses (ii)-(v)
hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when the Shelf Registration Statement or any
amendment thereto has been filed with the Commission
and when the Shelf Registration Statement or any
post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments
or supplements to the Shelf Registration Statement or
the prospectus included therein or for additional
information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any
proceedings for that purpose;
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(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the
suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the
Company to make changes in the Shelf Registration
Statement or the prospectus in order that the Shelf
Registration Statement or the prospectus do not
contain an untrue statement of a material fact nor
omit to state a material fact required to be stated
therein or necessary to make the statements therein
(in the case of the prospectus, in light of the
circumstances under which they were made) not
misleading, which written notice need not provide any
detail as to the nature of such event.
(c) The Company shall use best reasonable commercial
efforts to obtain the withdrawal at the earliest possible time, of any
order suspending the effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of
Securities included within the coverage of the Shelf Registration,
without charge, at least one copy of the Shelf Registration Statement
and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those incorporated by reference).
(e) The Company shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the
coverage of the Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus)
included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request. The Company
consents, subject to the provisions of this Agreement, to the use of
the prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Securities covered by the prospectus, or any amendment or supplement
thereto, included in the Shelf Registration Statement.
(f) Prior to any public offering of the Securities
pursuant to the Shelf Registration Statement, the Company shall
register or qualify or cooperate with the Holders of the Securities
included therein and their respective counsel in connection with the
registration or qualification of such Securities for offer and sale
under the securities or "blue sky" laws of such states of the United
States as any
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such Holder reasonably requests in writing and do any and all other
acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it
is not then so subject.
(g) The Company, at its own expense, shall cooperate
with the Holders of the Securities to facilitate the timely preparation
and delivery of certificates representing the Securities to be sold
pursuant to the Shelf Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the
Holders may request a reasonable period of time prior to sales of the
Securities pursuant to the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of Section 2(b) above during the period for
which the Company is required to maintain an effective Shelf
Registration Statement, the Company shall as promptly as practicable
prepare and file a post-effective amendment to the Shelf Registration
Statement or an amendment or supplement to the related prospectus and
any other required document so that, as thereafter delivered to Holders
or purchasers of Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated herein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided in the case of paragraph (v) of Section 2(b) the
Company's obligations pursuant to this paragraph (h) may be suspended
for one or more periods of up to 30 days in aggregate if the Board of
Directors of the Company has determined in good faith and using
reasonable judgment that disclosure of information sufficient to ensure
that the Shelf Registration Statement and related prospectus contain no
such misstatement or omission would be significantly and materially
disadvantageous to the Company's financial condition, business or
prospects. If the Company notifies the Purchasers or the Holders in
accordance with paragraphs (ii) through (v) of Section 2(b) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the purchasers and the Holders shall
suspend use of such prospectus.
(i) The Company will comply with all rules and
regulations of the Commission to the extent and so long as they are
applicable to the Shelf Registration and will make generally available
to its security holders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act, no later than 45
days after the end of a 12-month period (or 90 days, if such period is
a
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fiscal year) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month
period.
(j) The Company may require each Holder of Securities
to be sold pursuant to the Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution
of the Securities as the Company may from time to time reasonably
require for inclusion in the Shelf Registration Statement, and the
Company may exclude from such registration the Securities of any Holder
that fails to furnish such information within a reasonable time after
receiving such request.
3. Registration Expenses. The Company shall bear all
fees and expenses incurred in connection with the performance of its
obligations under Sections 1 and 2 hereof, whether or not the Shelf
Registration Statement is filed or becomes effective, provided that the
Holders of the Securities covered by the Shelf Registration shall bear
the fees and disbursements of their counsel.
4.(a) Indemnification. (a) The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who
controls such Holder within the meaning of the Securities Act or the
Exchange Act (each Holder and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses,
claims, damages or liabilities, joint or several, or any actions in
respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus
relating to the Shelf Registration, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and subject to subsection (c) below, shall
reimburse, as incurred, the Indemnified Parties for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or
liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Shelf Registration made in reliance upon and in conformity with written
information
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pertaining to such Holder and furnished to the Company by or on behalf
of such Holder specifically for inclusion therein.
(b) Each Holder, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Company or
any such controlling person becomes subject under the Securities Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by
or on behalf of such Holder specifically for inclusion therein; and,
subject to the limitation set forth immediately preceding this clause,
and to subsection (c) below, shall reimburse, as incurred, the Company
for any legal or other expenses reasonably incurred by the Company or
any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability
which such Holder may otherwise have to the Company or any of its
controlling persons.
(c) Promptly after receipt by an indemnified party
under this Section 4 of notice of the commencement of any action or
proceeding (including a governmental investigation), such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 4, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in subsections (a) or (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party if the representation of both such parties by the
same counsel would constitute a conflict of interest). Notwithstanding
the foregoing, if the defendants in any such action include both the
indemnified party
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and the indemnifying party and the indemnified party shall have
reasonably concluded that there exists a conflict of interest between
the indemnifying party and any indemnified party or that there may be
legal defenses available to it and other indemnified parties which are
different from or additional to, and inconsistent or in conflict with,
those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof the indemnifying party will not be
liable to such indemnified party under this Section 4 for any legal or
other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the
indemnifying party, and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such
action.
(d) If the indemnification provided for in this
Section 4 is unavailable or insufficient to hold harmless an
indemnified party under subsections (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsections
(a) or (b) above (i) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the
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 fault of the parties
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 on the one hand or such Holder or such other
indemnified party, as the case may be, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid by an
indemnified
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party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this Section 4(d), the Holders
shall not be required to contribute any amount in excess of the amount
by which the net proceeds received by such Holders from the sale of the
Securities pursuant to the Shelf Registration Statement exceeds the
amount of damages which such Holders have otherwise been required to
pay 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. For purposes of this paragraph (d), each
person, if any, who controls such indemnified party within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall
survive the sale of the Securities pursuant to the Shelf Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made
by or on behalf of any indemnified party.
5. Rules 144. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and it will, take such further action as any
Holder of Transfer Restricted Securities shall reasonably request to
enable such holder to sell such securities without registration,
including, without limitation, making publicly available the
information necessary to permit sales of their securities pursuant to
Rules 144. Notwithstanding the foregoing, nothing in this Section 5
shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act. The Company shall upon written
request of a Holder of Registrable Securities deliver to such Holder a
written statement as to its compliance with such request.
6. Miscellaneous. (a) 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, except by the Company and the written consent
of the Holders of a majority affected by such amendment, modification,
supplemented, waiver or consents.
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(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand
delivery, first-class mail, facsimile transmission, or air courier
which guarantees overnight delivery:
(1) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the
provisions of this Section 6(b), which address
initially is, with respect to each Purchaser, the
address set forth in the Purchase Agreement.
(2) if to the Company, at its address as
follows:
Xxxxxx Communications, Inc.
Two Democracy Center
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attn: Chief Financial Officer
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.:(000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
All such notices and communications shall be deemed
to have been duly given: at the time delivered by hand, if personally
delivered; three business days after being deposited in the mail,
postage prepaid, if mailed; when receipt is acknowledged by recipient's
facsimile machine operator, if sent by facsimile transmission; and on
the day delivered, if sent by overnight air courier guaranteeing next
day delivery.
(c) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns
of each of the parties and each Holder's registration rights are
transferable to and may be exercised by any person to whom Transfer
Restricted Securities have been transferred subject to Section 1(a)
hereof.
(d) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of
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which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the
Company submits to the nonexclusive jurisdiction of any federal or
state court in the State of New York.
(g) Severability. If any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
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If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Purchasers and
the Company in accordance with its terms.
Very truly yours,
XXXXXX COMMUNICATIONS, INC.
By: Signed Xxxxxxx Xxxxxxx
Name: XXXXXXX XXXXXXX
Title: Chief Financial Officer
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The foregoing Shelf Registration
Rights Agreement is hereby
confirmed and accepted as of the
date first above written.
THE PURCHASERS:
Signed Xxxxxx Xxxxxx
XXXXXX XXXX XXXXXX
XXXX & COMPANY INTERNATIONAL
TRUSTEES LIMITED
(as trustee of The X. Xxxxxx Settlement)
By: Signed B Goulding and X X Xxxxx
Name: B GOULDING and X X XXXXX
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XXXXXXX SACHS & CO
By: Signed J Xxxxx Xxxxxx
Name: J XXXXX XXXXXX
Title: Partner - Managing Director
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XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
By: Signed Xxxxxxx X Xxxxx, Xx
Name: XXXXXXX X XXXXX, XX
Title: Managing Director
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