1
EXHIBIT 4.3
[EXECUTION COPY]
REGISTRATION RIGHTS AGREEMENT
dated as of September 7, 2001
between
ON SEMICONDUCTOR CORPORATION
and
TPG ON HOLDINGS LLC
2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of
September 7, 2001, by and between ON Semiconductor Corporation, a Delaware
corporation (the "Company"), and TPG ON Holdings LLC, a Delaware limited
liability company (together with its permitted assigns, "TPG" or the
"Investor").
W I T N E S S E T H:
WHEREAS, the Company and the Investor have entered into an
Investment Agreement, dated as of September 7, 2001 (the "Investment
Agreement"), pursuant to which the Investor has agreed to purchase from the
Company, and the Company has agreed to issue and sell to the Investor, shares of
the Company's Series A Cumulative Convertible Preferred Stock, $0.01 par value
(the "Series A Preferred Stock"), having the rights, preferences, privileges and
restrictions set forth in the form of Certificate of Designations attached as
Exhibit A to the Investment Agreement; and
WHEREAS, as an inducement to the Investor entering into the
Investment Agreement, the Investor has required that the Company agree, and the
Company has agreed, to provide the rights set forth in this Agreement; and
WHEREAS, the consummation of the Closing is conditioned upon,
among other things, the execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, covenants and agreements of the parties hereto, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1. Capitalized Terms. Capitalized terms used but not defined
herein shall have the respective meanings assigned to such terms in the
Investment Agreement.
1.2. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Adverse Disclosure" means public disclosure of material
non-public information, disclosure of which, in the Board of Directors' good
faith judgment, after consultation with independent outside counsel to the
Company, (i) would be required to be made in any Registration Statement filed
with the SEC by the Company so that such Registration Statement would not be
materially misleading; (ii) would not be required to be made at such time but
for the filing of such Registration Statement; and (iii) the Company has a bona
fide business purpose for not disclosing publicly.
"Agreement" has the meaning set forth in the preamble hereto.
"Board of Directors" means the board of directors of the
Company.
3
"Common Stock" means the Company's common stock, par value
$0.01 per share.
"Company" has the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization or
otherwise.
"Company Public Sale" has the meaning set forth in Section
2.3(a).
"Demand Notice" has the meaning set forth in Section 2.2(e).
"Demand Period" has the meaning set forth in Section 2.2(d).
"Demand Registration" has the meaning set forth in Section
2.2(a).
"Demand Registration Statement" has the meaning set forth in
Section 2.2(a).
"Effectiveness Date" means the 180th day following the Closing
Date.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and any successor thereto, and any rules and regulations
promulgated thereunder, all as the same shall be in effect from time to time.
"Filing Date" means the 120th day following the Closing Date.
"holder" means any holder of Registrable Securities (whether
or not acquired pursuant to the Investment Agreement) who is a party hereto or
who succeeds to rights hereunder pursuant to Section 3.5.
"Investment Agreement" has the meaning set forth in the
recitals hereto.
"Investor" has the meaning set forth in the preamble hereto.
"Material Adverse Change" means (i) any general suspension of
trading in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States of America; (ii)
the declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States of America or Delaware; (iii) a material outbreak
or escalation of armed hostilities or other international or national calamity
involving the United States of America or Delaware or the declaration by the
United States or Delaware of a national emergency or war or a change in national
or international financial, political or economic conditions; and (iv) any
event, change, circumstance or effect that is or is reasonably likely to be
materially adverse to the business, properties, assets, liabilities, condition
(financial or otherwise), operations, results of operations or prospects of the
Company and its Subsidiaries taken as a whole.
"NASD" means the National Association of Securities Dealers,
Inc.
2
4
"Other Holder" means each Stockholder (as such term is defined
in the Stockholders Agreement) other than a TPG Holder (as such term is defined
in the Stockholders Agreement).
"Person" means any individual, firm, limited liability company
or partnership, joint venture, corporation, joint stock company, trust or
unincorporated organization, incorporated or unincorporated association,
government (or any department, agency or political subdivision thereof) or other
entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.
"Piggyback Registration" has the meaning set forth in Section
2.3(a).
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus, including
post-effective amendments, and all other material incorporated by reference in
such prospectus.
"Registrable Securities" means any shares of Common Stock or
other securities issued upon the conversion of or as a dividend with respect to
the Series A Preferred Stock and any securities that may be issued or
distributed or be issuable in respect of any Registrable Securities by way of
conversion, dividend, stock split or other distribution, merger, consolidation,
exchange, recapitalization or reclassification or similar transaction; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities to the extent (i) a Registration Statement with respect to the sale
of such Registrable Securities has been declared effective under the Securities
Act and such Registrable Securities have been disposed of in accordance with the
plan of distribution set forth in such Registration Statement, (ii) such
Registrable Securities have been distributed pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act or (iii) such
Registrable Securities shall have been otherwise transferred and new
certificates for them not bearing a legend restricting transfer under the
Securities Act shall have been delivered by the Company and such securities may
be publicly resold without Registration under the Securities Act.
"Registration" means a registration with the SEC of the
Company's securities for offer and sale to the public under a Registration
Statement. The term "Register" shall have a correlative meaning.
"Registration Expenses" has the meaning set forth in Section
2.8.
"Registration Statement" means any registration statement of
the Company filed with, or to be filed with, the SEC under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
3
5
"Series A Preferred Stock" has the meaning set forth in the
preamble hereto.
"Shelf Period" has the meaning set forth in Section 2.1(b).
"Shelf Registration" means a Registration effected pursuant to
Section 2.1.
"Shelf Registration Statement" means a Registration Statement
of the Company filed with the SEC on either (i) Form S-3 (or any successor form
or other appropriate form under the Securities Act) or (ii) if the Company is
not permitted to file a Registration Statement on Form S-3, an evergreen
Registration Statement on Form S-1 (or any successor form or other appropriate
form under the Securities Act), in each case for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities, as
applicable.
"Shelf Suspension" has the meaning set forth in Section
2.1(c).
"Stockholders Agreement" means the Stockholders' Agreement,
dated as of August 4, 1999, by and among the Company, TPG Semiconductor Holdings
LLC and Motorola, Inc., as amended from time to time.
"Underwritten Offering" means a Registration in which
securities of the Company are sold to an underwriter or underwriters on a firm
commitment basis for reoffering to the public.
1.3. General Interpretive Principles. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms "hereof," "herein" and similar terms refer
to this Agreement as a whole (including the exhibits, schedules and disclosure
statements hereto), and references herein to Sections refer to Sections of this
Agreement. Words of inclusion shall not be construed as terms of limitation
herein, so that references to "include", "includes" and "including" shall not be
limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations.
SECTION 2. REGISTRATION RIGHTS.
2.1. Shelf Registration.
(a) Filing. On or before the Filing Date, the Company shall
file with the SEC a Shelf Registration Statement relating to the offer and sale
of the Registrable Securities by the holders from time to time in accordance
with the methods of distribution elected by such holders and set forth in the
Shelf Registration Statement and, thereafter, shall use its reasonable best
efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act by the Effectiveness Date. If, on the Filing Date, the
Company does not qualify to file a Shelf Registration Statement under the
Securities Act, then the provisions of Section 2.2 shall apply, but at any time
thereafter that the Company does so qualify, it shall, as promptly as
4
6
practicable, file a Shelf Registration Statement and use its reasonable best
efforts to cause the Shelf Registration Statement to be declared effective.
(b) Continued Effectiveness. The Company shall use its
reasonable best efforts to keep such Shelf Registration Statement continuously
effective under the Securities Act in order to permit the Prospectus forming a
part thereof to be usable by holders until such time as the Investor and its
Affiliates hold no Series A Preferred Stock and less than 1.0% of the Common
Stock (assuming conversion of the Series A Preferred Stock) (such period of
effectiveness, the "Shelf Period"). Subject to Section 2.1(c), the Company shall
not be deemed to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
holders of the Registrable Securities covered thereby not being able to offer
and sell any Registrable Securities pursuant to such Shelf Registration
Statement during the Shelf Period, unless such action or omission is required by
applicable law.
(c) Suspension of Registration. If the continued use of such
Shelf Registration Statement at any time would require the Company to make an
Adverse Disclosure, the Company may, upon giving prompt written notice of such
action to the holders, suspend use of the Shelf Registration Statement (a "Shelf
Suspension"); provided, however, that the Company shall not be permitted to
exercise a Shelf Suspension (i) more than three times during any 18 month
period, or (ii) for a period exceeding 40 days on any one occasion. In the case
of a Shelf Suspension, the holders agree to suspend use of the applicable
Prospectus in connection with any sale or purchase of, or offer to sell or
purchase, Registrable Securities, upon receipt of the notice referred to above.
The Company shall immediately notify the holders upon the termination of any
Shelf Suspension, amend or supplement the Prospectus, if necessary, so it does
not contain any untrue statement or omission and furnish to the holders such
numbers of copies of the Prospectus as so amended or supplemented as the holders
may reasonably request. The Company agrees, if necessary, to supplement or make
amendments to the Shelf Registration Statement, if required by the registration
form used by the Company for the Shelf Registration or by the instructions
applicable to such registration form or by the Securities Act or the rules or
regulations promulgated thereunder or as may reasonably be requested by the
holders of a majority of the Registrable Securities then outstanding.
(d) Underwritten Offering. If the holders of not less than a
majority of any Registrable Securities included in any offering pursuant to such
Shelf Registration Statement so elect, such offering of Registrable Securities
shall be in the form of an Underwritten Offering, and the Company shall amend or
supplement the Shelf Registration Statement for such purpose. The holders of a
majority of such Registrable Securities included in such Underwritten Offering
shall have the right to select the managing underwriter or underwriters to
administer such offering; provided, that such managing underwriter or
underwriters shall be reasonably acceptable to the Company.
2.2. Demand Registrations.
(a) Demand by Holders. If, on or at any time after the
Effectiveness Date, the Shelf Registration Statement is not effective under the
Securities Act or is not available for use by the holders for a period exceeding
30 days, then at any time thereafter the holders of not less
5
7
than 35% of any Registrable Securities may make a written request to the Company
for Registration of Registrable Securities held by such holders and any other
holders of Registrable Securities; provided, that the estimated market value of
the Registrable Securities to be so Registered is at least $10 million in the
aggregate at the time such request is made. Any such requested Registration
shall hereinafter be referred to as a "Demand Registration." Each request for a
Demand Registration shall specify the kind and aggregate amount of Registrable
Securities to be Registered and the intended methods of disposition thereof.
Within 30 days of a request for a Demand Registration, the Company shall file a
Registration Statement relating to such Demand Registration (a "Demand
Registration Statement"), and shall use its reasonable best efforts to cause
such Demand Registration Statement to promptly be declared effective under (i)
the Securities Act and (ii) the "Blue Sky" laws of such jurisdictions as any
holder of Registrable Securities being registered under such Registration or any
underwriter, if any, reasonably requests.
(b) Limitation on Demand Registrations. Subject to Section
2.2(h), in no event shall the Company be required to effect more than two Demand
Registrations.
(c) Demand Withdrawal. A holder may withdraw its Registrable
Securities from a Demand Registration at any time prior to the effectiveness of
the applicable Demand Registration Statement. Upon receipt of notices from all
holders to such effect, the Company shall cease all efforts to secure
effectiveness of the applicable Demand Registration Statement and such
Registration nonetheless shall be deemed a Demand Registration for purposes of
Section 2.2(b) unless (i) the withdrawing holders shall have paid or reimbursed
the Company for all of the reasonable and documented fees and expenses incurred
by the Company in connection with the Registration of such withdrawn Registrable
Securities or (ii) the withdrawal is made following the occurrence of a Material
Adverse Change; provided, however, that if the Material Adverse Change (A) is an
event, change, circumstance or effect identified in clause (iv) of the
definition thereof and not an event specified in clauses (i), (ii) or (iii) of
such definition and (B) results from or arises out of changes or circumstances
affecting the industry in which the Company and its Subsidiaries operate, which
event, change, circumstance or effect does not affect the Company and its
Subsidiaries disproportionately relative to other entities operating in such
industry, then such Registration shall be deemed a Demand Registration for
purposes of Section 2.2(b) unless the withdrawing holders shall have paid or
reimbursed the Company for all of the reasonable and documented fees and
expenses incurred by the Company in connection with the Registration of such
withdrawn Registrable Securities.
(d) Effective Registration. The Company shall be deemed to
have effected a Demand Registration if the Demand Registration Statement is
declared effective by the SEC and remains effective for not less than 180 days
(or such shorter period as will terminate when all Registrable Securities
covered by such Demand Registration Statement have been sold or withdrawn), or
if such Registration Statement relates to an Underwritten Offering, such longer
period as in the opinion of counsel for the underwriter or underwriters a
Prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer (the applicable period, the
"Demand Period"). No Demand Registration shall be deemed to have been effected
if (i) during the Demand Period such Registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court or (ii) the conditions to closing specified in the underwriting
agreement, if any, entered into
6
8
in connection with such Registration are not satisfied by reason of a wrongful
act, misrepresentation or breach of such applicable underwriting agreement by
the Company.
(e) Demand Notice. Promptly upon receipt of any request for a
Demand Registration pursuant to Section 2.2(a) (but in no event more than 5
Business Days thereafter), the Company shall deliver a written notice (a "Demand
Notice") of any such Registration request to all other holders of Registrable
Securities to be included in such Demand Registration, and the Company shall
include in such Demand Registration all such Registrable Securities with respect
to which the Company has received written requests for inclusion therein within
10 Business Days after the date that the Demand Notice has been delivered. All
requests made pursuant to this Section 2.2(e) shall specify the aggregate amount
of Registrable Securities to be registered and the intended method of
distribution of such securities.
(f) Delay in Filing; Suspension of Registration. If the
filing, initial effectiveness or continued use of a Demand Registration
Statement at any time would require the Company to make an Adverse Disclosure,
the Company may, upon giving prompt written notice of such action to the
holders, delay the filing or initial effectiveness of, or suspend use of, the
Demand Registration Statement (a "Demand Suspension"); provided, however, that
the Company shall not be permitted to exercise a Demand Suspension (i) more than
three times during any 18 month period, or (ii) for a period exceeding 40 days
on any one occasion. In the case of a Demand Suspension, the holders agree to
suspend use of the applicable Prospectus in connection with any sale or
purchase, or offer to sell or purchase, Registrable Securities, upon receipt of
the notice referred to above. The Company shall immediately notify the holders
upon the termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue statement or
omission and furnish to the holders such numbers of copies of the Prospectus as
so amended or supplemented as the holders may reasonably request. The Company
agrees, if necessary, to supplement or make amendments to the Demand
Registration Statement, if required by the registration form used by the Company
for the Demand Registration or by the instructions applicable to such
registration form or by the Securities Act or the rules or regulations
promulgated thereunder or as may reasonably be requested by the holders of a
majority of the Registrable Securities that are included in such Demand
Registration Statement.
(g) Underwritten Offering. If the holders of not less than a
majority of the Registrable Securities requesting a Demand Registration so
elect, such offering of Registrable Securities shall be in the form of an
Underwritten Offering. The holders of a majority of such Registrable Securities
included in such Underwritten Offering shall have the right to select the
managing underwriter or underwriters to administer the offering; provided, that
such managing underwriter or underwriters shall be reasonably acceptable to the
Company.
(h) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of the Registrable Securities included in a Demand
Registration (or, in the case of a Demand Registration not being underwritten,
the holders of a majority of the Registrable Securities included therein),
advise the Board of Directors in writing that, in its or their opinion, the
number of securities requested to be included in such Demand Registration
exceeds the number which can be sold in such offering without being likely to
have a significant adverse effect on the price, timing or distribution of the
7
9
securities offered or the market for the securities offered, the number of
Registrable Securities to be included in such Demand Registration shall be
allocated pro rata among the holders that have requested to participate in such
Demand Registration on the basis of the relative number of Registrable
Securities then held by each such holder, to the extent necessary to reduce the
total number of Registrable Securities to be included in such offering to the
number recommended by the managing underwriter or underwriters or such holders,
provided, that any securities thereby allocated to a holder that exceed such
holder's request shall be reallocated among the remaining requesting holders in
like manner. To the extent that Registrable Securities so requested to be
registered are excluded from the offering, then the holders of such Registrable
Securities shall have the right to one additional Demand Registration under this
Section 2.2.
(i) Registration Statement Form. Registrations under this
Section 2.2 shall be on such appropriate form of the SEC (i) as shall be
selected by the Company and as shall be reasonably acceptable to the holders of
a majority of the Registrable Securities requesting a Demand Registration and
(ii) as shall permit the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition specified in such
holders' requests for such Registration.
2.3. Piggyback Registrations.
(a) Participation. If the Company at any time proposes to file
a Registration Statement under the Securities Act with respect to any offering
of its securities for its own account or for the account of any other Persons
(other than (i) a Registration under Section 2.1 or 2.2, (ii) a Registration on
Form S-4 or S-8 or any successor form to such Forms or (iii) a Registration of
securities solely relating to an offering and sale to employees or directors of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement) (a "Company Public Sale"), then, as soon as practicable (but in no
event less than 45 days prior to the proposed date of filing such Registration
Statement), the Company shall give written notice of such proposed filing to all
holders of Registrable Securities, and such notice shall offer the holders of
such Registrable Securities the opportunity to Register under such Registration
Statement such number of Registrable Securities as each such holder may request
in writing (a "Piggyback Registration"). Subject to Section 2.3(b), the Company
shall include in such Registration Statement all such Registrable Securities
which are requested to be included therein within 15 days after the receipt by
such holder of any such notice; provided, however, that if at any time after
giving written notice of its intention to Register any securities and prior to
the effective date of the Registration Statement filed in connection with such
Registration, the Company shall determine for any reason not to Register or to
delay Registration of such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable Securities
and, thereupon, (i) in the case of a determination not to Register, shall be
relieved of its obligation to Register any Registrable Securities in connection
with such Registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holders of Registrable Securities entitled to request that such Registration
be effected as a Demand Registration under Section 2.2, and (ii) in the case of
a determination to delay Registering, in the absence of a request for a Demand
Registration, shall be permitted to delay Registering any Registrable
Securities, for the same period as the delay in Registering such other
securities. If the offering pursuant to such Registration Statement is to be
underwritten, then each holder making a request for a Piggyback Registration
pursuant to this Section 2.3(a) must, and the Company shall make such
arrangements with the managing underwriter or underwriters so that each such
holder may, participate in such Underwritten Offering. If the offering pursuant
to such Registration Statement is to be on any other basis, then each holder
making a request for a Piggyback
8
10
Registration pursuant to this Section 2.3(a) must, and the Company will make
such arrangements so that each such holder may, participate in such offering on
such basis. Each holder of Registrable Securities shall be permitted to withdraw
all or part of such holder's Registrable Securities from a Piggyback
Registration at any time prior to the effective date thereof.
(b) Priority of Piggyback Registration. If the managing
underwriter or underwriters of any proposed Underwritten Offering of Registrable
Securities included in a Piggyback Registration informs the Company and the
holders of Registrable Securities in writing that, in its or their opinion, the
number of securities which such holders and any other Persons intend to include
in such offering exceeds the number which can be sold in such offering without
being likely to have a significant adverse effect on the price, timing or
distribution of the securities offered or the market for the securities offered,
then the securities to be included in such Registration shall be (i) first, 100%
of the securities that the Company or (subject to Section 2.7) any Person (other
than a holder of Registrable Securities) exercising a contractual right to
demand Registration, as the case may be, proposes to sell, and (ii) second, and
only if all the securities referred to in clause (i) have been included, the
number of Registrable Securities that, in the opinion of such managing
underwriter or underwriters, can be sold without having such adverse effect,
with such number to be allocated pro rata among the holders that have requested
to participate in such Registration based on the relative number of Registrable
Securities then held by each such holder (provided that any securities thereby
allocated to a holder that exceed such holder's request shall be reallocated
among the remaining requesting holders in like manner) and (iii) third, and only
if all of the Registrable Securities referred to in clause (ii) have been
included in such Registration, any other securities eligible for inclusion in
such Registration.
(c) No Effect on Demand Registrations. No Registration of
Registrable Securities effected pursuant to a request under this Section 2.3
shall be deemed to have been effected pursuant to Sections 2.1 and 2.2 or shall
relieve the Company of its obligations under Sections 2.1 or 2.2.
2.4. Black-out Periods
(a) Black-out Periods for Holders. In the event of a Company
Public Sale of the Company's equity securities in an Underwritten Offering, the
holders of Registrable Securities agree, if requested by the managing
underwriter or underwriters in such Underwritten Offering, not to effect any
public sale or distribution of any securities (except, in each case, as part of
the applicable Registration, if permitted) that are the same as or similar to
those being Registered in connection with such Company Public Sale, or any
securities convertible into or exchangeable or exercisable for such securities,
during the period beginning seven days before, and ending 90 days (or such
lesser period as may be permitted by the Company or such managing underwriter or
underwriters) after, the effective date of the Registration Statement filed in
connection with such Registration, to the extent timely notified in writing by
the Company or the managing underwriter or underwriters.
9
11
(b) Black-out Period for the Company and Others. In the case
of a Registration of Registrable Securities pursuant to Section 2.1 or 2.2 for
an Underwritten Offering, the Company agrees, if requested by the holders of a
majority of Registrable Securities to be included in such Registration or the
managing underwriter or underwriters, not to effect any public sale or
distribution of any securities which are the same as or similar to those being
Registered, or any securities convertible into or exchangeable or exercisable
for such securities, during the period beginning seven days before, and ending
90 days (or such lesser period as may be permitted by such holders or such
managing underwriter or underwriters) after, the effective date of the
Registration Statement filed in connection with such Registration (or, in the
case of an offering under a Shelf Registration Statement, the date of the
closing under the underwriting agreement in connection therewith), to the extent
timely notified in writing by a holder of Registrable Securities covered by such
Registration Statement or the managing underwriter or underwriters.
Notwithstanding the foregoing, the Company may effect a public sale or
distribution of securities of the type described above and during the periods
described above if such sale or distribution is made pursuant to Registrations
on Form S-4 or S-8 or any successor form to such Forms or as part of any
Registration of securities for offering and sale to employees or directors of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement. The Company agrees to use its reasonable best efforts to obtain
from each holder of restricted securities of the Company which securities are
the same as or similar to the Registrable Securities being Registered, or any
restricted securities convertible into or exchangeable or exercisable for any of
such securities, an agreement not to effect any public sale or distribution of
such securities during any such period referred to in this paragraph, except as
part of any such Registration, if permitted. Without limiting the foregoing (but
subject to Section 2.7), if after the date hereof the Company grants any Person
(other than a holder of Registrable Securities) any rights to demand or
participate in a Registration, the Company agrees that the agreement with
respect thereto shall include such Person's agreement to comply with any
blackout period required by this Section as if it were the Company hereunder.
2.5. Registration Procedures.
(a) In connection with the Company's Registration obligations
under Sections 2.1, 2.2 and 2.3, the Company will use its reasonable best
efforts to effect such Registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of distribution
thereof as expeditiously as reasonably practicable, and in connection therewith
the Company will:
(i) prepare the required Registration Statement including all
exhibits and financial statements required under the Securities Act to be filed
therewith, and before filing a Registration Statement or Prospectus, or any
amendments or supplements thereto, (x) furnish to the underwriters, if any, and
to the holders of the Registrable Securities covered by such Registration
Statement, copies of all documents prepared to be filed, which documents will be
subject to the review of such underwriters and such holders and their respective
counsel and (y) except in the case of a Registration under Section 2.3, not file
any Registration Statement or Prospectus or amendments or supplements thereto to
which the holders of a majority of Registrable Securities covered by such
Registration Statement or the underwriters, if any, shall reasonably object;
10
12
(ii) as soon as possible (in the case of a Demand
Registration, no later than 30 days after a request for a Demand Registration)
file with the SEC a Registration Statement relating to the Registrable
Securities including all exhibits and financial statements required by the SEC
to be filed therewith, and use its reasonable best efforts to cause such
Registration Statement to become effective under the Securities Act;
(iii) prepare and file with the SEC such amendments and
post-effective amendments to such Registration Statement and supplements to the
Prospectus as may be (x) reasonably requested by the holders of a majority of
participating Registrable Securities, (y) reasonably requested by any
participating holder (to the extent such request relates to information relating
to such holder), or (z) necessary to keep such Registration effective for the
period of time required by this Agreement, and comply with provisions of the
applicable securities laws with respect to the sale or other disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the sellers
thereof set forth in such Registration Statement;
(iv) notify the participating holders of Registrable
Securities and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing and provide copies of the relevant
documents, as soon as reasonably practicable after notice thereof is received by
the Company (a) when the applicable Registration Statement or any amendment
thereto has been filed or becomes effective, and when the applicable Prospectus
or any amendment or supplement to such Prospectus has been filed, (b) of any
written comments by the SEC or any request by the SEC or any other federal or
state governmental authority for amendments or supplements to such Registration
Statement or such Prospectus or for additional information, (c) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or any order by the SEC or any other regulatory authority preventing
or suspending the use of any preliminary or final Prospectus or the initiation
or threatening of any proceedings for such purposes, (d) if, at any time, the
representations and warranties of the Company in any applicable underwriting
agreement cease to be true and correct and in all material respects, and (e) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Registrable Securities for offering or sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(v) promptly notify each selling holder of Registrable
Securities and the managing underwriter or underwriters, if any, when the
Company becomes aware of the happening of any event as a result of which the
applicable Registration Statement or the Prospectus included in such
Registration Statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein (in the case of such Prospectus and any preliminary Prospectus, in light
of the circumstances under which they were made) not misleading or, if for any
other reason it shall be necessary during such time period to amend or
supplement such Registration Statement or Prospectus in order to comply with the
Securities Act and, in either case as promptly as reasonably practicable
thereafter, prepare and file with the SEC, and furnish without charge to the
selling holders and the managing underwriter or underwriters, if any, an
amendment or supplement to such Registration Statement or Prospectus which will
correct such misstatement or omission or effect such compliance;
11
13
(vi) use its reasonable best efforts to prevent or obtain the
withdrawal of any stop order or other order suspending the use of any
preliminary or final Prospectus;
(vii) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters and the holders of a majority of Registrable Securities being sold
agree should be included therein relating to the plan of distribution with
respect to such Registrable Securities; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii) furnish to each selling holder of Registrable
Securities and each underwriter, if any, without charge, as many conformed
copies as such holder or underwriter may reasonably request of the applicable
Registration Statement and any amendment or post-effective amendment thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference);
(ix) deliver to each selling holder of Registrable Securities
and each underwriter, if any, without charge, as many copies of the applicable
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such holder or underwriter may reasonably request (it
being understood that the Company consents to the use of such Prospectus or any
amendment or supplement thereto by each of the selling holders of Registrable
Securities and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto) and such other documents as such selling holder or
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities by such holder or underwriter;
(x) on or prior to the date on which the applicable
Registration Statement is declared effective, use its reasonable best efforts to
register or qualify, and cooperate with the selling holders of Registrable
Securities, the managing underwriter or underwriters, if any, and their
respective counsel, in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or "Blue Sky"
laws of each state and other jurisdiction of the United States as any such
selling holder or managing underwriter or underwriters, if any, or their
respective counsel reasonably request in writing and do any and all other acts
or things reasonably necessary or advisable to keep such registration or
qualification in effect for such period as required by Section 2.1(b) or Section
2.2(d), whichever is applicable, provided that the Company will not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so subject;
(xi) cooperate with the selling 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 and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters may request at least two business days prior to any
sale of Registrable Securities to the underwriters;
12
14
(xii) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(xiii) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and provide the applicable transfer agent with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xiv) make such representations and warranties to the holders
of Registrable Securities being registered, and the underwriters or agents, if
any, in form, substance and scope as are customarily made by issuers in
secondary underwritten public offerings;
(xv) enter into such customary agreements (including
underwriting and indemnification agreements) and take all such other actions as
the holders of at least a majority of any Registrable Securities being sold or
the managing underwriter or underwriters, if any, reasonably request in order to
expedite or facilitate the registration and disposition of such Registrable
Securities;
(xvi) obtain for delivery to the holders of Registrable
Securities being registered and to the underwriter or underwriters, if any, an
opinion or opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, in customary form, scope and
substance, which opinions shall be reasonably satisfactory to such holders or
underwriters, as the case may be, and their respective counsel;
(xvii) in the case of an Underwritten Offering, obtain for
delivery to the Company and the managing underwriter or underwriters, with
copies to the holders of Registrable Securities included in such Registration, a
cold comfort letter from the Company's independent certified public accountants
in customary form and covering such matters of the type customarily covered by
cold comfort letters as the managing underwriter or underwriters reasonably
request, dated the date of execution of the underwriting agreement and brought
down to the closing under the underwriting agreement;
(xviii) cooperate with each seller of Registrable Securities
and each underwriter, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD;
(xix) use its reasonable best efforts to comply with all
applicable securities laws and make available to its security holders, as soon
as reasonably practicable an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act and the rules and regulations promulgated
thereunder;
13
15
(xx) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(xxi) cause all Registrable Securities covered by the
applicable Registration Statement to be listed on each securities exchange on
which any of the Company's securities are then listed or quoted and on each
inter-dealer quotation system on which any of the Company's securities are then
quoted;
(xxii) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by a representative appointed by
the majority of the holders of Registrable Securities covered by the applicable
Registration Statement, by any underwriter participating in any disposition to
be effected pursuant to such Registration Statement and by any attorney,
accountant or other agent retained by such holders or any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees and the independent public accountants who have certified its
financial statements to make themselves available to discuss the business of the
Company and to supply all information reasonably requested by any such Person in
connection with such Registration Statement as shall be necessary to enable them
to exercise their due diligence responsibility; provided, however, that any such
Person gaining access to information regarding the Company pursuant to this
Section 2.5(a)(xxii) shall agree to hold in strict confidence and shall not make
any disclosure or use any information regarding the Company which the Company
determines in good faith to be confidential, and of which determination such
Person is notified, unless (w) the release of such information is requested or
required (by deposition, interrogatory, requests for information or documents by
a Governmental Entity, subpoena or similar process), (x) such information is or
becomes publicly known without a breach of this or any other agreement of which
such Person has knowledge, (y) such information is or becomes available to such
Person on a non-confidential basis from a source other than the Company or (z)
such information is independently developed by such Person; and
(xxiii) in the case of an Underwritten Offering, cause the
senior executive officers of the Company to participate in the customary "road
show" presentations that may be reasonably requested by the managing underwriter
or underwriters in any such Underwritten Offering and otherwise to facilitate,
cooperate with, and participate in each proposed offering contemplated herein
and customary selling efforts related thereto.
(b) The Company may require each seller of Registrable
Securities as to which any Registration is being effected to furnish to the
Company such information regarding the distribution of such securities and such
other information relating to such holder and its ownership of Registrable
Securities as the Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees to furnish such information to the
Company and to cooperate with the Company as reasonably necessary to enable the
Company to comply with the provisions of this Agreement.
(c) 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
2.5(a)(v), such holder will forthwith discontinue
14
16
disposition of Registrable Securities pursuant to such Registration Statement
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 2.5(a)(v), or until such holder is advised in
writing by the Company that the use of the Prospectus may be resumed, and if so
directed by the Company, such holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period during which the applicable Registration
Statement is required to be maintained effective shall be extended by the number
of days during the period 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 either receives the copies of the
supplemented or amended Prospectus contemplated by Section 2.5(a)(v) or is
advised in writing by the Company that the use of the Prospectus may be resumed.
(d) Holders may seek to register different types of
Registrable Securities simultaneously and the Company shall use its reasonable
best efforts to effect such Registration and sale in accordance with the
intended method or methods of disposition specified by such holders.
2.6. Underwritten Offerings.
(a) Shelf and Demand Registrations. If requested by the
underwriters for any Underwritten Offering requested by holders of Registrable
Securities pursuant to a Registration under Section 2.1 or under Section 2.2,
the Company shall enter into an underwriting agreement with such underwriters
for such offering, such agreement to be reasonably satisfactory in substance and
form to the Company, holders of a majority of the Registrable Securities to be
included in such underwriting, and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including indemnities no less
favorable to the recipient thereof than those provided in Section 2.9. The
holders of the Registrable Securities proposed to be distributed by such
underwriters will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the reasonable suggestions
of the Company regarding the form thereof. Such holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement, which underwriting agreement shall (i) contain such
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such holders of Registrable Securities as are
customarily made by issuers to selling stockholders in secondary underwritten
public offerings and (ii) provide that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also
shall be conditions precedent to the obligations of such holders of Registrable
Securities. Any such holder of Registrable Securities shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities, such holder's intended method of
distribution and any other representations required by law.
(b) Piggyback Registrations. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
Section 2.3 and such securities are to be
15
17
distributed in an Underwritten Offering through one or more underwriters, the
Company will, if requested by any holder of Registrable Securities pursuant to
Section 2.3 and subject to the provisions of Section 2.3(b), use its best
efforts to arrange for such underwriters to include on the same terms and
conditions that apply to the other sellers in such Registration all the
Registrable Securities to be offered and sold by such holder among the
securities of the Company to be distributed by such underwriters in such
Registration. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters, which underwriting agreement shall (i) contain such
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such holders of Registrable Securities as are
customarily made by issuers to selling stockholders in secondary underwritten
public offerings and (ii) provide that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also
shall be conditions precedent to the obligations of such holders of Registrable
Securities. Any such holder of Registrable Securities shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution or any other representations required by law.
(c) Participation in Underwritten Registrations. No Person may
participate in any Underwritten Offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
2.7. No Inconsistent Agreements; Additional Rights. The
Company will not hereafter enter into, and is not currently a party to, any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable Securities by this Agreement.
2.8. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement will be paid by the
Company, including (i) all registration and filing fees, and any other fees and
expenses associated with filings required to be made with the SEC or the NASD,
(ii) all fees and expenses in connection with compliance with state securities
or "Blue Sky" laws, (iii) all printing, duplicating, word processing, messenger,
telephone, facsimile and delivery expenses (including expenses of printing
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special audit and cold
comfort letters required by or incident to such performance), (v) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting practice,
(vi) all fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange or quotation of the
Registrable Securities on any inter-dealer quotation system, (vii) all
applicable rating agency fees with respect to the Registrable Securities, (viii)
all reasonable fees and disbursements of one law firm or other counsel selected
by the holders of a
16
18
majority of the Registrable Securities being registered, (ix) all fees and
expenses of accountants selected by the holders of a majority of the Registrable
Securities being registered, (x) any reasonable fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, (xi) all fees
and expenses of any special experts or other Persons retained by the Company in
connection with any Registration, and (xii) all of the Company's internal
expenses (including all salaries and expenses of its officers and employees
performing legal or accounting duties). All such expenses are referred to herein
as "Registration Expenses." The Company shall not be required to pay any fees
and disbursements to underwriters not customarily paid by the issuers of
securities in a secondary offering, including underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of Registrable
Securities.
2.9. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each holder of
Registrable Securities, each limited or general partner thereof, each member,
limited partner or general partner of each such limited or general partner, each
of their respective Affiliates, officers, directors, shareholders, employees,
advisors, and agents and each Person who controls (within the meaning of the
Securities Act or the Exchange Act) such Persons and each of their respective
Representatives from and against any and all losses, penalties, judgments,
suits, costs, claims, damages, liabilities (or actions or proceedings in respect
thereof, whether or not such indemnified party is a party thereto) and expenses,
joint or several (including reasonable costs of investigation and legal
expenses) (each, a "Loss" and collectively "Losses") arising out of or based
upon (i) any untrue or alleged untrue statement of a material fact contained in
any Registration Statement under which such Registrable Securities were
Registered under the Securities Act (including any final, preliminary or summary
Prospectus contained therein or any amendment thereof or supplement thereto or
any documents incorporated by reference therein), or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading; provided, however, that the Company shall not be liable to
any particular indemnified party (x) to the extent that any such Loss arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any such Registration Statement in reliance upon and
in conformity with written information furnished to the Company by such
indemnified party expressly for use in the preparation thereof or (y) to the
extent that any such Loss arises out of or is based upon an untrue statement or
omission in a preliminary Prospectus relating to Registrable Securities, if a
Prospectus (as then amended or supplemented) that would have cured the defect
was furnished to the indemnified party from whom the Person asserting the claim
giving rise to such Loss purchased Registrable Securities at least 5 days prior
to the written confirmation of the sale of the Registrable Securities to such
Person and a copy of such Prospectus (as amended and supplemented) was not sent
or given by or on behalf of such indemnified party to such Person at or prior to
the written confirmation of the sale of the Registrable Securities to such
Person. This indemnity shall be in addition to any liability the Company may
otherwise have. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such holder or any indemnified
party and shall survive the transfer of such securities by such holder. The
Company will also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers and directors and
17
19
each Person who controls such Persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with respect to the
indemnification of the indemnified parties.
(b) Indemnification by the Selling Holder of Registrable
Securities. Each selling holder of Registrable Securities agrees (severally and
not jointly) to indemnify and hold harmless, to the fullest extent permitted by
law, the Company, its directors and officers and each Person who controls the
Company (within the meaning of the Securities Act or the Exchange Act) from and
against any Losses resulting from (i) any untrue statement of a material fact in
any Registration Statement under which such Registrable Securities were
Registered under the Securities Act (including any final, preliminary or summary
Prospectus contained therein or any amendment thereof or supplement thereto or
any documents incorporated by reference therein), or (ii) any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or preliminary Prospectus, in
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information furnished in writing by such selling holder to the
Company specifically for inclusion in such Registration Statement and has not
been corrected in a subsequent writing prior to or concurrently with the sale of
the Registrable Securities to the Person asserting the claim. In no event shall
the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds received by such holder
under the sale of Registrable Securities giving rise to such indemnification
obligation. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above (with appropriate modification) with respect to information furnished in
writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement. Each holder also shall indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act or the
Exchange Act) to the same extent as provided above with respect to
indemnification of the Company.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (i) the indemnifying party has agreed in writing
to pay such fees or expenses, (ii) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after receipt of
notice of such claim from the Person entitled to indemnification hereunder and
employ counsel reasonably satisfactory to such Person, (iii) the indemnified
party has reasonably concluded (based upon advice of its counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, or
(iv) in the reasonable judgment of any such Person (based upon advice of its
counsel) a conflict of interest may exist between such Person and the
18
20
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). If the indemnifying party assumes the defense, the indemnifying
party shall not have the right to settle such action without the consent of the
indemnified party. No indemnifying party shall consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of an
unconditional release from all liability in respect to such claim or litigation.
If such defense is not assumed by the indemnifying party, the indemnifying party
will not be subject to any liability for any settlement made without its prior
written consent, but such consent may not be unreasonably withheld. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements or other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time from such
indemnified party or parties unless (x) the employment of more than one counsel
has been authorized in writing by the indemnifying party or parties, (y) an
indemnified party has reasonably concluded (based on the advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the other indemnified parties or (z) a conflict
or potential conflict exists or may exist (based upon advice of counsel to an
indemnified party) between such indemnified party and the other indemnified
parties, in each of which cases the indemnifying party shall be obligated to pay
the reasonable fees and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification
provided for in paragraphs (a) and (b) of this Section 2.9 is unavailable to an
indemnified party or insufficient in respect of any Losses referred to therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such Loss (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party or parties on the other hand; or (ii)
if the allocation provided by clause (i) of this Section 2.9(d) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) of this Section 2.9(d) but also the
relative fault of the indemnifying party on the one hand and the indemnified
party or parties on the other hand in connection with the acts, statements or
omissions that resulted in such losses, as well as any other relevant equitable
considerations. In connection with any Registration Statement filed with the SEC
by the Company, (x) the relative benefits received by the indemnifying on the
one hand and the indemnified party on the other hand shall be deemed to be in
the same respective proportions as the net proceeds from the offering of any
securities registered thereunder (before deducting expenses) received by the
indemnifying party and the net proceeds from the offering of any Registrable
Securities (before deducting expenses) received by the indemnified party, bear
to the aggregate public offering price of the securities registered thereunder;
and (y) the relative fault of the indemnifying party on the one hand and the
indemnified party on the other hand shall be determined by reference to, among
other things, whether any 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 indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties hereto agree that
it
19
21
would not be just or equitable if contribution pursuant to this Section 2.9(d)
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 the
immediately preceding paragraph. 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 amount paid or payable by an indemnified party
as a result of the Losses referred to in Sections 2.9(a) and 2.9(b) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 2.9(d), in connection with any Registration Statement
filed by the Company, a selling holder of Registrable Securities shall not be
required to contribute any amount in excess of the dollar amount of the proceeds
received by such holder under the sale of Registrable Securities giving rise to
such contribution obligation. If indemnification is available under this Section
2.9, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Sections 2.9(a) and 2.9(b) hereof without regard to the
relative fault of said indemnifying parties or indemnified party. The remedies
provided for in this Section 2.9 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.
2.10. Rules 144 and 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 (or, if
the Company is not required to file such reports, it will, upon the request of
any holder of Registrable Securities, make publicly available such necessary
information for so long as necessary to permit sales pursuant to Rules 144, 144A
or Regulation S under the Securities Act), and 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 (i) Rules 144, 144A or Regulation S under the
Securities Act, as such Rules may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements and, if
not, the specifics thereof.
SECTION 3. MISCELLANEOUS.
3.1. Term. This Agreement shall terminate upon the expiration
of the Shelf Period, except for the provisions of Sections 2.9 and 2.10 and all
of this Section 3, which shall survive any such termination.
3.2. Injunctive Relief. It is hereby agreed and acknowledged
that it will be impossible to measure in money the damage that would be suffered
if the parties fail to comply with any of the obligations herein imposed on them
and that in the event of any such failure, an aggrieved Person will be
irreparably damaged and will not have an adequate remedy at law. Any such Person
shall, therefore, be entitled (in addition to any other remedy to which it may
be entitled in law or in equity) to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this
20
22
Agreement, none of the parties hereto shall raise the defense that there is an
adequate remedy at law.
3.3. Attorneys' Fees. 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, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
3.4. Notices. All notices, other communications or documents
provided for or permitted to be given hereunder, shall be made in writing and
shall be given either personally by hand-delivery, by facsimile transmission, by
mailing the same in a sealed envelope, registered first-class mail, postage
prepaid, return receipt requested, or by air courier guaranteeing overnight
delivery:
(a) if to the Company:
ON Semiconductor Corporation
0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
(b) if to the Investor:
TPG ON Holdings LLC
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Each holder, by written notice given to the Company in
accordance with this Section 3.4 may change the address to which notices, other
communications or documents are to be sent to such holder. All notices, other
communications or documents shall be deemed to have been duly given: (i) at the
time delivered by hand, if personally delivered; (ii) when receipt is
acknowledged in writing by addressee, if by facsimile transmission; (iii) five
business days after being deposited in the mail, postage prepaid, if mailed by
first class mail; and (iv) on the first business day with respect to which a
reputable air courier guarantees delivery; provided, however, that notices of a
change of address shall be effective only upon receipt.
3.5. Successors, Assigns and Transferees. (a) The registration
rights of any holder under this Agreement with respect to any Registrable
Securities may be transferred and assigned, provided that, other than an
assignment to the Investor or an Affiliate of the Investor, no such assignment
shall be binding upon or obligate the Company to any such assignee unless and
until the Company shall have received notice of such assignment as herein
provided and a written agreement of the assignee to be bound by the provisions
of this Agreement.
21
23
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective successors and permitted
assigns. Whether or not any express assignment shall have been made, the
provisions of this Agreement which are for the benefit of the parties hereto
other than the Company shall also be for the benefit of and enforceable by any
subsequent holder of Registrable Securities, subject to the provisions contained
herein.
3.6. Governing Law; Service of Process; Consent to
Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WITHIN THE STATE, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
(b) To the fullest extent permitted by applicable law, each
party hereto (i) agrees that any claim, action or proceeding by such party
seeking any relief whatsoever arising out of, or in connection with, this
Agreement or the transactions contemplated hereby shall be brought only in the
United States District Court for the State of Delaware and the courts of the
State of Delaware and not in any other State or Federal court in the United
States of America or any court in any other country, (ii) agrees to submit to
the exclusive jurisdiction of such courts located in the State of Delaware for
purposes of all legal proceedings arising out of, or in connection with, this
Agreement or the transactions contemplated hereby, and (iii) irrevocably waives
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
3.7. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
3.8. Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained therein.
3.9. Amendment; Waiver.
(a) This Agreement may not be amended or modified and waivers
and consents to departures from the provisions hereof may not be given, except
by an instrument or instruments in writing making specific reference to this
Agreement and signed by the Company, the holders of a majority of Registrable
Securities then outstanding and, so long as it is a holder, the Investor;
provided, that no amendment, modification or supplement to this Agreement shall
be effective unless approved by a majority of the directors then serving on the
Board of Directors who have not previously been are not then and are not
anticipated to be a Representative of any TPG Person. Each holder of any
Registrable Securities at the time or thereafter outstanding shall
22
24
be bound by any amendment, modification, waiver or consent authorized by this
Section 3.9(a), whether or not such Registrable Securities shall have been
marked accordingly.
(b) The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. Except as otherwise expressly provided herein, no failure on the part of
any party to exercise, and no delay in exercising, any right, power or remedy
hereunder, or otherwise available in respect hereof at law or in equity, shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
3.10. Counterparts. This Agreement may be executed in any
number of separate 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 together shall constitute one and the same agreement.
3.11. Effectiveness. The provisions of this Agreement shall
take effect upon the occurrence of the Closing (as such term is defined in the
Investment Agreement) without further action by or on behalf of any party
hereto, and other than this Section 3.11 shall have no force or effect prior to
the Closing. This Agreement shall terminate and be of no further force and
effect upon the termination of the Investment Agreement.
3.12 Other Registration Rights. In the event that the Other
Holders exercise their registration rights under the Stockholders Agreement to
require the Company to Register shares held by such Other Holders in any
Registration Statement to be filed by the Company pursuant to this Agreement,
(i) the Company shall be entitled to include in such Registration Statement all
such shares that the Company is required to include therein in accordance with
the terms of the Stockholders Agreement, and (ii) any conflicting terms of this
Agreement shall be deemed to be modified, in each case to the extent necessary
to permit the Company to comply fully with its obligations under the
Stockholders Agreement.
23
25
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first written above.
ON SEMICONDUCTOR CORPORATION
By: /s/ Xxxxx Xxxxxxxx
________________________________
Name: Xxxxx Xxxxxxxx
Title: Sr. Vice President &
Chief Financial Officer
TPG ON HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
24
