1
EXHIBIT 10.9
BROADCOM CORPORATION
STOCK PURCHASE AGREEMENT
February 3, 1998
2
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock.................................................. 1
1.1 Sale and Issuance of Stock........................................... 1
1.2 The Closing.......................................................... 1
2. Representations and Warranties of the Company............................... 2
2.1 Organization and Good Standing....................................... 2
2.2 Authorization........................................................ 2
2.3 Valid Issuance of Stock.............................................. 2
2.4 Litigation........................................................... 2
2.5 Properties........................................................... 2
2.6 Compliance with Other Documents...................................... 2
3. Representations and Warranties of the Investor.............................. 3
3.1 Authorization........................................................ 3
3.2 Investigation........................................................ 3
3.3 Accredited Investor.................................................. 3
3.4 Purchase Entirely for Own Account.................................... 3
4. Conditions to the Investor's Obligation at Closing.......................... 3
4.1 Representations and Warranties....................................... 3
4.2 Securities Laws...................................................... 3
4.3 Authorizations....................................................... 3
4.4 Initial Public Offering of Common Stock.............................. 3
5. Conditions to the Company's Obligations at Closing.......................... 4
5.1 Representations and Warranties....................................... 4
5.2 Securities Laws...................................................... 4
5.3 Authorizations....................................................... 4
5.4 Initial Public Offering of Common Stock.............................. 4
5.5 Payment of Purchase Price............................................ 4
6. Covenants of the Company and the Investor................................... 4
6.1 Agreement Not to Transfer............................................ 4
6.2 Market Stand-Off..................................................... 5
6.3 Notice of Intention to Transfer...................................... 5
6.4 Standstill........................................................... 5
6.5 Voting Agreements.................................................... 6
6.6 Xxxx-Xxxxx-Xxxxxx.................................................... 6
6.7 Registration of Stock................................................ 6
3
7. Miscellaneous............................................................... 7
7.1 Governing Law........................................................ 7
7.2 Survival; Additional Securities...................................... 7
7.3 Successors and Assigns............................................... 7
7.4 Entire Agreement..................................................... 7
7.5 Notices.............................................................. 7
7.6 Amendments and Waivers............................................... 8
7.7 Legal Fees........................................................... 8
7.8 Expenses............................................................. 8
7.9 Titles and Subtitles................................................. 8
7.10 Counterparts......................................................... 8
7.11 Severability......................................................... 8
7.12 Confidentiality...................................................... 8
4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 3rd day of
February 1998, by and between Broadcom Corporation, a California corporation
(the "Company") and Cisco Systems, Inc., a Delaware Corporation (the
"Investor").
WHEREAS, the Company and the Investor are parties to a
Development and License Agreement dated as of September 1, 1996, pursuant to
which the Company has granted the Investor an option (the "Option") to purchase
shares of the Company's Common Stock in conjunction with the Company's initial
public offering (the "IPO").
WHEREAS, the Investor has indicated a desire to purchase 500,000
shares of Class A Common Stock from the Company and to have such shares
registered under the Securities Act of 1933, as amended (the "Securities Act")
concurrently with the Company's IPO.
WHEREAS, the Company has indicated a desire to sell 500,000
shares of Class A Common Stock to the Investor and has agreed to register such
shares under the Securities Act on the terms set forth herein.
WHEREAS, the Company and the Investor have agreed that the Option
shall be terminated and that this Agreement shall constitute the entire
understanding and agreement between the parties with regard to the subject
matter hereof.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Stock. Subject to the terms and
conditions of this Agreement, the Company agrees to sell to the Investor and the
Investor agrees to purchase from the Company 500,000 shares1 of the Company's
Class A Common Stock (the "Stock"), having the rights, preferences, privileges
and restrictions set forth in the form of Amended and Restated Articles of
Incorporation of the Company (the "Restated Articles") to be filed with the
California Secretary of State prior to the Closing (as defined below).
1.2 The Closing. The purchase and sale of the Stock shall be held
at the Company's offices concurrently with the closing of IPO or, if later, upon
satisfaction or waiver of each of the conditions set forth in Sections 4 and 5
(the "Closing"). At the Closing, the Company will deliver the Stock to the
Investor against payment of the purchase price therefor by
--------
1 The 500,000 shares have been calculated assuming the Company effects a
three-for-two split of its outstanding Common Stock prior to the Closing. In the
event that the Company does not effect this three-for-two stock split, the
number of shares to be purchased shall be adjusted to 333,333.
5
check payable to the order of the Company or by wire transfer. The per share
purchase price for the Stock shall be equal to the per share price paid by the
public for the Company's Class A Common Stock in the IPO, less any underwriter
discounts and commissions.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor that:
2.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and has all requisite corporate power and authority to carry
on its business as now conducted.
2.2 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder, and the authorization, issuance and
delivery of the Stock has been taken or will be taken prior to the Closing,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and by general principles of equity.
2.3 Valid Issuance of Stock. The Stock, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed,
will be duly and validly issued, fully paid and nonassessable and, based in part
upon the representations of the Investor in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
2.4 Litigation. Except as set forth in the Company's registration
statement prepared in connection with the IPO, as filed with the Securities and
Exchange Commission ("SEC") and amended from time to time (the "Registration
Statement"), there are no actions, proceedings or investigations pending or, to
the best of Company's knowledge, any basis therefor or threat thereof, against
or affecting the Company, that, either in any case or in the aggregate, would
result in any material adverse change in the business, financial condition, or
results of operations of the Company.
2.5 Properties. To the best of the Company's knowledge (but
without having conducted any special investigation), the Company has (i) good
and marketable title to its properties and assets and has good title to all its
leasehold interests, and (ii) sufficient title, license and/or ownership of all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for its business as now
conducted on the date hereof.
2.6 Compliance with Other Documents. The execution and delivery
of this Agreement, consummation of the transactions contemplated hereby, and
compliance with the terms and provisions hereof will not conflict with or result
in a breach of the terms and conditions of, or constitute a default under the
Restated Articles or Bylaws of the Company or of any contract or agreement to
which the Company is now a party, except where such conflict, breach or default
of any such contract or agreement, either individually or in the aggregate,
would not have a material adverse effect on the Company's business, financial
condition or results of operations.
2
6
3. Representations and Warranties of the Investor. The Investor
hereby represents and warrants that:
3.1 Authorization. This Agreement constitutes the valid and
legally binding obligation of the Investor, enforceable in accordance with its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and by general principles of equity.
3.2 Investigation. The Investor acknowledges that it has had an
opportunity to discuss the business, affairs and current prospects of the
Company with the Company's president. The Investor further acknowledges having
had access to information about the Company that it has requested or considers
necessary for purposes of purchasing the Stock.
3.3 Accredited Investor. The Investor is an "accredited investor"
as such term is defined in Regulation D adopted by the SEC.
3.4 Purchase Entirely for Own Account. This Agreement is made
with the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Stock will be acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
4. Conditions to the Investor's Obligation at Closing. The
obligation of the Investor to purchase the Stock at the Closing is subject to
the fulfillment to the Investor's satisfaction on or prior to the Closing of the
following conditions:
4.1 Representations and Warranties. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct
when made, and shall be true and correct as of the Closing with the same force
and effect as if they had been made on and as of such date, subject to changes
contemplated by this Agreement.
4.2 Securities Laws. The offer and sale of the Stock to the
Investor pursuant to this Agreement shall be either (i) registered under the
Securities Act, or (ii) exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all
applicable state securities laws.
4.3 Authorizations. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement (including, if applicable, the expiration of any waiting period under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act")) shall have been duly obtained and shall be effective on and as of the
Closing.
4.4 Initial Public Offering of Common Stock. The initial public
offering of the Company's Class A Common Stock shall have occurred.
3
7
5. Conditions to the Company's Obligations at Closing. The
obligation of the Company to sell the Stock at the Closing is subject to the
fulfillment to the Company's satisfaction on or prior to the Closing of the
following conditions:
5.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 hereof shall be true as of the
Closing with the same force and effect as if they had been made on and as of
such date, subject to changes contemplated by this Agreement.
5.2 Securities Laws. The offer and sale of the Stock to the
Investor pursuant to this Agreement shall be either (i) registered under the
Securities Act, or (ii) exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all
applicable state securities laws.
5.3 Authorizations. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement (including, if applicable, the expiration of any waiting period under
the HSR Act) shall have been duly obtained and shall be effective on and as of
the Closing.
5.4 Initial Public Offering of Common Stock. The initial public
offering of the Company's Common Stock shall have occurred.
5.5 Payment of Purchase Price. The Investor shall have delivered
to the Company the purchase price for the Stock as set forth in Section 1.2
hereof.
6. Covenants of the Company and the Investor.
6.1 Agreement Not to Transfer.
(a) Prior to the first anniversary of the Closing, the Investor
shall not, directly or indirectly, Transfer or offer to Transfer any shares of
the Stock.
(b) Following the first anniversary of the Closing and prior to
the second anniversary of the Closing, the Investor shall not, directly or
indirectly, Transfer or offer to Transfer, in the aggregate, more than 250,000
shares of the Stock during any one calendar quarter.
(c) Notwithstanding the foregoing restrictions on Transfer (the
"Transfer Restrictions"), the Transfer Restrictions shall be ineffective in the
event (i) an unrelated third party has publicly announced and is actively
pursuing the purchase of all or substantially all of the assets or capital stock
of the Company or a merger in which the Company would not be the surviving
corporation; provided, that if such acquisition or merger is not consummated
within sixty days of such public announcement, the Transfer Restrictions shall
be reinstated, or (ii) Dr. Xxxxx Xxxxxxx and Xx. Xxxxx Xxxxxxxx have a material
conflicting operational or management role in another company or are no longer
in a position to influence management or operating responsibilities at
4
8
the Company (a "Key Executive Loss"), it being understood that the Company's
retention of additional management shall not by itself be deemed a Key Executive
Loss.
(d) In order to enforce the Transfer Restrictions, the Company
may impose stop-transfer instructions with respect to the Stock until the end of
the restricted period.
(e) As used in this Agreement, the term "Transfer" shall mean any
sale, transfer, assignment, hypothecation, encumbrance or other disposition,
whether voluntary or involuntary, of shares of the Stock. In the case of a
hypothecation, the Transfer shall be deemed to occur both at the time of the
initial pledge and at any pledgee's sale or a sale by any secured creditor or a
retention by the secured creditor of the pledged shares of the Stock in complete
or partial satisfaction of the indebtedness for which the shares of the Stock
are security.
6.2 Market Stand-Off. In addition to the Transfer Restrictions
(which shall in no way be limited by the following), in connection with any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act, the Investor
shall not Transfer or offer to Transfer any shares of the Stock without the
prior written consent of the Company and its underwriters. Such restriction (the
"Market Stand-Off") shall be in effect for such period of time from and after
the effective date of the final prospectus for the offering as may be requested
by the Company or such underwriters; provided, however, that (i) such Market
Stand-Off shall not exceed one hundred eighty (180) days, and (ii) the Investor
shall be subject to the Market Stand-Off only if the officers and directors of
the Company are also subject to similar restrictions. In order to enforce the
Market Stand-Off, the Company may impose stop-transfer instructions with respect
to the Stock until the end of the applicable stand-off period.
6.3 Notice of Intention to Transfer. On or prior to the third
anniversary of the Closing, in the event the Investor plans to Transfer in the
aggregate more than 100,000 shares of the Stock in one or more transactions
during any three (3) month period, the Investor shall use its best efforts to
inform the Company of such intention to Transfer such shares ten (10) days prior
to such Transfer.
6.4 Standstill. The Investor agrees that, prior to the third
anniversary of the Closing, unless specifically invited by the Company, the
Investor will not, in any manner, directly or indirectly, effect any acquisition
of Voting Securities (as hereinafter defined), or beneficial ownership thereof
if, immediately after any such acquisition, the Investor would beneficially own,
in the aggregate, Voting Securities representing more than ten percent (10%) of
the outstanding Common Stock of the Company. The Investor also agrees during
such period not to make any public request (or publicize any request) of the
Company (or its directors, officers, employees or agents), directly or
indirectly, to amend or waive any provision of this Section 6.4 (including this
sentence). The Investor also agrees not to form, join or in any way participate
in a "group" (as defined under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), or take any other action, in order to circumvent the
provisions of this Section 6.4.
For purposes of this Agreement, (i) the term "Voting Securities"
shall refer to all securities of the Company entitled to vote generally for the
election of directors, and (ii) the term
5
9
"beneficial ownership" shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.
The restrictions set forth in this Section 6.4 shall be
ineffective upon the occurrence of either of the following events: (i) an
unrelated third party has publicly announced and is actively pursuing the
purchase of all or substantially all of the assets or capital stock of the
Company or a merger in which the Company would not be the surviving corporation;
or (ii) an officer of the Company, duly authorized by the Company's Board of
Directors, has informed the Investor in writing of the Company's potential
interest in entering into a sale of all or substantially all of its assets or
stock or a merger in which the Company would not be the surviving corporation;
provided, however, that if such acquisition, merger or sale is not consummated
within sixty days of such public announcement (in the case of clause (i)) or of
such notice in writing (in the case of clause (ii)), the restrictions set forth
in this Section 6.4 shall be reinstated.
6.5 Voting Agreements. For a period ending on the later of (a)
the seventh anniversary of the Closing, (b) the expiration of any and all
agreements between the Company and the Investor, including but not limited to
the Development and License Agreement dated as of September 1, 1996, future
co-development agreements, ASIC volume purchase and supply agreements, and any
extensions or modifications of the foregoing, or (c) the Investor's ceasing to
make a regular pattern of ASIC purchases from the Company, the Investor agrees
to vote all shares of Voting Securities owned by it (i) in each election of
directors for the entire slate of nominees recommended by the Company's Board of
Directors to the Company's shareholders and (ii) on all other matters to be
voted on by holders of Voting Securities, unless the Company otherwise consents
in writing, in the same proportion as the votes cast by all other shareholders
of the Company entitled to vote on such matter (other than the Investor). The
Investor, as a holder of Voting Securities, shall be present, in person or by
proxy, at all meetings of shareholders of the Company so that all shares of
Voting Securities beneficially owned by it may be counted for the purpose of
determining the presence of a quorum at such meetings.
The voting agreements set forth in this Section 6.5 shall
terminate immediately upon the occurrence of either of the following events: (i)
an unrelated third party has publicly announced and is actively pursuing the
purchase of all or substantially all of the assets or capital stock of the
Company or a merger in which the Company would not be the surviving corporation;
or (ii) a Key Executive Loss has occurred; provided, however, that if in the
case of clause (i) such acquisition, merger or sale is not consummated within
sixty days of such public announcement, the voting agreements set forth in this
Section 6.5 shall be reinstated.
6.6 Xxxx-Xxxxx-Xxxxxx. The Company and the Investor will assist
and cooperate with each other regarding any filings required under the HSR Act
and any other applicable laws and regulations. The Company and the Investor each
agree to make any HSR Act and other filings promptly upon the other's request.
6.7 Registration of Stock. The Company agrees that, to the extent
allowed by the SEC, it will register the Stock in the IPO. If the Company is not
able to register the Stock in the IPO, the Company agrees that, upon request by
the Investor, it will effect registration of the Stock in accordance with the
provisions contained in Exhibit A attached hereto. If the Company
6
10
is not able to register the Stock in the IPO, the Investor understands and
agrees that (i) the Stock will be characterized as "restricted securities" under
the federal securities laws inasmuch as it is being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances, and (ii) each
certificate representing the Stock and any other securities issued in respect of
the Stock upon any stock split, stock dividend, recapitalization, merger or
similar event (unless no longer required in the opinion of counsel for the
Company) shall be stamped or otherwise imprinted with appropriate legends
mandated by federal and state securities laws.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California, without regard to the conflict of law provisions thereof.
7.2 Survival; Additional Securities. The representations and
warranties set forth in Sections 2 and 3 shall survive until the Closing. The
covenants and agreements set forth in Section 6 shall survive in accordance with
their terms. Any new, substituted or additional securities which are by reason
of any stock split, stock dividend, recapitalization or reorganization
distributed with respect to the Stock ("Stock Distributions") shall be
immediately subject to the covenants and agreements set forth in Section 6 to
the same extent the Stock is at such time covered by such provisions.
7.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Notwithstanding
anything to the contrary contained herein, the covenants set forth in Section 6
shall not be binding upon any entity (other than an affiliate of the Investor)
which acquires any shares of the Stock or a Stock Distribution in a transaction
permitted hereunder.
7.4 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties with regard to the subject
matter hereof.
7.5 Notices. Except as otherwise provided, all notices and other
communications required or permitted hereunder shall be in writing, shall be
effective when given, and shall in any event be deemed to be given upon receipt
or, if earlier, (i) five (5) days after deposit with the U.S. postal service or
other applicable postal service, if delivered by first class mail, postage
prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1) business day
after the day of deposit with Federal Express or similar overnight courier,
freight prepaid, if delivered by overnight courier or (iv) one (1) business day
after the day of facsimile transmission, if delivered by facsimile transmission
with copy by first class mail, postage prepaid, and shall be addressed,
7
11
(a) if to the Investor, at the Investor's address set forth below its signature,
or at such other address as the Investor shall have furnished to the Company in
writing, or (b) if to the Company, at its address as set forth below its
signature, or at such other address as the Company shall have furnished to the
Investor in writing.
7.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Investor.
7.7 Legal Fees. In the event of any action at law, suit in equity
or arbitration proceeding in relation to this Agreement or the Stock or any
Stock Distribution, the prevailing party shall be paid by the other party a
reasonable sum for the attorneys' fees and expenses incurred by such prevailing
party.
7.8 Expenses. Irrespective of whether the Closing is effected,
the Company and the Investor shall each pay their own costs and expenses
incurred with respect to the negotiation, execution, delivery and performance of
this Agreement.
7.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.11 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.12 Confidentiality. The parties hereto agree that, except with
the prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish, or make accessible to anyone any
confidential information, knowledge, or data concerning or relating to the
business or financial affairs of such other party to which said party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, or the performance of its obligations hereunder.
[Signature Page to Follow]
8
12
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year hereinabove first written.
BROADCOM CORPORATION
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, President
-------------------------------------
By: Xxxxx X. Xxxxxxxx, President
CISCO SYSTEMS, INC.
000 X. Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxxx, General Counsel
-------------------------------------
By:
9
13
EXHIBIT A
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Exhibit A, capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Stock Purchase Agreement between the Company and the Investor to
which this Exhibit A is attached. In addition, the following terms used herein
shall have the following meanings:
(a) The term "Form S-1" means such form under the Act as
in effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(b) The term "Form S-3" means such form under the Act as
in effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "1934 Act" means the Securities Exchange Act
of 1934, as amended.
(d) The term "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
1.2 Request for Registration.
(a) If the Company shall receive, at any time after one
year following the Closing, a written request from the Investor that the Company
effect a registration on a Form S-3 and any related qualification or compliance
with respect to the Stock, then the Company shall, as expeditiously as
reasonably possible, effect the registration of all, but not less than all, such
Stock on Form S-3 and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and distribution of all of
the Stock. The Company shall have no obligation to effect any registration of
less than all of the Stock.
(b) Notwithstanding anything to the contrary in this
Section 1.2, the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.2: (i) if the Company
shall furnish to the Investor a certificate signed by the President of the
Company stating that, in the good faith judgment of the Board of Directors of
the Company, such registration should be deferred due to material events
directly relating to the Company, in which event the Company shall have the
right to defer the filing of the Form S-3 for a period of not more than 90 days
after receipt of the request of the Investor under this Section
A-1
14
1.2 (provided, however, that the Company may defer such registration only once);
or (ii) in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) If Form S-3 is not available to the Company to effect
the registration of the Stock as contemplated by this Section 1.2, then (i) the
Company shall effect such registration on Form S-1 and (ii) in such event, all
references in this Section 1 to Form S-3 shall be read as references to Form
S-1.
(d) The Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2 after
the earlier to occur of the following events: (i) the Company has effected one
registration pursuant to this Section 1.2, and such registration has been
declared or ordered effective and otherwise satisfies and continues to satisfy
the terms and conditions of this Section 1.2; or (ii) the Company has
voluntarily effected the registration of all of the Stock without having first
received a request for such registration pursuant to this Section 1.2 (a
"Voluntary Registration"), and such Voluntary Registration has been declared or
ordered effective and otherwise satisfies and continues to satisfy the terms and
conditions of this Section 1.2.
1.3 Obligations of the Company. Whenever required under Section
1.2 to effect the registration on Form S-3 of the Stock, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a Form S-3 with respect
to such Stock and use its best efforts to cause such registration statement to
become effective as soon as reasonably practicable after the mailing of the
request for such registration but in no event later than ninety (90) days after
such mailing. The Company shall keep such registration statement effective until
the earlier of (i) two (2) years after the Closing, (ii) the distribution of all
of the Stock as contemplated in the registration statement has been completed,
and (iii) the date which all shares of the Stock held by the Investor may
immediately be sold under Rule 144 during any 90-day period.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Stock.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investor; provided that the Company shall not be required in
A-2
15
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) Notify the Investor covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(f) Cause all such Stock registered pursuant hereunder to
be listed on each securities exchange on which similar securities issued by the
Company are then listed.
(g) Provide a transfer agent and registrar for all of the
Stock registered pursuant hereunder and a CUSIP number for all such Stock, in
each case not later than the effective date of such registration.
1.4 Investor Obligation to Furnish Information. It shall be a
condition precedent to the obligations of the Company to take any action
pursuant hereto with respect to the Stock that the Investor shall furnish to the
Company such information regarding itself, the Stock, and the intended method of
disposition of such securities as shall be required to effect the registration
of such Stock.
1.5 Expenses of Registration. All expenses incurred in connection
with registrations, filings or qualifications pursuant hereto, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the Investor hereunder but excluding the fees and disbursements of
any other counsel for the Investor) shall be borne by the Company; provided,
however, that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant hereto if the registration request is
subsequently withdrawn at the request of the Investor, unless the Investor
agrees to forfeit its right to any demand registration pursuant hereto; provided
further, however, that if at the time of such withdrawal, the Investor has
learned of a material adverse change in the condition, business, or prospects of
the Company from that known to the Investor at the time of its request and has
withdrawn the request with reasonable promptness following disclosure by the
Company of such material adverse change, then the Investor shall not be required
to pay any of such expenses and shall retain its right of registration pursuant
to Section 1.2.
1.6 Indemnification. In the event any Stock is included in a
registration statement under Section 1.2:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless the Investor, any underwriter (as defined in the
Act) for the Investor and each person, if any, who controls the Investor or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims,
A-3
16
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) 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, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will pay to the Investor, or such underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection (a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability, or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Investor, underwriter or controlling person.
(b) To the extent permitted by law, the Investor will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, and any
controlling person of any such underwriter, against any losses, claims, damages,
or liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Investor expressly for
use in connection with such registration; and each such Investor will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection (b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection (b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Investor, which consent shall not be unreasonably withheld; provided, that, in
no event shall any indemnity under this subsection (b) exceed the gross proceeds
from the offering received by the Investor.
(c) Promptly after receipt by an indemnified party under
this Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by
A-4
17
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.6, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.6.
(d) If the indemnification provided for in this Section
1.6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
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.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and the Investor under
this Section 1.6 shall survive the completion of any offering of the Stock in a
registration statement pursuant hereto, and otherwise.
1.7 Termination. The Company's obligation to register the Stock
pursuant to this agreement shall terminate on the earlier of (i) the second
anniversary of the Closing and (ii) the date on which all shares of the Stock
held by the Investor may immediately be sold under Rule 144 during any 90-day
period.
A-5
