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WARRANT
REGISTRATION RIGHTS AGREEMENT
Dated as of April 2, 1998
Among
CONVERGENT COMMUNICATIONS, INC.,
THE PERMITTED HOLDERS (as defined herein)
and
XXXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED,
BEAR, XXXXXXX & CO. INC.,
BT ALEX. XXXXX INCORPORATED
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TABLE OF CONTENTS
Page
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Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 (a) Demand Registration . . . . . . . . . . . . . . . . . . . . . . 7
(b) Effective Registration . . . . . . . . . . . . . . . . . . . . 8
(c) Restrictions on Sale by Holders. . . . . . . . . . . . . . . . 8
(d) Selection of Underwriter.. . . . . . . . . . . . . . . . . . . 9
(e) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 (a) Piggy-Back Registration . . . . . . . . . . . . . . . . . . . . 9
(b) Priority in Piggy-Back Registration. . . . . . . . . . . . . . 10
(c) Restrictions on Sale by Holders. . . . . . . . . . . . . . . . 11
2.3 Limitations, Conditions and Qualifications to Obligations Under
Registration Covenants . . . . . . . . . . . . . . . . . . . . 12
2.4 Restrictions on Sale by the Company and Others . . . . . . . . . . . 14
2.5 Rule 144 and Rule 144A . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Underwritten Registrations . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.3 Drag-Along Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5. Indemnification and Contribution. . . . . . . . . . . . . . . . . . . . 24
Section 6. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . 28
(c) No Piggy-Back on Demand Registrations. . . . . . . . . . . . . 28
(d) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 28
(e) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Successors and Assigns . . . . . . . . . . . . . . . . . . . . 29
(g) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 29
(j) Severability . . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(l) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 30
(m) Securities Held by the Company or Its Affiliates . . . . . . . 30
WARRANT REGISTRATION RIGHTS AGREEMENT
This WARRANT REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made
and entered into as of April 2, 1998, by and among CONVERGENT COMMUNICATIONS,
INC., a Colorado corporation (the "COMPANY"), the Permitted Holders (as
defined), and XXXXXXX XXXXX & CO., XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED ("XXXXXXX XXXXX"), BEAR, XXXXXXX & CO. INC. ("BEAR, XXXXXXX") and
BT ALEX. XXXXX INCORPORATED ("BT" and, together with Xxxxxxx Xxxxx and Bear,
Xxxxxxx, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement dated March
26, 1998 among the Company and the Initial Purchasers (the "PURCHASE
AGREEMENT"), with respect to the issue and sale by the Company and the purchase
by the Initial Purchasers, severally, of the respective number of the Company's
Units (the "UNITS"), each Unit consisting of $1,000 aggregate principal amount
of the Company's 13% Senior Notes due 2008 (the "NOTES") and four warrants (the
"WARRANTS"), each Warrant initially entitling the holder thereof to purchase 2.7
shares of common stock, no par value, of the Company (1,728,000 shares of Common
Stock in the aggregate), set forth opposite such Initial Purchaser's name on
Schedule A to the Purchase Agreement. In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Company has agreed to provide to the
Initial Purchasers and their respective direct and indirect transferees and
assigns the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
Section 1. DEFINITIONS. As used in this Agreement, the following
defined terms shall have the following meanings:
"ADVICE" has the meaning ascribed to such term in Section 4 hereof.
"AFFILIATE" of any specified Person means any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For the purposes of
this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms "affiliated," "controlling" and "controlled"
have meanings correlative to the foregoing.
"AGREEMENT" shall have the meaning ascribed to such term in the
preamble hereto.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
"CAPITAL STOCK" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting and/or non-voting) of, such Person's capital
stock, whether outstanding on the Issue Date or issued after the Issue
Date, and any and all rights (other than any evidence of Indebtedness),
warrants or options exchangeable for or convertible into such capital
stock.
"CHANGE OF CONTROL" shall have the meaning ascribed to such term in
the Indenture.
"COMPANY" shall have the meaning ascribed to such term in the preamble
of this Agreement and shall also include the Company's permitted successors
and assigns.
"COMMON STOCK" shall mean the Company's Common Stock, no par value,
and any other class or series of common equity equivalent shares of the
Company hereafter created.
"CONVERTIBLE PREFERRED STOCK" shall mean any securities convertible or
exercisable or exchangeable into Common Stock of the Company, whether
outstanding on the date hereof or thereafter issued.
"CURRENT MARKET VALUE" shall have the meaning ascribed to such term in
the Warrant Agreement.
"DEMAND REGISTRATION" shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
"DRAG-ALONG RIGHT" shall have the meaning ascribed to such term in
Section 3.3(a) hereof.
"DTC" shall have the meaning ascribed to such term in Section 4(i)
hereof.
"EFFECTIVENESS PERIOD" shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"FAIR MARKET VALUE" shall mean the value of any securities as
determined (without any discount for lack of liquidity, the amount of such
securities proposed to be sold or the fact that such securities held by any
Holder of such security may represent a minority interest in a private
company) by a nationally recognized investment banking firm selected by the
Company for the determination of such value.
"HOLDER" shall mean each holder (including the Initial Purchasers) of
any Warrants, Warrant Shares or Registrable Securities, and each of their
successors, assigns and direct and
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indirect transferees who become registered owners of such Warrants, Warrant
Shares or Registrable Securities.
"INCLUDED SECURITIES" shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
"INDENTURE" shall mean the Indenture, dated as of the date hereof,
between the Company and Norwest Bank Colorado, N.A., as Trustee, pursuant
to which the Notes are issued.
"INITIAL PUBLIC EQUITY OFFERING" shall mean a primary public offering
(whether or not underwritten, but excluding any offering pursuant to Form
S-8 under the Securities Act or any other publicly registered offering
pursuant to the Securities Act pertaining to an issuance of shares of
Common Stock or securities exercisable therefor under any benefit plan,
employee compensation plan, or employee or director stock purchase plan) of
Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"INITIAL PURCHASERS" shall have the meaning ascribed to such term in
the preamble hereof.
"INSPECTORS" shall have the meaning ascribed to such term in Section
4(m) hereof.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on which
(i) banking institutions in The City of New York are required or authorized
by law or other government action to be closed and (ii) the principal U.S.
securities exchange or market, if any, on which any Common Stock is listed
or admitted to trading and the principal U.S. securities exchange or
market, if any, on which the Warrants are listed or admitted to trading are
closed for business.
"XXXXXXX XXXXX" shall have the meaning ascribed to such term in the
preamble hereto.
"NOTES" shall have the meaning ascribed to such term in the preamble
hereto.
"PARTICIPATING HOLDER" shall have the meaning ascribed to such term in
Section 3.2(c) hereof.
"PERMITTED HOLDERS" shall have the meaning ascribed to such term in
the Indenture.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
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"PIGGY-BACK REGISTRATION" shall have the meaning ascribed to such term
in Section 2.2(a) hereof.
"PROPOSED PURCHASER" shall have the meaning ascribed to such term in
Section 3.2(a) hereof.
"PROSPECTUS" shall mean the prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"PURCHASE AGREEMENT" shall have the meaning ascribed to such term in
the preamble hereof.
"REGISTRABLE SECURITIES" shall mean any of (i) the Common Stock issued
and issuable upon exercise of the Warrants and (ii) any other securities
issued or issuable with respect to the Warrants or Warrant Shares by way of
stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (a) a registration statement
with respect to the offering of such securities by the holder thereof shall
have been declared effective under the Securities Act and such securities
shall have been disposed of by such holder pursuant to such registration
statement, (b) such securities have been sold to the public pursuant to, or
are eligible for sale to the public without volume or manner of sale
restrictions under, Rule 144(k) (or any similar provision then in force,
but not Rule 144A) promulgated under the Securities Act, (c) such
securities shall have been otherwise transferred and new certificates for
such securities not bearing a legend restricting further transfer shall
have been delivered by the Company or its transfer agent and subsequent
disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in
force, or (d) such securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. ("NASD") registration and filing fees and
expenses, (ii) all fees and expenses incurred in connection with compliance
with state or other securities or blue sky laws and compliance with the
rules of the NASD (including, without limitation, reasonable fees and
disbursements of United States and local counsel for any underwriters and
Holders in connection with state or other securities or blue sky
qualification of any of the Registrable Securities), (iii) all expenses
(including, without limitation, all word processing, distribution,
messenger, telephone and
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delivery expenses) of any Persons in preparing, printing and distributing
any documents relating to the performance of and compliance with this
Agreement, (iv) all fees and disbursements of counsel for the Company and
all independent certified public accountants, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, (v) premiums and other costs of insurance
against liabilities arising out of the public offering of the Registrable
Securities being registered, (vi) the fees and expenses of a "qualified
independent underwriter" as defined by Conduct Rule 2720 of the NASD, if
required by the NASD rules, in connection with the offering of the
Registrable Securities and (vii) the reasonable fees and expenses of the
Registrar and Transfer Agent, including its counsel. Notwithstanding the
foregoing, the holders of the Registrable Securities being registered shall
pay all agency or brokerage fees and commissions and underwriting discounts
and commissions attributable to the sale of such Registrable Securities and
the fees and disbursements of any counsel or other advisors or experts
retained by such holders (severally or jointly), other than the reasonable
fees and disbursements of (A) one counsel for the Holders (which counsel
shall be selected by a majority of the Holders participating in the
offering of the Registrable Securities and may be counsel for the Initial
Purchasers or counsel for the Company) and (B) experts retained by the
Company in connection with any Registration Statement, transfer taxes on
resale of any of the Registrable Securities by such holders and any
advertising expenses customarily required to be paid by issuers or sellers
of securities.
"REGISTRATION STATEMENT" shall mean any appropriate registration
statement of the Company filed with the SEC pursuant to the Securities Act
which covers any of the Subject Equity pursuant to the provisions of this
Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other
than Rule 144A) or regulation hereafter adopted by the SEC providing for
offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an issuer
of such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
"RULE 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other
than Rule 144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
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"SELLING HOLDER" shall mean a Holder who is selling Subject Equity or
Registrable Securities in accordance with the provisions of Section 2.1 or
2.2, respectively, hereof.
"SUBJECT EQUITY" shall have the meaning ascribed to such term in
Section 2.1(a) hereof.
"SUSPENSION PERIOD" shall have the meaning ascribed to such term in
Section 2.3(a) hereof.
"TAG-ALONG NOTICE" shall have the meaning ascribed to such term in
Section 3.2(c) hereof.
"TAG-ALONG RIGHT" shall have the meaning ascribed to such term in
Section 3.2(a) hereof.
"TRANSFER" shall have the meaning ascribed to such term in Section
3.2(a) hereof.
"TRANSFER NOTICE" shall have the meaning ascribed to such term in
Section 3.2(c) hereof.
"TRIGGERING DATE" shall mean the date of the consummation of a BONA
FIDE underwritten public offering of Common Stock, as a result of which at
least 20% of the outstanding shares of Common Stock are listed on a U.S.
national securities exchange or The Nasdaq National Market.
"UNITS" shall have the meaning ascribed to such term in the preamble
of this Agreement.
"WARRANT AGENT" shall mean American Stock Transfer & Trust Company and
any successor warrant agent for the Warrants pursuant to the Warrant
Agreement.
"WARRANT AGREEMENT" shall mean the Warrant Agreement dated as of the
date hereof, between the Company and the Warrant Agent, as amended or
supplemented from time to time in accordance with the terms thereof.
"WARRANT SHARES" shall mean shares of Common Stock issuable upon
exercise of the Warrants at an exercise price of $0.01 per share, subject
to adjustment as provided in the Warrant Agreement.
"WARRANTS" shall have the meaning ascribed to such term in the
preamble hereto.
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Section 2. REGISTRATION RIGHTS.
2.1 (a) DEMAND REGISTRATION. After the occurrence of an Exercise
Event (as such term is defined in the Warrant Agreement), the holders of a
number of Warrants, Warrant Shares and Registrable Securities (the "SUBJECT
EQUITY") equivalent to at least a majority of the outstanding Subject Equity,
from time to time, may make a written request to the Company to effect one
registration (a "DEMAND REGISTRATION") under the Securities Act of the Subject
Equity. Within 20 days after the receipt of such written request for a Demand
Registration, the Company shall notify the Holders of all Subject Equity that a
Demand Registration has been requested. In addition, the Company shall
(i) prepare, file with the SEC and use its best efforts to cause to become
effective under the Securities Act within 150 days of such demand a Registration
Statement with respect to such Subject Equity and (ii) keep such Registration
Statement continuously effective until the earlier to occur of (A) the date that
is 60 days after such effectiveness (the "EFFECTIVENESS PERIOD") and (B) such
period of time as all of the Subject Equity included in such registration
statement shall have been sold thereunder. Any such request will specify the
number of shares of Subject Equity proposed to be sold and will also specify the
intended method of disposition thereof. Within 30 days after receipt by any
Holder of Subject Equity of such notice from the Company, such Holder may
request in writing that such Holder's Subject Equity be included in such
Registration Statement and the Company shall include in such Registration
Statement the Subject Equity of any such Holder requested to be so included (the
"INCLUDED SECURITIES"). Each such request by such other Holders shall specify
the number of Included Securities proposed to be sold and the intended method of
disposition thereof. Subject to Section 2.1(b) hereof, the Company shall be
required to effect a Demand Registration of Subject Equity pursuant to this
Section 2.1(a) on one occasion.
If such demand occurs during the "lock up" or "black out" period (not
to exceed 180 days) imposed on the Company pursuant to or in connection with any
underwriting or purchase agreement relating to an underwritten Rule 144A or
registered public offering of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock, the Company shall not be required
to so notify holders of Subject Equity and file such Demand Registration
Statement prior to the end of such "lock up" or "black out" period, in which
event the Company will use its best efforts to cause such Demand Registration
statement to become effective no later than the later of (i) 150 days after such
demand or (ii) 30 days after the end of such "lock up" or "black out" period.
In the event of any "lock up" or "black out" period or any underwriting or other
purchase agreement, the Company shall so notify the holders of Registrable
Securities.
Notwithstanding the foregoing, in lieu of filing and causing to become
effective a Demand Registration, the Company may satisfy its obligation with
respect to such Demand Registration by making and consummating (or having its
designee make and consummate) an offer to purchase all Subject Equity at a price
at least equal to Current Market Value (as defined in the Warrant Agreement, but
without the inclusion of clause (i)(a) thereof), less any applicable Exercise
Price.
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(b) EFFECTIVE REGISTRATION. A Registration Statement shall not be
deemed to have been effected as a Demand Registration unless it shall have been
declared effective by the SEC, no later than the later of (i) 150 days after the
request for a Demand Registration or (ii) 30 days after the end of any "lock up"
or "black out" period described in Section 2.1(a) hereof and the Company has
complied in all material respects with all of its obligations under this
Agreement with respect thereto; PROVIDED, HOWEVER, that if, after such
Registration Statement has become effective, the offering of Subject Equity
pursuant to such Registration Statement is or becomes the subject of any stop
order, injunction or other order or requirement of the SEC or any other
governmental, judicial or administrative order or requirement that prevents,
restrains or otherwise limits the sale of Subject Equity pursuant to such
Registration Statement for any reason not attributable to any Holder
participating in such registration, and such Registration Statement has not
become effective within a reasonable time period thereafter, such Registration
Statement shall be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 2.1 is deemed not to have been effected or
(ii) a Demand Registration does not remain effective under the Securities Act
until at least the earlier of (A) an aggregate of 60 days (subject to Section
2.3 herein) after the effective date thereof or (B) the consummation of the
distribution by the Holders of all of the Subject Equity covered thereby, then
such Demand Registration shall not count towards determining if the Company has
satisfied its obligation to effect one Demand Registration pursuant to this
Section 2.1. For purposes of calculating the 60-day period referred to in the
preceding sentence, any period of time during which such Registration Statement
was not in effect shall be excluded. The Holders of Subject Equity shall be
permitted to withdraw all or any part of the Registrable Securities from a
Demand Registration. Notwithstanding any such withdrawal by a Holder of Subject
Equity, if the Company has complied with all of its obligations hereunder and
has effected a Demand Registration within 150 days after the request for a
Demand Registration, such withdrawal shall not require the Company to effect any
additional Demand Registrations.
(c) RESTRICTIONS ON SALE BY HOLDERS. Each Holder of Warrants and
Registrable Securities whose Warrants and Registrable Securities are covered by
a Registration Statement filed pursuant to this Section 2.1 and are to be sold
thereunder agrees, if and to the extent reasonably requested by the managing
underwriter or underwriters in an underwritten public offering, not to effect
any public sale or distribution of Warrants and Registrable Securities or of
securities of the Company of the same class as any securities included in such
Registration Statement, including a sale pursuant to Rule 144 (except as part of
such underwritten offering), during the 30-day period prior to, and during the
180-day period beginning on, the closing date of each underwritten offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or such managing underwriter or underwriters.
The foregoing provisions of Section 2.1(c) shall not apply to any
Holders of Warrants and Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
PROVIDED, HOWEVER, that any such Holder shall undertake, in its request to
participate in any such underwritten offering, not to effect any public sale or
distribution of any Warrants and Registrable Securities commencing on the date
of sale of such Warrants and
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Registrable Securities unless it has provided 45 days' prior written notice of
such sale or distribution to the managing underwriter or underwriters.
(d) SELECTION OF UNDERWRITER. If the Holders so elect, the offering
of such Subject Equity pursuant to such Demand Registration shall be in the form
of an underwritten offering. The Holders making such Demand Registration shall
select one or more nationally recognized firms of investment bankers, who shall
be reasonably acceptable to the Company, to act as the managing underwriter or
underwriters in connection with such offering and shall select any additional
investment bankers and managers to be used in connection with the offering.
(e) EXPENSES. The Company will pay all Registration Expenses in
connection with the registration requested pursuant to Section 2.1(a) hereof.
Each Holder of Subject Equity shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Subject Equity pursuant to a Registration Statement requested
pursuant to this Section 2.1.
2.2 (a) PIGGY-BACK REGISTRATION. If at any time the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any of
its securityholders of Common Stock (other than (i) a registration statement on
Form S-4 or S-8 (or any substitute form that may be adopted by the SEC) or any
other publicly registered offering pursuant to the Securities Act pertaining to
the issuance of shares of Capital Stock or securities exercisable therefor under
any benefit plan, employee compensation plan, or employee or director stock
purchase plan, (ii) a registration statement filed in connection with an offer
of securities solely to the Company's existing securityholders or (iii) a Demand
Registration), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event fewer than 15 days before the anticipated filing date or 10 days if the
Company is subject to filing reports under the Exchange Act and able to use Form
S-3 under the Securities Act), and such notice shall offer such Holders the
opportunity to register such number of shares of Registrable Securities as each
such Holder may request in writing within 12 days (or eight days if the Company
is subject to filing reports under the Exchange Act and able to use Form S-3
under the Securities Act) after receipt of such written notice from the Company
(which request shall specify the Registrable Securities intended to be disposed
of by such Selling Holder and the intended method of distribution thereof) (a
"PIGGY-BACK REGISTRATION"). The Company shall use its best efforts to keep such
Piggy-Back Registration continuously effective under the Securities Act in the
qualifying jurisdictions until at least the earlier of (A) 60 days after the
effective date thereof or (B) the consummation of the distribution by the
Holders of all of the Registrable Securities covered thereby. The Company shall
use its best efforts to cause the managing underwriter or underwriters, if any,
of such proposed offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other securityholder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. Any
Selling Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement
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pursuant to this Section 2.2 by giving written notice to the Company of its
request to withdraw. The Company may withdraw a Piggy-Back Registration at any
time prior to the time it becomes effective or the Company may elect to delay
the registration; PROVIDED, HOWEVER, that the Company shall give prompt written
notice thereof to participating Selling Holders. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2, and each Holder of
Registrable Securities shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a Registration Statement effected pursuant to
this Section 2.2.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders of Registrable
Securities pursuant to Section 2.1 hereof, and no failure to effect a
registration under this Section 2.2 and to complete the sale of securities
registered thereunder in connection therewith shall relieve the Company of any
other obligation under this Agreement.
(b) PRIORITY IN PIGGY-BACK REGISTRATION. In a registration pursuant
to Section 2.2 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders requesting inclusion in such
offering that in such underwriter's or underwriters' reasonable opinion the
total number of securities which the Company, the Selling Holders and any other
persons desiring to participate in such registration intend to include in such
offering is such as to materially and adversely affect the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event: (x) in cases only involving the registration for sale of securities
for the Company's own account (which may include securities included pursuant to
the exercise of piggy-back rights herein and in other contractual commitments of
the Company), securities shall be registered in such offering in the following
order of priority: (i) FIRST, the securities which the Company proposes to
register and (ii) SECOND, PROVIDED that no securities sought to be included by
the Company have been excluded from such registration, on a PRO RATA basis, (a)
the securities which have been requested to be included in such registration by
the Holders of Registrable Securities pursuant to this Agreement (such
securities for the account of the Holders to be allocated among the Holders PRO
RATA based on the amount of securities sought to be registered by the Holder),
together with (b) the securities of other Persons entitled to exercise
"piggy-back" registration rights pursuant to contractual commitments of the
Company (PRO RATA based on the amount of securities sought to be registered by
such Persons); and (y) in cases not involving the registration for sale of
securities for the Company's own account only, securities shall be registered in
such offering in the following order of priority: (i) FIRST, securities to be
sold for the account of the Company and the securities of any Person whose
exercise of a "demand" registration right pursuant to a contractual commitment
of the Company is the basis for the registration (PROVIDED that if such Person
is a Holder of Registrable Securities, as among Holders of Registrable
Securities there shall be no priority and Registrable Securities sought to be
included by Holders of Registrable Securities shall be included PRO RATA based
on the amount of securities sought to be registered by
10
such Persons) and (ii) SECOND, PROVIDED that no securities of the Company or
such Person referred to in the immediately preceding clause (i) have been
excluded from such registration, on a PRO RATA basis, (a) the securities
requested to be included in such registration by the Holders of Registrable
Securities pursuant to this Agreement (such securities for the account of the
Holders to be allocated among the Holders PRO RATA based on the total amount of
securities sought to be registered by the Holders), together with (b) the
securities of other Persons entitled to exercise "piggy-back" registration
rights pursuant to contractual commitments (PRO RATA based on the amount of
securities sought to be registered by such Persons).
If, as a result of the provisions of this Section 2.2(b), any Selling
Holder shall not be entitled to include all Registrable Securities in a
Piggy-Back Registration that such Selling Holder has requested to be included,
such Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration.
(c) RESTRICTIONS ON SALE BY HOLDERS. Each Holder of Warrants and
Registrable Securities whose Warrants and Registrable Securities are covered by
a Registration Statement filed pursuant to this Section 2.2 and are to be sold
thereunder agrees, if and to the extent reasonably requested by the managing
underwriter or underwriters in an underwritten public offering, not to effect
any public sale or distribution of Warrants and Registrable Securities or of
securities of the Company of the same class as any securities included in such
Registration Statement, including a sale pursuant to Rule 144 (except as part of
such underwritten offering), during the 30-day period prior to, and during the
180-day period beginning on, the closing date of each underwritten offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or such managing underwriter or underwriters.
The foregoing provisions of Section 2.2(c) shall not apply to any
Holders of Warrants and Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
PROVIDED, HOWEVER, that any such Holder shall undertake, in its request to
participate in any such underwritten offering, not to effect any public sale or
distribution of any Warrants and Registrable Securities commencing on the date
of sale of such Warrants and Registrable Securities unless it has provided 45
days' prior written notice of such sale or distribution to the managing
underwriter or underwriters.
2.3 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company set forth in Sections
2.1, 2.2 and 2.6 hereof are subject to each of the following limitations,
conditions and qualifications:
(a) Subject to the next sentence of this paragraph, the Company shall
be entitled to postpone, for a reasonable period of time, the filing of, or
suspend the effectiveness of, any registration statement or amendment
thereto, or suspend the use of any Prospectus and shall not be required to
amend or supplement the registration statement, any related Prospectus or
any document incorporated therein by reference (other than an effective
registration statement being used for an underwritten offering); PROVIDED
that the duration of such
11
postponement or suspension (a "SUSPENSION PERIOD") may not exceed an
aggregate of 90 days after the event or circumstance giving rise to such
Suspension Period and the duration of such Suspension Period shall be
excluded from the calculation of the 60-day period described in
Section 2.1(b) hereof. Such Suspension Period may be effected only if
(i) an event or circumstance occurs and is continuing as a result of which
the registration statement, any related Prospectus or any document
incorporated therein by reference as then amended or supplemented or
proposed to be filed would, in the Company's good faith judgment, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (ii) (A) the
Company determines in its good faith judgment that the disclosure of such
an event at such time would have a material adverse effect on the business,
operations or prospects of the Company or (B) the disclosure otherwise
relates to a material business transaction which has not yet been publicly
disclosed; PROVIDED, that the Effectiveness Period shall be extended by the
number of days in any Suspension Period; PROVIDED FURTHER that the Company
may suspend the effectiveness for a period not in excess of five Business
Days to allow for the updating of the financial statements included in a
Registration Statement to the extent required by law, not to exceed 45 days
in aggregate in any 12-month period. If the Company shall so postpone the
filing of a Registration Statement it shall, as promptly as possible,
deliver a certificate signed by the chief executive officer of the Company
to the Selling Holders as to such determination, and the Selling Holders
shall (1) have the right, in the case of a postponement of the filing or
effectiveness of a Registration Statement, upon the affirmative vote of the
Holders of not less than a majority of the Registrable Securities to be
included in such Registration Statement, to withdraw the request for
registration by giving written notice to the Company within 10 days after
receipt of such notice or (2) in the case of a suspension of the right to
make sales, receive an extension of the registration period equal to the
number of days of the suspension. Any Demand Registration as to which the
withdrawal election referred to in the preceding sentence has been effected
shall not be counted for purposes of the Demand Registration the Company is
required to effect pursuant to Section 2.1 hereof.
(b) The Company's obligations shall be subject to the obligations of
the Selling Holders, which the Selling Holders acknowledge, to furnish all
information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations
to permit the Company to comply with all applicable requirements of the
SEC, if applicable, and to obtain any acceleration of the effective date of
such Registration Statement.
2.4 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The Company
covenants and agrees that (i) it shall not, and that it shall not cause or
permit any of its subsidiaries to, effect any public sale or distribution of any
securities of the same class as any of the Warrants or Registrable Securities or
any securities convertible into or exchangeable or exercisable for such
securities (or any option or other right for such securities) during the 90-day
period beginning on, the commencement of any underwritten offering of Warrants
or Registrable Securities pursuant to a
12
Demand Registration which has been requested pursuant to this Agreement, prior
to the Company or any of its subsidiaries publicly announcing its intention to
effect any such public sale or distribution; (ii) except as permitted herein,
the Company will not, and the Company will not cause or permit any subsidiary of
the Company to, after the date hereof, enter into any agreement or contract that
conflicts with or limits or prohibits the full and timely exercise by the
Holders of Warrants or Registrable Securities of the rights herein to request a
Demand Registration or to join in any Piggy-Back Registration subject to the
other terms and provisions hereof; and (iii) upon request of the Holders of not
less than a majority of the Warrants or Registrable Securities to be included in
such Registration Statement or any underwriter, it shall use its reasonable best
efforts to secure the written agreement of each of its officers and directors to
not effect any public sale or distribution of any securities of the same class
as the Warrants or Registrable Securities (or any securities convertible into or
exchangeable or exercisable for an such securities), or any option or right for
such securities during the period described in clause (i) of this Section 2.4.
2.5 RULE 144 AND RULE 144A. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder or beneficial owner of Warrants or
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule 144A under the Securities Act. The Company further
covenants that it will take such further action as any Holder of Warrants or
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Warrants or Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder of
Warrants or Registrable Securities, the Company will in a timely manner deliver
to such Holder a written statement as to whether it has complied with such
information requirements.
2.6 UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by any Registration Statement pursuant to a Demand Registration are to
be sold in an underwritten public offering, the investment banker or investment
bankers and manager or managers that will administer the offering will be
selected by the Holders of not less than a majority of the Registrable
Securities to be sold thereunder and will be reasonably acceptable to the
Company.
No Holder of Registrable Securities may participate in any
underwritten registration pursuant to a Registration Statement filed under this
Agreement unless such Holder (a) agrees to (i) sell such Holder's Registrable
Securities on the basis provided in and in compliance with any underwriting
arrangements approved by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and (ii) comply with Rules 101, 102
and 104 of Regulation M under the Exchange Act and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
13
If the Company has complied with all its obligations under this
Agreement with respect to a Demand Registration or a Piggy-Back Registration
relating to an underwritten public offering, all holders of Warrants and
Registrable Securities, upon request of the lead managing underwriter with
respect to such underwritten public offering, will be required to not sell or
otherwise dispose of any Warrant or Registrable Security owned by them for a
period not to exceed 180 days from the consummation of such underwritten public
offering.
Section 3. TRANSFERS.
3.1 GENERALLY. All Subject Equity at any time and from time to time
outstanding shall be held subject to the conditions and restrictions set forth
in this Section 3. All shares of Capital Stock now or hereafter held by the
Permitted Holders shall be held subject to the conditions and restrictions set
forth in this Section 3. Each Holder of Subject Equity and the Permitted
Holders by executing this Agreement or by accepting a certificate representing
Capital Stock or other indicia of ownership therefor from the Company agree with
the Company and with each other stockholder to such conditions and restrictions.
3.2 TAG-ALONG RIGHTS. (a) Prior to the Triggering Date, each of the
Holders of Subject Equity shall have the right (the "TAG-ALONG RIGHT") to
require the Proposed Purchaser (as defined below) to purchase from each of them
all Subject Equity owned by such Holder in the event of any proposed direct or
indirect sale or other disposition (collectively, a "TRANSFER") of Common Stock
or Convertible Preferred Stock (whether now or hereafter issued) to any Person
or Persons (such other Person or Persons being hereinafter referred to as the
"PROPOSED PURCHASER") by any Permitted Holders or any of their Affiliates in any
transaction or a series of related transactions resulting in a Change of
Control.
(b) Any Subject Equity purchased from the Participating Holders (as
defined below) pursuant to this Section 3.2 shall be paid for in the same type
of consideration and at the same price per share of Common Stock and upon the
same terms and conditions of such proposed Transfer of Common Stock by any
Permitted Holder or any of its Affiliates; except that the price per Warrant to
be paid by the Proposed Purchaser shall be less the then aggregate Exercise
Price of such Warrant per share. If the Subject Equity to be purchased includes
securities other than Common Stock, the price to be paid for such securities
shall be the same price per share or other denomination paid by the Proposed
Purchaser for like securities purchased from any Permitted Holder or any of its
Affiliates or, if like securities are not purchased from any Permitted Holder or
any of its Affiliates, the Fair Market Value of such securities determined by a
nationally recognized investment banking firm selected by the Company.
(c) Each Permitted Holder shall notify, or cause to be notified, each
Holder of Subject Equity in writing (a "TRANSFER NOTICE") of each such proposed
Transfer at least 30 days prior to the date thereof. Such notice shall set
forth: (a) the name and address of the Proposed Purchaser and the number of
shares of Common Stock and other securities, if any, proposed to be transferred,
(b) the proposed amount of consideration and terms and conditions of payment
offered by such
14
Proposed Purchaser (if the proposed consideration is not cash, the Transfer
Notice shall describe the terms of the proposed consideration) and (c) that
either the Proposed Purchaser has been informed of the "Tag-Along Right" and has
agreed to purchase Subject Equity in accordance with the terms hereof or that
the Permitted Holder or any of its Affiliates will make such purchase. The
Tag-Along Right may be exercised by any Holder of Subject Equity by delivery of
a written notice to the Company (the "TAG-ALONG NOTICE"), within 10 days of such
Holder's receipt of the Transfer Notice, indicating its election to exercise the
Tag-Along Right (a "PARTICIPATING HOLDER"). The Tag-Along Notice shall state
the amount of Subject Equity that such Holder proposes to include in such
Transfer to the Proposed Purchaser. Failure by any Holder to provide a
Tag-Along Notice within the 10-day notice period shall be deemed to constitute
an election by such Holder not to exercise its Tag-Along Right. The closing
with respect to any sale to a Proposed Purchaser pursuant to this Section 3.2
shall be held at the time and place specified in the Transfer Notice but in any
event within 60 days of the date such Transfer Notice is given; PROVIDED that if
through the exercise of reasonable efforts the Company is unable to cause such
transaction to close within 60 days, such period may be extended for such
reasonable period of time as may be necessary to close such transaction.
Consummation of the sale of Common Stock or Convertible Preferred Stock by any
Permitted Holder or any of its Affiliates to a Proposed Purchaser shall be
conditioned upon consummation of the sale by each Participating Holder to such
Proposed Purchaser (or the Permitted Holder) of the Subject Equity entitled to
be transferred as described above, if any.
(d) [reserved]
(e) If the Proposed Purchaser does not purchase the Subject Equity
entitled to be transferred as described in this Section 3.2 on the same terms
and conditions as purchased from the Permitted Holders or any of their
Affiliates, then the Permitted Holders or their Affiliates shall purchase such
Subject Equity if the Transfer occurs.
(f) If at the end of 60 days following the date on which a Transfer
Notice was given, or as otherwise extended pursuant to the provisions of Section
3.2(a), the sale of Common Stock by the Permitted Holders or their Affiliates
and the sale of the Subject Equity entitled to be transferred as provided above
have not been completed in accordance with the terms of the Proposed Purchaser's
offer, all certificates representing such Subject Equity shall be returned to
the Participating Holders, and all the restrictions on Transfer contained in
this Agreement with respect to Common Stock owned by the Permitted Holders and
their Affiliates shall remain in effect.
3.3 DRAG-ALONG RIGHTS. If at any time prior to an Initial Public
Equity Offering, any Permitted Holders or any of their respective Affiliates
determines to sell all of the Capital Stock of the Company owned by them to a
Person other than a Permitted Holder or its Affiliate in a transaction resulting
in a Change of Control, the transferring Permitted Holder (whether directly or
through an Affiliate) shall have the right (the "DRAG-ALONG RIGHT") to require
the Holders of Subject Equity to sell such Subject Equity to such transferee;
PROVIDED that (i) the consideration to be received by the Holders of Subject
Equity shall be the same type of consideration received by the Permitted Holders
and their Affiliates and, in any event, shall be cash or freely transferable
15
marketable securities, and (ii) after giving effect to such transaction, the
Permitted Holders making the transfers and its Affiliates shall not own,
directly or indirectly, any Capital Stock or rights to purchase Capital Stock
of the Company. Any Warrants or Registrable Securities, or both, purchased
from the Holders thereof pursuant to this Section 3.3 shall be paid for at
the same price per share of Common Stock and upon the same terms and
conditions as such proposed transfer of Common Stock by the Permitted Holders
and their Affiliates. The price per Warrant to be paid by the Proposed
Purchaser shall be less the aggregate Exercise Price of such Warrant. If the
Subject Equity to be purchased includes securities other than Common Stock,
the price to be paid for such securities shall be the same price per share or
other denomination paid by the Proposed Purchaser for like securities
purchased from the Permitted Holders and their Affiliates or, if like
securities are not purchased from the Permitted Holders and their Affiliates,
the Fair Market Value of such securities determined by a nationally
recognized investment banking firm selected by the Company.
Section 4. REGISTRATION PROCEDURES. In connection with the
obligations of the Company with respect to any Registration Statement
pursuant to Sections 2.1, 2.2 and 2.6 hereof, the Company shall, except as
otherwise provided:
(a) A reasonable period of time prior to the initial filing of a
Registration Statement or Prospectus and a reasonable period of time prior
to the filing of any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), furnish to the Holders and the managing underwriters, if any,
copies of all such documents proposed to be filed, which documents (other
than those incorporated or deemed to be incorporated by reference) shall be
subject to the review of such Holders, and such underwriters, if any, and
cause the officers and directors of the Company, counsel to the Company and
independent certified public accountants to the Company to respond to such
reasonable inquiries as shall be necessary, in the opinion of counsel to
such underwriters, to conduct a reasonable investigation within the meaning
of the Securities Act; PROVIDED that the foregoing inspection and
information gathering shall be coordinated on behalf of the Holders by
Xxxxxxx Xxxxx. The Company shall not file any such Registration Statement
or related Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities included in such
Registration Statement shall reasonably object on a timely basis.
(b) Prepare and file with the SEC such amendments, including
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for
the applicable time period required hereunder; cause the related Prospectus
to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or
in such Prospectus as so supplemented.
16
(c) Notify the Holders of Registrable Securities to be sold and the
managing underwriters, if any, promptly, and (if requested by any such
person) confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed,
and (B) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
SEC or any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the SEC, any state
securities commission, any other governmental agency or any court of any
stop order suspending the effectiveness of such Registration Statement or
of any order or injunction suspending or enjoining the use of a Prospectus
or the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction, or the initiation or threatening of any proceeding for
such purpose, and (v) of the happening of any event or the existence of any
information becoming known that makes any statement made in a Registration
Statement or related Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or
omits to state any material fact required to be stated therein or necessary
to make the statements therein, not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) Use its best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of any order enjoining or suspending the
effectiveness of the Registration Statement or the use of a Prospectus or
the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities covered thereby for
sale in any jurisdiction described in Section 4(h) at the earliest
practicable moment.
(e) If requested by the managing underwriters, if any, or if none, by
the Holders of a majority of the Registrable Securities being sold pursuant
to such Registration Statement, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, following consultation with their counsel or if none,
such Holders reasonably request in writing to be included therein, and (ii)
make all required filings of such Prospectus supplement or such
post-effective amendment under the Securities Act as soon as practicable
after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
PROVIDED, HOWEVER, that the Company shall not be required to take any
action pursuant to this Section 4(e) that would in the opinion of counsel
for the Company, violate applicable law.
(f) Upon written request to the Company, furnish to each Holder of
Registrable Securities to be sold pursuant to a Registration Statement and
each managing underwriter,
17
if any, without charge, at least one conformed copy of the Registration
Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein
by reference, and all exhibits to the extent requested (including those
previously furnished or incorporated by reference) as soon as practicable
after the filing of such documents with the SEC.
(g) Deliver to each Holder of Registrable Securities to be sold
pursuant to a Registration Statement and each managing underwriter, if any,
without charge, as many copies of each Prospectus (including each form of
Prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto and each document
supplemental thereto by each of the Selling Holders of Registrable
Securities and the underwriters or agents, if any, in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, use its best
efforts to register or qualify or cooperate with the Holders of Registrable
Securities to be sold, the managing underwriter or underwriters, if any,
and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of
such Registrable Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions as any such Holder or underwriter reasonably
requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective hereunder and do any and all
other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; PROVIDED, HOWEVER, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where
it is not then so qualified or (ii) take any action that would subject it
to general service of process in any such jurisdiction where it is not then
so subject or to taxation in any jurisdiction where it is not so subject.
(i) In connection with any sale or transfer of Registrable Securities
that will result in such securities no longer being Registrable Securities,
cooperate with the Holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends whatsoever and shall be
in a form eligible for deposit with The Depository Trust Company ("DTC");
and to enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriter or underwriters, if
any, or such Holders may reasonably request at least two business days
prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 4(c)(v)
above, as promptly as practicable prepare a supplement or amendment,
including if appropriate a post-effective amendment to each Registration
Statement or a supplement to the related
18
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(k) Prior to the effective date of a Registration Statement, (i)
provide the registrar for the Registrable Securities with certificates for
such securities in a form eligible for deposit with DTC and (ii) provide a
CUSIP or ISIN number for such securities.
(l) Enter into such agreements (including, except in connection with
a Piggy-Back Registration (other than if the offering relating to the
Piggy-Back Registration is underwritten), an underwriting agreement in
such form, scope and substance as is customary in underwritten offerings)
and take all such other reasonable actions in connection therewith
(including those reasonably requested by the managing underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold) in
order to expedite or facilitate the disposition of such Registrable
Securities, and, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration, (i)
make such representations and warranties to the Holders of such Registrable
Securities and the underwriter or underwriters, if any, with respect to the
business of the Company and the subsidiaries of the Company (including with
respect to businesses or assets acquired or to be acquired by any of them),
and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, addressed to
each selling Holder of Registrable Securities and each of the underwriters,
if any), covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such underwriters; (iii) obtain customary "cold comfort"
letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each Selling Holder of Registrable Securities and
each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten offerings; (iv) if an underwriting
agreement is entered into, the same shall contain customary indemnification
provisions and procedures no less favorable to the Selling Holder and the
underwriters, if any, than those set forth in Section 5 hereof (or such
other provisions and procedures acceptable to Holders of a majority of
Registrable Securities covered by such Registration Statement and the
managing underwriter, if any); and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of
19
the Registrable Securities being sold and the managing underwriters or
underwriters to evidence the continued validity of the representations and
warranties made pursuant to clause (i) above and evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreements entered into by the Company; PROVIDED, HOWEVER, that the Holders
of Registrable Securities participating in a Piggy-Back Registration shall
not enter into an underwriting agreement other than an underwriting
agreement entered into at the request of the Company or other
securityholders of the Company.
(m) Make available for inspection by a representative of the selling
Holders of Registrable Securities, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney,
consultant or accountant retained by such representative of the Selling
Holders of Registrable Securities or underwriter (collectively, the
"INSPECTORS"), at the offices where normally kept, during the reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Company and the subsidiaries of the Company
(including with respect to businesses and assets acquired or to be acquired
to the extent that such information is available to the Company), and cause
the officers, directors, agents and employees of the Company and its
subsidiaries of the Company (including with respect to businesses and
assets acquired or to be acquired to the extent that such information is
available to the Company) to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration
Statement; PROVIDED, HOWEVER, that such persons shall first agree in
writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time
of delivery of such information shall be kept confidential by such Persons,
unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to U.S. securities laws in
connection with the filing of the Registration Statement or the use of any
Prospectus), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard such
information by such person or (iv) such information becomes available to
such person from a source other than the Company and its subsidiaries and
such source is not bound by a confidentiality agreement; PROVIDED, FURTHER
that the foregoing investigation shall be coordinated on behalf of the
Selling Holders of Registrable Securities by Xxxxxxx Xxxxx.
(n) Comply with all applicable rules, regulations and policies of the
SEC and make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder no later than 60 days after the end of any 12-month period
(or 135 days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to an underwriter or to underwriters in a
firm commitment or reasonable efforts underwritten offering and (ii) if not
sold to an underwriter or to underwriters in such an offering, commencing
on the first day of the first fiscal quarter of the Company after the
20
effective date of the relevant Registration Statement, which statements
shall cover such said period, consistent with the requirements of Rule 158
under the Securities Act.
(o) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed.
(p) Cooperate with each seller of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends
and registered in such names as the Selling Holders may reasonably request
at least two business days prior to the closing of any sale of Registrable
Securities.
(q) Cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and its respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.
The Company may require a Holder of Registrable Securities to be
included in a Registration Statement to furnish to the Company such information
regarding (i) the intended method of distribution of such Registrable
Securities, (ii) such Holder and (iii) the Registrable Securities held by such
Holder as is required by law to be disclosed in such Registration Statement and
the Company may exclude from such Registration Statement the Registrable
Securities of any Holder who fails to furnish such information within a
reasonable time after receiving such request.
If any such Registration Statement refers to any Holder by name or
otherwise as the Holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act, the deletion of the reference to such Holder in such amendment
or supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder of Registrable Securities agrees by acquisition of such
Subject Equity that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iv) or
4(c)(v) hereof, such Holder will forthwith discontinue disposition of such
Subject Equity covered by the Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(j) hereof, or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and in either case has received copies of any additional or
21
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. If the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Subject Equity covered by such Registration Statement
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 4(j) hereof or (y) the Advice, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus.
Holders of the Subject Equity shall be obligated to keep confidential
the existence of a Suspension Period or any confidential information
communicated by the Company to the Holder with respect thereto.
Section 5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees
to indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter, if any, who participates in an offering of Registrable Securities,
their respective affiliates, and their respective directors, officers,
employees, agents and each Person, if any, who controls any of such parties
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) pursuant to which Registrable Securities were
registered under the Securities Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, in each case, based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; PROVIDED that (subject to
Section 5(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of one counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged
22
untrue statement or omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) of this Section 5(a);
PROVIDED, HOWEVER, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent (i) arising out of an untrue
statement or omission or alleged untrue statement or omission (A) made in or
omitted from a preliminary Prospectus or Registration Statement and corrected or
included in a subsequent Prospectus or Registration Statement or any amendment
or supplement thereto made in reliance upon and in conformity with written
information furnished to the Company by the Selling Holders of Registrable
Securities, any Holder, or any underwriter expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) or (B) resulting from the use of the Prospectus during a
period when the use of the Prospectus has been suspended or is otherwise
unavailable for sales thereunder in accordance with Sections 2.1(b), 2.1(c),
2.2(c), 2.3, 2.4 or 2.6 hereof, PROVIDED, in each case, that Holders received
prior notice of such suspension or other unavailability.
(b) In the case of any registration of Registrable Securities, each
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each Initial Purchaser, each underwriter, if any, who participates in
an offering of Registrable Securities and the other Selling Holders and each of
their respective directors and officers (including each officer of the Company
who signed the Registration Statement) and each Person, if any, who controls the
Company, any Initial Purchaser, any underwriter or any other Selling Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 5(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in the Registration Statement (or any amendment
thereto), or the Prospectus (or any amendment or supplement thereto); PROVIDED,
HOWEVER, that no such Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to such Registration Statement.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to either paragraph (a) or (b)
above, such Person (the "INDEMNIFIED PARTY") shall give notice as promptly as
reasonably practicable to each Person against whom such indemnity may be sought
(the "INDEMNIFYING PARTY"), but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action; PROVIDED, HOWEVER, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
23
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 5 (whether or not the indemnified parties are
actual or potential parties thereof), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in any of the indemnity
provisions set forth in this Section 5 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, in such proportion as is appropriate to reflect the relative fault of
such indemnifying party or parties on the one hand, and such indemnified party
or parties on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party or parties on the one hand, and such indemnified party or
parties on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or parties or such indemnified party or
parties and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Initial Purchasers and the Holders of the Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 5 were
determined by PRO RATA allocation (even if the Selling Holders of Registrable
Securities were treated as one entity, and the Holders were treated as one
entity, for such purpose) or by another method of allocation which does not take
account of the equitable considerations referred to above in Section 5. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 5 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim
24
whatsoever based upon any such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 5, each Person, if any, who
controls an Initial Purchaser or Holder within the meaning of this Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Initial Purchaser or Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. Notwithstanding the provisions of this
Section 5(e), no Holder shall be required to contribute any amount in excess of
the amount by which the net proceeds received by such Holder from the sale of
Registrable Securities exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
Section 6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of any of its
obligations under this Agreement, each Holder and Permitted Holders, in addition
to being entitled to exercise all rights provided herein, in the Purchase
Agreement or granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of any of the provisions of this Agreement.
(b) NO INCONSISTENT AGREEMENTS. The Company and the Permitted
Holders will not enter into any agreement which is inconsistent with the rights
granted to the Holders of Warrants and Registrable Securities in this Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities, if any, under any such agreements.
(c) NO PIGGY-BACK ON DEMAND REGISTRATIONS. The Company shall not
grant to any of its securityholders (other than the Holders in such capacity)
the right to include any of their securities in any Registration Statement filed
pursuant to a Demand Registration.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of the Holders
and Permitted Holders of not less than a majority of the then outstanding
Warrants and each class and series of Registrable Securities; PROVIDED, HOWEVER,
that, for the purposes of this Agreement, Warrants and Registrable Securities
that are owned, directly or indirectly, by the Company, the Permitted Holders or
any of their Affiliates are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions
25
hereof with respect to a matter that relates exclusively to the rights of one or
more Holders and Permitted Holders and that does not directly or indirectly
affect the rights of other Holders and other Permitted Holders may be given by a
majority of the Holders and Permitted Holders so affected; PROVIDED, HOWEVER,
that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence. Notwithstanding the foregoing, no amendment, modification,
supplement, waiver or consent with respect to Section 5 shall be made or given
otherwise than the prior written consent of each Person affected thereby.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder or a Permitted Holder, at the most current address of such Holder
or such Permitted Holder as set forth in the register for the Warrants or the
Registrable Securities, which address initially is, with respect to each Initial
Purchaser, the address set forth with respect to such Initial Purchaser in the
Purchase Agreement; and (ii) if to the Company, initially at the address set
forth in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 6(e).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. If any transferee of
any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive the benefits hereof. The Company
may not assign any of its rights or obligations hereunder without the prior
written consent of each Holder of Registrable Securities. Notwithstanding the
foregoing, no successor or assignee of the Company shall have any rights granted
under the Agreement until such person shall acknowledge its rights and
obligations hereunder by a signed written statement of such person's acceptance
of such rights and obligations.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.
26
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(l) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Warrant Agreement, is intended by the parties as a final
expression of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, the Purchase
Agreement and the Warrant Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter.
(m) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities or Warrants is required hereunder, Registrable Securities or Warrants
held by the Company or by any of its affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted (in either the numerator or
the denominator) in determining whether such consent or approval was given by
the Holders of such required percentage.
[SIGNATURE PAGE FOLLOWS]
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CONVERGENT COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
IN THEIR CAPACITIES AS PERMITTED HOLDERS, FOR
PURPOSES OF SECTION 3 AND 6 HEREOF ONLY
XXXX X. XXXXX
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
[Xxx. Xxxxx -- 500,000 shares]
By: /s/ Xxxxx X.X. Xxxxx
----------------------------------------
Name: Xxxxx X.X. Xxxxx
[Trusts for the benefit of 4 minor children -
200,000 shares]
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Trustee
IN THEIR CAPACITIES AS PERMITTED HOLDERS, FOR
PURPOSES OF SECTION 3 AND 6 HEREOF ONLY
XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
[Xxx. Xxxxx -- 500,000 shares]
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
[Trusts for the benefit of 3 minor children -
150,000 shares]
By: /s/ Xxxxx Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx Xxxxxx
Title: Trustee
IN THEIR CAPACITIES AS PERMITTED HOLDERS, FOR
PURPOSES OF SECTION 3 AND 6 HEREOF ONLY
XXXXXX X. XXXXX
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
[Xxx. Xxxxx -- 500,000 shares]
By: /s/ Xxxxx Xxxxxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxx Xxxxx
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
By: XXXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Director
