1
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
DATED JUNE 30, 2000
BETWEEN
XXXXXXXXXXX INTERNATIONAL, INC.
AND
XXXXXX XXXXXXX & CO. INCORPORATED
2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is dated
as of June 30, 2000, by and between Xxxxxxxxxxx International, Inc., a Delaware
corporation (the "COMPANY"), and Xxxxxx Xxxxxxx & Co. Incorporated (the "INITIAL
PURCHASER").
This Agreement is entered into in connection with the Purchase
Agreement, dated June 26, 2000 ("PURCHASE AGREEMENT"), by and between the
Company and the Initial Purchaser, which provides for the sale by the Company to
the Initial Purchaser of $910,000,000 aggregate principal amount at maturity of
the Company's Zero Coupon Convertible Senior Debentures due 2020 (the "FIRM
DEBENTURES"), which are convertible into common stock of the Company, par value
$1.00 per share (the "UNDERLYING COMMON STOCK"), plus up to an additional
$140,000,000 aggregate principal amount at maturity of debentures which the
Initial Purchaser may subsequently elect to purchase pursuant to the terms of
the Purchase Agreement (the "ADDITIONAL DEBENTURES" and together with the Firm
Debentures, the "CONVERTIBLE DEBENTURES"). The Convertible Debentures are being
issued pursuant to the Indenture (the "INDENTURE"), dated as of May 17, 1996, as
amended by the First Supplemental Indenture dated as of May 27, 1998, and
further amended by the Second Supplemental Indenture dated as of June 30, 2000,
between the Company and the Bank of New York, as successor to Bank of Montreal
Trust Company, as trustee (the "TRUSTEE"). In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Initial Purchaser and any subsequent holder or holders (each a "HOLDER" and
collectively, the "HOLDERS") of the Convertible Debentures or Underlying Shares
as provided herein. The execution and delivery of this Agreement is a condition
to the Initial Purchaser's obligation to purchase the Firm Debentures under the
Purchase Agreement.
Section 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 2(e) hereof.
Affiliate: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or controlled
by, or under direct or direct common control with, such specified person or (ii)
any officer or director of such other person. For purposes of this definition,
the term "control" (including the terms "controlling," "controlled by" and
"under common control with") of a person means the possession, direct or
indirect, of the power (whether or not exercised) to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
Applicable Conversion Price: "Applicable Conversion Price"
refers to the original issue price of the Convertible Debentures plus accrued
original issue discount to the date of calculation divided by the Conversion
Rate as then in effect.
3
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $1.00 par value per
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.
Conversion Rate: Conversion Rate shall have the meaning
assigned such term in Section 1501 of the Indenture.
Convertible Debentures: See the Recitals.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each June 30 and December 31.
Deferral Period: See Section 2(d)(ii) hereof.
Effectiveness Period: The period commencing with the date
hereof and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
Event: See Section 2(e) hereof.
Event Termination Date: See Section 2(e), hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the Recitals of this Agreement.
Indenture: See the Recitals of this Agreement.
Initial Purchaser: Xxxxxx Xxxxxxx & Co. Incorporated.
Initial Shelf Registration: See Section 2(a) hereof.
Losses: See Section 6 hereof.
-2-
4
Notice Holder: See Section 2(d)(i) hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
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 amendment or prospectus
supplement, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the first paragraph of this Agreement.
Registrable Securities: The Convertible Debentures and the
Underlying Common Stock, whether or not such securities have been converted or
exchanged, and at all times subsequent to any such conversion or exchange, and
any security issued with respect thereto upon any stock dividend, split or
similar event until, in the case of any such security, (i) it is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering its offering and sale, (ii) it is saleable by
the Holder thereof pursuant to Rule 144(k) or (iii) it is sold to the public
pursuant to Rule 144 and, as a result of the event or circumstance described in
any of the foregoing clauses (i) through (iii), the legends with respect to
transfer restrictions required under the Indenture are removed or removable in
accordance with the terms of the Indenture. Notwithstanding the foregoing, all
Registrable Securities shall cease to be Registrable Securities on the second
anniversary of the effective date of the Registration Statement.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Restricted Securities: As this term is defined in Rule 144.
Rule 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
-3-
5
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Xxxxxxx & Xxxxx L.L.P. or such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, the reasonable fees and expenses of which will be paid
by the Company pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Bank of New York (or any successor entity), the
Trustee under the Indenture.
Underlying Common Stock: See the Recitals of this Agreement.
Section 2. Shelf Registration.
(a) Shelf Registration. The Company shall prepare and file
with the SEC, as soon as practicable but in any event within ninety (90) days
after the latest date of original issuance of the Convertible Debentures (the
"FILING DATE"), a Registration Statement for an offering to be made on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF
REGISTRATION") registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the "INITIAL SHELF REGISTRATION"). The
Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in the manner or manners designated by them. The Company shall use its
reasonable best efforts to cause the Initial Shelf Registration to become
effective under the Securities Act as promptly as is practicable but in any
event within one hundred eighty (180) days after the latest date of original
issue of the Convertible Debentures and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the end of the
Effectiveness Period or the date a Subsequent Shelf Registration (as defined
below) covering all of the Registrable Securities has been declared effective
under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason at any
time during the Effectiveness Period (other than because all Registrable
Securities shall have ceased to be Registrable Securities), the Company shall
use its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within thirty (30)
days of such cessation of effectiveness amend the Shelf Registration in a manner
reasonably expected to
-4-
6
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional Shelf Registration covering all of the Registrable Securities (a
"SUBSEQUENT SHELF REGISTRATION"). If a Subsequent Shelf Registration is filed,
the Company shall use its reasonable best efforts to cause the Subsequent Shelf
Registration to become effective as promptly as is practicable after such filing
and to keep such Registration Statement continuously effective until the end of
the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Initial
Purchaser or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Registration Statement.
(d) The Company will give notice of its intention to make the
filing of the Registration Statement to each Holder in the same manner as
provided in the Indenture in which notice the Company shall seek a determination
form each Holder as to whether such Holder elects to have the Registrable
Securities held by such Holder registered for sale pursuant to the Registration
Statement. The Company may exclude from such registration the Registrable
Securities of any Holder if such Holder fails to furnish such information within
ten (10) Business Days after receiving such request. Following the effectiveness
of the Registration Statement, Each Holder of Registrable Securities agrees that
if such Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). each Holder of Registrable Securities agrees to give written
notice to the Company at least seven (7) Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration, which
notice shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and the intended
distribution of Registrable Securities by such Holder required to amend or
supplement the Registration Statement with respect to such intended distribution
of Registrable Securities by such Holder. As promptly as is practicable after
the date such notice is provided, and in any event within five (5) Business Days
after such date, the Company shall either:
(i) (A) if necessary, prepare and file with the
Commission a post-effective amendment to the Shelf Registration or a supplement
to the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that
such Registration Statement 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 not misleading, and so that, as thereafter
delivered to purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (B) provide the Holders of the Registrable Securities who
gave such notice copies of any documents filed pursuant to Section 2(d)(i)(A);
and (C) inform each such Holder that the Company has complied with its
obligations in Section 2(d)(i)(A) (or that, if the Company
-5-
7
has filed a post-effective amendment to the Shelf Registration which has not yet
been declared effective, the Company will notify each such Holder to that
effect, will use its reasonable best efforts to secure the effectiveness of such
post-effective amendment and will immediately notify each such Holder pursuant
to Section 2(d)(i)(C) hereof when the amendment has become effective); each
Holder who has given notice of intention to distribute such Holder's Registrable
Securities in accordance with Section 2(d) hereof (a "NOTICE HOLDER") will sell
all or any or such Registrable Securities pursuant to the Shelf Registration and
related Prospectus only during the 45-day period commencing with the date on
which the Company gives notice, pursuant to Section 2(d)(i)(C), that the
Registration Statement and Prospectus may be used for such purpose (such 45-day
period is referred to as a "SELLING PERIOD"); the Notice Holders will not sell
any Restricted Securities pursuant to such Registration Statement or Prospectus
after such Selling Period without giving a new notice of intention to sell
pursuant to Section 2(d) hereof and receiving a further notice from the Company
pursuant to Section 2(d)(i)(A) hereof; or
(ii) in the event (A) of the happening of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) or 3(c)(v) hereof
or (B) that, in the judgment of the Company, it is advisable to suspend use of
the Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which the Company believes public disclosure would not be in
the best interests of the Company, the Company shall deliver a certificate in
writing, signed by an authorized executive officer of the Company, to the Notice
Holders and the Special Counsel to the effect of the foregoing and, upon receipt
of such certificate, each such Notice Holder's Selling Period will not commence
or resume, as the case may be, until such Notice Holder's receipt of copies of
the supplemented or amended Prospectus provided for in Section 2(d)(i)(A)
hereof, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The
Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed, and the Selling Period will commence, as promptly as
is practicable and, in the case of a pending development or event referred to in
Section 2(d)(ii)(B) hereof, as soon as the earlier of (x) public disclosure of
such pending material corporate development or similar material event or (y) in
the judgment of the Company, public disclosure of such material corporate
development or similar material event would be in the best interests of the
Company.
Notwithstanding the foregoing, the Company shall not under any
circumstances be entitled to exercise its right under this Section 2(d)(ii) to
defer the commencement of a Selling Period more than 90 days in any twelve (12)
month period, and the period during which a Selling Period is suspended shall
not exceed thirty (30) days unless the Company shall deliver to such Notice
Holders a second notice to the effect set forth above, which shall have the
effect of extending the period during which such Selling Period is deferred by
up to an additional thirty (30) days, or such shorter period of time as is
specified in such second notice; provided that the period during which a Selling
Period is deferred, a "DEFERRAL PERIOD," shall not exceed sixty (60) days in any
three (3) month period.
-6-
8
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) the date on which the
Initial Shelf Registration is first declared effective is not within one hundred
eighty (180) days after the latest date of original issuance of the Convertible
Debentures (the "MANDATORY EFFECTIVE DATE"), (iii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act or (iv) the aggregate number of days in any one Deferral Period exceeds the
number permitted pursuant to Section 2(d)(ii) hereof (each of the events of a
type described in any of the foregoing clauses (i) through (iv) are individually
referred to herein as an "EVENT," and the Filing Date in the case of clause (i),
the Mandatory Effective Date in the case of clause (ii), the date on which the
effectiveness of the Shelf Registration has been suspended or proceedings with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act have been commenced in the case of clause (iii), and the date on which the
duration of a Deferral Period exceeds the number of days permitted by Section
2(d)(ii) hereof in the case of clause (iv), being referred to herein as an
"EVENT DATE"). Events shall be deemed to continue until the "EVENT TERMINATION
DATE," which shall be the following dates with respect to the respective types
of Events: the date the Initial Registration Statement is filed in the case of
an Event of the type described in clause (i), the date the Initial Registration
Statement is declared effective in the case of an Event of the type described in
clause (ii), the date that all stop orders suspending effectiveness of the Shelf
Registration have been removed and the proceedings initiated with respect to the
Shelf Registration under Section 8(d) or (e) of the Securities Act have
terminated, as the case may be, in the case of Events of the types described in
clause (iii), and termination of the Deferral Period which caused the limit on
the duration of a Deferral Period set forth in Section 2(d)(ii) to be exceeded
in the case of the commencement of an Event of the type described in clause
(iv).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events that have occurred and are continuing (a "DAMAGES
ACCRUAL PERIOD"), commencing on the Event Date on which such Damages Accrual
Period began, the Company agrees to pay, as liquidated damages, and not as a
penalty, an additional amount (the "ADDITIONAL INTEREST"):
(A) (i) to each Holder of a Convertible Debenture (in each case
that is a Notice Holder), accruing at a rate equal to
one-quarter of one percent per annum (25 basis points) on an
amount equal to the aggregate issue price plus accrued
original issue discount of such Convertible Debenture held by
such Notice Holder; and
(ii) to each Holder of Underlying Common Stock that is a
Notice Holder, accruing at a rate equal to one-quarter of one
percent per annum (25 basis points) calculated on an amount
equal to the product of:
-7-
9
(x) the Applicable Conversion Price as of the
Business Day immediately prior to the
applicable Damages Payment Date times
(y) the number of shares of Common Stock that
are Registrable Securities held by such
Notice Holder;
and
(B) if the Damages Accrual Period continues for in excess of
thirty (30) days, from and after the end of such thirty (30)
day period until the applicable Event Termination Date,
(i) to each Holder of a Convertible Debenture (in each
case whether or not a Notice Holder), accruing at a
rate equal to one-quarter of one percent per annum
(25 basis points) on an amount equal to the aggregate
issue price plus accrued original issue discount of
such Convertible Debenture held by such Holder, and
(ii) to each Holder of Underlying Common Stock (whether or
not a Notice Holder), accruing at a rate equal to
one-quarter of one percent per annum (25 basis
points) calculated on an amount equal to the product
of
(x) the Applicable Conversion Price as of the
Business Day immediately prior to the
applicable Damages Payment Date times
(y) the number of shares of Common Stock that
are Registrable Securities held by such
Holder.
Notwithstanding the foregoing, no Additional Interest shall accrue
(1) under clause (A) of the preceding sentence during any period
for which Additional Interest accrues under clause (B) of the
foregoing sentence or
(2) as to any Registrable Security from and after the earlier of
(x) the date such security is no longer a Registrable Security
and (y) expiration of the Effectiveness Period.
Notwithstanding the foregoing, no Damages Accrual Period with
respect to any Event described in clause (iii) of paragraph
2(e) shall commence unless and until a Holder or Holders has
given notice in accordance with Section 2(d) hereof.
Except as provided in this paragraph, upon the occurrence of
an Event or of multiple concurrent Events, the rate of accrual of Additional
Interest shall be one-quarter of one percent per annum (25 basis points) with
respect to any period. Notwithstanding the foregoing, the rate of accrual of
Additional Interest shall be one-half of one percent per annum (50 basis points)
with respect to any period that multiple concurrent Events have occurred and are
continuing if one of such multiple concurrent Events is an Event described in
clause (ii) of
-8-
10
paragraph 2(e) and the Initial Registration Statement (excluding any
post-effective amendments thereto) has not been declared effective. Once the
Initial Registration Statement has been declared effective, the rate of accrual
of Additional Interest shall not exceed one-quarter of one percent per annum (25
basis points).
The Company shall pay the liquidated damages due on any
Convertible Debenture or Underlying Common Stock by depositing with the Trustee,
in trust for the benefit of the Holders of Convertible Debentures or Underlying
Common Stock, as the case may be, entitled thereto, at least one (1) Business
Day prior to the applicable Damages Payment Date, sums sufficient to pay the
liquidated damages accrued or accruing from and including the last preceding
Damages Payment Date to, but not including, such Damages Payment Date.
Additional Interest due shall be payable on each Damages Payment Date to the
Holders of Registrable Securities entitled thereto holding such Registrable
Securities on the record date for such Damages Payment Date; provided that
accrued Additional Interest shall be paid on the applicable redemption date upon
the redemption of any Convertible Debenture (to the extent accrued with respect
to such Convertible Debenture). The Trustee shall be entitled, on behalf of the
Notice Holders and the Holders of Convertible Debentures or Underlying Common
Stock, to seek any available remedy for the enforcement of this Agreement,
including for the payment of such liquidated damages. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a violation of
the terms of this Agreement with respect to which liquidated damages are
expressly provided shall be such liquidated damages. Nothing shall preclude a
Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.
All of the Company's obligations set forth in this Section
2(e) which are outstanding with respect to any Registrable Security at the time
such security ceases to be a Registrable Security shall survive until such time
as all such obligations with respect to such security have been satisfied in
full (notwithstanding termination of this Agreement pursuant to Section 9(o)).
The parties hereto agree that the liquidated damages provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities (other than the Initial
Purchaser) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
Section 3. Registration Procedures. In connection with the
registration obligations of the Company under Section 2 hereof, the Company
shall effect such registrations to permit the sale of the Registrable Securities
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
-9-
11
(a) Prepare and file with the SEC a Registration Statement on
any appropriate form under the Securities Act available for the sale of the
Registrable Securities by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use their reasonable best efforts
to cause each such Registration Statement to become effective and remain
effective as provided herein; provided, that before filing any such Registration
Statement or Prospectus or any amendments or supplements thereto (other than
documents that would be incorporated or deemed to be incorporated therein by
reference) the Company shall furnish to the Initial Purchaser and the Special
Counsel of such offering, if any, copies of all such documents proposed to be
filed, which documents will be subject to the review of the Initial Purchaser
and the Special Counsel, and the Company shall not file any such Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be incorporated or deemed
to be incorporated by reference therein) to which the Initial Purchaser or the
Special Counsel shall reasonably object in writing within two (2) full Business
Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2; 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) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
as so amended or such Prospectus as so supplemented.
(c) Notify the Notice Holders and, following the giving of
notice pursuant to Section 2(d), the Initial Purchaser and the Special Counsel
promptly, and (if requested by any such person) confirm such notice in writing,
(i) when a Prospectus, any Prospectus supplement, a Registration Statement or a
post-effective amendment to a Registration Statement has been filed with the
SEC, and, 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 or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening 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, (v) of the existence of any fact
or happening of any event which makes any statement of a material fact in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue or which would require the
making of any changes in the Registration Statement or Prospectus in order that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
-10-
12
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 or omit to state any 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,
and (vi) of the determination by the Company that a post-effective amendment to
a Registration Statement would be appropriate.
(d) Use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) If reasonably requested by the Initial Purchaser, the
Special Counsel, or the Holders of a majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchaser, the Special Counsel, or such Holders, in connection with any
offering of Registrable Securities, agree should be included therein as required
by applicable law, and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as promptly as is practicable after
the Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, that the Company
shall not be required to take any actions under this Section 3(e) that are not,
in the reasonable opinion of counsel for the Company, in compliance with
applicable law.
(f) Furnish to each selling Holder, the Special Counsel and
the Initial Purchaser, without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including financial statements
but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing by such
Holder, counsel or Initial Purchaser).
(g) Deliver to each selling Holder, the Special Counsel and
the Initial Purchaser in connection with any offering of Registrable Securities,
without charge, as many copies of the Prospectus or Prospectuses relating to
such Registrable Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such persons may reasonably request; and the
Company hereby consents to the use of such Prospectus or each amendment or
supplement thereto by each of the selling Holders of Registrable Securities in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders and the Special
Counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
-11-
13
United States as any selling Holder 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 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, that the Company will 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 suits or to taxation in any such jurisdiction where it is not then so
subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States (except as may be
required solely as a consequence of the nature of such selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals) as may be
necessary to enable the selling Holder or Holders thereof to consummate the
disposition of such Registrable Securities.
(j) During any Selling Period (other than during a Deferral
Period), immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus shall 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 the light of the circumstances under which they were
made, not misleading, promptly prepare and file a post-effective amendment to
each Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
(such as a Current Report on Form 8-K) that would be incorporated by reference
into the Registration Statement so that the Registration Statement shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and so that the Prospectus 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 the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement, use
their best efforts to cause it to become effective as promptly as is
practicable.
(k) Enter into such agreements and take all such other actions
in connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection (i) make such representations
and warranties, subject to the ability of the Company to do so, to the Holders
of such Registrable Securities with respect to the business of the Company and
its subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, in each
case, in form,
-12-
14
substance and scope as shall be reasonably satisfactory to the Special Counsel
and the Holders of a majority of the Registered Securities being sold, and (ii)
deliver such documents and certificates as may be reasonably requested by the
Holders of a majority of the Registrable Securities being sold and the Special
Counsel to evidence the continued validity of the representations and warranties
of the Company and its subsidiaries made pursuant to clause (i) above. The plan
of distribution of the Registration Statement and the Prospectus included
therein shall permit resales of Registrable Securities to be made by selling
security holders through brokers and dealers. However, the Company will not be
obligated hereunder to pay the costs and expenses of opinions of counsel of such
selling security holders, or accountants' "cold comfort" letters and the
officers and directors of the Company will not be obligated hereunder to
participate in marketing efforts on behalf of such selling security holders.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of Registrable Securities being
sold, and any Special Counsel or accountant retained by such selling Holders,
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the executive officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by any such representative, Special Counsel or accountant
in connection with such disposition; subject to reasonable assurances by each
such person that such information will only be used in connection with matters
relating to such Registration Statement; provided, however, that such persons
shall, upon the request of the Company, 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 Federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such persons or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement.
(m) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders earning statements
(which need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act).
(n) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the Holders may request.
-13-
15
(o) Provide a CUSIP number for all Registrable Securities not
later than the effective date of the Registration Statement and provide the
Trustee and the transfer agent for the Common Stock with printed certificates
for the Registrable Securities which are in a form eligible for deposit with the
Depositary Trust Company.
(p) Cause all Underlying Common Stock covered by the
Registration Statement to be listed on each securities exchange or quotation
system on which the Company's Common Stock is then listed no later than the date
the Registration Statement is declared effective and, in connection therewith,
to the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
(q) Cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.
Section 4. Holder's Obligations. Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities pursuant
to a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company with the notice required pursuant to
Section 2(d) hereof (including the information required to accompany such
notice) and, promptly after the request by the Company, such other information
regarding such Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request. The Company may exclude from
such registration the Registrable Securities of any Holder who does not furnish
such information provided above for so long as such information is not so
furnished. Each Holder of Registrable Securities as to which any Registration
Statement is being effected agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not misleading. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to
such Holder or its plan of distribution and that such Prospectus does not as of
the time of such sale omit to state any material fact relating to such Holder or
its plan of distribution necessary to make the statements in such Prospectus, in
the light of the circumstances under which they were made, not misleading.
Section 5. Registration Expenses. Subject to Section 3(k)
hereof, all fees and expenses incident to the performance by the Company of or
compliance with this Agreement shall be borne by the Company whether or not any
of the Registration Statements become effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, fees and disbursements of
-14-
16
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such United States jurisdictions as the Holders of
a majority of the Registrable Securities being sold may designate), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depositary Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the Special Counsel or the Holders of a majority of
the Registrable Securities included in any Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for the Company and the Special Counsel in connection
with the Shelf Registration (provided that the Company shall not be liable for
the fees and expenses of more than one separate firm for all parties
participating in any transaction hereunder), and (v) Securities Act liability
insurance obtained by the Company in its sole discretion. In addition, the
Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Underlying Common Stock and the
fees and expenses of any person, including special experts, retained by the
Company. Notwithstanding the provisions of this Section 5, each seller of
Registrable Securities shall pay all registration expenses to the extent the
Company is prohibited by applicable Blue Sky laws from paying for or on behalf
of such seller of Registrable Securities.
Section 6. Indemnification.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) from and against all losses, liabilities,
claims, damages and expenses (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (collectively, "Losses"), arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such Losses arise out of or based upon the information relating to
any Holder furnished to the Company in writing by such Holder expressly for use
therein; provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A) (i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claim from which such Losses arise and
(ii) the Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with
-15-
17
copies of the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, with or prior to
the delivery of written confirmation of the sale of a Registrable Security to
the person asserting the claim from which such Losses arise. The Company shall
also indemnify each broker-dealer participating in the offering and sale of
Registrable Securities and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent and with the same limitations as provided above with respect
to the indemnification of the Holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. Each
Holder agrees, and such agreement shall be evidenced by the Holder delivering
the notice described in Section 2(d) hereof, severally and not jointly to
indemnify and hold harmless the Company, the Company's directors, the Company's
officers who sign a Registration Statement, and each person, if any, who
controls the Company (within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act), from and against all losses arising out
of or based upon any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information relating to such Holder so furnished in writing by such Holder to
the Company expressly for use in such Registration Statement or Prospectus. In
no event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all persons, if any, who
control any Holder
-16-
18
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and (b) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, the Company's directors, the
Company's officers who sign a Registration Statement, and each person, if any,
who controls the Company within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Holders and such persons who control the Holders,
such firm shall be designated in writing by the Holders of a majority of
Registrable Securities sold pursuant to the Registration Statement. In the case
of any such separate firm for the Company, and such directors, officers,
trustees and control persons of the Company, such firm shall be designated in
writing by the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding 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 and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) Contribution. To the extent that the indemnification
provided for in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof in respect of any Losses or is insufficient to hold
such indemnified party harmless, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the initial
placement (before deducting expenses) of the Convertible Debentures pursuant to
the Purchase Agreement. Benefits received by any Holder shall be deemed to be
equal to the value of receiving Registrable Securities that are registered under
the Securities Act. The relative fault of the Holders on the one hand and the
Company on the other hand shall be determined by reference to, among other
things, whether the
-17-
19
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by the Company and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method or allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
Losses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of the Company and the Holders hereunder shall be in addition to any
liability the Company and the Holders may otherwise have hereunder, under the
Purchase Agreement or otherwise. The provisions of this Section 6 shall survive,
notwithstanding any transfer of the Registrable Securities by any Holder or any
termination of this Agreement.
The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any person controlling any Holder, or the Company, the
Company's officers or the Company's directors or any person controlling the
Company and (iii) the sale of any Registrable Securities by any Holder.
Section 7. Information Requirements.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales of Registrable Securities pursuant to Rule 144 and
Rule 144A under the Securities Act. The Company further covenants that it will
-18-
20
cooperate with any Holder of Registrable Securities and take such further
reasonable action as any Holder of Registrable Securities may reasonably request
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act. Upon the request of any Holder
of Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities under any section of the
Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the instructions to Form S-3 in order to allow it to be eligible to file
registration statements on Form S-3 in connection with secondary offerings.
Section 8. Submission to Jurisdiction. The Company irrevocably
consents and agrees, for the benefit of the Holders, that any legal action, suit
or proceeding against it with respect to its obligations, liabilities or any
other matter arising out of or in connection with this Agreement may be brought
in the courts of the State of New York or the courts of the United States
located in The City of New York and hereby irrevocably consents and submits to
the non-exclusive jurisdiction of each such court in personam, generally and
unconditionally, with respect to any such action, suit or proceeding for itself
and in respect of its properties, assets and revenues.
The Company has irrevocably designated, appointed and
empowered CT Corporation System, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and its properties,
assets and revenues, service of any and all legal process, summons, notices and
documents which may be served in any such action, suit or proceeding referred to
in the preceding paragraph of this Section 8 brought in any United States or
State court that may be made on such designee, appointee and agent in accordance
with legal procedures prescribed for such courts. Said designation and
appointment shall be irrevocable until the end of the Effectiveness Period,
provided, however, that if for any reason such designee, appointee and agent
hereunder shall cease to be available to act as such, the Company agrees to
designate a new designee, appointee and agent in The City of New York on the
terms and for the purposes of this Section 8 satisfactory to the Initial
Purchaser. The Company further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents out of any
of the aforesaid courts in any such action, suit, or proceeding by serving a
copy thereof upon the relevant agent for service of process referred to in this
Section 8 (whether or not the appointment of such agent shall for any reason
prove to be ineffective or such agent shall accept or acknowledge such service)
or by mailing copies thereof by registered or certified air mail, postage
prepaid, to the Company at its address specified in or designated pursuant to
Section 9 of this Agreement. The Company agrees that the failure of such
designee, appointee
-19-
21
and agent to give any notice of such service to it shall not impair or affect in
any way the validity of such service or any judgment rendered in any action or
proceeding based thereon. Nothing herein shall in any way be deemed to limit the
ability of the Notice Holders or the Holders of the Registrable Securities, to
serve any such legal process, summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction over the Company or bring
actions, suits or proceedings against the Company in such other jurisdictions,
and in such manner, as may be permitted by applicable law. The Company hereby
irrevocably and unconditionally waives, to the fullest extent permitted by law,
any objection which it may now, or until the end of the Effectiveness Period,
have to the laying of venue or any of the aforesaid actions, suits or
proceedings arising out of or in connection with this Agreement brought in the
United States Federal courts located in The City of New York or the courts of
the State of New York and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
The provisions of this Section 8 shall survive any termination
of this Agreement, in whole or in part.
Section 9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement, provided, that the sole damages payable for a violation of
the terms of this Agreement for which liquidated damages are expressly provided
pursuant to Section 2(e) hereof shall be such liquidated damages. 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
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of the
date hereof, and shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which conflicts with the rights
granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
Holders of the Company's securities under any other agreements.
(c) 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, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Convertible Debentures
-20-
22
deemed to be the Holders, for purposes of this Section, of the number of
outstanding shares of Underlying Common Stock into which such Debentures are
convertible or exchangeable). Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders; provided, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one (1) business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows (provided that with
respect to any notice of intention to sell given by a Holder to the Company
pursuant to Section 2(d) hereof in accordance with this Section 9(d) which is
given on or after December 24 of any year and on or prior to January 1 of the
next year, such notice shall only be deemed given upon the earlier of actual
receipt of such notice by the Company or the first Business Day next succeeding
such January 1):
(w) if to a Holder of Registrable Securities, at the
most current address given by such Holder to the Company in
accordance with the provisions of Section 9(e);
(x) if to the Company, to:
Xxxxxxxxxxx International, Inc.
000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx
Telecopy No.: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
-21-
23
(y) if to the Initial Purchaser, to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Telecopy No.: (000) 000-0000
; and
(z) if to the Special Counsel, to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: G. Xxxxxxx X'Xxxxx
Telecopy No.: (000) 000-0000
or to such other address as such person may have furnished to
the other persons identified in this Section 9(d) in writing
in accordance herewith.
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the Company as the owner thereof for all
purposes, including, without limitation, the giving of notices under this
Agreement.
(f) Approval of Holders. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) (other than the Initial
Purchaser or subsequent Holders of Registrable Securities if such subsequent
Holders are deemed to be such affiliates solely by reason of their holdings of
such Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(g) Successors and Assigns. Any person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(h) 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
-22-
24
shall be deemed to be original and all of which taken together shall constitute
one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held 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 thereby, 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 which may
be hereafter declared invalid, void or unenforceable.
(l) Entire Agreement. This 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 the
registration rights granted by the Company with respect to the Registrable
Securities sold pursuant to the Purchase Agreement. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) Further Assurances. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
-23-
25
(o) Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
[The remainder of this page is intentionally left blank]
-24-
26
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
XXXXXXXXXXX INTERNATIONAL, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
------------------------------------
Title: Vice President - Legal
----------------------------------
and Associate General Counsel
----------------------------------
Accepted as of the date first
above written,
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ XXXXXX XXXXXXX
-----------------------------
Name: Xxxxxx Xxxxxxx
---------------------------
Title: Vice President
--------------------------
