EXHIBIT 10.5
Execution Version
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REGISTRATION RIGHTS AGREEMENT
dated as of April 8, 2005
between
XXXXXXXX MARITIME LIMITED
and
XXXXXXXX MARITIME INVESTORS LLC
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REGISTRATION RIGHTS AGREEMENT
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS........................................................ 1
1.1. Defined Terms.......................................................... 1
1.2. General Interpretive Principles........................................ 4
ARTICLE II. REGISTRATION RIGHTS................................................ 4
2.1. Demand Registration.................................................... 4
2.2. Shelf Registration..................................................... 8
2.3. Piggyback Registration................................................. 9
2.4. Lock-Up Periods........................................................ 10
2.5. Registration Procedures................................................ 11
2.6. Underwritten Offerings................................................. 16
2.7. No Inconsistent Agreements; Additional Rights.......................... 17
2.8. Registration Expenses.................................................. 18
2.9. Indemnification........................................................ 18
2.10. Rules 144 and 144A and Regulation S.................................... 21
ARTICLE III. MISCELLANEOUS...................................................... 21
3.1 Term................................................................... 21
3.2. Injunctive Relief...................................................... 21
3.3. Attorneys' Fees........................................................ 22
3.4. Notices................................................................ 22
3.5. Successors, Assigns and Transferees.................................... 23
3.6. Governing Law; Service of Process; Consent to Jurisdiction............. 23
3.7. Severability........................................................... 24
3.8. Amendment; Waiver...................................................... 24
3.9. Counterparts........................................................... 24
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of April 8,
2005, by and between Xxxxxxxx Maritime Limited, a Xxxxxxxx Islands Corporation
(the "Company") and Xxxxxxxx Maritime Investors LLC, a Xxxxxxxx Islands limited
liability company ("QMI").
RECITALS
WHEREAS, as of the date hereof, QMI owns all the Registrable Securities
(as defined below) of the Company; and
WHEREAS, the parties desire to set forth certain registration rights
applicable to the Registrable Securities.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
covenants and agreements of the parties hereto, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" has the meaning specified in Rule 12b-2 under the
Exchange Act. The term "Affiliated" has a correlative meaning.
"Agreement" has the meaning set forth in the preamble.
"Board of Directors" means the board of directors of the Company.
"Company" has the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization,
conversion or otherwise.
"Company Public Sale" has the meaning set forth in Section 2.3(a).
"Demanding Investor" has the meaning set forth in Section 2.l(a).
"Demand Notice" has the meaning set forth in Section 2.1(e).
"Demand Period" has the meaning set forth in Section 2.l(d).
"Demand Registration" has the meaning set forth in Section 2.l(a).
"Demand Registration Statement" has the meaning set forth in Section
2.l(a).
"Demand Suspension" has the meaning set forth in Section 2.1 (g).
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"Effectiveness Date" means the date on which Holders are no longer
subject to any underwriter's lock-up or other contractual restriction on the
sale of Registrable Securities in connection with the Company's IPO.
"Equity Securities" means any equity interest or other securities
convertible into equity interests of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor thereto, and any rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time.
"Holder" means any holder of Registrable Securities who is a party
hereto or who succeeds to rights hereunder pursuant to Section 3.5.
"Indemnified Parties" has the meaning set forth in Section 2.9(a).
"Initial Registrable Securities" means the Registrable Securities
outstanding as of the date hereof.
"Investor" means QMI until the dissolution of QMI, and effective
immediately upon such dissolution shall mean each of Xxxxxxxx Maritime Partners
L.P and FR X Offshore, L.P., and their respective successors and permitted
assigns.
"IPO" means an initial registered offering of equity securities or
equity interests of the Company to the public.
"Material Adverse Change" means
(i) any general suspension of trading in, or limitation on prices
for, securities on any national securities exchange or in the over-the-counter
market in the United States;
(ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States;
(iii) a material outbreak or escalation of armed hostilities or
other international or national calamity involving the United States or the
declaration by the United States of a national emergency or war or a change in
national or international financial, political or economic conditions; and
(iv) any event, change, circumstance or effect that is or is
reasonably likely to be materially adverse to the business, properties, assets,
liabilities, condition (financial or otherwise), operations, results of
operations or prospects of the Company and its subsidiaries taken as a whole.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, association, limited
liability company, partnership, estate, trust, unincorporated organization or a
government or any agency or political subdivision thereof.
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"Piggyback Registration" has the meaning set forth in Section
2.3(a). "Preemption Notice" has the meaning set forth in Section 2.1 (f).
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus and all other
material incorporated by reference in such prospectus.
"Registrable Securities" means any Equity Securities and any
securities that may be issued or distributed or be issuable in respect of any
Equity Securities by way of conversion, dividend, stock split or other
distribution, merger, consolidation, exchange, recapitalization or
reclassification or similar transaction; provided, however, that any such
Registrable Securities shall cease to be Registrable Securities to the extent:
(i) a Registration Statement with respect to the sale of such
Registrable Securities has been declared effective under the Securities Act and
such Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such Registration Statement;
(ii) such Registrable Securities have been distributed pursuant to
Rule 144 (or any similar provisions then in force) under the Securities Act; or
(iii) such Registrable Securities shall have been otherwise
transferred and new certificates for them not bearing a legend restricting
transfer under the Securities Act shall have been delivered by the Company and
such securities may be publicly resold without Registration under the Securities
Act.
"Registration" means a registration with the SEC of the Company's
securities for offer and sale to the public under a Registration Statement. The
term "Register" shall have a correlative meaning.
"Registration Expenses" has the meaning set forth in Section 2.8.
"Registration Statement" means any registration statement of the
Company filed with, or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the related Prospectus,
amendments and supplements to such registration statement, including pre- and
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"Representatives" means, with respect to any Person, any of such
Person's officers, directors, employees, agents, attorneys, accountants,
actuaries, consultants, equity financing partners or financial advisors or other
Person associated with, or acting on behalf of, such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor thereto, and any rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.
"Shelf Period" has the meaning set forth in Section 2.2(b).
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"Shelf Registration" means a Registration effected pursuant to
Section 2.2.
"Shelf Registration Statement" means a Registration Statement of the
Company filed with the SEC on either (i) Form S-3 (or any successor form or
other appropriate form under the Securities Act) or (ii) if the Company is not
permitted to file a Registration Statement on Form S-3, an evergreen
Registration Statement on Form S-l (or any successor form or other appropriate
form under the Securities Act), in each case for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the SEC) covering all of the Registrable Securities.
"Shelf Suspension" has the meaning set forth in Section 2.2(c).
"Underwritten Offering" means a Registration in which securities of
the Company are sold to an underwriter or underwriters on a firm commitment
basis for reoffering to the public.
1.2 General Interpretive Principles
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof, "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and any subsection, Section, Exhibit, Schedule and Annex
references are to this Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including
without limitation."
(d) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this
Agreement.
(e) Whenever the context requires, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms.
ARTICLE II
REGISTRATION RIGHTS
2.1. Demand Registration
(a) Demand by Holders. If at any time or from time to time after the
Effectiveness Date, there is no currently effective Shelf Registration
Statement on file with the SEC under which an Investor holding, in the
aggregate, not less than 5% of the Registrable Securities then outstanding
could sell all of its Registrable Securities, such Investor may make a
written request to the Company for Registration of Registrable Securities
held by such Investor (a "Demanding Investor"). Any such requested
Registration shall hereinafter be referred to as a "Demand Registration."
Each request for a Demand Registration shall specify the kind and
aggregate amount of Registrable Securities to be Registered and the
intended methods
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of disposition thereof. Within 30 days of a request for a Demand
Registration, the Company shall file a Registration Statement relating to
such Demand Registration (a "Demand Registration Statement"), and shall
use its reasonable best efforts to cause such Demand Registration
Statement to promptly be declared effective under (i) the Securities Act
and (ii) the "Blue Sky" laws of such jurisdictions as any Holder of
Registrable Securities being registered under such Registration or any
underwriter, if any, reasonably requests.
(b) Limitation on Demand Registrations. Subject to Section 2.1(i),
each Investor shall have the right to request up to two Demand
Registrations, one of which may be used to demand that the Company file a
continuously effective Shelf Registration Statement pursuant to Section
2.2(a). Notwithstanding the foregoing, in no event shall the Company be
required to effect more than a total of four Demand Registrations.
(c) Demand Withdrawal. A Demanding Investor and any other Holder
that has requested its Registrable Securities be included in a Demand
Registration pursuant to Section 2.l(e) may withdraw its Registrable
Securities from a Demand Registration at any time prior to the
effectiveness of the applicable Demand Registration Statement. Upon
receipt of a notice to such effect from the Demanding Investor, the
Company shall cease all efforts to secure effectiveness of the applicable
Demand Registration Statement and such Registration nonetheless shall be
deemed a Demand Registration with respect to the Demanding Investor for
purposes of Section 2. l(b) unless
(i) the withdrawing Demanding Investor shall have paid or
reimbursed the Company for its pro rata share of all reasonable and
documented out-of-pocket fees and expenses incurred by the Company
in connection with the Registration of such Demanding Investor's
withdrawn Registrable Securities; or
(ii) the withdrawal is made following the occurrence of a
Material Adverse Change or because the Registration would require
the Company to make disclosure of any event that the Board of
Directors of the Company determines would not be in the best
interests of the Company and its shareholders due to a pending
transaction, investigation or other event, including any public
disclosure of material non-public information, where such disclosure
would, at that time, materially adversely affect the Company and its
shareholders.
(d) Effective Registration. The Company shall be deemed to have
effected a Demand Registration if the Demand Registration Statement is
declared effective by the SEC and remains effective for (a) other than
with respect to a Shelf Registration, not less than 180 days (or such
shorter period as will terminate when all Registrable Securities covered
by such Demand Registration Statement have been sold or withdrawn), (b)
the Shelf Period, in the case of a Shelf Registration, or (c) if any such
Registration Statement relates to an Underwritten Offering, such longer
period as, in the opinion of counsel for the underwriter or underwriters,
a Prospectus is required by law to be delivered in connection with sales
of Registrable Securities by
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an underwriter or dealer (the applicable period, the "Demand Period"). No
Demand Registration shall be deemed to have been effected if:
(i) during the Demand Period such Registration is interfered
with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court; or
(ii) the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such Registration
are not satisfied other than by reason of a wrongful act,
misrepresentation or breach of such applicable underwriting
agreement by the Demanding Investor.
(e) Demand Notice. Promptly upon receipt of any request for a Demand
Registration pursuant to Section 2. l(a) (but in no event more than five
Business Days thereafter), the Company shall deliver a written notice (a
"Demand Notice") of any such Registration request to all other Holders of
Registrable Securities, and the Company shall include in such Demand
Registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within ten Business
Days after the date that the Demand Notice has been delivered. All
requests made pursuant to this Section 2.l(e) shall specify the aggregate
amount of Registrable Securities to be registered and the intended method
of distribution of such securities.
(f) Preemption. If not more than 30 days prior to receipt of any
request for a Demand Registration pursuant to Section 2. l(a), the Company
shall have (i) circulated to prospective underwriters and their counsel a
draft of a Registration Statement for a primary offering of Equity
Securities on behalf of the Company, (ii) solicited bids for a primary
offering of Equity Securities, or (iii) otherwise reached a written
understanding with an underwriter with respect to a primary offering of
Equity Securities, the Company may preempt the Demand Registration with
such primary offering by delivering written notice of such intention (the
"Preemption Notice") to the Demanding Investor and all other Holders of
Registrable Securities, within five days after the Company has received
the request. The period of preemption may be up to 45 days following the
date such Preemption Notice is delivered. Notwithstanding anything to the
contrary herein, the Company shall not be entitled to exercise its right
to preempt a Demand Registration pursuant to this Section 2.l(f) more than
once during any 12-month period.
(g) Delay in Filing; Suspension of Registration. If the filing,
initial effectiveness or continued use of a Demand Registration Statement
at any time would require the Company to make disclosure of any event that
the Board of Directors of the Company determines would not be in the best
interests of the Company and its shareholders due to a pending
transaction, investigation or other event, including any public disclosure
of material non-public information, where such disclosure would, at that
time, materially adversely affect the Company and its shareholders, the
Company may, upon giving prompt written notice of such action to the
Holders, delay the filing or initial effectiveness of, or suspend use of,
the Demand Registration Statement (a "Demand Suspension"): provided,
however, that the Company shall not be permitted to exercise a Demand
Suspension (i) more than once during any 6-month
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period, or (ii) for a period exceeding 60 days on any one occasion. In the
case of a Demand Suspension, the Holders agree to suspend use of the
applicable Prospectus in connection with any sale or purchase, or offer to
sell or purchase, Registrable Securities, upon receipt of the notice
referred to above. The Company shall immediately notify the Holders upon
the termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any material untrue
statement or omission and furnish to the Holders such numbers of copies of
the Prospectus as so amended or supplemented as any such Holders may
reasonably request. The Company agrees, if necessary, to supplement or
make amendments to the Demand Registration Statement, if required by the
registration form used by the Company for the Demand Registration or by
the instructions applicable to such registration form or by the Securities
Act or the rules or regulations promulgated thereunder or as may
reasonably be requested by the Demanding Investor.
(h) Underwritten Offering. If a Demanding Investor so elects, an
offering of Registrable Securities pursuant to a Demand Registration shall
be in the form of an Underwritten Offering. Such Demanding Investor shall
have the right to select the managing underwriter or underwriters to
administer the offering; provided such managing underwriter or
underwriters shall be reasonably acceptable to the Company.
(i) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of the Registrable Securities included in a Demand
Registration, advise the Board of Directors in writing that, in its or
their opinion, the number of securities requested to be included in such
Demand Registration exceeds the number that can be sold in such offering
without being likely to have a significant adverse effect on the price,
timing or distribution of the securities offered or the market for the
securities offered, the securities to be included in such Demand
Registration shall be:
(i) first, up to 100% of the Registrable Securities that the
Demanding Investor proposes to include in the Demand Registration;
(ii) second, and only if all the securities referred to in
clause (i) have been included, the number of Registrable Securities
that, in the opinion of such managing underwriter or underwriters
can be sold without having such adverse effect, with such number to
be allocated pro rata among the Holders that have requested to
participate in such Demand Registration based on the relative number
of Registrable Securities then held by each such Holder (provided
that any securities thereby allocated to a Holder that exceed such
Holder's request shall be reallocated among the remaining requesting
Holders in like manner); and
(iii) third, and only if all the securities referred to in
clause (ii) have been included, the number of securities that the
Company proposes to include in such Registration that, in the
opinion of the managing underwriter or underwriters can be sold
without having such adverse effect.
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2.2 Shelf Registration
(a) Filing. After the Effectiveness Date, as promptly as practicable
following a demand by an Investor that holds, in the aggregate, not less
than 5% of the Registrable Securities then outstanding, the Company shall
file with the SEC a Shelf Registration Statement relating to the offer and
sale of all Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by such Holders and
set forth in the Shelf Registration Statement and, thereafter, shall use
its reasonable best efforts to cause such Shelf Registration Statement to
be declared effective under the Securities Act. If, on the date of any
such demand, the Company does not qualify to file a Shelf Registration
Statement under the Securities Act, the provisions of this Section 2.2
shall not apply, and the provisions of Section 2.1 shall apply instead.
(b) Continued Effectiveness. The Company shall use its reasonable
best efforts to keep such Shelf Registration Statement continuously
effective under the Securities Act in order to permit the Prospectus
forming a part thereof to be usable by Holders until the earlier of (i)
the date as of which all Registrable Securities have been sold pursuant to
the Shelf Registration Statement or another registration statement filed
under the Securities Act (but in no event prior to the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder)
and (ii) the date as of which each of the Holders is permitted to sell its
Registrable Securities without Registration pursuant to Rule 144 under the
Securities Act without volume limitation or other restrictions on transfer
thereunder (such period of effectiveness, the "Shelf Period"). Subject to
Section 2.2(c), the Company shall not be deemed to have used its
reasonable best efforts to keep the Shelf Registration Statement effective
during the Shelf Period if the Company voluntarily takes any action or
omits to take any action that would result in Holders of the Registrable
Securities covered thereby not being able to offer and sell any
Registrable Securities pursuant to such Shelf Registration Statement
during the Shelf Period, unless such action or omission is required by
applicable law.
(c) Suspension of Registration. If the continued use of such Shelf
Registration Statement at any time would require the Company to make
disclosure of any event that the Board of Directors of the Company
determines would not be in the best interests of the Company and its
shareholders due to a pending transaction, investigation or other event,
including any public disclosure of material non-public information, where
such disclosure would, at that time, materially adversely affect the
Company and its shareholders, the Company may, upon giving at least ten
days' prior written notice of such action to the Holders, suspend all
Holders' ability to use the Shelf Registration Statement (a "Shelf
Suspension"); provided that the Company shall not be permitted to exercise
a Shelf Suspension (i) more than one time during any six-month period, or
(ii) for a period exceeding 60 days on any one occasion. In the case of a
Shelf Suspension, the Holders agree to suspend use of the applicable
Prospectus in connection with any sale or purchase of, or offer to sell or
purchase, Registrable Securities, upon receipt of the notice referred to
above. The Company shall immediately notify the Holders upon the
termination of any Shelf Suspension, amend or supplement the Prospectus,
if necessary, so it does not contain any material untrue statement or
omission and furnish to the Holders such numbers of copies of the
Prospectus as so amended or supplemented as the Holders may reasonably
request. The Company agrees, if necessary, to supplement or make
amendments to the Shelf Registration Statement, if required by the
registration form used by the Company for the Shelf Registration or by the
instructions applicable to such registration form or by the
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Securities Act or the rules or regulations promulgated thereunder or as
may reasonably be requested by an Investor.
(d) Underwritten Offering. If an Investor holds, in the aggregate,
not less than 5% of the Registrable Securities then outstanding and so
elects, an offering of such Investor's Registrable Securities pursuant to
the Shelf Registration Statement shall be in the form of an Underwritten
Offering, and the Company shall amend or supplement the Shelf Registration
Statement for such purpose. Such Investor shall have the right to select
the managing underwriter or underwriters to administer such offering;
provided that such managing underwriter or underwriters shall be
reasonably acceptable to the Company.
2.3 Piggyback Registration
(a) Participation. If the Company at any time proposes to file a
Registration Statement under the Securities Act with respect to any
offering of its securities for its own account or for the account of any
other Persons (other than (i) a Registration under Section 2.1 or 2.2,
(ii) a Registration on Form S-4 or S-8 or any successor form to such Forms
or (iii) a Registration of securities solely relating to an offering and
sale to employees or directors of the Company pursuant to any employee
stock plan or other employee benefit plan arrangement) (a "Company Public
Sale"), then, as soon as practicable (but in no event less than 30 days
prior to the proposed date of filing of such Registration Statement), the
Company shall give written notice of such proposed filing to all Holders
of Registrable Securities, and such notice shall offer each Holder of not
less than 5% of Registrable Securities then outstanding the opportunity to
Register under such Registration Statement such number of Registrable
Securities as each such Holder may request in writing (a "Piggyback
Registration"). Subject to Section 2.3(b), the Company shall include in
such Registration Statement all such Registrable Securities that are
requested to be included therein within 15 days after such notice is
delivered; provided that if at any time after giving written notice of its
intention to Register any securities and prior to the effective date of
the Registration Statement filed in connection with such Registration, the
Company shall determine for any reason not to Register or to delay
Registration of such securities, the Company shall give written notice of
such determination to each Holder of Registrable Securities and,
thereupon:
(i) in the case of a determination not to Register, shall be
relieved of its obligation to Register any Registrable Securities in
connection with such Registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of any Holders of Registrable
Securities entitled to request that such Registration be effected as
a Demand Registration under Section 2.1; and
(ii) in the case of a determination to delay Registering, in
the absence of a request for a Demand Registration, shall be
permitted to delay Registering any Registrable Securities, for the
same period as the delay in Registering such other securities. If
the offering pursuant to such Registration Statement is to be
underwritten, then each Holder making a request for a Piggyback
Registration pursuant to this Section 2.3(a) must, and the Company
shall make such arrangements with the managing underwriter or
underwriters so that each such Holder may, participate in such
Underwritten Offering. If the offering pursuant to such Registration
Statement is to be on any other basis, then each Holder
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making a request for a Piggyback Registration pursuant to this
Section 2.3 (a) must, and the Company shall make such arrangements
so that each such Holder may, participate in such offering on such
basis.
Each Holder of Registrable Securities shall be permitted to withdraw all
or part of such Holder's Registrable Securities from a Piggyback
Registration at any time prior to the effectiveness of such Registration
Statement.
(b) Priority of Piggyback Registration. If the managing underwriter
or underwriters of any proposed Underwritten Offering of Registrable
Securities included in a Piggyback Registration informs the Company and
the Holders of Registrable Securities in writing that, in its or their
opinion, the number of securities which such Holders and any other Persons
intend to include in such offering exceeds the number that can be sold in
such offering without being likely to have a significant adverse effect on
the price, timing or distribution of the securities offered or the market
for the securities offered, then the securities to be included in such
Registration shall be:
(i) first, up to 100% of the securities that the Company or
(subject to Section 2.7) any Person (other than a Holder of
Registrable Securities) exercising a contractual right to demand
Registration, as the case may be, proposes to sell;
(ii) second, and only if all the securities referred to in
clause (i) have been included, the number of Registrable Securities
that, in the opinion of such managing underwriter or underwriters,
can be sold without having such adverse effect, with such number to
be allocated pro rata among the Holders that have requested to
participate in such Registration based on the relative number of
Registrable Securities then held by each such Holder (provided that
any securities thereby allocated to a Holder that exceed such
Holder's request shall be reallocated among the remaining requesting
Holders in like manner); and
(iii) third, and only if all of the Registrable Securities
referred to in clause (ii) have been included in such Registration,
any other securities eligible for inclusion in such Registration.
(c) No Effect on Demand Registrations. No Registration of
Registrable Securities effected pursuant to a request under this Section
2.3 shall be deemed to have been effected pursuant to Sections 2.1 and 2.2
or shall relieve the Company of its obligations under Sections 2.1 or 2.2.
2.4 Lock-Up Periods
(a) Lock-Up Periods for Holders. In the event of a Company Public
Sale of the Company's equity securities in an Underwritten Offering, the
Holders of Registrable Securities agree, if requested by the managing
underwriter or underwriters in such Underwritten Offering, not to effect
any public sale or distribution of any securities (except, in each case,
as part of the applicable Registration, if permitted) that are the same as
or similar to those being Registered in connection with such Company
Public Sale, or any securities convertible into or exchangeable or
exercisable for such securities, during the period beginning seven days
before and ending 180 days, in the case of the Company's initial public
offering, or 45 days, in the case of any other Company Public Sale in an
Underwritten Offering (or, in each case, such lesser period as may be
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permitted by the Company or such managing underwriter or underwriters)
after, the effective date of the Registration Statement filed in
connection with such Registration, to the extent timely notified in
writing by the Company or the managing underwriter or underwriters.
(b) Lock-Up Period for the Company and Others. In the case of a
Registration of Registrable Securities pursuant to Section 2.1 or 2.2 for
an Underwritten Offering, the Company and each Holder of Registrable
Securities agrees, if requested by the Demanding Investor or the managing
underwriter or underwriters, not to effect any public sale or distribution
of any securities that are the same as or similar to those being
Registered, or any securities convertible into or exchangeable or
exercisable for such securities, during the period beginning seven days
before, and ending 45 days (or such lesser period as may be permitted by
such Holders or such managing underwriter or underwriters) after, the
effective date of the Registration Statement filed in connection with such
Registration (or, in the case of an offering under a Shelf Registration
Statement, the date of the closing under the underwriting agreement in
connection therewith), to the extent timely notified in writing by a
Holder of Registrable Securities covered by such Registration Statement or
the managing underwriter or underwriters. Notwithstanding the foregoing,
the Company may effect a public sale or distribution of securities of the
type described above and during the periods described above if such sale
or distribution is made pursuant to Registrations on Form S-4 or S-8 or
any successor form to such Forms or as part of any Registration of
securities for offering and sale to employees or directors of the Company
pursuant to any employee stock plan or other employee benefit plan
arrangement. The Company agrees to use its reasonable best efforts to
obtain from each Holder of restricted securities of the Company which
securities are the same as or similar to the Registrable Securities being
Registered, or any restricted securities convertible into or exchangeable
or exercisable for any of such securities, an agreement not to effect any
public sale or distribution of such securities during any such period
referred to in this paragraph, except as part of any such Registration, if
permitted. Without limiting the foregoing (but subject to Section 2.7), if
after the date hereof the Company grants any Person (other than a Holder
of Registrable Securities) any rights to demand or participate in a
Registration, the Company agrees that the agreement with respect thereto
shall include such Person's agreement to comply with any lock-up period
required by this Section as if it were the Company hereunder.
2.5 Registration Procedures
(a) In connection with the Company's Registration obligations under
Sections 2.1, 2.2 and 2.3, the Company shall use its reasonable best
efforts to effect such Registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of
distribution thereof as expeditiously as reasonably practicable, and in
connection therewith the Company shall:
(i) prepare the required Registration Statement including all
exhibits and financial statements required under the Securities Act
to be filed therewith, and before filing a Registration Statement or
Prospectus, or any amendments or supplements thereto, (x) furnish to
the underwriters, if any, and to the Holders of the Registrable
Securities covered by such Registration Statement, copies of all
documents prepared to be filed, which documents shall be subject to
the review of such underwriters and such Holders and their
respective counsel and (y) except in the case of a Registration
under Section 2.3, not file any Registration Statement or Prospectus
or amendments or supplements thereto to
11
which the Demanding Investor or the underwriters, if any, shall
reasonably object;
(ii) as soon as possible (in the case of a Demand
Registration, no later than 60 days after a request for a Demand
Registration) file with the SEC a Registration Statement relating to
the Registrable Securities including all exhibits and financial
statements required by the SEC to be filed therewith, and use its
reasonable best efforts to cause such Registration Statement to
become effective under the Securities Act;
(iii) prepare and file with the SEC such pre- and
post-effective amendments to such Registration Statement and
supplements to the Prospectus as may be (x) reasonably requested by
the Demanding Investor, (y) reasonably requested by any
participating Holder (to the extent such request relates to
information relating to such Holder), or (z) necessary to keep such
Registration effective for the period of time required by this
Agreement, and comply with provisions of the applicable securities
laws with respect to the sale or other disposition of all securities
covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the
sellers thereof set forth in such Registration Statement;
(iv) notify the participating Holders of Registrable
Securities and the managing underwriter or underwriters, if any, and
(if requested) confirm such advice in writing and provide copies of
the relevant documents, as soon as reasonably practicable after
notice thereof is received by the Company (a) when the applicable
Registration Statement or any amendment thereto has been filed or
becomes effective, and when the applicable Prospectus or any
amendment or supplement to such Prospectus has been filed, (b) of
any written comments by the SEC or any request by the SEC or any
other federal or state governmental authority for amendments or
supplements to such Registration Statement or such Prospectus or for
additional information, (c) of the issuance by the SEC of any stop
order suspending the effectiveness of such Registration Statement or
any order by the SEC or any other regulatory authority preventing or
suspending the use of any preliminary or final Prospectus or the
initiation or threatening of any proceedings for such purposes, (d)
if, at any time, the representations and warranties of the Company
in any applicable underwriting agreement cease to be true and
correct in all material respects, and (e) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for offering or sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(v) subjection to the provisions of Section 2.1(g), promptly
notify each selling Holder of Registrable Securities and the
managing underwriter or underwriters, if any, when the Company
becomes aware of the happening of any event as a result of which the
applicable Registration Statement or the Prospectus included in such
Registration Statement (as then in effect) contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein (in the case of such
Prospectus and any preliminary Prospectus, in light of the
circumstances under which they were made) not misleading or, if for
any other reason it shall be necessary during such time period to
amend or supplement such Registration Statement or Prospectus in
12
order to comply with the Securities Act and, in either case as
promptly as reasonably practicable thereafter, prepare and file with
the SEC, and furnish without charge to the selling Holders and the
managing underwriter or underwriters, if any, an amendment or
supplement to such Registration Statement or Prospectus which shall
correct such misstatement or omission or effect such compliance;
(vi) use its reasonable best efforts to prevent or obtain the
withdrawal of any stop order or other order suspending the use of
any preliminary or final Prospectus;
(vii) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing
underwriter or underwriters and the Investors whose Registrable
Securities are being sold agree should be included therein relating
to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
(viii) furnish to each selling Holder of Registrable
Securities and each underwriter, if any, without charge, as many
conformed copies as such Holder or underwriter may reasonably
request of the applicable Registration Statement and any pre- or
post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(ix) deliver to each selling Holder of Registrable Securities
and each underwriter, if any, without charge, as many copies of the
applicable Prospectus (including each preliminary Prospectus) and
any amendment or supplement thereto as such Holder or underwriter
may reasonably request (it being understood that the Company
consents to the use of such Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable
Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto) and such other
documents as such selling Holder or underwriter may reasonably
request in order to facilitate the disposition of the Registrable
Securities by such Holder or underwriter;
(x) on or prior to the date on which the applicable
Registration Statement is declared effective, use its reasonable
best efforts to register or qualify, and cooperate with the selling
Holders of Registrable Securities, the managing underwriter or
underwriters, if any, and their respective counsel, in connection
with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "Blue Sky"
laws of each state and other jurisdiction of the United States as
any such selling Holder or managing underwriter or underwriters, if
any, or their respective counsel reasonably request in writing and
do any and all other acts or things reasonably necessary or
advisable to keep such registration or qualification in effect for
such period as required by Section 2.l(d) or 2.2(b), whichever is
applicable, provided that the Company will not be required to
qualify generally to do business in any
13
jurisdiction where it is not then so qualified or to take any action
which would subject it to taxation or general service of process in
any such jurisdiction where it is not then so subject;
(xi) cooperate with the selling Holders of Registrable
Securities and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any
sale of Registrable Securities to the underwriters;
(xii) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate
the disposition of such Registrable Securities;
(xiii) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable
Securities and provide the applicable transfer agent with printed
certificates for the Registrable Securities which are in a form
eligible for deposit with The Depository Trust Company;
(xiv) make such representations and warranties to the Holders
of Registrable Securities being registered, and the underwriters or
agents, if any, in form, substance and scope as are customarily made
by issuers in secondary underwritten public offerings;
(xv) enter into such customary agreements (including
underwriting and indemnification agreements) and take all such other
actions as the Demanding Investor or the managing underwriter or
underwriters, if any, reasonably request in order to expedite or
facilitate the registration and disposition of such Registrable
Securities;
(xvi) obtain for delivery to the Holders of Registrable
Securities being registered and to the underwriter or underwriters,
if any, an opinion or opinions from counsel for the Company dated
the effective date of the Registration Statement or, in the event of
an Underwritten Offering, the date of the closing under the
underwriting agreement, in customary form, scope and substance,
which opinions shall be reasonably satisfactory to such Holders or
underwriters, as the case may be, and their respective counsel;
(xvii) in the case of an Underwritten Offering, obtain for
delivery to the Company and the managing underwriter or
underwriters, with copies to the Holders of Registrable Securities
included in such Registration, a cold comfort letter from the
Company's independent certified public accountants in customary form
and covering such matters of the type customarily covered by cold
comfort letters as the managing underwriter or underwriters
reasonably request, dated the date of execution of the underwriting
agreement and brought down to the closing under the underwriting
agreement;
14
(xviii) cooperate with each seller of Registrable Securities
and each underwriter, if any, participating in the disposition of
such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(xix) use its reasonable best efforts to comply with all
applicable securities laws and make available to its security
Holders, as soon as reasonably practicable, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;
(xx) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the
effective date of such Registration Statement;
(xxi) use its reasonable best efforts to cause all Registrable
Securities covered by the applicable Registration Statement to be
listed on each securities exchange on which any of the Company's
securities are then listed or quoted and on each inter-dealer
quotation system on which any of the Company's securities are then
quoted;
(xxii) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by a Representative
appointed by the Demanding Investor, by any underwriter
participating in any disposition to be effected pursuant to such
Registration Statement and by any attorney, accountant or other
agent retained by such Demanding Investor or any such underwriter,
all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the
Company's officers, directors and employees and the independent
public accountants who have certified its financial statements to
make themselves available to discuss the business of the Company and
to supply all information reasonably requested by any such Person in
connection with such Registration Statement as shall be necessary to
enable them to exercise their due diligence responsibility; provided
that any such Person gaining access to information regarding the
Company pursuant to this Section 2.5(a)(xxii) shall agree to hold in
strict confidence and shall not make any disclosure or use any
information regarding the Company that the Company determines in
good faith to be confidential, and of which determination such
Person is notified, unless (w) the release of such information is
requested or required (by deposition, interrogatory, requests for
information or documents by a governmental entity, subpoena or
similar process), (x) such information is or becomes publicly known
other than through a breach of this or any other agreement of which
such Person has knowledge, (y) such information is or becomes
available to such Person on a non-confidential basis from a source
other than the Company or (z) such information is independently
developed by such Person; and
(xxiii) in the case of an Underwritten Offering, cause the
senior executive officers of the Company to participate in the
customary "road show" presentations that may be reasonably requested
by the managing underwriter or underwriters in any such Underwritten
Offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and
customary selling efforts related thereto.
15
(b) The Company may require each seller of Registrable Securities as
to which any Registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information relating to such Holder and its ownership of Registrable
Securities as the Company may from time to time reasonably request in
writing. Each Holder of Registrable Securities agrees to furnish such
information to the Company and to cooperate with the Company as reasonably
necessary to enable the Company to comply with the provisions of this
Agreement.
(c) Each Holder of Registrable Securities agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 2.5(a)(v), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 2.5(a)(v), or until such Holder
is advised in writing by the Company that the use of the Prospectus may be
resumed, and if so directed by the Company, such Holder shall deliver to
the Company (at the Company's expense) all copies, other than permanent
file copies then in such Holder's possession, of the Prospectus covering
such Registrable Securities current at the time of receipt of such notice.
In the event the Company shall give any such notice, the period during
which the applicable Registration Statement is required to be maintained
effective shall be extended by the number of days during the period from
and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such
Registration Statement either receives the copies of the supplemented or
amended Prospectus contemplated by Section 2.5(a)(v) or is advised in
writing by the Company that the use of the Prospectus may be resumed.
2.6 Underwritten Offerings
(a) Shelf and Demand Registrations. If requested by the underwriters
for any Underwritten Offering requested by Holders of Registrable
Securities pursuant to a Registration under Section 2.1 or Section 2.2,
the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company, the Demanding Investor
and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in
agreements of that type, including indemnities no less favorable to the
recipient thereof than those provided in Section 2.9. The Holders of the
Registrable Securities proposed to be distributed by such underwriters
shall cooperate with the Company in the negotiation of the underwriting
agreement and shall give consideration to the reasonable suggestions of
the Company regarding the form thereof. Such Holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement, which underwriting agreement shall (i) contain
such representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such Holders of Registrable
Securities as are customarily made by issuers to selling stockholders in
secondary underwritten public offerings and (ii) provide that any or all
of the conditions precedent to the obligations of such underwriters under
such underwriting agreement also shall be conditions precedent to the
obligations of such Holders of Registrable Securities. Any such Holder of
Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such Holder, such
Holder's title to the Registrable Securities, such Holder's intended
method of distribution and any other representations that are customary in
secondary underwritten
16
public offerings or that are required to be made by such Holder under
applicable law, and the aggregate amount of the liability of such Holder
shall not exceed such Holder's net proceeds from such Underwritten
Offering.
(b) Piggyback Registrations. If the Company proposes to register any
of its securities under the Securities Act as contemplated by Section 2.3
and such securities are to be distributed in an Underwritten Offering
through one or more underwriters, the Company shall, if requested by any
Holder of Registrable Securities pursuant to Section 2.3 and subject to
the provisions of Section 2.3(b), use its reasonable best efforts to
arrange for such underwriters to include on the same terms and conditions
that apply to the other sellers in such Registration all the Registrable
Securities to be offered and sold by such Holder among the securities of
the Company to be distributed by such underwriters in such Registration.
The Holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the
Company and such underwriters, which underwriting agreement shall (i)
contain such representations and warranties by, and the other agreements
on the part of, the Company to and for the benefit of such Holders of
Registrable Securities as are customarily made by issuers to selling
stockholders in secondary underwritten public offerings and (ii) provide
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement also shall be conditions
precedent to the obligations of such Holders of Registrable Securities.
Any such Holder of Registrable Securities shall not be required to make
any representations or warranties to, or agreements with the Company or
the underwriters other than representations, warranties or agreements
regarding such Holder, such Holder's title to the Registrable Securities
and such Holder's intended method of distribution or any other
representations that are customary in secondary underwritten public
offerings or that are required to be made by such Holder under applicable
law, and the aggregate amount of the liability of such Holder shall not
exceed such Holder's net proceeds from such Underwritten Offering.
(c) Participation in Underwritten Registrations. Subject to the
provisions of Section 2.6(a) and (b) above, no Person may participate in
any Underwritten Offering hereunder unless such Person (i) agrees to sell
such Person's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements
and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under
the terms of such underwriting arrangements.
(d) Price and Underwriting Discounts. In the case of an Underwritten
Offering under Section 2.1 or 2.2, the price, underwriting discount and
other financial terms for the Registrable Securities shall be determined
by the Demanding Investor. In addition, in the case of any Underwritten
Offering, each of the Holders may withdraw their request to participate in
the registration pursuant to Section 2.1, 2.2 or 2.3 after being advised
of such price, discount and other terms and shall not be required to enter
into any agreements or documentation that would require otherwise.
2.7 No Inconsistent Agreements: Additional Rights. The Company shall not
hereafter enter into, and is not currently a party to, any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders of Registrable Securities by this Agreement. Without the consent of all
Investors holding at least 5% of the Registrable
17
Securities, the Company shall not enter into any agreement granting registration
or similar rights to any Person.
2.8 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement shall be paid by the Company,
including (i) all registration and filing fees, and any other fees and expenses
associated with filings required to be made with the SEC or the NASD, (ii) all
fees and expenses in connection with compliance with any securities or "Blue
Sky" laws, (iii) all printing, duplicating, word processing, messenger,
telephone, facsimile and delivery expenses (including expenses of printing
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special audit and cold
comfort letters required by or incident to such performance), (v) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting practice,
(vi) all fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange or quotation of the
Registrable Securities on any inter-dealer quotation system, (vii) all
applicable rating agency fees with respect to the Registrable Securities, (viii)
all reasonable fees and disbursements of one law firm or other counsel selected
by the Demanding Investor, (ix) all fees and expenses of accountants selected by
the Demanding Investor, (x) any reasonable fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, (xi) all fees
and expenses of any special experts or other Persons retained by the Company in
connection with any Registration, and (xii) all of the Company's internal
expenses (including all salaries and expenses of its officers and employees
performing legal or accounting duties). All such expenses are referred to herein
as "Registration Expenses." The Company shall not be required to pay any fees
and disbursements to underwriters not customarily paid by the issuers of
securities in a secondary offering, including underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of Registrable
Securities.
2.9 Indemnification
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Holder of
Registrable Securities, each member, limited or general partner thereof,
each member, limited or general partner of each such member, limited or
general partner, each of their respective Affiliates, officers, directors,
shareholders, employees, advisors, and agents and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) such
Persons and each of their respective Representatives from and against any
and all losses, penalties, judgments, suits, costs, claims, damages,
liabilities and expenses, joint or several (including reasonable costs of
investigation and legal expenses) (each, a "Loss" and collectively
"Losses") arising out of or based upon (i) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement under
which such Registrable Securities were Registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein
or any amendment thereof or supplement thereto or any documents
incorporated by reference therein) or any other disclosure document
produced by or on behalf of the Company or any of its subsidiaries
including, without limitation, reports and other documents filed under the
Exchange Act, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or preliminary Prospectus,
in light of the circumstances under which they were made) not misleading
or (iii) any actions or inactions or proceedings in respect of the
foregoing whether or not such indemnified party is a party thereto;
provided, that the Company
18
shall not be liable to any particular indemnified party (x) to the extent
that any such Loss arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
Registration Statement or other document in reliance upon and in
conformity with written information furnished to the Company by such
indemnified party expressly for use in the preparation thereof or (y) to
the extent that any such Loss arises out of or is based upon an untrue
statement or omission in a preliminary Prospectus relating to Registrable
Securities, if a Prospectus (as then amended or supplemented) that would
have cured the defect was furnished to the indemnified party from whom the
Person asserting the claim giving rise to such Loss purchased Registrable
Securities at least five (5) days prior to the written confirmation of the
sale of the Registrable Securities to such Person and a copy of such
Prospectus (as amended and supplemented) was not sent or given by or on
behalf of such indemnified party to such Person at or prior to the written
confirmation of the sale of the Registrable Securities to such Person.
This indemnity shall be in addition to any liability the Company may
otherwise have. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any
indemnified party and shall survive the transfer of such securities by
such Holder. The Company shall also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each
Person who controls such Persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the indemnified parties.
(b) Indemnification by the Selling Holder of Registrable Securities.
Each selling Holder of Registrable Securities agrees (severally and not
jointly) to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act or the
Exchange Act) from and against any Losses resulting from (i) any untrue
statement of a material fact in any Registration Statement under which
such Registrable Securities were Registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein
or any amendment thereof or supplement thereto or any documents
incorporated by reference therein), or (ii) any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or preliminary Prospectus,
in light of the circumstances under which they were made) not misleading,
in each case, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information furnished in writing
by such selling Holder to the Company specifically for inclusion in such
Registration Statement and has not been corrected in a subsequent writing
prior to or concurrently with the sale of the Registrable Securities to
the Person asserting the claim. In no event shall the liability of any
selling Holder of Registrable Securities hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder under
the sale of Registrable Securities giving rise to such indemnification
obligation. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, to the same
extent as provided above (with appropriate modification) with respect to
information furnished in writing by such Persons specifically for
inclusion in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification (provided that any delay or failure to so notify the
indemnifying party shall relieve the indemnifying party of its
19
obligations hereunder only to the extent, if at all, that it is actually
and materially prejudiced by reason of such delay or failure) and (ii)
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that
any Person entitled to indemnification hereunder shall have the right to
select and employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (i) the indemnifying party has agreed in
writing to pay such fees or expenses, (ii) the indemnifying party shall
have failed to assume the defense of such claim within a reasonable time
after receipt of notice of such claim from the Person entitled to
indemnification hereunder and employ counsel reasonably satisfactory to
such Person, (iii) the indemnified party has reasonably concluded (based
upon advice of its counsel) that there may be legal defenses available to
it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, or (iv) in the reasonable
judgment of any such Person (based upon advice of its counsel) a conflict
of interest may exist between such Person and the indemnifying party with
respect to such claims (in which case, if the Person notifies the
indemnifying party in writing that such Person elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such claim on behalf of
such Person). If the indemnifying party assumes the defense, the
indemnifying party shall not have the right to settle such action without
the consent of the indemnified party. No indemnifying party shall consent
to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of an unconditional release from all
liability in respect to such claim or litigation without the prior written
consent of such indemnified party. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its prior written consent, but
such consent may not be unreasonably withheld. It is understood that the
indemnifying party or parties shall not, except as specifically set forth
in this Section 2.9(c), in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements or other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time unless (x) the employment of
more than one counsel has been authorized in writing by the indemnifying
party or parties, (y) an indemnified party has reasonably concluded (based
on the advice of counsel) that there may be legal defenses available to it
that are different from or in addition to those available to the other
indemnified parties or (z) a conflict or potential conflict exists or may
exist (based upon advice of counsel to an indemnified party) between such
indemnified party and the other indemnified parties, in each of which
cases the indemnifying party shall be obligated to pay the reasonable fees
and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification provided for
in paragraphs (a) and (b) of this Section 2.9 is unavailable to an
indemnified party or insufficient in respect of any Losses referred to
therein, then the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such Loss in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party or parties on
the other hand in connection with the acts, statements or omissions that
resulted in such losses, as well as any other relevant equitable
considerations. In connection with any Registration Statement filed with
the SEC by the Company, the relative fault of the indemnifying party on
the one hand and the indemnified party on the other hand shall be
determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact or
20
the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just or equitable if contribution
pursuant to this Section 2.9(d) were determined by pro rata allocation or
by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 2.9(d). No Person
guilty of fraudulent misrepresentation (within the meaning of Section 1
l(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The amount
paid or payable by an indemnified party as a result of the Losses referred
to in Sections 2.9(a) and 2.9(b) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 2.9(d), in connection with any Registration Statement filed by the
Company, a selling Holder of Registrable Securities shall not be required
to contribute any amount in excess of the dollar amount of the net
proceeds received by such Holder under the sale of Registrable Securities
giving rise to such contribution obligation. If indemnification is
available under this Section 2.9, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in Sections 2.9(a) and
2.9(b) hereof without regard to the provisions of this Section 2.9(d). The
remedies provided for in this Section 2.9 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
2.10 Rules 144 and 144A: Regulation S. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if
the Company is not required to file such reports, it will, upon the reasonable
request of any Holder of Registrable Securities, make publicly available such
necessary information for so long as necessary to permit sales pursuant to Rules
144, 144A or Regulation S under the Securities Act), and it will take such
further action as any Holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without Registration under the Securities Act within the
limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
reasonable request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements and, if not, the specifics thereof.
ARTICLE III
MISCELLANEOUS
3.1 Term. This Agreement shall terminate upon the later of the expiration
of the Shelf Period and such time as there are no Registrable Securities, except
for the provisions of Sections 2.9 and 2.10 and all of this Section 3, which
shall survive any such termination.
3.2 Injunctive Relief. It is hereby agreed and acknowledged that it will
be impossible to measure in money the damage that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled (in addition to any other remedy to which it may be
entitled in law or in equity) to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this
21
Agreement, none of the parties hereto shall raise the defense that there is an
adequate remedy at law.
3.3 Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement or where any provision hereof is validly asserted as
a defense, the successful party shall, to the extent permitted by applicable
law, be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
3.4 Notices. All notices, other communications or documents provided for
or permitted to be given hereunder, shall be made in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by personal
hand-delivery, by facsimile transmission, by electronic mail, by mailing the
same in a sealed envelope, registered first-class mail, postage prepaid, return
receipt requested, or by air courier guaranteeing overnight delivery:
(a) if to the Company:
Xxxxxxxx Maritime Limited
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxx L.L.P.
First City Tower
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) if to the Investor:
Xxxxxxxx Maritime Investors LLC
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
and
FR Fund X Offshore, L.P.
Xxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000)-000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
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Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Each Holder, by written notice given to the Company in accordance with
this Section 3.4, may change the address to which notices, other communications
or documents are to be sent to such Holder.
3.5 Successors. Assigns and Transferees.
(a) Each party may assign all or a portion of its rights hereunder
to any Person to which such party transfers its ownership of all or any of
its Registrable Securities; provided that no such assignment shall be
binding upon or obligate the Company to any such assignee unless and until
the Company shall have received notice of such assignment as herein
provided and a written agreement of the assignee to be bound by the
provisions of this Agreement, and, provided further, that the rights
described under Sections 2.1 and 2.2 shall not transfer to any Person
unless such Person (i) is an Affiliate of the Holder transferring such
rights or (ii) receives in such transfer at least five percent of all
Equity Securities and such Equity Securities could not otherwise be
transferred by such assignee without registration under the Securities
Act. Notwithstanding the foregoing, upon the dissolution of QMI, QMI shall
be deemed to have assigned (and such assignation shall be permitted
hereunder) all of its rights and obligations under this Agreement to each
party entitled to receive Equity Securities in such dissolution and
subsequent liquidation of QMI; provided that any remaining rights to cause
a Demand Registration shall be assigned to Xxxxxxxx Maritime Partners L.P.
and FR X Offshore, L.P. pro rata, rounded to the nearest whole number, in
accordance with their ownership of Registrable Securities.
(b) The terms and provisions of this Agreement shall be binding on
and inure to the benefit of each of the parties hereto and their
respective successors. Nothing in this Agreement, express or implied, is
intended or shall be construed to confer upon any Person not a party
hereto (other than each other Person entitled to indemnity or contribution
under Section 2.9) any right, remedy or claim under or by virtue of this
Agreement.
3.6 Governing Law: Service of Process: Consent to Jurisdiction. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PROVISIONS, POLICIES OR
PRINCIPLES THEREOF RELATING TO CHOICE OR CONFLICT OF LAWS.
(b) To the fullest extent permitted by applicable law, each party
hereto (i) agrees that any claim, action or proceeding by such party
seeking any relief whatsoever arising out of, or in connection with, this
Agreement or the transactions contemplated hereby shall be brought only in
the United States District Court for the Southern District of New York and
the courts of the State of New York located in the Borough of
23
Manhattan and not in any other State or Federal court in the United States
of America or any court in any other country, (ii) agrees to submit to the
exclusive jurisdiction of such courts located in the State of New York for
purposes of all legal proceedings arising out of, or in connection with,
this Agreement or the transactions contemplated hereby, and (iii)
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.
3.7 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
therein.
3.8 Amendment; Waiver
(a) This Agreement may not be amended or modified and waivers and
consents to departures from the provisions hereof may not be given, except
by an instrument or instruments in writing making specific reference to
this Agreement and signed by the Company and all Investors holding at
least 5% of the Registrable Securities then outstanding. Each Holder of
any Registrable Securities at the time or thereafter outstanding shall be
bound by any amendment, modification, waiver or consent authorized by this
Section 3.8(a), whether or not such Registrable Securities shall have been
marked accordingly.
(b) The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. Except as otherwise expressly provided herein, no failure on the
part of any party to exercise, and no delay in exercising, any right,
power or remedy hereunder, or otherwise available in respect hereof at law
or in equity, shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right,
power or remedy.
3.9 Counterparts. This Agreement may be executed in any number of separate
counterparts and by the parties hereto in separate counterparts each of which
when so executed shall be deemed to be an original and all of which together
shall constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
XXXXXXXX MARITIME LIMITED
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
XXXXXXXX MARITIME INVESTORS LLC
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager
[Signature Page to Registration Rights Agreement]
