EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement"), dated as of February
9, 1998, by and among USABancShares, Inc. (the "Company"), a Pennsylvania
corporation, and each of the undersigned Investors (hereinafter referred to
individually as an "Investor" and collectively as the "Investors").
WITNESSETH:
WHEREAS, the Company and each of the Investors have entered into a
Purchase Agreement, dated as of February 9, 1998, providing for the purchase by
the Investors of shares of the Company's common stock, par value $1.00 per share
(the "Common Stock"), subject to the terms and conditions set forth therein; and
WHEREAS, the Company desires to provide the Investors with certain
registration rights with respect to the shares of Common Stock issuable pursuant
to the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual agreements
~ forth herein and for other good and valuable consideration, the receipt and
the sufficiency of which are hereby acknowledged, the Company and the Investors,
intending to be legally bound, agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Affiliate" shall mean, with respect to any Person, any Person that.
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings corresponding to the foregoing.
(b) "Business Day" shall mean any day except a Saturday, Sunday or other day on
which commercial banks in the Commonwealth of Pennsylvania are authorized or
obligated by law to close.
(c) "Commission" shall mean the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
(d) "Common Stock" shall mean the Class A common stock, par value $1.00 per
share, of the Company.
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(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(f) "Holder" shall mean any holder of outstanding Registrable Securities,
including any Person to whom Registrable Securities have been transferred in
compliance with this Agreement.
(g) "Initiating Holders" shall mean one or more Holders of not less than 25% of
the Registrable Securities then outstanding.
(h) "Issue Date" shall mean February 13, 1998, the date of original issuance
pursuant to the Purchase Agreement of the shares of Common Stock.
(i) "Person" shall mean an individual a corporation, a partnership, an
association a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
(j) "Purchase Agreement" shall mean the Purchase Agreement, dated as of February
9, 1998, among the Company and the Investors, as amended supplemented or
otherwise modified from time to time.
(k) "Registrable Securities" shall mean (i) the shares of Common Stock issued
pursuant to the Purchase Agreement, (ii) the shares of Common Stock issued upon
exercise of the Warrants and (iii) any shares of the capital stock (or rights to
receive capital stock of the Company) issued in respect of the Common Stock
issued pursuant to the Purchase Agreement and/or upon exercise of the Warrants,
by reason of or in connection with any stock dividend, stock distribution, stock
split, purchase in any rights offering or in connection with any combination of
shares, recapitalization, merger or consolidation, or any other equity
securities issued pursuant to any other pro rata distribution with respect to
the Common Stock issued pursuant to the Purchase Agreement and/or upon exercise
of the Warranty Notwithstanding the foregoing, Registrable Securities shall not
include otherwise Registrable Securities (i) sold to or through a broker or
dealer or underwriter or (ii)sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act under Section 4(1)
thereof, if in any such case (iii) transfer restrictions, and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale.
(1) "Registration Statement" shall mean any registration statement (including a
"shelf"registration statement) filed with the Commission pursuant to Sections 3
or 4 of this Agreement.
(m) "Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
(n) "Shelf Registration" shall have the meaning set forth in Section 4 of this
Agreement.
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(o) "Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 4 of this Agreement which
covers all of the Registrable Securities required to be registered on an
appropriate form for purposes of an offering on a continuous basis pursuant to
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the Commission.
(p) "Underwritten Offering" shall mean a bona fide underwritten public offering
pursuant to a Registration Statement.
(q) "Warrants" shall mean the Warrants of the Company issued by the Company to
the Placement Agent (as defined in the Purchase Agreement) as compensation, in
part, for its efforts in advising and assisting the Company in the sale of
Common Stock.
Section 2. Restrictions on Transferability.
The Registrable Securities shall not be sold, transferred or otherwise
disposed of, except in accordance with and subject to (i) the provisions of the
Securities Act and the rules and regulations promulgated thereunder and (ii) the
applicable requirements of Section 3.2 of the Purchase Agreement.
Section 3. Piggyback Registration Rights.
(a) If at any time or from time to time following the Issue Date, the Company
shall determine to register any Company securities, for its own account or the
account of any of its stockholders, other than a registration on Form S-4 or
Form S-8 or any successor or similar forms thereto, the Company will: (i) give
to each Holder written notice thereof as soon as practicable prior to filing the
Registration Statement; and (ii) include in such registration and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests from the Holders, made by one or more Holders within
ten (10) days of mailing of such written notice by the Company. The registration
rights provided hereunder shall be subject to paragraph (b) hereof. In addition,
notwithstanding the foregoing, if, at any time after giving such notice the
Company shall determine for any reason or for no reason not to register or to
delay registration of the securities of the Company which were to be included in
the Registration Statement, the Company may, at its election, give written
notice of such determination to each Holder desiring to include Registrable
Securities in such Registration Statement. In the case of a determination not to
register the securities of the Company, the Company shall be relieved of its
obligation to register any of such Holders' Registrable Securities in connection
with such registration (but not from its obligations to pay reasonable expenses
incurred in connection therewith, subject to the limitations set forth in
Section 6). In the case of a delay in registering the securities of the Company,
the Company shall be permitted to delay registering any Holders' Registrable
Securities which otherwise qualify for registration pursuant to this Section
4(a) for the same period as the delay in registering such other securities of
the Company. The Company will pay the reasonable expenses in connection with
each registration pursuant to this Section 3, to the extent provided in Section
6.
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(b) In the case where the Company is registering securities for the purpose of
an Underwritten Offering, if the managing underwriter of the offering advises
the Company and each Holder desiring to include Registrable Securities in such
Registration Statement in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without materially and adversely affecting the success of
such offering, the Company will include in such registration only such amount of
securities which the Company is so advised can be sold in such offering, which
shall be determined as follows:
First, the securities proposed by the Company to be sold for its own
account; and Second, allocated among the Holders desiring to include Registrable
Securities in such Registration Statement pro rata based on the percentage of
Registrable Securities to be included in such Registration Statement by such
Holders.
Section 4. Shelf Registration Rights.
(a) The Company shall, at the Company's cost, subject to Section 6 hereof,
(i) within 300 days after the Issue Date, file with the Commission, and
thereafter use its best efforts to cause to be declared effective as promptly as
practicable, a Shelf Registration Statement relating to the offer and sale of
the Registrable Securities by the Holders from time to time;
(ii) use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming a part thereof
to be usable by Holders identified as selling security holders in such Shelf
Registration Statement for a period of two years from the date the Shelf
Registration Statement is declared effective by the Commission or until such
earlier date as all Registrable Securities shall have been disposed of or on
which all Registrable Securities shall be saleable without registration pursuant
to Rule 144(k) (or any similar provision then in effect), or as a result of any
changes in the existing registration requirements under the Securities Act which
eliminate the Holders' need for the Shelf Registration Statement, or upon
receipt of an opinion of counsel satisfactory to the Company which provides that
all Registrable Securities may be resold without registration in a transaction
that would result in the Registrable Securities being freely tradeable provided
that the purchaser is not an affiliate of the Company (the Effectiveness
Period"); and (iii) notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming a part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, 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 (iii) any Prospectus
forming a part of any Shelf Registration Statement, and any supplement to such
Prospectus (as amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that the Company shall be entitled
to rely on the information provided to them by the Holders with respect to such
Holders.
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(b) Any Holder desiring to sell Registrable Securities pursuant to the Shelf
Registration Statement shall provide not less than ten (10) days prior written
notice to the Company. Any such notice shall specify the number of shares of
Common Stock proposed to be sold and the intended method of disposition thereof.
The Company shall use its best efforts to promptly file any required
amendment(s) to the Shelf Registration Statement in order to facilitate any
sales of shares of Common Stock as described above.
(c) If Initiating Holders so elect, the offering of such Registrable Securities
pursuant to such Shelf Registration shall be in the form of an underwritten
offering. If any Shelf Registration is in the form of an underwritten offering,
the Initiating Holders will select and retain the investment banker or
investment bankers and manager or managers that will administer the offering;
provided that such investment bankers and managers must be reasonably
satisfactory to the Company.
Section 5. Underwritten Offerings.
(a) In connection with any public underwriting of Company securities that are
covered by a Registration Statement, the Company agrees, subject to the
requirements of Sections 3 and 4 hereof, to arrange for its underwriters to
include in the securities to be so distributed by it the Registrable Securities
of any Holder who makes such request of the Company. Each such Holder agrees
that any of such Registrable Securities so included shall be distributed and
sold through such underwriters. The Holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company and such underwriters and any such underwriting agreement
shall require that the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters also shall be made to and for the benefit of such Holders and that
the conditions precedent to the obligations of such underwriters under such
underwriting agreement shall be conditions precedent to the obligations of such
Holders.
(b) No Holder may participate in any Underwritten Offering under Sections 3 and
4 unless such Holder (i) agrees to sell its Registrable Securities on the basis
provided in any underwriting arrangement approved by the Company and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
securities escrow agreements, underwriting agreements and other documents
required under the terms of such underwriting, and furnishes to the Company such
information as the Company may reasonably request in writing for inclusion in
the Registration Statement (and the prospectus included therein); provided,
however, that no Holder shall 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 and such
Holder's intended method of distribution and any other representation required
by law.
(c) (i) The managing underwriter of an Underwritten Offering of the Company may
advise the Company to cause Holders of Registrable Securities to delay the
public sale or distribution of such securities. Each Holder agrees, whether or
not such Holder participating in an Underwritten Offering, if so required by the
managing underwriter, not to effect any public sale or distribution of such
Holder's Registrable Securities or sales of such share~ pursuant to Rule 144,
during the fifteen days prior to and the ninety (90) days after any firm
commitment Underwritten Offering pursuant to
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Section 3 or 4 has become effective. If the managing underwriter advises the
Company in writing that, in its opinion, no such public sale or distribution
should be effected for a specified period longer than ninety (90) days after
such Underwritten Offering has become effective in order to complete the sale
and distribution of securities included in such registration and the Company
gives notice to such Holder of such advice, such Holders shall not effect any
public sale or distribution or sales pursuant to Rule 144 for a reasonably
longer period after such Underwritten Offering has become effective, but in no
event longer than one hundred twenty (120) days, except as part of such
Underwritten Offering.
(ii) The Company agrees, if so required by the managing underwriter, (x) not to
effect any public sale or distribution of its equity securities or securities
convertible into exchangeable or exercisable for any of such securities during
the fifteen days prior to and the ninety (90) days after any firm commitment
Underwritten Offering pursuant to Section 3 or 4 has become effective, except as
part of such Underwritten Offering and except pursuant to registrations on Form
S-4 and Form S-8 or any successor or similar forms thereto, and (y) to use its
best efforts to cause each holder of its equity securities or any securities
convertible into or exchangeable or exercisable for any of such securities, in
each case purchased from the Company at any time after the date hereof (other
than in a public offering), to agree not to effect any such public sale or
distribution of such securities during such period or, in either case, if the
managing underwriter advises the Company in writing that in its opinion no such
public sale or distribution should be effected for a specified period longer
than ninety (90) days after such Underwritten Offering has become effective in
order to complete the sale and distribution of securities included in such
registration, during a reasonably longer period after such Underwritten Offering
but in no event longer than one hundred twenty (120) days, except as part of
such Underwritten Offering.
Section 6. Registration Expenses.
The Company will pay all reasonable registration expenses in connection with any
registration pursuant to Section 3 or 4 of this Agreement, including without
limitation all registration and filing fees, fees with respect to filings
required to be made with the National Association of Securities Dealers, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
and fees and expenses of counsel for the Company and of all independent public
accountants of the Company (including the expenses of any "comfort' letters or
update thereof required by or incident to the foregoing) in connection with such
registration, except that the following expenses relating to the Registrable
Securities shall not be borne by the Company:
(a) underwriting discounts and commissions, underwriting expenses and transfer
taxes, if any (other than discounts, commissions, expenses and transfer taxes
relating to securities offered and sold by the Company) and cost of liability
insurance (except to the extent carried by the Company on its own behalf); and
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(b) the cost of any special audit required by the Securities Act or the rules
and regulations of the Commission thereunder as a result of the Company's
obligation to maintain a Registration Statement current for more than 90 days
pursuant to Section 7, which costs shall be prorated among the Holders who have
Registrable Securities covered by such Registration Statement, based on the
percentage of Registrable Securities so included in such Registration Statement.
Section 7. Registration Procedures.
Whenever the Company seeks to effect the registration of any shares of
Registrable Securities under the Securities Act as provided in Sections 3 and 4,
the Company agrees it will as expeditiously as possible, subject to the terms
and conditions of such sections (including without limitation the Company's
right to terminate or delay a registration pursuant to Sections 3 and 4):
(a) prepare and file with the Commission the requisite Registration Statement to
effect such registration, use its best efforts to cause such Registration
Statement to become effective and promptly notify each Holder of securities
covered by such Registration Statement and any managing underwriter of the
effectiveness thereof;
(b) prepare and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective, notify each Holder of
securities covered by such Registration Statement and any managing underwriter
as promptly as practicable of any request by the Commission for amendments or
supplements to such Registration Statement or related prospectus or for
additional information and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement until the earlier of such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such Registration Statement, but for no longer
than 90 days subsequent to the effective date of such registration; provided
that if less than all the securities covered by the Registration Statement are
withdrawn from registration after the expiration of such period, the securities
so withdrawn shall be allocated pro rata among the Holders thereof on the basis
of the percentage of Registrable Securities held by them which were included in
such registration;
(c) furnish to each seller of shares covered by such Registration Statement such
number of conformed copies of such Registration Statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such Registration Statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents as such seller or
such Holder may reasonably request;
(d) use its best efforts to register or qualify all shares covered by such
Registration Statement under such other securities or blue sky laws of such
jurisdictions as each seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such Registration
Statement remains in effect. and take any other action which may be reasonably
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necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to (i) qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this Section 7(d) be obligated to be so qualified,
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause all shares covered by such 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 to
consummate the disposition of such shares;
(f) enter into customary agreements (including, in the case of an Underwritten
Offering, an underwriting agreement in customary form) and take all other action
in connection therewith in order to expedite or facilitate the distribution of
the Registrable Securities included in such Registration Statement, and, in the
case of an Underwritten Offering, make representations and warranties to the
Holders of Registrable Securities covered by such Registration Statement and to
the underwriters in such form and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and confirm the same to the
extent customary if and when requested;
(g) make available for inspection during normal business hours by a
representative of the Holders of Registrable Securities covered by such
Registration Statement and any managing underwriter, and any attorney or
accountant retained by such Holders or managing underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the officers, directors and employees of the Company to supply all
information reasonably requested by such representative, managing underwriter,
attorney or accountant in connection with such Registration Statement;
(h) in the case of an Underwritten Offering by the Company, use its best efforts
to furnish to each Holder of Registrable Securities covered by such Registration
Statement and the underwriters a signed counterpart, addressed to such Holder
and the underwriters, of
(i) an opinion of counsel for the Company, dated the effective date of such
Registration Statement and dated the date of each closing under the underwriting
agreement, reasonably satisfactory in form and substance to such Holder, and
(ii) a "comfort" letter, dated the effective date of such Registration Statement
and the date of each closing under the underwriting agreement, signed by the
independent public accountants who have certified the Company's financial
statements included in such Registration Statement, covering substantially the
same matters with respect to such Registration Statement (and the prospectus
included therein) and with respect to events subsequent to the date of such
financial statements, as are customarily covered in accountants' letters
delivered to underwriters in underwritten public offerings of securities and
such other financial matters as such Holder and the underwriters may reasonably
request;
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(i) immediately notify each Holder of Registrable Securities covered by such
Registration Statement and any managing underwriter, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and at the request of any such
Holder or any such managing underwriter, promptly prepare and furnish to such
Holder or managing underwriter a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include 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 in the light of the circumstances under which they were made;
(j) notify each Holder of Registrable Securities covered by such Registration
Statement and any managing underwriter as promptly as practicable after becoming
aware of the issuance by the commission of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose or the receipt by the Company of any notification
with respect to the suspension of qualification of any Registrable Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose and make all reasonable efforts to obtain as promptly as
practicable the withdrawal of any order or other action suspending the
qualification of the Registrable Securities for sale in any jurisdiction;
(k) (i) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, (ii) make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first
full calendar month after the effective date of such Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, and (iii) not file any Registration Statement or prospectus or
amendment or supplement to such Registration Statement or prospectus to which
any such Holder of Registrable Securities covered by any Registration Statement
shall have reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the Securities
Act, such Holder having been furnished with a copy thereof at least two Business
Days prior to the filing thereof
(l) provide a transfer agent and registrar for all shares of Common Stock
covered by such Registration Statement not later than the effective date of such
Registration Statement; and
(m) use its best efforts to list all shares of Common Stock covered by such
Registration Statement on any securities exchange or national market system on
which the Common Stock is then listed.
The Company may require each holder of Registrable Securities as to which any
registration is being effected to furnish the Company with such information and
undertakings regarding such Holder and the distribution of such securities as
the Company may from time to time reasonably request in writing.
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Each Holder of Registrable Securities covered by any Registration Statement
agrees (i) that upon receipt of any notice from the Company of the happening of
any event of the kind described in paragraph (i) of this Section 7, such Holder
will forthwith discontinue such Holder's disposition of Registrable Securities
pursuant to the Registration Statement relating to such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by paragraph (i) of this Section 7 and, if so directed
by the Company, will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies (which shall be conspicuously marked as
such), then in such Holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice and (ii)
that it will immediately notify the Company, at any time when a prospectus
relating to the registration of such shares is required to be delivered under
the Securities Act, of the happening of any event as a result of which
information previously furnished by such Holder to the Company in writing for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made.
If, at any time prior to the expiration of the Termination Date (as defined in
Section 9 hereof) in the good faith reasonable judgment of the Company's Board
of Directors, the disposition of Registrable Securities would require the
premature disclosure of material non-public information which may reasonably be
expected to have an adverse effect on the Company, then the Company shall not be
required to maintain the effectiveness of or amend or supplement the
Registration Statement for a period (a "Disclosure Delay Period expiring upon
the earlier to occur of (i) the date on which such material information
disclosed to the public or ceases to be material or (ii) up to thirty (30)
calendar days atter the date on which the Company provides a notice to the
Investors stating that the failure to disclose such non-public information
causes the prospectus included in the Registration Statement, as then in effect,
to include an untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statement therein
not misleading. For the avoidance of doubt, in no event shall a Disclosure Delay
Period exceed thirty (30) calendar days.
The Company will give prompt written notice to the Holders of each Disclosure
Delay Period. Advance notice of the Disclosure Delay Period shall be given to
the extent practicable. If practicable, such notice shall estimate the duration
of such Disclosure Delay Period. Each Holder, by accepting Registrable
Securities, agrees that, upon receipt of such notice prior to the Holder's
disposition of all such Registrable Securities, such Holder xxxx forthwith
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement, and will not deliver any prospectus forming a part
thereof in connection with any sale of such Registrable Securities until the
expiration of such Disclosure Delay Period. Notwithstanding anything herein to
the contrary, there shall not be more than an aggregate of sixty (60) calendar
days in any twelve (12) month period during which the Company is in a Disclosure
Delay Period nor more than an aggregate of thirty (30) calendar days in any
ninety (90) calendar day period during which the Company is in a Disclosure
Delay Period
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Section 8. Indemnification.
(a) In the event of any registration of any Holder's Registrable Securities
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold harmless each such Holder (a "Selling Holder"), its directors, each
underwriter and each controlling Person of any Selling Holder, if any, against
any losses, claims, damages or liabilities, joint or several (or actions in
respect thereof), including reasonable attorneys' fees and costs, to which such
Selling Holder, underwriter or controlling Person may be subject under the
Securities Act, under any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement (or alleged untrue statement) of
any material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, and any preliminary
prospectus or final prospectus contained therein, any summary prospectus issued
in connection with any securities being registered, any other document used to
sell the securities (including an illegal prospectus) (collectively, the
"Selling Documents"), or any amendment or supplement thereto (an "Amended
Selling Document"), or (ii) any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statements therein (in light of the circumstances in which they were made with
to any prospectus) not misleading, and shall reimburse each such Selling Holder,
its directors, underwriter or controlling Person for any legal or other expenses
reasonably incurred by such Selling Holder, its directors, underwriter or
controlling Person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable to any Selling Holder. its directors, underwriter or controlling
Person in any such event to the extent that any 105% claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, Selling Document, Amended Selling Document or any other
document, in reliance upon and in conformity with written information furnished
to the Company by such Selling Holder, its directors, underwriter or controlling
Person, respectively, specifically for use therein; and provided further that
the Company shall not be liable under this paragraph (a) with respect to any
rnisstatement or omission or alleged misstatement or omission in any Selling
Document to the extent that any such loss, claim. damage or liability results
from the fact that the Selling Holder, underwriter or controlling Person sold
securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of any Amended Selling Document if the
Company had previously furnished copies thereof to such Selling Holder,
underwriter or controlling Person and if the misstatement or omission or alleged
misstatement or omission was corrected in the Amended Selling Document. The
indemnity provided for herein shall remain in full force and effect regardless
of any investigation made by or on behalf of such Selling Holder, its directors,
underwriter or controlling Person.
(b) In the event of any registration of any of the Company's securities or any
Registrable Securities under the Securities Act, each Selling Holder shall
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with such Registration Statement and
agrees, severally and not jointly, to indemnify and hold harmless the Company,
its directors, each underwriter and each controlling Person of the Company, if
any, against any losses, claims, damages or liabilities, joint or several (or
actions in respect thereof), to which the Company, its directors, each
underwriter or controlling Person may be subject under the Securities Act or
under any other statute or at common law, insofar as such losses, claims,
damages or
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liabilities, joint or several (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement (or alleged untrue statement) of any
material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, any Selling Document or any
Amended Selling Document, or (ii) any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in light of the circumstances in which they were made with
respect to any prospectus) not misleading, and shall reimburse the Company, its
directors, such underwriter and controlling Person for any legal or other
expenses reasonably incurred by such Persons in connection with investigating or
defending any such loss, claim, damage, liability or action; in each case, to
the extent, and only to the extent, that each untrue statement or omission (or
alleged untrue statement or omission) is made in reliance upon and in strict
conformity with written information furnished to the Company by such Selling
Holder.
(c) If the indemnification provided for in paragraph (a) or (b) above is
unavailable to an indemnified party in accordance with its terms in respect of
any losses, claims, damages or liabilities referred to therein, then the
obligations of each indemnitor thereunder shall be limited to such amount paid
or payable by such indemnified party as a result of such losses, claims, damages
or liabilities, in such proportion as is appropriate to reflect the relative
fault of such indemnitor on the one hand and of the indemnified parties on the
other hand in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of each indemnitor and of the indemnified
parties shall be determined by reference to, among other things, whether the
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 such
indemnitor, or by the indemnified parties, 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 and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation or by any
other method of allocation which 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, claims,
damages and liabilities or actions in respect thereof referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expense reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no Selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities sold by it exceeds the
amount of any damages which such person has otherwise been required to pay and
has actually paid by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of a 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.
(d) Promptly after receipt by an indemnified party of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnitor under paragraph (a) or (b) above, as the case may
be, notify the indemnitor in writing of the commencement thereof; but the
omission to so notify the indemnitor shall not relieve it from any liability
which it may have to any indemnified party under such subsection unless the
failure to
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provide such notice results in the forfeiture by the indemnitor of substantial
rights or defenses. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnitor of the commencement
thereof, the indemnitor shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnitor and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties which are
in addition to or in conflict with those available to the indemnitor, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses (in which case the indemnitor shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties). Upon the permitted assumption by the indemnitor of the defense of such
action, and approval by the indemnified party of counsel, the indemnitor shall
not be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof (other than reasonable costs of investigation) unless
(i) the indemnified party shall have employed separate counsel in connection
with the assertion of legal defenses in accordance with the proviso to the next
preceding sentence, (ii) the indemnitor shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time, (iii) the indemnitor and its counsel do not actively and
vigorously pursue the defense of such action, or (iv) the indemnitor has
authorized the employment of counsel for the indemnified party at the expense of
the indemnitor. The indemnitor shall not be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld.
Section 9. Termination of Rights.
All rights of any particular Holder under this Agreement shall terminate at 5:00
p.m.,Eastern Time, on the date two (2) years after the date of this Agreement
("Termination Date"), provided that the provisions of Section 8 hereof shall
survive any termination of this Agreement.
Section 10. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed under
the internal substantive laws of the Commonwealth of Pennsylvania, without
regard to its conflicts of laws principles
(b) Successors and Assigns. The provisions hereof shall inure to the benefit of,
and be binding upon, the parties and their respective successors, assigns,
heirs, executors and administrators. The rights and obligations of any Investor
hereunder may be assigned by such Investor to any Person acquiring Registrable
Securities from the Investor contemporaneously with such assignment, provided
that the rights so assumed shall apply only to the Registrable Securities so
acquired. The rights and obligations of the Company hereunder may not be
assigned by it without the prior written consent of the Investors.
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(c) Entire Agreement. This Agreement and the Purchase Agreement constitute the
full and entire understanding and agreement among the parties with regard to the
subject matter hereof and thereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants or
agreements except as specifically set forth herein or therein. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto and their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein.
(d) Separability. Any invalidity, illegality or limitation of the enforceability
of any one or more of the provisions of this Agreement. or any part thereof,
shall in no way affect or impair the validity, legality or enforceability of the
other provisions of this Agreement. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent practicable,
be modified so as to make it valid, legal and enforceable and to retain as
nearly as practicable the intent of the parties, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(e) Amendment and Waiver. Any provision of this Agreement may be amended and the
observance of any provision of this Agreement may be waived (either generally or
in a particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely), with the written consent of the
Company and the Holders of riot less than a majority of the Registrable
Securities; provided, however, that no such amendment or waiver shall reduce the
aforesaid percentage of Registrable Securities the Holders of which are required
to consent to any waiver or supplemental agreement without the consent of the
Holders of all outstanding Registrable Securities. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon the Company and
each Holder under this Agreement. Upon the effectuation of each such amendment
or waiver, the Company shall promptly give written notice thereof to the Holders
who have not previously consented thereto in writing.
(f) Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any Holder, any subsequent Holder of any Registrable
Securities or the Company upon any breach, default or noncompliance under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on the Holders' or the Company's part of any
breach, default or noncompliance under this Agreement or any waiver on the
Holders' or the Company's part of any provisions or conditions of this Agreement
must be in writing and shall be effective only to the extent specifically set
forth in such writing, and that all remedies afforded to the Holders and the
Company under this Agreement shall be cumulative and not alternative.
(g) Notices, etc. All notices, demands and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail. telex, telecopier, or air courier guaranteeing overnight
delivery:
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(i) if to any Holder, initially at the address set forth below its name on the
Holder's signature page to this Agreement, arid thereafter at such other
address, notice of which is given in accordance with this Section 10(g); and
(ii) if to the Company, initially at One Penn Square, 00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: President, and thereafter at such
other address notice of which is given in accordance with this Section 10(g).
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered, five Business Days after
being sent by certified mail, return receipt requested, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
Business Day if timely delivered to an air courier guaranteeing overnight
delivery.
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