EXHIBIT 10.29
[EXECUTION COPY]
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into this 6th
day of March, 2002, by and between COMDIAL CORPORATION, a Delaware corporation
(the "Company") and BANK OF AMERICA, N.A., a national banking association (the
"Bank").
WHEREAS, pursuant to that certain Preferred Stock Investment Agreement
dated on an even date herewith (the "Investment Agreement") by and between the
Company and the Bank, whereby among other things the Bank is exchanging
$10,000,000 of outstanding debt owed by the Company into shares of the Company's
Series B Alternate Rate Cumulative Convertible Redeemable Preferred Stock, par
value $10.00 per share (the "Preferred Stock").
WHEREAS, as a condition to their willingness to enter into the Investment
Agreement, the Bank desires that the Company grant certain registration rights
with respect to the Common Stock which they may acquire upon conversion of the
Preferred Stock.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Bank and the Company hereby
agree as follows:
1. Definitions.
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As used herein:
(a) Exchange Act. The term "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
(b) Holder. The term "Holder" means the Bank and all other Persons holding
Registrable Securities so long as the Bank or such other Persons holds
Registrable Securities.
(c) Registration. The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a Registration
Statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such Registration Statement.
(d) Person. The term "Person" shall have the meaning set forth in Section
2(2) of the Securities Act.
(e) Preferred Stock. The term "Preferred Stock" shall have the meaning set
forth in the recitals above.
(f) Prospectus. The term "Prospectus" shall have the meaning set forth in
Section 2(10) of the Securities Act.
(g) Registrable Securities. The term "Registrable Securities" means (i)
all shares of Common Stock issued or issuable pursuant to the conversion of the
Preferred Stock and (ii) any shares of the Common Stock of the Company or other
securities issued in connection with any stock
split, stock dividend, recapitalization or similar event relating to the
foregoing; excluding in all cases, however, any Registrable Securities sold to
the public pursuant to an effective Registration Statement or sold pursuant to
Rule 144 (or successor provision) promulgated under the Securities Act.
(h) Registration Expenses. The term "Registration Expenses" shall mean any
and all expenses incident to the performance of or compliance by the Company
with this Agreement, including without limitation: (i) all SEC or National
Association of Securities Dealers, Inc. (the "NASD") registration and filing
fees, including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be retained by
any Holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable fees and
disbursements of one counsel for any underwriters or Holder in connection with
blue sky qualification of any of the Registrable Securities) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company, including
the expenses of any "cold comfort" letters required by or incident to such
performance and compliance, (vi) the fees and expenses of any exchange agent or
custodian, (vii) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any securities exchange or
exchanges, (viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement, and (v)
the reasonable fees and expenses of one special legal counsel for Holder.
(i) Registration Statement. The term "Registration Statement" shall mean
any Registration Statement of the Company that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
(j) Securities Act. The term "Securities Act" means the Securities Act of
1933, as amended.
(k) SEC. The term "SEC" means the Securities and Exchange Commission.
2. Registration Rights.
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(a) Demand Rights. If the Company receives written request from the Holder
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of the Registrable Securities that the Company file a Registration Statement
covering the Registrable Securities, then the Company shall as soon as
practicable after receipt of such request file a Registration Statement for a
public offering of all Registrable Securities which the Holder requests to be
registered (which offering may be an underwritten offering in the Company's sole
discretion) and use its best efforts to cause such Registration Statement to
become effective; provided that (i)
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the Company shall only be required to file up to four (4) such Registration
Statements (other than on Form S-3 below) pursuant to this section and (ii) the
amount of Registrable Securities to be registered shall be equal to or greater
than the lesser of (A) 250,000 shares of Common Stock and (B) a number of shares
having an anticipated aggregate public offering price (before underwriting
discounts and commissions) of not less than $250,000.
(b) Piggyback Rights. If at any time or from time to time, the Company
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shall determine to register any Common Stock for public sale under the
Securities Act (other than on a registration statement related to any employee
benefit plan, acquisition or corporate reorganization or registration for
foreign issuance or distribution) the Company will: (a) promptly give to the
Holder written notice thereof (which shall include a list of the jurisdictions
in which the Company intends to attempt to qualify its Common Stock under the
applicable blue sky or other state securities laws); and (b) use all
commercially reasonable efforts to cause to be included in such registration
under the Securities Act (and any related qualification under blue sky laws or
other compliance) and in any underwriting involved therein on the same terms and
conditions as the other securities included in such registration, all the
Registrable Securities specified in a written request made within 30 days after
receipt of such written notice from the Company by the Holder; except that, if,
in connection with any offering, the managing underwriter (or, in case of an
offering that is not underwritten, a nationally recognized investment banking
firm) shall advise the Company in writing that there should be a limitation on
the number of shares of Common Stock which may be included in the Registration
Statement because, in its judgment, such limitation is necessary to effect an
orderly public distribution that would not materially and adversely affect the
offering price or market price of the Common Stock, then the Company shall be
only obligated to include in such Registration Statement that number of
Registrable Securities that is in excess of the number of shares of Common Stock
the Company proposes to sell under the Registration Statement. If the
registration is initiated by the Company for its own account, the Company shall
not be required to reduce the number of shares of Common Stock to be offered by
the Company in such Registration Statement for any reason.
(c) Form S-3. After the Company has qualified for the use of a
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Registration Statement on Form S-3, in addition to the rights contained in
Section 2(a) above, the Holder shall have the right to request the Company use
its best efforts to effect a registration of the Registrable Securities on Form
S-3 (each such request to be in writing and to state the number of shares to be
disposed of and the intended methods of disposition); provided, however, that
the amount of Registrable Securities to be registered shall be equal to or
greater than the lesser of (A) 250,000 shares of Common Stock and (B) a number
of shares having an anticipated aggregate public offering price (before
underwriting discounts and commissions) of not less than $250,000.
3. Effectiveness.
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A Registration Statement pursuant to which any Registrable Securities are
being offered will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
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declared effective, the offering of the Registrable Securities pursuant to such
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The
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Company will be deemed not to have used best efforts to cause the Registration
Statement to become, or to remain, effective during the requisite period if it
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or that would result in the Holder not
being able to offer and sell the Registrable Securities during that period
unless such action is required by applicable laws and regulations or currently
prevailing interpretations of the staff of the SEC. The Company shall use best
efforts to maintain the effectiveness for up to 180 days (or such shorter period
of time as the underwriters need to complete the distribution of the registered
offering) of any Registration Statement pursuant to which any of the Registrable
Securities are being offered, and from time to time will amend or supplement
such Registration Statement and the Prospectus contained therein to the extent
necessary to comply with the Securities Act and any applicable state securities
laws or regulations. The Company shall also provide the Holder with as many
copies of the Prospectus contained in any such Registration Statement as the
Holder may reasonably request.
4. Expenses of Registration.
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All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Agreement shall be borne by the
Company. Except as provided herein, the Holder shall pay all underwriters' fees,
discounts or commissions or transfer taxes, if any, relating to the sale or
disposition of the Holder's Registrable Securities.
5. Registration Procedures.
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In the case of each registration, qualification, or compliance effected by
the Company pursuant to this Agreement, the Company will keep the Holder advised
in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. At its expense, the Company will:
(a) Prepare and file with the SEC a Registration Statement with respect to
such Registrable Securities as described in Section 2 and use its best efforts
to cause such Registration Statement to become effective and to remain effective
in accordance with Section 3 (provided that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
will furnish to the counsel selected by the Holder copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel);
(b) Prepare and file with the SEC 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 and current for a period
of not less than 180 days (plus any period during which Holders must refrain
from selling pursuant to Section 5(f)) or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof as set forth in such Registration Statement;
(c) Furnish to each selling Holder and to each managing underwriter, if
any, (i) at least three (3) business day prior to filing with the SEC, any
Registration Statement covering shares of Registrable Securities, and any
amendment or supplement thereto, and any Prospectus, which
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documents will be subject to the reasonable review of the selling Holders and
such underwriter, and, with respect to a Registration Statement prepared
pursuant to Section 2(a), the Company shall not file any such documents with the
SEC to which selling Holder shall reasonably object; and (ii) a copy of any and
all transmittal letters or other correspondence with the SEC or any other
governmental agency or self-regulatory body or other body having jurisdiction
(including any domestic or foreign securities exchange) relating to such
offering of shares of Registrable Securities;
(d) (i) Furnish to the Holder, and to each underwriter, if any, without
charge, such number of copies of such Registration Statement, each amendment and
supplement thereto, the Prospectus included in such Registration Statement
(including each preliminary Prospectus), and such other documents as the Holder
or underwriters may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by the Holder; and (ii) consent to the use of
the Prospectus or any amendment or supplement thereto by the Holder of
Registrable Securities included in the Registration Statement in connection with
the offering and sale of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto;
(e) Use its commercially reasonable best efforts to register or qualify
such Registrable Securities under all applicable securities or blue sky laws of
such jurisdictions of the United States by the time the applicable Registration
Statement is declared effective by the SEC as the Holder and any underwriters
reasonably request in writing and do any other related acts which may be
reasonably necessary or advisable to enable the Holder and underwriters to
consummate the disposition in such jurisdictions of the Registrable Securities;
provided, however, that the Company shall not be required to (i) qualify as a
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foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(e), (ii) file
any general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process, or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(f) Notify the Holder, its counsel, and the managing underwriters, if any,
promptly, and promptly confirm such notice in writing, (i) 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, or the fact that, the
Prospectus included in such Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the reasonable request of a majority of the Holders, the
Company will prepare a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading; (ii)
when a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (iii) of any request by the
SEC or any state securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional information after the
Registration Statement has become effective, (iv) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the qualification of the Registrable Securities or
the initiation of any proceedings for that purpose, (v) if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties of
the Company contained in any purchase agreement, securities sales agreement or
other similar agreement, if any, cease to be true
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and correct in all material respects, and (vi) the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate;
(g) If applicable, use its best efforts to cause all such Registrable
Securities to be listed or quoted on each securities exchange or interdealer
quotation system on which similar securities issued by the Company are then
listed or quoted;
(h) Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement;
(i) Enter into such customary agreements (including underwriting
agreements on customary terms) and take all such other actions as the selling
Holders or the underwriters, if any, reasonably requests in order to expedite or
facilitate the disposition of such Registrable Securities;
(j) Obtain for delivery to the Company and the managing underwriters, if
any, with copies to the Holders of the Registrable Securities being registered,
a comfort letter from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by comfort
letters as the Holders shall reasonably request, dated the effective date of the
Registration Statement and brought down to the closing;
(k) If necessary, obtain a CUSIP number for the Registrable Securities not
later than the effective date of the Registration Statement; and
(l) Make available for inspection by the selling Holder, any underwriter
participating in any disposition pursuant to such Registration Statement and any
attorney, accountant or any other agent retained by the Holder or any such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by the Holder, any such
underwriter, attorney, accountant or agent in connection with such Registration
Statement.
(m) Cooperate with the Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and registered in such names as the Holder or
the underwriters may reasonably request at least two Business Days prior to the
closing of any sale of Registrable Securities pursuant to such Registration
Statement;
(n) As expeditiously as possible, upon the occurrence of any circumstance
contemplated by Section 5(f)(i), 5(f)(iii), 5(f)(iv), or 5(f)(v) hereof, use
best efforts to prepare a supplement or post-effective amendment to such
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and to notify the Holder to suspend
use of the Prospectus as promptly as practicable after the occurrence of such an
event, and the Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission;
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(o) Cooperate with each seller of Registrable Securities covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(p) Make "generally available to its security holders" (within the meaning
of Rule 158 of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder no
later than 45 days after the end of the 12-month period beginning with the first
day of the Company's first fiscal quarter commencing after the effective date of
the Registration Statement, which earnings statement shall cover said 12-month
period; and
(q) Use best efforts to take all other steps necessary to effect the
registration of the Registrable Securities covered by a Registration Statement
contemplated hereby.
6. Indemnification and Contribution.
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(a) In connection with any Registration Statement, the Company shall
indemnify and hold harmless the Holder and each underwriter who participates in
an offering of the Registrable Securities, each Person, if any, who controls any
of such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each of their respective directors, officers,
employees and agents, as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto) covering
Registrable Securities, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the prior written consent of
the Company; and
(iii) from and against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by Holder
or any underwriter (except to the extent otherwise expressly provided in
Section 6(c) hereof)), incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or
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omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 6(a);
provided, however, that (i) this indemnity does not apply to any loss,
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liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission with respect to a
Holder made in reliance upon and in conformity with written information
furnished in writing to the Company by the Holder, or any underwriter with
respect to the Holder, or any underwriter, as the case may be, expressly for use
in a Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) and (ii) the Company shall not be liable to the
Holder, any underwriter or controlling Person, with respect to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary Prospectus to the extent that any such loss, liability, claim,
damage or expense of the Holder, any underwriter or controlling Person results
from the fact that the Holder or any underwriter, sold Registrable 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 the final Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to the
Holder or any underwriter or controlling Person and the loss, liability, claim,
damage or expense of the Holder or underwriter, or controlling Person results
from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company to an indemnified party pursuant to this Section 6 as a
result of such losses shall be returned to the Company if it shall be finally
determined by such a court in a judgment not subject to appeal or final review
that such indemnified party was not entitled to indemnification by the Company.
(b) It shall be a condition to the obligation of the Company to effect a
registration of Registrable Securities under the Securities Act pursuant hereto
that each seller of Registrable Securities, severally and not jointly,
indemnifies and holds harmless the Company, any underwriter and each of their
respective directors, officers (including each officer of the Company who signed
the Registration Statement), employees and agents, any underwriter or any other
selling Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all loss, liability, claim,
damage and expense whatsoever described in the indemnity contained in Section
6(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in a Registration
Statement or any Prospectus in reliance upon and in conformity with written
information furnished to the Company by such selling Holder with respect to such
Holder expressly for use in such Registration Statement, or any such Prospectus;
provided that the liability of each seller of Registrable Securities pursuant to
this Section 6(b) shall not exceed an amount equal to the net proceeds of the
sale of Registrable Shares sold pursuant to such registration statement that are
received by or for the benefit of such seller of Registrable Securities.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers properly served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have under this
Section 6, except to the extent that it is materially prejudiced by such
failure. An indemnifying party may participate at its own expense in the defense
of such action, or, if it so elects within a reasonable time after receipt of
such notice, assume the defense of any suit brought to enforce any such claim;
but if it so elects to assume the defense, such defense shall be conducted by
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counsel chosen by it and approved by the indemnified party or parties, which
approval shall not be unreasonably withheld. In the event that an indemnifying
party elects to assume the defense of any such suit and retain such counsel, the
indemnified party or parties shall bear the fees and expenses of any additional
counsel thereafter retained by such indemnified party or parties; provided,
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however, that the indemnified party or parties shall have the right to employ
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counsel (in addition to local counsel) to represent the indemnified party or
parties who may be subject to liability arising out of any action in respect of
which indemnity may be sought against the indemnifying party if, in the
reasonable judgment of counsel for the indemnified party or parties, there may
be legal defenses available to such indemnified party or parties which are
different from or in addition to those available to the indemnifying party, in
which event the fees and expenses of appropriate separate counsel shall be borne
by the indemnifying party. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release in form and substance satisfactory to the
indemnified parties of each indemnified party from ail liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 6 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Holder
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company and the Holder, as incurred; provided, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holder, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company, on the one hand, and the Holder, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Holder, on the other hand, 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 the Company, on the one hand, or by or on behalf of the
Holder, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this Section 6 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 6, each
affiliate of the Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section 15
of the Securities Act or
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Section 20 of the Exchange Act shall have the same rights to contribution as the
Holder, and each director of the Company, each officer of the Company who signed
the Registration Statement, and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company.
(e) The obligations of the Company and the Holders under this Section 6
shall survive the completion of an offering of Registrable Securities pursuant
to a Registration Statement. Notwithstanding the foregoing, to the extent that
the indemnification and contribution provisions contained in the underwriting
agreement executed in connection with such Registration Statement conflict with
the foregoing provisions, the provisions in such underwriting agreement shall
control; provided that the Company will use its reasonable best efforts to
negotiate terms of indemnification that are reasonably favorable to the various
sellers pursuant thereto, as appropriate under the circumstances.
(f) The indemnity agreements contained herein shall be in addition to any
other rights to indemnification or contribution which any indemnified party may
have pursuant to law or contract and shall remain operative and in full force
and effect regardless of any investigation made or omitted by or on behalf of
any indemnified party and shall survive the transfer of the Registrable Shares
by any such party.
(g) The indemnification and contribution required by this Section 6 shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
7. Information by Holder.
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The Holder of Registrable Securities included in any registration shall
furnish to the Company such written information regarding Holder and the
distribution proposed by Holder as the Company may reasonably request in writing
and as shall be required in connection with any registration, qualification, or
compliance referred to in this paragraph. The Company hereby acknowledges and
agrees that, unless otherwise expressly agreed to in writing by a seller of
Registrable Securities to the contrary, for all purposes of this Agreement the
only information furnished or to be furnished to the Company for use in any such
registration statement, preliminary, final or summary prospectus or amendment or
supplement thereto are statements specifically relating to (i) transactions
between such seller of Registrable Securities and its affiliates, as that term
is defined in Rule 12b-2 of the Exchange Act ("Affiliates"), on the one hand,
and the Company, on the other hand; (ii) the beneficial ownership of shares of
the Company's Common Stock by such seller of Registrable Securities and its
Affiliates and (iii) the name and address of such seller of Registrable
Securities. If any additional information about such seller of Registrable
Securities or the plan of distribution (other than for an underwritten offering)
is required by law to be disclosed in any such document, then such seller shall
not unreasonably withhold its agreement referred to in the immediately preceding
sentence.
8. Postponement Rights.
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The Company shall have the right to postpone the filing (or suspend the
effectiveness) of any Registration Statement for a period of not in excess of 60
days if (A) the Company would, in the
10
opinion of its counsel, be required to disclose in such registration statement a
material business situation, transaction or negotiation affecting the Company
not otherwise then required by law to be publicly disclosed and (B) in the good
faith judgment of the Board of Directors of the Company, such disclosure would
materially and adversely affect such business situation, transaction or
negotiation; provided that the Company will promptly deliver evidence of such
determination by the Board of Directors of the Company to each Holder which
shall have requested to join in such registration pursuant to Section 2;
provided, further, that the aggregate number of days of postponements and
suspensions hereunder shall not exceed 60 days during any twelve (12) month
period. The Company shall give prompt notice to each Holder of the end of any
delay period hereunder. If the Company shall give any notice of postponement or
suspension of any Registration Statement, the Company shall not, during the
period of such postponement or suspension, register any shares of the Company's
Common Stock, other than pursuant to a registration statement on Form S-4 or S-8
(or an equivalent registration form then in effect). If the Company shall give
any notice of postponement of the filing or suspension of the effectiveness of a
Registration Statement, the Company shall, at such time as the reason that
caused such postponement or suspension no longer exists (but in no event later
than 60 days after the date of the postponement or suspension), use its best
efforts to effect the registration under the Securities Act of the Registrable
Securities covered by the postponed or suspended Registration Statement. If the
Company shall postpone or suspend the filing of any Registration Statement, the
Holder or Holders who delivered the demand pursuant to Section 2(a) shall have
the right to withdraw the demand for such registration by giving notice to the
Company within 20 days of the notice of postponement or suspension. In the event
that the demand is withdrawn, such demand shall not be counted for purposes of
determining the number of registrations to which Holders are entitled hereunder.
9. Limitations on Subsequent Registration Rights.
---------------------------------------------
Except in the case of an "Approved Transaction" as defined in Section 8 of
the Company's Certificate of Designation establishing the Preferred Stock, the
Company shall not grant to any holder of securities of the Company any
registration rights which have a priority greater than or equal to those granted
to Holders of Registrable Securities pursuant to Section 2 without the prior
written consent of the Holders of at least a majority of the aggregate
outstanding Registrable Securities, voting as a single group.
10. No Preferred Stock Registration Rights.
--------------------------------------
Nothing in this Agreement shall be construed to impose on the Company any
obligations or duties as to the registration of the Preferred Stock; provided
that holders of Preferred Stock shall be entitled to initiate or participate in
a registration pursuant to Section 2 with respect to shares of Common Stock
issuable upon conversion of shares of Preferred Stock, which shares of Preferred
Stock shall be converted into Common Stock on or before the date the
Registration Statement is declared effective by the SEC.
11. Lock-Up Agreement.
-----------------
Holder hereby agrees, so long as such Holder holds at least five percent
(5%) of the Company's outstanding voting equity securities, that it shall not,
to the extent requested by the
11
managing underwriter of securities of the Company, sell or otherwise transfer or
dispose of any Registrable Securities or other shares of stock of the Company
then owned by such Holder (other than to donees, members or partners of the
Holder who agree to be similarly bound) for up to 90 days following the date of
the final prospectus in connection with any registration statement of the
Company filed under the Securities Act; provided, however, that such agreement
shall be applicable only to the registration statements of the Company that
cover securities to be sold on the Company's behalf to the public in an
underwritten offering but not to Registrable Securities sold pursuant to such
registration statement; provided, further, that each officer and director who
own equity securities of the Company also agrees to such restrictions. In
addition, Holder agrees to execute an agreement, in the lead underwriter's
standard form, reflecting the foregoing at the time of the underwritten
offering. The provisions of this Section shall be binding upon any transferee or
assignee of any Registrable Securities, whether or not such persons are entitled
to registration rights pursuant to this Agreement.
12. Rule 144 Reporting Obligations.
------------------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Registrable Securities to the public without registration, after such time as a
public market exists for the Common Stock of the Company, the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the Commission in a timely
manner, taking into account any permitted extensions of filing deadlines, all
reports and other documents required of the Company under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as Holder owns any Registrable Securities, to furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time after 90
days after the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing Holder to sell any such securities
without registration (at any time after the Company has become subject to the
reporting requirements of the Exchange Act).
13. Legends.
-------
Holder understands that the share certificates evidencing any Registrable
Securities shall be endorsed with the following legends (in addition to any
legends required under applicable state securities laws):
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(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
(b) "THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN INVESTOR RIGHTS AGREEMENT AND
A STOCKHOLDER AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OR HIS
PREDECESSOR IN INTEREST. COPIES OF SUCH AGREEMENTS MAY BE OBTAINED BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY."
(c) Any legend required to be placed thereon by any other applicable
state securities laws and any other agreement between the parties hereto.
14. Specific Performance.
--------------------
The parties agree that irreparable damage will result in the event that
the obligations of the Company under this Agreement are not specifically
enforced, and that any damages available at law for a breach of any such
obligations would be inadequate. Therefore, the Holders of the Registrable
Securities shall have the right to specific performance by the Company of the
provisions of this Agreement, and appropriate injunctive relief may be applied
for and granted in connection therewith. The Company hereby irrevocably waives,
to the extent that it may do so under applicable law, any defense based on the
adequacy of a remedy at law which may be asserted as a bar to the remedy of
specific performance in any action brought against the Company for specific
performance of this Agreement by the Holders of Registrable Securities. Such
remedies and all other remedies provided for in this Agreement shall, however,
be cumulative and not exclusive and shall be in addition to any other remedies
which may be available under this Agreement.
15. Termination of Obligations.
--------------------------
The right of Holder to request registration or inclusion in any
registration pursuant to Section 2 hereof shall terminate on the earlier of (i)
the date on which the Holders, collectively, cease to own Registrable Securities
representing at least one percent (1%) of the outstanding Common Stock and (ii)
seven years from the date of this Agreement. Notwithstanding the foregoing, the
rights, duties and obligations of the Company and the Holders under Section 6
shall survive the termination of this Agreement.
16. Assignability.
-------------
This Agreement shall be binding upon and inure to the benefit of the
respective heirs, successors and assigns of the parties hereto.
13
17. Changes in Capital Stock.
------------------------
If, and as often as, there is any change in the Common Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the shares
as so changed.
18. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, without regard to the conflict of laws
provisions thereof.
19. Amendment.
---------
Any modification, amendment or waiver of this Agreement or any provision
hereof shall be in writing executed by the Holders of a majority of the then
outstanding Registrable Securities and the Company. The Company shall provide
prompt notice of any such modification, amendment or waiver to all Holders of
the then outstanding Registrable Securities. Any amendment effected in
accordance with this Section 19 shall be binding upon the Company, the Bank, and
each other Holder of Registrable Securities.
20. Severability.
------------
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
21. Successors and Assigns.
----------------------
This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of the Bank, including, without limitation
and without the need for an express assignment, subsequent Holders. If any
transferee of Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
22. Notices.
-------
Any notice required or permitted to be given to a party pursuant to the
provisions of this Agreement will be in writing and will be effective on (i) the
date of delivery by facsimile, or (ii) the business day after deposit with a
nationally-recognized courier or overnight service, including Express Mail, for
United States deliveries or (iii) five (5) business days after deposit in the
United States mail by registered or certified mail for United States deliveries.
All notices not delivered
14
personally or by facsimile will be sent with postage and other charges prepaid
and properly addressed to the party to be notified at the address set forth
below such party's signature on this Agreement or at such other address as such
party may designate by five (5) days advance written notice to the other parties
hereto. All notices for delivery outside the United States will be sent by
facsimile, or by nationally recognized courier or overnight service. Any notice
given hereunder to more than one person will be deemed to have been given, for
purposes of counting time periods hereunder, on the date given to the last party
required to be given such notice. Notices to the Company will be marked to the
attention of the Chief Financial Officer.
23. Attorneys' Fees.
---------------
If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
24. Entire Agreement.
----------------
This Agreement and the other writings referred to herein contain the
entire understandings among the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings among the parties
with respect to its subject matter.
25. Headings.
--------
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
26. Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
27. Further Assurances.
------------------
From and after the date of this Agreement, upon the request of a party,
the other parties shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
[Remainder of Page Intentionally Left Blank]
15
IN WITNESS WHEREOF, the undersigned Holder and the Company have executed
this Agreement on the day and year first above written.
COMPANY: COMDIAL CORPORATION
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
-------------
Title: Senior Vice President/Chief Financial Officer
---------------------------------------------
HOLDER: BANK OF AMERICA, N.A.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name: Xxxxxx Xxxxxxxxx
----------------
Title: Senior Vice President
---------------------
#1038873 (Richmond)
