EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
dated as of
October 26, 1999
among
Caliber Learning Network, Inc.,
Xxxxxxx US Discovery Fund III, L.P.,
Xxxxxxx US Discovery Offshore Fund III, L.P.
and
Xxxxxx Xxxxxxx Nominees Limited
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TABLE OF CONTENTS
Page
ARTICLE I.........................................................................................................1
DEMAND REGISTRATIONS.....................................................................................1
1.1 Requests for Registration............................................................1
1.2 Limitations on Demand Registrations..................................................2
1.3 Effective Registration Statement.....................................................2
1.4 Priority on Demand Registrations.....................................................2
1.5 Selection of Underwriters............................................................3
1.6 Other Registration Rights............................................................3
ARTICLE II........................................................................................................3
OTHER REGISTRATIONS......................................................................................3
2.1 Right to Piggyback...................................................................3
2.2 Priority on Primary Registrations....................................................3
2.3 Priority on Secondary Registrations..................................................3
2.4 Other Registrations..................................................................4
ARTICLE III.......................................................................................................4
REGISTRATION PROCEDURES..................................................................................4
ARTICLE IV........................................................................................................8
REGISTRATION EXPENSES....................................................................................8
ARTICLE V.........................................................................................................8
UNDERWRITTEN OFFERINGS...................................................................................8
5.1 Demand Underwritten Offerings........................................................8
5.2 Incidental Underwritten Offerings....................................................9
ARTICLE VI........................................................................................................9
INDEMNIFICATION..........................................................................................9
6.1 Indemnification by the Company.......................................................9
6.2 Indemnification by Holders..........................................................10
6.3 Indemnification Procedures..........................................................11
6.4 Indemnification of Underwriters.....................................................12
6.5 Contribution........................................................................12
6.6 Timing of Indemnification Payments..................................................13
ARTICLE VII......................................................................................................13
RULE 144................................................................................................13
Page
ARTICLE VIII.....................................................................................................13
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.............................................................13
ARTICLE IX.......................................................................................................14
MERGERS, ETC............................................................................................14
ARTICLE X........................................................................................................14
DEFINITIONS.............................................................................................14
ARTICLE XI.......................................................................................................16
MISCELLANEOUS...........................................................................................16
11.1 No Inconsistent Agreements..........................................................16
11.2 Adjustments Affecting Registrable Securities........................................16
11.3 Remedies............................................................................16
11.4 Amendments and Waivers..............................................................16
11.5 Successors and Assigns..............................................................16
11.6 Notices.............................................................................17
11.7 Headings............................................................................18
11.8 Gender..............................................................................18
11.9 Invalid Provisions..................................................................18
11.10 Governing Law.......................................................................18
11.11 Counterparts........................................................................18
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of October 26,
1999, among Caliber Learning Network, Inc., a Maryland corporation (the
"Company"), Xxxxxxx US Discovery Fund III, L.P., Xxxxxxx US Discovery Offshore
Fund III, L.P., and Xxxxxx Xxxxxxx Nominees Limited (collectively, the "Xxxxxxx
Funds"). The Xxxxxxx Funds, any Xxxxxxx Holder and any Transferee are
collectively referred to herein as the "Investors" and, individually, an
"Investor." Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed thereto in Article X.
W I T N E S S E T H:
WHEREAS, simultaneously herewith, the Xxxxxxx Funds have
purchased an aggregate of 150,000 shares of Series A Convertible Preferred Stock
pursuant to the terms of the Stock Purchase Agreements;
WHEREAS, it is a condition to the consummation of the
transactions contemplated by the Stock Purchase Agreements that the Company and
the Xxxxxxx Funds enter into this Agreement whereby the Company shall grant, and
the Investors shall obtain, the rights relating to the registration of the
Registrable Securities under the Securities Act, as set forth in this Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEMAND REGISTRATIONS
1.1 REQUESTS FOR REGISTRATION. Subject to Section 1.2, at any
time and from time to time on or after the date hereof, the Xxxxxxx Holders and
any Transferee may request registration under the Securities Act of all or part
of their Registrable Securities which registration shall be filed (i) on Form
S-1 or any similar long-form registration available to the Company ("Long-Form
Demand Registration"), or (ii) on Form S-3 or any similar short-form
registration ("Short Form Demand Registration"). Thereafter, the Company will
use its best efforts to promptly effect the registration of such Registrable
Securities under the Securities Act on the form requested by the holder or
holders making such registration request. All registrations requested pursuant
to this Section 1.1 are referred to herein as "Demand Registrations." Upon
receipt of a request for a Demand Registration, the Company will give prompt
written notice (in any event within five (5) Business Days after its receipt of
such request) of the request for a Demand Registration to all holders of
Registrable Securities not making such request and will include in such Demand
Registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten (10) days after the
receipt of the Company's notice. The holders of the Registrable Securities
making any such registration request may, at any time prior to the effective
date of the registration statement relating to any Demand Registration, revoke
such Demand Registration request by providing written notice to the Company.
1.2 LIMITATIONS ON DEMAND REGISTRATIONS. The holders of the
Registrable Securities, as a group, shall be entitled to (i) one (1) Long-Form
Demand Registration and (ii) two (2) Short-Form Demand Registrations.
1.3 EFFECTIVE REGISTRATION STATEMENT. (a) A Demand
Registration requested pursuant to Section 1.1 of this Agreement shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Securities and Exchange Commission (the "SEC") or other
governmental agency or court for any reason, and the Registrable Securities
covered thereby have not been sold, or (iii) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied by reason of (x) a failure
by or inability of the Company to satisfy any thereof, or (y) the occurrence of
an event outside the control of the holders of Registrable Securities.
(b) A Demand Registration requested pursuant to Section 1.1(a)
of this Agreement shall not be deemed to have been effected if holders of
Registrable Securities are not able to register and sell at least 80% of the
amount of Registrable Securities requested to be included in such registration.
1.4 PRIORITY ON DEMAND REGISTRATIONS. The Company will not
include in any Demand Registration any securities which are not Registrable
Securities without the written consent of the Xxxxxxx Holders. If other
securities are permitted to be included in a Demand Registration which is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities exceeds the
number of Registrable Securities which can be sold in such offering within a
price range acceptable to the Xxxxxxx Holders, the Company will include in such
registration prior to the inclusion of any securities which are not Registrable
Securities the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold within a price range acceptable
to the Xxxxxxx Holders, pro rata among the respective holders on the basis of
the amount of Registrable Securities requested to be offered thereby.
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1.5 SELECTION OF UNDERWRITERS. The Xxxxxxx Holders will have
the right to select the underwriters and the managing underwriters to administer
a Demand Registration, provided that such underwriters and managing underwriters
shall be reasonably acceptable to the Company.
1.6 OTHER REGISTRATION RIGHTS. The Company may grant to any
Person the right to request the Company to register any equity securities of the
Company, or any securities convertible, exchangeable or exercisable for or into
such securities ("Other Securities"); provided, however, that all such
registration rights shall be subordinate in all respects to the registration
rights held by the holders of the Registrable Securities.
ARTICLE II
OTHER REGISTRATIONS
2.1 RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration), and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
will give prompt written notice (in any event within three (3) Business Days
after its receipt of notice of any exercise of other demand registration rights)
to all holders of Registrable Securities of its intention to effect such a
registration and will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within ten (10) days after the receipt of the Company's notice.
2.2 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering at a price range which is
acceptable to the Company, the Company will include in such registration (i)
first, the securities the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such registration and (iii) third, other
securities requested to be included in such registration.
2.3 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering at a
price acceptable to the holders of the Company's securities, the Company will
include in such registration (i) first, the securities requested to be included
therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, and (iii)
third, other securities requested to be included in such registration. The
Company hereby agrees that whenever it grants piggyback rights to any holder of
its
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securities such holder's piggyback rights will be expressly subordinated to the
piggyback rights granted to the holders of the Registrable Securities under this
Article II.
2.4 OTHER REGISTRATIONS. If the Company has previously filed
a registration statement for a Long-Form Demand Registration with respect to
Registrable Securities pursuant to Article I of this Agreement or pursuant to
this Article II, or previously filed underwritten registration of shares of the
Company's Common Stock which includes shares sold for the Company's account
("Company Registration"), and if such previous registration has not been
withdrawn or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities convertible,
exchangeable or exercisable for or into its equity securities under the
Securities Act (except on Form S-4 or S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities other
than the holders of the Registrable Securities, until a period of at least three
(3) months elapsed from the effective date of such previous registration.
ARTICLE III
REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, the
Company will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
registration thereof, and pursuant thereto the Company will as expeditiously as
possible or, in the case of clause (q) below, will not:
(a) promptly prepare and file with the SEC a registration
statement with respect to such Registrable Securities (such registration
statement to include all information which the holders of the Registrable
Securities to be registered thereby shall reasonably request) and use its best
efforts to promptly cause such registration statement to become effective,
provided that at least five days before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will (i)
furnish to counsel selected by the Xxxxxxx Holders, copies of all such documents
proposed to be filed, and the Company shall not , in the case of a Demand
Registration, file any such documents to which such counsel shall have objected
on the grounds that such document does not comply in all material respects with
the requirements of the Securities Act or of the rules or regulations
thereunder, and (ii) notify each holder of Registrable Securities covered by
such registration statement of (x) any request by the SEC to amend such
registration statement or amend or supplement any prospectus or (y) any stop
order issued or threatened by the SEC, and take all reasonable actions required
to prevent the entry of such stop order or to remove it if entered;
(b) (i) promptly prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as
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may be necessary (A) in the case of a Long-Form Demand Registration, to keep
such registration statement effective for a period of not less than 180 days
(except that such 180-day period shall be (I) shortened to the extent that all
shares are sold thereunder, or (II) extended (x) by the length of any period
that a stop order or similar proceeding is in effect which prohibits the
distribution of the Registrable Securities, and (y) by the number of days during
the period from and including the date on which each seller of Registrable
Securities shall have received a notice delivered pursuant to clause (f) below
until the date when such seller shall have received a copy of the supplemented
or amended prospectus contemplated by clause (f) below), and (B) in the case of
a Shelf Registration, keep such registration statement continually effective,
(ii) 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 set forth in such registration statement;
(c) as soon as reasonably possible furnish to each seller of
Registrable Securities, without charge, such number of conformed copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus
and prospectus supplement and, in each case, including all exhibits) and such
other documents as such seller may reasonably request, all in conformity with
the requirements of the Securities Act, in order to facilitate the disposition
of the Registrable Securities owned by such seller;
(d) use its best efforts promptly to register or qualify the
Shares under such other securities or blue sky laws of such jurisdictions as any
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and to do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller, provided,
however, that the Company will not be required to (i) qualify generally to do
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for this clause (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) furnish to each seller of Registrable Securities a signed
copy, addressed to such seller (and the underwriters, if any) of an opinion of
counsel for the Company or special counsel to the selling stockholders, dated
the effective date of such registration statement (and, if such registration
statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to counsel selected by the Xxxxxxx Holders, covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of issuer's counsel
delivered to the underwriters in underwritten public offerings, and such other
legal matters as the seller (or the underwriters, if any) may reasonably
request;
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(f) promptly notify each seller of Registrable Securities, at
a time when a prospectus relating to the Shares is required to be delivered
under the Securities Act, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, 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
light of the circumstances under which they were made, and, at the request of
any such seller, promptly prepare and furnish such seller 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 Registrable
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 light of the circumstances
under which they were made;
(g) cause all of the Shares to be listed or quoted, and to
continue to be listed or quoted on the American Stock Exchange, other national
securities exchange, the Nasdaq National Market or the Nasdaq Small-Cap Market,
on which the Common Stock of the Company is then listed, if the listing of such
Shares is then permitted under the rules of such exchange or The NASDAQ Stock
Market;
(h) provide a transfer agent and registrar for all of the
Shares not later than the effective date of such registration statement;
(i) enter into such customary arrangements and take all such
other actions as the Xxxxxxx Holders or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of the Shares;
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement, in each case
pursuant to confidentiality agreements, as appropriate;
(k) cause the Company's officers to make presentations to
potential purchasers of the Shares, as reasonably requested by any seller of
Registrable Securities or any underwriter participating in any disposition
pursuant to such registration statement;
(l) subject to other provisions hereof, use its best efforts
to cause the Shares to be registered with or approved by such other governmental
agencies or authorities or self-
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regulatory organizations as may be necessary to enable the sellers thereof to
consummate the disposition of the Shares;
(m) in connection with (i) a Short-Form Demand Registration or
a Piggyback Registration, if any other participant in such Short-Form Demand
Registration or Piggyback Registration, as the case may be, receives a "comfort"
letter as described herein, or (ii) a Long-Form Demand Registration, use its
best efforts to obtain a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements, addressed to each seller, and to the underwriters, if any,
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 the underwriters in underwritten public
offerings of securities and such other financial matters as such seller (or the
underwriters, if any) may reasonably request;
(n) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, in each case as soon as practicable, an earning statement covering a
period of at least twelve months, beginning after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
(o) permit any holder of Registrable Securities, which holder,
in the sole judgment exercised in good faith of such holder, might be deemed to
be a controlling person of the Company (within the meaning of the Securities Act
or the Exchange Act), to participate in the preparation of any registration
statement covering such holder's Registrable Securities and to include therein
material, furnished to the Company in writing, which in the reasonable judgment
of such holder should be included and which is reasonably acceptable to the
Company;
(p) use every reasonable effort to obtain the lifting at the
earliest possible time of any stop order suspending the effectiveness of any
registration statement or of any order preventing or suspending the use of any
preliminary prospectus;
(q) at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents incorporated by reference into the prospectus), of
which each seller of Registrable Securities or the managing underwriters shall
not have previously been advised and furnished a copy or to which the sellers of
Registrable Securities, the managing underwriters, or counsel for such sellers
or for the underwriters shall reasonably object; and
(r) make such representations and warranties (subject to
appropriate disclosure schedule exceptions) to sellers of Registrable Securities
and the underwriters, if any,
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in form, substance and scope as are customarily made by issuers to underwriters
and selling holders, as the case may be, in underwritten public offerings of
substantially the same type.
ARTICLE IV
REGISTRATION EXPENSES
All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and expenses for
listing or quoting the Shares on each securities exchange or The NASDAQ Stock
Market on which similar securities issued by the Company are then listed or
quoted, and fees and disbursements of counsel for the Company, reasonable fees
and disbursement of one counsel chosen by the Xxxxxxx Holders, any transfer
agent and all independent certified public accountants, underwriters (excluding
discounts and selling commissions) and other Persons retained by the Company in
connection with any Demand Registration or any Piggyback Registration (all such
expenses being herein called "Registration Expenses"), will be paid by the
Company.
ARTICLE V
UNDERWRITTEN OFFERINGS
5.1 DEMAND UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offerings of Registrable Securities pursuant
to a Demand Registration, the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to the Company, the Xxxxxxx Holders and the
underwriters, and to contain such representations and warranties by the Company
and such other terms as are generally included in agreements of this type,
including, without limitation, indemnities customarily included in such
agreements. The holders of Registrable Securities to be distributed by such
underwriters may be parties to such underwriting agreement and may, at their
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. The
Company shall cooperate with any such holder of Registrable Securities in order
to limit any representations or warranties to, or agreements with, the Company
or the underwriters to be made by such holder only to those representations,
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by law.
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5.2 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by Article II of this Agreement and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any holder of Registrable Securities as provided in Article II of
this Agreement, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder, subject to the limitations set
forth in Article II hereof, among the securities to be distributed by 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 may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless, to the extent permitted by law, each of the holders
of any Registrable Securities covered by any registration statement prepared
pursuant to this Agreement, each other Person, if any, who controls such holder
within the meaning of the Securities Act or the Exchange Act, and each of their
respective directors, general partners and officers, as follows:
(i) against any and all loss, liability, claim,
damage and expense arising out of or based upon an untrue
statement or alleged untrue statement of a material fact
contained in any registration statement (or any amendment or
supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense to the extent of the aggregate amount paid
in settlement of any litigation, investigation or proceeding
by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue
statement or omission or any
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such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense incurred by them in
connection with investigating, preparing or defending against
any litigation, investigation or proceeding by any
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 omission, to
the extent that any such expense is not paid under clause (i)
or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any holder expressly for use in the preparation of any registration statement
(or any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus (or any
amendment or supplement thereto); and provided further, that the Company will
not be liable to any holder under the indemnity agreement in this Section 6.1,
with respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, liability, claim, damage or expense of such controlling Person or
holder results from the fact that such holder 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 or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company has previously and timely furnished copies thereof to such holder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, general
partner, or other controlling person and shall survive the transfer of such
securities by such seller.
6.2 INDEMNIFICATION BY HOLDERS. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder agrees to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 6.1 of this
Agreement), to the extent permitted by law, the Company and its directors,
officers and controlling Persons, and their respective directors, officers and
general partners, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such holder, specifically stating that it is
for use in the preparation of such registration statement, preliminary, final or
summary prospectus or amendment or supplement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company, or such holder, as the case may be, or any of their respective
directors, officers, controlling Persons or general partners and shall survive
the transfer of such
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securities by such holder. The obligations of each holder of Registrable
Securities pursuant to this Section 6.2 are to be several and not joint;
provided, that, with respect to each claim pursuant to this Section 6.2, each
such holder's maximum liability under this Section shall be limited to an amount
equal to the net proceeds actually received by such holder (after deducting any
underwriting discount and expenses) from the sale of Registrable Securities
being sold pursuant to such registration statement or prospectus by such holder.
6.3 INDEMNIFICATION PROCEDURES. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 6.1 or Section 6.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 6.1 or Section 6.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, in which case the
indemnifying party shall not be liable for the fees and expenses of (i) more
than one counsel for all holders of Registrable Securities, selected by the
Xxxxxxx Holders, or (ii) more than one counsel for the Company in connection
with any one action or separate but similar or related actions. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels. The indemnifying party will not, without the
prior written consent of each indemnified party, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such indemnified party or any Person who controls such indemnified party
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party from all liability arising out of such claim, action, suit or proceeding.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party will have the right to
retain, at its own expense, counsel with respect to the defense of a claim.
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6.4 INDEMNIFICATION OF UNDERWRITERS. The Company and each
holder of Registrable Securities requesting registration shall provide for the
foregoing indemnity in any underwriting agreement with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority other than the Securities Act.
6.5 CONTRIBUTION. If the indemnification provided for in
Sections 6.1 and 6.2 of this Agreement is unavailable or insufficient to hold
harmless an indemnified party under such Sections, then each indemnifying party
shall contribute to the amount paid or payable to such indemnified party as a
result of the losses, claims, damages or liabilities referred to in Section 6.1
or Section 6.2 of this Agreement in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand, and the
indemnified party on the other, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations, including, without limitation, the
relative benefits received by each party from the offering of the securities
covered by such registration statement, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault 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 indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 6.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.5. The amount paid to an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 6.5 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim (which shall be
limited as provided in Section 6.3 of this Agreement if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this Section 6.5. Promptly after receipt by an
indemnified party under this Section 6.5 of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 6.5, such indemnified
party shall notify the indemnifying party in writing of the commencement thereof
if the notice specified in Section 6.3 of this Agreement has not been given with
respect to such action; provided, that the omission to so notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may otherwise have to any indemnified party under this Section 6.5,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. The Company and each holder of Registrable Securities
agrees with each other and the underwriters of the Registrable Securities, if
requested by such underwriters, that (i) the underwriters' portion of such
contribution shall not exceed the underwriting discount
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and (ii) the amount of such contribution shall not exceed an amount equal to the
net proceeds actually received by such indemnifying party from the sale of
Registrable Securities in the offering to which the losses, liabilities, claims,
damages or expenses of the indemnified parties relate. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
6.6 Timing of Indemnification Payments. The indemnification
required by this Article VI shall be made (i) by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expenses are incurred, and (ii) upon determination of liability by a
court of competent jurisdiction whether or not such judgment is appealed, with
respect to loss, damage or liability.
ARTICLE VII
RULE 144
The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other information), and it will
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemption provided by (i) Rule 144 or Rule 144A
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
ARTICLE VIII
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's securities on the
basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements and consistent with the provisions of this Agreement.
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ARTICLE IX
MERGERS, ETC.
The Company shall not, directly or indirectly, enter into any
merger, consolidation, or reorganization in which the Company shall not be the
surviving corporation unless the proposed surviving corporation shall, prior to
such merger, consolidation, or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to be references to the
securities that the Investors or the holders of Registrable Securities would be
entitled to receive in exchange for Registrable Securities under any such
merger, consolidation, or reorganization.
ARTICLE X
DEFINITIONS
As used in this Agreement, the following defined terms shall
have the meanings set forth below:
"Business Day" means a day other than Saturday, Sunday or any
day on which banks in the State of New York are authorized or obligated to
close.
"Common Stock" means the Company's Common Stock, par value
$.01 per share.
"Demand Registrations" shall have the meaning set forth in
Section 1.1(a) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Xxxxxxx Funds" shall have the meaning set forth in the first
paragraph hereof.
"Xxxxxxx Holders" shall have the meaning given it in Section 3
of the Stock Purchase Agreements.
"Investor" or "Investors" shall have the meaning set forth in
the first paragraph hereof.
"Long-Form Demand Registrations" shall have the meaning set
forth in Section 1.1(a) hereof.
"Other Securities" shall have the meaning set forth in Section
1.6 hereof.
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"Person" means any individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Registrable Securities" means (i) any shares of Common Stock
issued or issuable upon conversion of the Series A Preferred purchased by the
Xxxxxxx Funds pursuant to the Stock Purchase Agreements and (ii) any securities
issued or issuable with respect to the Common Stock referred to in clause (i) by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, such securities will
cease to be Registrable Securities when they have (x) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them or (y) been transferred pursuant to Rule
144 (or any similar rule then in force) under the Securities Act.
"SEC" shall have the meaning set forth in Section 1.1(b)
hereof.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Series A Preferred" means the Company's Series A Convertible
Preferred Stock, par value $.01 per share, which Series A Preferred is
convertible into shares of Common Stock.
"Shares" means the shares of Registrable Securities registered
on the registration statement filed with the SEC in connection with any Demand
Registration or any Piggyback Registration.
"Short-Form Demand Registration" shall have the meaning set
forth in Section 1.1(a) hereof.
"Stock Purchase Agreements" means, collectively, the separate
Stock Purchase Agreements, dated as of October 26, 1999, between the Company and
each of the Xxxxxxx Funds.
"Transferees" shall have the meaning given it in Section 3 of
the Stock Purchase Agreements.
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ARTICLE XI
MISCELLANEOUS
11.1 No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the holders of Registrable Securities in
this Agreement.
11.2 Adjustments Affecting Registrable Securities. The Company
will not effect or permit to occur any combination, subdivision or
reclassification of any of its securities which would adversely affect the
ability of the holders of Registrable Securities to include Registrable
Securities in a registration undertaken pursuant to this Agreement or which, to
the extent within its control, would adversely affect the marketability of such
Registrable Securities in any such registration (including, without limitation,
effecting a stock split or a combination of shares).
11.3 Remedies. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
11.4 Amendments and Waivers. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
will be effective against the Company or any holder of Registrable Securities,
unless such modification, amendment or waiver is approved in writing by the
Company and the Xxxxxxx Holders. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
11.5 Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
Investors or the holders of Registrable Securities are also for the benefit of,
and enforceable by, any subsequent holder of Registrable Securities.
-16-
11.6 Notices. Subject to Section 11.6(b) hereof, all notices,
requests and other communications hereunder must be in writing and will be
deemed to have been duly given only if delivered personally or by facsimile
transmission or sent by nationally recognized overnight courier service to the
parties at the following addresses or facsimile numbers:
(i) If to an Investor or a holder of Registrable
Securities, to:
c/x Xxxxxxx Asset Management USA
000 Xxxx Xxxxxx
XX, XX 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
(ii) If to the Company, to:
Caliber Learning Network, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxx
with a copy to:
Piper & Marbury L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
All such notices, requests and other communications will (x) if delivered
personally to the address as provided in this Section 11.6(a), be deemed given
upon delivery, (y) if delivered by facsimile transmission to the facsimile
number as provided in this Section 11.6(a), be deemed given upon receipt and (z)
if delivered by nationally recognized overnight courier service in the manner
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described above to the address as provided in this Section 11.6(a), be deemed
given on the Business Day following the day it was sent (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this Section
11.6(a)). Any party may from time to time change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.
11.7 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
11.8 Gender. Whenever the pronouns "he" or "his" are used
herein they shall also be deemed to mean "she" or "hers" or "it" or "its"
whenever applicable. Words in the singular shall be read and construed as though
in the plural and words in the plural shall be construed as though in the
singular in all cases where they would so apply.
11.9 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (i) such provision will be fully severable, (ii) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
11.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to a
contract executed and performed in such State without giving effect to the
conflicts of laws principles thereof.
11.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
CALIBER LEARNING NETWORK, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
XXXXXXX US DISCOVERY FUND III, L.P.
By: XXXXXXX US DISCOVERY
PARTNERS, L.P.,
its general partner
By: XXXXXXX US DISCOVERY, LLC,
its general partner
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Xxxxxx X. Xxxx, member
XXXXXXX US DISCOVERY OFFSHORE
FUND III, L.P.
By: XXXXXXX US DISCOVERY
PARTNERS, L.P.,
its general partner
By: XXXXXXX US DISCOVERY, LLC,
its general partner
By: /s/ Xxxxxx X. Xxxx
--------------------------
Xxxxxx X. Xxxx, member
XXXXXX XXXXXXX NOMINEES LIMITED
By: /s/
-------------------------
[Signature page to Registration Rights Agreement]
