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Exhibit 10.19
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of May 26, 1999, by
and between Emcore Corporation, a New Jersey corporation ("Company"), and GE
Capital Equity Investments, Inc. ("GE Capital" or "Purchaser").
W I T N E S S E T H :
WHEREAS, Company and Purchaser have entered into that certain
Note Purchase Agreement, dated as of May 26,1999 (the "Purchase Agreement"),
pursuant to which Company has agreed to issue and sell to Purchaser, and
Purchaser has agreed to purchase from Company, a senior subordinated convertible
promissory note in the principal amount of $7,800,000, which is initially
convertible into 340,984 shares of Common Stock of Company (the "Note"); and
WHEREAS, in order to induce Purchaser to enter into the
Purchase Agreement and to purchase the Note, Company has agreed to provide
registration rights with respect thereto;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms
defined in the Purchase Agreement are used herein as therein defined, and the
following shall have (unless otherwise provided elsewhere in this Registration
Rights Agreement) the following respective meanings (such meanings being equally
applicable to both the singular and plural form of the terms defined):
"Agreement" shall mean this Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to the Agreement as the same
may be in effect at the time such reference becomes operative.
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of New York.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act and other
federal securities laws.
"Conversion Shares" shall mean shares of Common Stock issued
upon conversion of the Note.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
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"Holder" shall mean the holder of the Note.
"NASD" shall mean the National Association of Securities
Dealers, Inc., or any successor corporation thereto.
"Registrable Securities" shall mean the shares of Common Stock
from time to time issued or issuable to the holder of the Note upon the
conversion thereof. "Required Holders" shall mean Holders of at least a majority
of the Registrable Securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
2. Required Registration. Upon receipt of a written request
from the holders of Registrable Securities requesting that Company effect a
registration under the Securities Act covering at least 50% of the Registrable
Securities initially outstanding, and specifying the intended method or methods
of disposition thereof, Company shall promptly notify all Holders in writing of
the receipt of such request and each such Holder, in lieu of exercising its
rights under Section 3 may elect (by written notice sent to Company within 10
Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have Registrable Securities included in such registration
thereof pursuant to this Section 2. Thereupon Company shall, as expeditiously as
is possible, use its reasonable best efforts to effect the registration under
the Securities Act of all shares of Registrable Securities which Company has
been so requested to register by such Holders for sale, all to the extent
required to permit the disposition (in accordance with the intended method or
methods thereof, as aforesaid) of the Registrable Securities so registered;
provided, however, that Company shall not be required to effect more than one
(1) registration of any Registrable Securities pursuant to this Section 2, which
registration shall not be underwritten; and provided further, however, that the
right of the holders of Registrable Securities to request that Company effect a
registration of any Registrable Securities pursuant to this Section 2 shall
terminate when the Registrable Securities may be sold pursuant to Rule 144 under
the Securities Act during any six-month period. A Holder may only request a
registration of registrable securities which it has a present intention to sell
and it shall so state in its request for registration.
3. Incidental Registration. If Company at any time proposes
to file on its behalf and/or on behalf of any of its security holders (the
"demanding security holders") a Registration Statement under the Securities Act
on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities, it will give written notice to all Holders at least
15 days before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by
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Company. The notice shall offer to include in such filing the aggregate number
of shares of Registrable Securities as such Holders may request.
Each Holder desiring to have Registrable Securities registered
under this Section 3 shall advise Company in writing within 10 Business Days
after the date of receipt of such offer from Company, setting forth the amount
of such Registrable Securities for which registration is requested. Company
shall thereupon include in such filing, the number of shares of Registrable
Securities for which registration is so requested, subject to the next sentence,
and shall use its reasonable best efforts to effect registration under the
Securities Act of such shares if such offering proceeds. If the managing
underwriter of a proposed public offering shall advise Company in writing that,
in its opinion, the distribution of the Registrable Securities requested to be
included in the registration concurrently with the securities being registered
by Company or such demanding security holder would materially and adversely
affect the distribution of such securities by Company or such demanding security
holder, then all selling security holders, other than Company, (including the
demanding security holder who initially requested such registration) shall
reduce the amount of securities each intended to distribute through such
offering on a pro rata basis. Except as otherwise provided in Section 5, all
expenses of such registration shall be borne by Company.
4. Registration Procedures. If Company is required by the
provisions of Section 2 or 3 to use its reasonable best efforts to effect the
registration of any of its securities under the Securities Act, Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a
Registration Statement with respect to such securities and use its reasonable
best efforts to cause such Registration Statement to become and remain effective
for a period of time required for the disposition of such securities by the
holders thereof, but not to exceed 120 days;
(b) prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities covered by such
Registration Statement until the earlier of such time as all of such securities
have been disposed of in a public offering or the expiration of 120 days;
(c) furnish to such selling security holders such
number of copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such selling security holders may reasonably
request;
(d) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States as each holder of
such securities shall request (provided, however, that Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then
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qualified or to file any general consent to service or process), and do such
other reasonable acts and things as may be required of it to enable such holder
to consummate the disposition in such jurisdiction of the securities covered by
such Registration Statement;
(e) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 2, on the date that
such shares of Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date that the Registration Statement with
respect to such shares of Registrable Securities becomes effective, (1) an
opinion, dated such date, of the independent counsel representing Company for
the purposes of such registration, addressed to the underwriters, if any, in
customary form and covering matters of the type customarily covered in such
legal opinions; and (2) a comfort letter dated such date, from the independent
certified public accountants of Company, addressed to the underwriters, if any,
and, if such accountants refuse to deliver such letter to such Holder, then to
Company, in a customary form and covering matters of the type customarily
covered by such comfort letters and as the underwriters or such Holder shall
reasonably request;
(f) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities; and
(g) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, but not
later than 18 months after the effective date of the Registration Statement, an
earnings statement covering the period of at least 12 months beginning with the
first full month after the effective date of such Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
It shall be a condition precedent to the obligation of Company
to take any action pursuant to this Agreement in respect of the securities which
are to be registered at the request of any Holder that such Holder shall furnish
to Company such information regarding the securities held by such Holder and the
intended method of disposition thereof as Company shall reasonably request and
as shall be required in connection with the action taken by Company. Such Holder
shall also enter into reasonably acceptable customary custody and other
agreements in connection with any registration statements if requested by
Company.
5. Expenses. All expenses incurred in complying with this
Agreement, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), printing expenses,
fees and disbursements of counsel for Company, the reasonable fees and expenses
of counsel for the selling security holders (selected by those holding a
majority of the shares being registered), expenses of any special audits
incident to or required by any such registration and expenses of complying
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with the securities or blue sky laws of any jurisdiction pursuant to Section
4(d), shall be paid by Company, except that:
(a) all such expenses in connection with any
amendment or supplement to the Registration Statement or prospectus filed more
than 180 days after the effective date of such Registration Statement because
any Holder has not effected the disposition of the securities requested to be
registered shall be paid by such Holder; and
(b) Company shall not be liable for any fees,
discounts or commissions to any underwriter or any fees or disbursements of
counsel for any underwriter in respect of the securities sold by such Holder.
6. Indemnification and Contribution.
(a) In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Agreement,
Company shall indemnify and hold harmless the holder of such Registrable
Securities, such holder's directors and officers, and each other person
(including each underwriter) who participated in the offering of such
Registrable Securities and each other person, if any, who controls such holder
or such participating person within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
holder or any such director or officer or participating person or controlling
person may become subject under the Securities Act or any other statute or at
common law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any alleged untrue
statement of any material fact contained, on the effective date thereof, in any
Registration Statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse such holder or such
director, officer or participating person or controlling person for any legal or
any other expenses reasonably incurred by such holder or such director, officer
or participating person or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
actual or alleged untrue statement or actual or alleged omission made in such
Registration Statement, preliminary prospectus, prospectus or amendment or
supplement in reliance upon and in conformity with written information furnished
to Company by or on behalf of such holder specifically for use therein or (in
the case of any registration pursuant to Section 2) so furnished for such
purposes by or on behalf of any underwriter. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
holder or such director, officer or participating person or controlling person,
and shall survive the transfer of such securities by such holder.
(b) Each Holder, by acceptance hereof, agrees to
indemnify and hold harmless Company, its directors and officers and each other
person, if any, who controls Company within the meaning of the Securities Act
against any losses, claims,
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damages or liabilities, joint or several, to which Company or any such director
or officer or any such person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information in writing provided to Company by or on behalf of such Holder
specifically for use in the following documents and contained, on the effective
date thereof, in any Registration Statement under which securities were
registered under the Securities Act at the request of such holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto. Notwithstanding the provisions of this paragraph (b) or
paragraph (d) below, no Holder shall be required to indemnify any person
pursuant to this Section 6 or to contribute pursuant to paragraph (d) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder in connection with any such registration under the Securities Act.
(c) Promptly after receipt by an indemnified party
under Sections 6(a) or (b) above of notice of the assertion of any claim, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability that it may have under this Section 6 except to the extent that it has
been prejudiced in any material respect by such failure or from any liability
that it may have otherwise). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties with respect to such
different defenses), in any of which events such fees and expenses shall be
borne by the indemnifying parties. The indemnifying party under Sections 6(a) or
(b) above shall only be liable for the legal expenses of one counsel for all
indemnified parties in each jurisdiction in which any claim or action is
brought; provided, however, that the indemnifying party shall be liable for
separate counsel for any indemnified party in a jurisdiction, if counsel to the
indemnified parties shall have reasonably concluded that there may be defenses
available to such indemnified party that are different from or additional to
those available to one or more of the other indemnified parties and that
separate counsel for such indemnified party is prudent under the circumstances.
Anything in this subsection to the contrary notwithstanding, an
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indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent; provided, however, that such written
consent was not unreasonably withheld.
(d) If the indemnification provided for in this
Section 6 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. 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.
7. Certain Limitations on Registration Rights.
Notwithstanding the other provisions of this Agreement:
(a) Company shall not be obligated to register the
Registrable Securities of any Holder if, in the opinion of counsel to Company
reasonably satisfactory to the Holder and its counsel (or, if the Holder has
engaged an investment banking firm, to such investment banking firm and its
counsel), the sale or other disposition of such Holder's Registrable Securities,
in the manner proposed by such Holder (or by such investment banking firm), may
be effected without registering such Registrable Securities under the Securities
Act; and
(b) Company shall not be obligated to register the
Registrable Securities of any Holder pursuant to Section 2 if Company has had a
registration statement, under which such Holder had a right to have its
Registrable Securities included pursuant to Section 2 or 3, declared effective
within one year prior to the date of the request pursuant to Section 2;
provided, however, that if any Holder elected to have
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shares of its Registrable Securities included under such registration statement
but some or all of such shares were excluded pursuant to the penultimate
sentence of Section 3, then such one-year period shall be reduced to the greater
of six months or any lock-up period agreed to by such Holder with an
underwriter.
(c) Company shall have the right to delay the filing
or effectiveness of a registration statement required pursuant to Section 2
hereof during one or more periods aggregating not more than 90 days in any
twelve-month period in the event that (i) Company would, in accordance with the
advice of its counsel, be required to disclose in the prospectus information not
otherwise then required by law to be publicly disclosed and (ii) in the judgment
of Company's Board of Directors, there is a reasonable likelihood that such
disclosure, or any other action to be taken in connection with the prospectus,
would materially and adversely affect any existing or prospective material
business situation, transaction or negotiation or otherwise materially and
adversely affect Company.
8. Market Stand-Off Agreement. Each Holder hereby agrees
that, during the period of duration specified by Company and an underwriter of
common stock or other securities of Company, following the effective date of a
registration statement of Company filed under the Securities Act, it shall not,
to the extent requested by Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of Company held
by it at any time during such period except common stock included in such
registration; provided, however, that such market stand-off time period shall
not exceed 180 days and all officers and directors of Company enter into similar
agreements.
In order to enforce the foregoing covenant, Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares of securities of every other person subject to the
foregoing restriction) until the end of such period.
9. Miscellaneous.
(a) No Inconsistent Agreements. Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders in this Agreement. Except as
set forth on Schedule 1 hereto, Company has not previously entered into any
agreement with respect to any of its securities granting any registration rights
to any person.
(b) Remedies. Each Holder, 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.
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision
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hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
(c) Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has obtained the written consent of the Required
Holders.
(d) Notice Generally. Any notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder to be
made pursuant to the provisions of this Agreement shall be sufficiently given or
made if in writing and either delivered in person with receipt acknowledged or
sent by registered or certified mail, return receipt requested, postage prepaid,
or by telecopy and confirmed by telecopy answerback, addressed as follows:
(i) If to any Holder, at its last known address
appearing on the books of Company maintained for such
purpose.
(ii) If to Company, at
Emcore Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Telecopy Number: (000) 000-0000
with a copy to:
White & Case
First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three Business Days after the same shall have been deposited in
the United States mail.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto including any person to whom Registrable Securities are
transferred.
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(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law; Jurisdiction. This Agreement
shall be governed by, construed and enforced in accordance with the laws of the
State of New York without giving effect to the conflict of laws provisions
thereof. Each of the parties hereby submits to personal jurisdiction and waives
any objection as to venue in the County of New York, State of New York. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights hereunder.
(h) Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
(i) Entire Agreement. This Agreement, together with
the Purchase Agreement, represents the complete agreement and understanding of
the parties hereto in respect of the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EMCORE CORPORATION
By:
---------------------------------
Name:
Title:
GE CAPITAL EQUITY INVESTMENTS, INC.
By:
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Name:
Title:
[SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT]
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SCHEDULE 1
Other Registration Rights
