Exhibit 4.8
Execution Copy
REGISTRATION RIGHTS AGREEMENT
BETWEEN
KEY3MEDIA GROUP, INC.
AND
THE PURCHASERS NAMED HEREIN
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DATED: DECEMBER 19, 2001
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TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................................. 1
1.1 Definitions.......................................................... 1
1.2 Other Definitions.................................................... 4
ARTICLE II REGISTRATION UNDER THE SECURITIES ACT....................................... 5
2.1 Shelf Registration Statement......................................... 5
2.2 Demand Registration.................................................. 6
2.3 Incidental Registration.............................................. 9
2.4 Expenses............................................................. 11
2.5 Underwritten Offerings............................................... 11
2.6 Blackout Periods..................................................... 12
ARTICLE III RESTRICTIONS ON SALE....................................................... 13
3.1 Restrictions on Sale by the Company and Others....................... 13
ARTICLE IV REGISTRATION PROCEDURES..................................................... 13
4.1 Obligations of the Company........................................... 13
4.2 Seller Information................................................... 18
4.3 Notice to Discontinue................................................ 18
ARTICLE V INDEMNIFICATION; CONTRIBUTION................................................ 19
5.1 Indemnification by the Company....................................... 19
5.2 Indemnification by Holders .......................................... 20
5.3 Conduct of Indemnification Proceedings............................... 20
5.4 Contribution......................................................... 21
5.5 Indemnification Payments............................................. 22
ARTICLE VI GENERAL .................................................................... 22
6.1 Registration Rights to Others........................................ 22
6.2 Availability of Information.......................................... 22
6.3 Amendments and Waivers............................................... 23
6.4 Notices.............................................................. 23
6.5 Successors and Assigns............................................... 24
6.6 Counterparts......................................................... 24
6.7 Descriptive Headings, Etc............................................ 24
6.8 Severability......................................................... 24
6.9 Governing Law........................................................ 25
6.10 Remedies; Specific Performance....................................... 25
6.11 Entire Agreement..................................................... 25
6.12 Nominees for Beneficial Owners....................................... 25
6.13 Consent to Jurisdiction; Waiver of Jury.............................. 25
6.14 Further Assurances................................................... 26
6.15 No Inconsistent Agreements........................................... 26
6.16 Construction......................................................... 26
Schedule A........................................................... 28
Schedule B........................................................... 29
REGISTRATION RIGHTS AGREEMENT dated December 19, 2001 by and
between Key3Media Group, Inc. (the "Company") and the purchasers listed on
Schedule A hereto (collectively, the "Purchasers").
W I T N E S S E T H :
WHEREAS, the Company and the Purchasers have entered into a
Stock Purchase Agreement, dated December 18, 2001 (such Stock Purchase
Agreement, as amended or otherwise modified from time to time, the "Stock
Purchase Agreement"), pursuant to which the Company will issue and sell, and the
Purchasers will purchase up to 1,200,000 shares of Series B 5.5% Convertible
Redeemable Preferred Stock, par value $0.01 per share, of the Company (the
"Preferred Shares"), convertible into shares of Common Stock, par value $0.01
per share, of the Company (the "Common Stock").
WHEREAS, in order to induce the Purchasers to enter into the
Stock Purchase Agreement, the board of directors of the Company has authorized
and approved the grant by the Company of certain registration rights in respect
of the Registrable Securities (as defined below) on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person, which shall be deemed to include (i) with
respect to the Purchasers, any general or limited partner or member of the
Purchasers, and (ii) with respect to any individual, shall also mean the spouse,
sibling, child, stepchild, grandchild, niece, nephew or parent of such Person,
or the spouse thereof.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Demand Registration" means a registration required to be
effected by the Company pursuant to Section 2.2.
"Demand Registration Statement" means a registration statement
of the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.2 and all amendments and
supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference (or deemed to be incorporated by reference)
therein.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Holders" means each Initial Holder for so long as it owns
Registrable Securities and its successors and permitted assigns who acquire or
are otherwise transferees of Registrable Securities, directly or indirectly,
from the Initial Holder (or any subsequent Holders), for so long as such
successors and permitted assigns own Registrable Securities.
"Holders' Counsel" means one firm of legal counsel (per
registration) representing the Holders of Registrable Securities participating
in such registration, which counsel shall be selected (i) in the case of a
Demand Registration, by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request, and
(ii) in all other cases, by the Majority Holders of the Registration.
"Incidental Registration Statement" means a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.3 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Initial Holder" means the Purchasers.
"Initiating Holders" means, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Majority Holders" means one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" means, with respect to
a particular registration, one or more Holders of Registrable Securities who
would hold a majority of the Registrable Securities to be included in such
registration.
"NASD" means the National Association of Securities Dealers,
Inc.
"Person" means any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
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"Prospectus" means the prospectus included in a Registration
statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in each
case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" means (i) the shares of Common Stock
issuable upon conversion of the Preferred Shares and (ii) any other securities
of the Company (or any successor or assign of the Company, whether by merger,
consolidation, sale of assets or otherwise) which may be issued or issuable with
respect to, in exchange for, or in substitution of, the Registrable Securities
referenced in clause (i) above by reason of any dividend or stock split,
combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a Registration Statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
Registration Statement, (B) such securities have been otherwise transferred, a
new certificate or other evidence of ownership for them not bearing the legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act, (C) such securities shall have ceased to be outstanding, or (D)
such securities become eligible for sale under Rule 144(k) without any volume,
manner of sale or other restrictions.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with this Agreement by the Company and its
subsidiaries, including, without limitation, (i) registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of a qualified independent underwriter, if
any, counsel in connection therewith and the reasonable fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), (v) fees and disbursements of
counsel for the Company and of Holders' Counsel, (vi) customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters), (vii) fees and expenses of any special experts retained by the
Company in connection with such registration, (viii) fees and expenses of
listing the Registrable Securities on a securities exchange or on the NASDAQ
National Market System, (ix) rating agency fees, and (x) out-of-pocket expenses
of the Company.
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"Registration Statement" means any registration statement of
the Company which covers any Registrable Securities 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 (or deemed to be
incorporated by reference) therein.
"SEC" means the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor statute.
"Shelf Registration" means a shelf registration pursuant to
Rule 415 under the Securities Act.
"Underwriters" means the underwriters, if any, of the offering
being registered under the Securities Act.
"Underwritten Offering" means a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
1.2 Other Definitions. The meanings of the following terms can
be found in the Sections of this Agreement indicated below:
Term Section
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Agents........................................... Section 5.1
Claims........................................... Section 5.1
Common Stock..................................... Recitals
Company.......................................... Preamble
Compliance Program............................... Section 2.6
General Blackout Notice.......................... Section 2.6(a)
General Blackout Period.......................... Section 2.6(a)
Purchaser........................................ Preamble
Incidental Registration.......................... Section 2.3(a)
Inspectors....................................... Section 4.1(g)
Permitted Trading Period......................... Section 2.6
Preferred Shares................................. Recitals
Records.......................................... Section 4.1(g)
Request.......................................... Section 2.2(a)
Shelf Registration Period........................ Section 2.1(b)
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Term Section
---- -------
Shelf Registration Statement..................... Section 2.1(a)
Stock Purchase Agreement......................... Recitals
Withdrawn Demand Registration.................... Section 2.2(a)
Withdrawn Request................................ Section 2.2(a)
ARTICLE II
REGISTRATION UNDER THE SECURITIES ACT
2.1 Shelf Registration Statement.
(a) The Company: (A) shall cause to be filed with the SEC, on
or before December 31, 2001, a shelf registration statement (the "Shelf
Registration Statement") on an appropriate form under the Securities Act,
relating solely to the offer and sale of all the Registrable Securities by the
Holders thereof from time to time in accordance with the methods of distribution
specified by the Initial Holder as set forth in the Registration Statement and
Rule 415 under the Securities Act; and (B) shall use its best efforts to have
such Shelf Registration declared effective by the SEC as soon as practicable
thereafter, but in no event later than June 30, 2002; provided, however, that no
Holder (other than the Initial Holders) shall be entitled to have the
Registrable Securities held by it covered by such Registration Statement unless
such Holder agrees in writing to be bound by all the provisions of this
Agreement applicable to such Holder.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended in order
to permit the Prospectus included therein to be lawfully delivered by the
Holders of the Registrable Securities at all times (except during a General
Blackout Period), beginning on the effective date of the Shelf Registration
Statement and ending on the earlier of (i) the date on which all of the
Registrable Securities covered by such Shelf Registration may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor provision having
similar effect) without any volume, manner of sale or other restrictions, or
(ii) the date on which no Holder owns any Registrable Securities (in any such
case, such period being called the "Shelf Registration Period"); provided,
however, that prior to the termination of such Shelf Registration pursuant to
clause (i), the Company shall first furnish to each Holder of Registrable
Securities participating in such Shelf Registration (A) an opinion, in form and
substance satisfactory to the Majority Holders of the Registration, of counsel
for the Company satisfactory to the Majority Holders stating that such
Registrable Securities are freely saleable pursuant to Rule 144(k) under the
Securities Act (or any successor provision having similar effect) without any
volume, manner of sale or other restrictions or (B) a "No-Action Letter" from
the staff of the SEC
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stating that the SEC would not recommend enforcement action if the Registrable
Securities included in such Shelf Registration were sold in a public sale other
than pursuant to an effective registration statement. The Company shall be
deemed not to have used its best efforts to keep the Registration Statement
effective during the Shelf Registration Period if it voluntarily takes any
action that would result in Holders of the Registrable Securities covered
thereby not being able to offer and sell such Registrable Securities during the
Shelf Registration Period, unless such action is required by applicable law or
the SEC.
(c) If at any time the Majority Holders request in writing
that all or any part of the Registrable Securities covered by the Shelf
Registration Statement be offered by means of a firm commitment Underwritten
Offering, the Company shall cause to be filed with the SEC as soon as
practicable any necessary or appropriate supplement to the Shelf Registration
Statement in order to effect such Underwritten Offering. In such case, the sole
or managing Underwriters and any additional investment bankers and managers to
be used in connection with such registration shall be selected by the Company,
subject to the approval of such Majority Holders (such approval not to be
unreasonably withheld).
2.2 Demand Registration.
(a) Right to Demand Registration. Commencing June 30, 2002, at
any time or from time to time when the Shelf Registration Statement provided for
in Section 2.1 has not become or is not effective under the Securities Act
(including, but not limited to, if the Company is not eligible to effect a
continuous offering using a Form S-3 registration statement in reliance upon
Rule 415 under the Securities Act or any comparable successor form, Rule or
statute), the Majority Holders shall have the right to request in writing that
the Company register all or part of such Holders' Registrable Securities (a
"Request") (which Request shall specify the amount of Registrable Securities
intended to be disposed of by such Holders and the intended method or methods of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the Company shall give written notice of such requested registration to all
Holders of Registrable Securities. Subject to Section 2.2(b), the Company shall
include in a Demand Registration (i) the Registrable Securities intended to be
disposed of by the Initiating Holders and (ii) the Registrable Securities
intended to be disposed of by any other Holder and shares of Common Stock of any
Person that has analogous incidental or "piggyback" registration rights which in
either case shall have made a written request (which request shall specify the
amount of Registrable Securities or shares of Common Stock to be registered) to
the Company for inclusion thereof in such registration within 20 days after the
receipt of such written notice from the Company. The Company shall, as
expeditiously as possible following a Request, use its reasonable best efforts
to cause to be filed with the SEC a Demand Registration Statement providing for
the registration under the Securities Act of the Registrable Securities which
the Company has been so requested to register by all such Holders, to the extent
necessary to permit the disposition of such Registrable Securities so to be
registered in accordance with the intended method of disposition thereof
specified in such Request. The Company shall use its best efforts to
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have such Demand Registration Statement declared effective by the SEC as soon as
practicable thereafter and to keep such Demand Registration Statement
continuously effective for the period specified in Section 4.1(b). A Request may
be withdrawn prior to the filing of the Demand Registration Statement by the
Majority Holders of the Registration (a "Withdrawn Request") and a Demand
Registration Statement may be withdrawn prior to the effectiveness thereof by
the Majority Holders of the Registration (a "Withdrawn Demand Registration"),
and such withdrawals shall be treated as a Demand Registration which shall have
been effected pursuant to this Section 2.2, unless the Holders of Registrable
Securities to be included in such Registration Statement reimburse the Company
for its reasonable out-of-pocket Registration Expenses relating to the
preparation and filing of such Demand Registration Statement (to the extent
actually incurred); provided, however, that if a Withdrawn Request or Withdrawn
Demand Registration is made (A) because of a material adverse change in the
business, financial condition or prospects of the Company determined, in the
case of an Underwritten Offering, by the sole or lead managing Underwriter in
its reasonable discretion, or (B) because the sole or lead managing Underwriter
advises that the amount of Registrable Securities to be sold in such offering be
reduced pursuant to Section 2.2(b) by more than 33% of the Registrable
Securities to be included in such Registration Statement, or (C) because of a
postponement of such registration pursuant to Section 2.6, then such withdrawal
shall not be treated as a Demand Registration effected pursuant to this Section
2.2 (and shall not be counted toward the number of Demand Registrations), and
the Company shall pay all Registration Expenses in connection therewith. Any
Holder requesting inclusion in a Demand Registration may, at any time prior to
the effective date of the Demand Registration Statement (and for any reason)
revoke such request by delivering written notice to the Company revoking such
requested inclusion.
No more than three Requests may be made by all Holders in the aggregate
pursuant to this Section 2.2; provided that the Company shall not be obligated
to effect any Demand Registration within six months of the effectiveness of any
other Demand Registration Statement. The registration rights granted pursuant to
the provisions of this Section 2.2 shall be in addition to the registration
rights granted pursuant to the other provisions of Article II hereof.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering within
a price range acceptable to the Majority Holders of the Registration (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), the Company
shall include in such Demand Registration, to the extent of the number which the
Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated pro rata in proportion to the number of Registrable Securities
requested to be included in such Demand Registration by each of them. In the
event the Company shall not, by virtue
7
of this Section 2.2(b), include in any Demand Registration all of the
Registrable Securities of any Holder requesting to be included in such Demand
Registration, such Holder may, upon written notice to the Company given within
five days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such Demand
Registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such Demand Registration.
(c) Underwriting; Selection of Underwriters. Notwithstanding
anything to the contrary contained in Section 2.2(a), if the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of a firm commitment
Underwritten Offering and such Initiating Holders may require that all Persons
(including other Holders) participating in such registration sell their
Registrable Securities to the Underwriters at the same price and on the same
terms of underwriting applicable to the Initiating Holders. If any Demand
Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration shall be selected by the Company, subject to
the approval of the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Request (such approval
not to be unreasonably withheld).
(d) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand 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, or (iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied other than by the sole reason of
any breach or failure by the Holders of Registrable Securities or are not
otherwise waived.
(e) Other Registrations. During the period (i) beginning on
the date of a Request, and (ii) ending on the date that is 90 days after the
date that a Demand Registration Statement filed pursuant to such Request has
been declared effective by the SEC or, if the Holders shall withdraw such
Request or such Demand Registration Statement, on the date of such Withdrawn
Request or such Withdrawn Demand Registration, the Company shall not, without
the consent of the Majority Holders, file a registration statement (other than a
registration statement on Form S-4 or S-8 or any successor form to such forms)
pertaining to any securities of the Company that are substantially similar to
the Registrable Securities.
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(f) Registration Statement Form. Registrations under this
Section 2.2 shall be on such appropriate registration form of the SEC (i) as
shall be selected by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request and
as shall be reasonably acceptable to the Company, and (ii) which shall be
available for the sale of Registrable Securities in accordance with the intended
method of disposition specified in the requests for registration; provided,
however, that if the Company is then a registrant entitled to use Form S-3 or
any successor form thereto to register such securities, such registration shall
be effected on such form. The Company agrees to include in any such Registration
Statement all information which any selling Holder, upon advice of counsel,
shall reasonably request.
2.3 Incidental Registration.
(a) Right to Include Registrable Securities. Commencing on the
date of this Agreement, if the Company, at any time or from time to time,
proposes to register any of its equity securities under the Securities Act
(other than in a registration on Form S-4 or S-8 or any successor form to such
forms and other than pursuant to Sections 2.1 or 2.2) whether or not pursuant to
registration rights granted to other holders of its securities and whether or
not for sale for its own account, the Company shall deliver prompt written
notice (which notice shall be given at least 30 days prior to such proposed
registration) to all Holders of Registrable Securities of its intention to
undertake such registration, describing in reasonable detail the proposed
registration and distribution (including the anticipated range of the proposed
offering price, the class and number of securities proposed to be registered and
the distribution arrangements) and of such Holders' right to participate in such
registration under this Section 2.3 as hereinafter provided. Subject to the
other provisions of this paragraph (a) and Section 2.3(b), upon the written
request of any Holder made within 20 days after the receipt of such written
notice (which request shall specify the amount of Registrable Securities to be
registered), the Company shall effect the registration under the Securities Act
of all Registrable Securities requested by Holders to be so registered (an
"Incidental Registration"), to the extent required to permit the disposition of
the Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the Registration Statement which covers the securities which the
Company proposes to register and shall cause such Registration Statement to
become and remain effective with respect to such Registrable Securities in
accordance with the registration procedures set forth in Article IV. If an
Incidental Registration involves an Underwritten Offering, immediately upon
notification to the Company from the Underwriter of the price at which such
securities are to be sold, the Company shall so advise each participating
Holder. The Holders requesting inclusion in an Incidental Registration may, at
any time prior to the effective date of the Incidental Registration Statement
(and for any reason), revoke such request by delivering written notice to the
Company revoking such requested inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give
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written notice of such determination to each Holder of Registrable Securities
and, thereupon, (A) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses incurred in connection therewith), without prejudice,
however, to the rights of Holders to cause such registration to be effected as a
registration under Sections 2.1 or 2.2, and (B) in the case of a determination
to delay such registration, the Company shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other securities; provided, however, that if such delay shall
extend beyond 120 days from the date the Company received a request to include
Registrable Securities in such Incidental Registration, then the Company shall
again give all Holders the opportunity to participate therein and shall follow
the notification procedures set forth in the preceding paragraph. There is no
limitation on the number of such Incidental Registrations pursuant to this
Section 2.3 which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.3 shall be in addition to the registration rights granted pursuant to
the other provisions of Article II hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially adversely affecting the price at which the securities being offered
can be sold and/or their ability to successfully market and sell the securities
being offered (such writing to state the basis of such opinion and the
approximate number of such securities which may be included in such offering
without such effect), the Company shall include in such registration, to the
extent of the number which the Company is so advised may be included in such
offering without such effect, (i) in the case of a registration initiated by the
Company, (A) first, the securities that the Company proposes to register for its
own account, (B) second, the Registrable Securities requested to be included in
such registration by the Holders and any other stockholders having contractual
rights to participate in such registration, allocated pro rata in proportion to
the number of Registrable Securities or securities covered by such contractual
rights requested to be included in such registration by each of them, and (C)
third, other securities of the Company to be registered on behalf of any other
Person, and (ii) in the case of a registration initiated by a Person other than
the Company, (A) first, the securities requested to be included in such
registration by any Persons initiating such registration, allocated pro rata in
proportion to the number of securities requested to be included in such
registration by each of them, (B) second, the Registrable Securities requested
to be included in such registration by the Holders and any securities of other
stockholders having contractual rights to participate in such registration,
allocated pro rata in proportion to the number of Registrable Securities
requested to be included in such
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registration by each of them, (C) third, the securities that the Company
proposes to register for its own account, and (D) fourth, other securities of
the Company to be registered on behalf of any other Person; provided, however,
that in the event the Company will not, by virtue of this Section 2.3(b),
include in any such registration all of the Registrable Securities of any Holder
requested to be included in such registration, such Holder may, upon written
notice to the Company given within three days of the time such Holder first is
notified of such matter, reduce the amount of Registrable Securities it desires
to have included in such registration, whereupon only the Registrable
Securities, if any, it desires to have included will be so included and the
Holders not so reducing shall be entitled to a corresponding increase in the
amount of Registrable Securities to be included in such registration.
2.4 Expenses. Registration Expenses incurred in connection with any
registration made or requested to be made pursuant to this Article II will be
borne by the Company, whether or not any such Registration Statement becomes
effective, to the extent permitted by applicable law.
2.5 Underwritten Offerings.
(a) Underwritten Offerings. If requested by the sole or lead
managing Underwriter for any Underwritten Offering effected pursuant to a Demand
Registration or the Shelf Registration Statement, the Company shall enter into a
customary underwriting agreement with the Underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Company and
to each Holder of Registrable Securities participating in such offering, and to
contain such representations and warranties by the Company and such other terms
as are customary in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Article V.
(b) Holders of Registrable Securities to be Parties to
Underwriting Agreement. The Holders of Registrable Securities to be distributed
by Underwriters in an Underwritten Offering contemplated by Article II shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' 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; provided, however, that the Company shall not be
required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder and such
Holder's Registrable Securities.
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(c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any underwritten registration hereunder unless such Person (i) agrees to sell
its securities on the same terms and conditions provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangement and (ii) accurately completes and executes in a timely manner all
questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
(d) Limitations on Underwritten Offerings. In no event shall
the Company be required to effect more than two (2) Underwritten Offerings
pursuant to this Agreement (whether as a Shelf Registration Statement pursuant
to Section 2.1 or a Demand Registration pursuant to Section 2.2).
2.6 Blackout Periods.
(a) Holders agree that the Company shall be entitled to
postpone the filing or effectiveness of, or sales under (unless they have
already contractually agreed to make such sales), a Demand Registration and to
require them to discontinue the disposition of their securities covered by a
Shelf Registration during any General Blackout Period (as defined below) (i) if
the board of directors of the Company determines in good faith that effecting
such a registration or continuing such disposition at such time would have an
adverse effect upon (A) a proposed sale of all (or substantially all) of the
assets of the Company or a merger, reorganization, recapitalization or similar
current transaction materially affecting the capital, structure or equity
ownership of the Company or (B) any other material financing, acquisition or
extraordinary corporate transaction, or (ii) if the Company is in possession of
material, non-public information which the board of directors of the Company
determines in good faith is not in the best interests of the Company to disclose
in a registration statement at such time, provided, however, that the Company
may delay the filing or effectiveness of, or sales under (unless they have
already contractually agreed to make such sales), a Demand Registration and
require the Holders of Registrable Securities referred to in this Section 2.6(a)
to discontinue the disposition of their securities covered by a Shelf
Registration only for a reasonable period of time not to exceed 30 days (or such
earlier time as such transaction is consummated or no longer proposed or the
material information has been made public) (each, a "General Blackout Period");
provided, further, that the effectiveness period of any Demand Registration
shall be extended by the number of days in any General Blackout Period to the
extent that the Registration Statement already was effective at the commencement
of the General Blackout Period. There shall not be more than three General
Blackout Periods in any 12 month period. The Company shall promptly notify the
Holders referred to in this Section 2.6(a) in writing (a "General Blackout
Notice") of any decision to postpone the filing or effectiveness of, or sales
under (unless they have already contractually agreed to make such sales), a
Demand Registration or to discontinue sales of Registrable Securities covered by
a Shelf Registration pursuant to this Section 2.6 and shall include an
undertaking by the Company to promptly notify the Holders referred to in this
Section 2.6(a) as soon as a
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Demand Registration may be effected or sales of Registrable Securities covered
by a Demand Registration or Shelf Registration may resume.
(b) In making any such determination to initiate or terminate
a General Blackout Period, the Company shall not be required to consult with or
obtain the consent of any Holder, and any such determination shall be the
Company's sole responsibility. Each Holder shall treat all notices received from
the Company pursuant to this Section 2.6 in the strictest confidence and shall
not disseminate such information. If the Company shall impose a General Blackout
Period prior to the filing of a Demand Registration Statement pursuant to this
Section 2.6, the Majority Holders shall have the right to withdraw the request
for registration. Any such withdrawal shall be made by giving written notice to
the Company within 30 days after receipt of the General Blackout Notice. Such
withdrawn registration request shall not be treated as a Demand Registration
effected pursuant to Section 2.2 (and shall not be counted towards the number of
Demand Registrations effected), and the Company shall pay all Registration
Expenses in connection therewith.
ARTICLE III
RESTRICTIONS ON SALE
3.1 Restrictions on Sale by the Company and Others. The
Company agrees that (i) if timely requested in writing by the sole or lead
managing Underwriter in an Underwritten Offering of any Registrable Securities,
it will not make any short sale of, loan, grant any option for the purchase of
or effect any public sale or distribution of any of the Company's equity
securities that are substantially similar to the Registrable Securities being
offered (or any security convertible into or exchangeable or exercisable for any
of such equity securities) during the nine business days (as defined in Rule 100
of Regulation M promulgated under the Exchange Act) prior to, and during the
time period reasonably requested by the sole or lead managing Underwriter not to
exceed 90 days, beginning on the effective date of the applicable Registration
Statement (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such forms), and (ii)
it will use its commercially reasonable efforts to cause each officer and
director of the Company and each Affiliate that holds 10% or more of equity
securities (or any security convertible into or exchangeable or exercisable for
any of its equity securities) of the Company purchased from the Company at any
time after the date of this Agreement (other than in a registered public
offering) to so agree.
ARTICLE IV
REGISTRATION PROCEDURES
4.1 Obligations of the Company. Subject to Section 2.6, whenever the
Company is required to effect the registration of Registrable Securities under
the Securities Act pursuant to Article II of this Agreement, the Company shall,
as expeditiously as possible:
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(a) prepare and file with the SEC (promptly, and, except as
set forth in Section 2.1, in any event within 60 days after receipt of a request
to register Registrable Securities) the requisite Registration Statement to
effect such registration, which Registration Statement shall comply as to form
in all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed therewith, and
the Company shall use its best efforts to cause such Registration Statement to
become effective (provided, that the Company may discontinue any registration of
its securities that are not Registrable Securities, and, under the circumstances
specified in Section 2.3, its securities that are Registrable Securities);
provided, however, that before filing with the SEC a Registration Statement or
Prospectus or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall (i) provide Holders' Counsel and any other
Inspector (as defined in Section 4.1(g)) with an adequate and appropriate
opportunity to review, comment and participate in the preparation of such
Registration Statement, Prospectus or other comparable statement and (ii)
refrain from filing with the SEC such Registration Statement, Prospectus or
other comparable statement if Holder's Counsel, any selling Holder or any other
Inspector reasonably objects to such filing on the grounds that it does not
comply in all material respects with the requirements of the Securities Act or
of the rules or regulations thereunder;
(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 (i) to keep such Registration Statement effective,
and (ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such Registration Statement (but not before
the expiration of the 90 day period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable), and (B) (x) six months
after the effective date of any Registration Statement other than a Shelf
Registration Statement; and (y) with respect to any Shelf Registration, the time
period provided in Section 2.1;
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement (including
each preliminary Prospectus) in conformity with the requirements of the
Securities Act, and other documents, as such selling Holder and Underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such selling Holder (the Company hereby
consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of Registrable Securities and the Underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Registration Statement or Prospectus);
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(d) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify all Registrable
Securities and other securities covered by such Registration Statement under
such other securities or blue sky laws of such jurisdictions as any selling
Holder of Registrable Securities covered by such Registration Statement or the
sole or lead managing Underwriter, if any, may reasonably request, and take any
other action as may be reasonably necessary or advisable to enable such selling
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such selling Holder; provided that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 4.1(d), (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to general
service of process in any such jurisdiction;
(e) use its reasonable best efforts to obtain all other
approvals, consents, exemptions or authorizations from such governmental
agencies or authorities as may be necessary to enable the selling Holders of
such Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) promptly notify Holders' Counsel, each Holder of
Registrable Securities covered by such Registration Statement and the sole or
lead managing Underwriter, if any: (i) when the Registration Statement, any
pre-effective amendment, the Prospectus or any prospectus supplement related
thereto or post- effective amendment to the Registration Statement has been
filed and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any state securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contemplated by Section 2.5(b) cease to be
true and correct in all material respects, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exists circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to an event described in any of the clauses (ii) through (vii) of this
Section 4.1, the Company shall promptly prepare a supplement or post-effective
amendment to such Registration Statement or related Prospectus or any
15
document incorporated therein by reference or file any other required document
so that (1) such Registration Statement shall not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (2) as
thereafter delivered to the Purchasers of the Registrable Securities being sold
thereunder, 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 in the light of the circumstances under which
they were made not misleading (and shall furnish to each such Holder and each
Underwriter, if any, a reasonable number of copies of such Prospectus so
supplemented or amended); and if the notification relates to an event described
in clause (iii) of this Section 4.1(f), the Company shall take all reasonable
action required to prevent the entry of such stop order or to remove it if
entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective date
of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
Majority Holders, and furnish to each Holder participating in the offering and
to each Underwriter, if any, a copy of such opinion and letter addressed to such
Holder (in the case of the opinion) and Underwriter (in the case of the opinion
and the "cold comfort" letter);
(i) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such Registration
Statement not later than the effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency or
authority having
16
jurisdiction over the offering, and make available to its security holders, as
soon as reasonably practicable but no later than 90 days after the end of any
12-month period, an earnings statement (i) commencing at the end of any month in
which Registrable Securities are sold to Underwriters in an Underwritten
Offering and (ii) commencing with the first day of the Company's calendar month
next succeeding each sale of Registrable Securities after the effective date of
a Registration Statement, which statement shall cover such 12- month periods, in
a manner which satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the
Registration, use its best efforts to cause all such Registrable Securities to
be listed (i) on each national securities exchange on which the Company's
securities are then listed or, (ii) if securities of the Company are not at the
time listed on any national securities exchange (or, if the listing of
Registrable Securities is not permitted under the rules of each national
securities exchange on which the Company's securities are then listed), on a
national securities exchange or The NASDAQ Stock Market's National Market, as
designated by the Majority Holders;
(l) keep each selling Holder of Registrable Securities advised
in writing as to the initiation and progress of any registration under Article
II hereunder;
(m) enter into and perform customary agreements (including, if
applicable, 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;
(n) cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(o) furnish to each Holder participating in the offering and
the sole or lead managing Underwriter, if any, without charge, at least one
manually- signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(p) cooperate with the selling Holders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the Underwriters or, if not an Underwritten Offering,
in accordance with the instructions of the selling Holders of
17
Registrable Securities at least three business days prior to any sale of
Registrable Securities;
(q) if requested by the sole or lead managing Underwriter or
any selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, or the Underwriters or the intended
method of distribution as the sole or lead managing Underwriter or the selling
Holder of Registrable Securities reasonably requests to be included therein and
as is appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; and supplement or make
amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities; and
(r) use its commercially reasonable efforts to take all other
steps necessary to expedite or facilitate the registration and disposition of
the Registrable Securities contemplated hereby.
4.2 Seller Information. The Company may require each selling Holder of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of disposition as the Company may
from time to time reasonably request in writing; provided that such information
shall be used only in connection with such registration.
If any Registration Statement or comparable statement under "blue sky"
laws refers to any Holder by name or otherwise as the Holder of any securities
of the Company, then such Holder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to such Holder
and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, and (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
4.3 Notice to Discontinue. Each Holder of Registrable Securities agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 4.1(f)(ii) through (vii), such Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement
18
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 4.1(f) and, if
so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities which
is current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 4.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 4.1(f).
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each Holder of
Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of legal counsel) in respect
thereof (collectively, "Claims"), insofar as such Claims arise out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder or any Underwriter
specifically stating that it was expressly for use therein. The Company shall
also indemnify any Underwriters of the Registrable Securities, their Agents and
each Person who controls any such Underwriter (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Person who may be entitled to
19
indemnification pursuant to this Article V and shall survive the transfer of
securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable Securities
held by it are included in the securities as to which a registration is being
effected, agrees to, severally and not jointly, indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its directors and officers,
each other Person who participates as an Underwriter in the offering or sale of
such securities and its Agents and each Person who controls the Company or any
such Underwriter (within the meaning of the Securities Act) and its Agents
against any and all Claims, insofar as such Claims arise out of or are based
upon any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to such
registration, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein; provided, however, that the aggregate amount
which any such Holder shall be required to pay pursuant to this Section 5.2
shall be limited to the proportion that the net proceeds from the sale of the
Registrable Securities sold by such Holder under the Registration Statement
bears to the total net proceeds from the sale of all securities sold thereunder,
but in no event be greater than the amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities pursuant to the Registration
Statement giving rise to such Claims less all amounts previously paid by such
Holder with respect to any such Claims. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Article V, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Article V, (i) notify the indemnifying party in writing of the Claim
or the commencement of such action or proceeding; provided, that the failure of
any indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under this Article V, except to the extent the
indemnifying party is materially and actually prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article V, and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party (with Xxxxxxxx & Xxxxxxxx being deemed
reasonably satisfactory counsel to the parties for purposes of this Section
5.3); provided, however, that any indemnified party shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (A) the indemnifying party has agreed in writing to pay such fees
and expenses, (B) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such indemnified
party within 20 days after receiving notice from such indemnified party that the
indemnified
20
party believes it has failed to do so, (C) in the reasonable judgment of any
such indemnified party, based upon advice of counsel, a conflict of interest may
exist between such indemnified party and the indemnifying party with respect to
such claims (in which case, if the indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such indemnified party) or (D) such
indemnified party is a defendant in an action or proceeding which is also
brought against the indemnifying party and reasonably shall have concluded that
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party. No indemnifying party shall
be liable for the fees and expenses of more than one counsel employed by the
indemnified parties in connection with a proceeding involving a Claim under this
Article V. No indemnifying party shall be liable for any settlement of any such
claim or action effected without its written consent. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (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, and (iii) does not provide for
any action on the part of any Indemnified Party other than the payment of money
damages which is to be paid in full by the indemnifying party.
5.4 Contribution. If the indemnification provided for in Section 5.1 or 5.2
from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless, an
indemnified party hereunder in respect of any Claim, 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 Claim 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
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party 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 party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by a party as a result of any Claim referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in Section 5.3, any legal or other fees, costs or expenses
reasonably incurred by such party in connection with any investigation or
proceeding. Notwithstanding anything in this Section 5.4 to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 5.4 to contribute any amount in excess of the net proceeds received by
such indemnifying party from the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such Claims, less all amounts
previously paid by such indemnifying party with respect to such Claims. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(a) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
5.5 Indemnification Payments. The indemnification and contribution
required by this Article V shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
ARTICLE VI
GENERAL
6.1 Registration Rights to Others. Other than as set forth on Schedule
B, the Company is not party to any agreement with respect to its securities
granting any registration rights to any Person. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, (i)
such rights shall not be in conflict with or adversely affect any of the rights
provided in this Agreement to the Holders and (ii) if such rights are provided
on terms or conditions more favorable in the aggregate to such holder than the
terms and conditions provided in this Agreement, the Company shall provide (by
way of amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.2 Availability of Information. The Company covenants that it shall
timely file any reports required to be filed by it under the Securities Act or
the Exchange Act (including, but not limited to, the reports under Sections 13
and 15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 under
the Securities Act), and that it shall take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (ii) any other rule or regulation now existing or
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
22
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
6.3 Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Holders holding more than 50% of the Registrable
Securities then outstanding; provided, however, that no such amendment,
modification, supplement, waiver or consent to departure shall reduce the
aforesaid percentage of Registrable Securities without the written consent of
all of the Holders of Registrable Securities; and provided, further, that
nothing herein shall prohibit any amendment, modification, supplement,
termination, waiver or consent to departure the effect of which is limited only
to those Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
If to the Company, to:
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
With a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
If to the Purchasers, to the addresses set forth opposite their
respective names in Schedule A.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
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6.5 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Any Holder may assign to any Affiliate or to any other
transferee of at least 50% of the Registrable Securities then owned by such
Holder (other than a transferee that acquires such Registrable Securities in a
registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any such transferee shall take and hold
Registrable Securities, such transferee shall promptly notify the Company and by
taking and holding such Registrable Securities such transferee shall
automatically be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement as if it were a party hereto (and shall, for all purposes, be
deemed a Holder under this Agreement). If the Company shall so request, any
successor or permitted assign (including any permitted transferee) shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
terms hereof. For purposes of this Agreement, "successor" for any entity other
than a natural person shall mean a successor to such entity as a result of such
entity's merger, consolidation, sale of substantially all of its assets, or
similar transaction. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder or by
the Company without the consent of the Company and the Majority Holders.
6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.7 Descriptive Headings, Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof', "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
6.8 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any
24
way impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
the conflict of laws principles thereof).
6.10 Remedies; Specific Performance. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or constitute
a waiver of or acquiescence in any such breach. No remedy shall be exclusive of
any other remedy. All available remedies shall be cumulative.
6.11 Entire Agreement. This Agreement and the Stock Purchase Agreement
are intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings relating to such subject matter, other than those set
forth or referred to herein or in the Stock Purchase Agreement. This Agreement
and the Stock Purchase Agreement supersede all prior agreements and
understandings between the Company and the other parties to this Agreement with
respect to such subject matter.
6.12 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
6.13 Consent to Jurisdiction; Waiver of Jury. Each party to this
Agreement hereby irrevocably and unconditionally agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby
25
irrevocably and unconditionally expressly submits to the personal jurisdiction
and venue of such courts for the purposes thereof and hereby irrevocably and
unconditionally waives any claim (by way of motion, as a defense or otherwise)
of improper venue, that it is not subject personally to the jurisdiction of such
court, that such courts are an inconvenient forum or that this Agreement or the
subject matter may not be enforced in or by such court. Each party hereby
irrevocably and unconditionally consents to the service of process of any of the
aforementioned courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the address
set forth or provided for in Section 6.5 of this Agreement, such service to
become effective 10 days after such mailing. Nothing herein contained shall be
deemed to affect the right of any party to serve process in any manner permitted
by law or commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction to enforce judgments obtained in any action,
suit or proceeding brought pursuant to this Section. Each of the parties hereby
irrevocably waives trial by jury in any action, suit or proceeding, whether at
law or equity, brought by any of them in connection with this Agreement or the
transactions contemplated hereby.
6.14 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
6.15 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement which is inconsistent with the rights granted to the Holders
in this Agreement. 6.16 Construction. The Company and the Holders acknowledge
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company and
the Holders.
6.16 Construction. The Company and the Holders acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the Company and the
Holders.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
KEY3MEDIA GROUP, INC.
By:
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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SCHEDULE A
List of Purchasers and their Addresses
[To come]
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SCHEDULE B
Other Registration Rights Granted by the Company
Registration Rights Agreement, dated as of November 27, 2001, between Key3Media
Group, Inc., and Trinity Fund, Ltd. and Spirit Fund, Ltd.
Registration Rights Agreement, dated as of November 27, 2001, between Key3Media
Group, Inc., and Invemed Catalyst Fund, L.P.
Registration Rights Agreement, dated as of November 27, 2001, between Key3Media
Group, Inc., and ValueAct Capital Partners, L.P., ValueAct Capital Partners II,
L.P. and ValueAct Capital International, Ltd.
Registration Rights Agreement, dated as of November 27, 2001, between Key3Media
Group, Inc., and Xxxxxxx X. Xxxx
Registration Rights Agreement, dated as of July, 2000, between Key3Media Group,
Inc. and SOFTBANK Corp. and its Subsidiaries (as defined therein)
Registration Rights Agreement, dated as of August 18, 2000, between Key3Media
Group, Inc., Princess Gate Investors III, L.P., certain affiliates of Xxxxxx
Xxxxxxx Xxxx Xxxxxx & Co. and certain Persons whose investment manager is PG
Investors III, Inc. listed therein
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