REGISTRATION RIGHTS AGREEMENT
EXHIBIT 4.3
This Registration Rights Agreement (this “Agreement”) is made and entered into as of October
11, 2006, by and between Xxxxxxx Cable, Inc., a Delaware corporation (together with any successor
entity thereto, the “Company”), and Friedman, Billings, Xxxxxx & Co., Inc., a Delaware corporation
(“FBR”), for the benefit of (i) FBR, (ii) the purchasers of the Company’s common stock, par value
$0.001 per share, as participants (“Participants”) in the private placement by the Company of
shares of its common stock (the “Private Placement”), and (iii) the direct and indirect transferees
of FBR and each of the Participants.
This Agreement is made pursuant to the Purchase/Placement Agreement (the “Purchase/Placement
Agreement”), dated as of October 11, 2006, by and between the Company and FBR in connection with
the purchase and sale or placement of an aggregate of 7,900,000 shares of the Company’s common
stock (plus an additional 500,000 shares to cover additional allotments, if any). In order to
induce FBR to enter into the Purchase/Placement Agreement, the Company has agreed to provide the
registration rights provided for in this Agreement to FBR, the Participants, and their respective
direct and indirect transferees. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Purchase/Placement Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following meanings:
Accredited Investor Shares: Shares initially sold by the Company to “accredited investors”
(within the meaning of Rule 501(a) promulgated under the Securities Act) as Participants.
Agreement: As defined in the preamble.
Affiliate: As to any specified Person, (i) any Person directly or indirectly owning,
controlling or holding, with power to vote, 10% or more of the outstanding voting securities of
such other Person, (ii) any Person, 10% or more of whose outstanding voting securities are directly
or indirectly owned, controlled or held, with power to vote, by such other Person, (iii) any Person
directly or indirectly controlling, controlled by or under common control with such other Person,
(iv) any executive officer, director, trustee or general partner of such Person and (v) any legal
entity for which such Person acts as an executive officer, director, trustee or general partner.
An indirect relationship shall include circumstances in which a Person’s spouse, children, parents,
siblings or mother, father, sister- or brother-in-law is or has been associated with a Person.
Business Day: With respect to any act to be performed hereunder, each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New
York or other applicable places where such act is to occur are authorized or obligated by
applicable law, regulation or executive order to close.
Closing Date: October 11, 2006 or such other time or such other date as FBR and the Company
may agree.
Commission: The Securities and Exchange Commission.
Common Stock: The common stock, par value $0.001 per share, of the Company.
Company: As defined in the preamble.
Controlling Person: As defined in Section 6(a) hereof.
End of Suspension Notice: As defined in Section 5(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Commission pursuant thereto.
Executive: Each of G. Xxxx Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxxxx and their respective
Affiliates.
FBR: As defined in the preamble.
Holder: Each record owner of any Registrable Shares from time to time, including FBR and its
Affiliates.
Indemnified Party: As defined in Section 6(c) hereof.
Indemnifying Party: As defined in Section 6(c) hereof.
IPO Registration Statement: As defined in Section 2(b) hereof.
Issuer Free Writing Prospectus: As defined in Section 2(c) hereof.
Liabilities: As defined in Section 6(a) hereof.
NASD: The National Association of Securities Dealers, Inc.
Participant: As defined in the preamble.
Person: An individual, partnership, corporation, trust, unincorporated organization,
government or agency or political subdivision thereof, or any other legal entity.
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Private Placement: As defined in the preamble.
Proceeding: An action, claim, suit or proceeding (including without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or, to the knowledge
of the Person subject thereto, threatened.
Prospectus: The prospectus included in any Registration Statement, including any preliminary
prospectus at the “time of sale” within the meaning of Rule 159 under the Securities Act, and all
other amendments and supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference, if any, in such
prospectus.
Purchase/Placement Agreement: As defined in the preamble.
Purchaser Indemnitee: As defined in Section 6(a) hereof.
Registrable Shares: The Rule 144A Shares, the Accredited Investor Shares and the Regulation S
Shares, upon original issuance thereof, and at all times subsequent thereto, including upon the
transfer thereof by the original holder or any subsequent holder and any shares or other securities
issued in respect of such Registrable Shares by reason of or in connection with any stock dividend,
stock distribution, stock split, purchase in any rights offering or in connection with any exchange
for or replacement of such Registrable Shares or any combination of shares, recapitalization,
merger or consolidation, or any other equity securities issued pursuant to any other pro rata
distribution with respect to the Common Stock, until, in the case of any such Rule 144A Share,
Accredited Investor Share or Regulation S Share or any such share or security issued in respect
thereof, the earliest to occur of (i) the date on which it has been registered pursuant to the
Securities Act and it has been disposed of in accordance with the Registration Statement relating
to it, (ii) the date on which either it has been transferred pursuant to Rule 144 (or any similar
provision then in effect) or is saleable pursuant to Rule 144(k) promulgated by the Commission
pursuant to the Securities Act or (iii) the date on which it is sold to the Company.
Registration Default: As defined in Section 2(f) hereof.
Registration Expenses: Any and all expenses incident to the Company’s performance of or
compliance with this Agreement, including, without limitation: (i) all Commission, securities
exchange, NASD registration, listing, inclusion and filing fees; (ii) all fees and expenses
incurred in connection with compliance with international, federal or state securities or blue sky
laws (including, without limitation, any registration, listing and filing fees and reasonable fees
and disbursements of counsel (which fees and disbursements shall not exceed $5,000) in connection
with blue sky qualification of any of the Registrable Shares and the preparation of a blue sky
memorandum and compliance with the rules of the NASD); (iii) all expenses in preparing or assisting
in preparing, word processing, duplicating, printing, delivering and distributing any Registration
Statement, any Prospectus, any amendments or
supplements thereto, certificates and any other documents relating to the performance under and
compliance with this Agreement; (iv) all fees and expenses incurred in connection with the listing
or inclusion of any of the
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Registrable Shares on any securities exchange or The NASDAQ Stock
Market, Inc.® pursuant to Section 4(n) of this Agreement; (v) the fees and disbursements of counsel
for the Company and of the independent registered public accounting firm of the Company (including,
without limitation, the expenses of any special audit and “cold comfort” letters required by or
incident to the performance of this Agreement); (vi) reasonable fees and disbursements of Xxxxxx
Xxxxxxx Xxxxx & Scarborough, LLP, or one such other counsel, reasonably acceptable to the Company,
for the Holders, selected by the Holders holding a majority of the Registrable Shares (such
counsel, “Selling Holders’ Counsel”); and (vii) any fees and disbursements customarily paid in
issues and sales of securities (including the fees and expenses of any experts retained by the
Company in connection with any Registration Statement); provided, however, that Registration
Expenses shall exclude brokers’ or underwriters’ discounts and commissions, if any, relating to the
sale or disposition of Registrable Shares by a Holder.
Registration Statement: Any registration statement of the Company that covers the resale of
Registrable Shares pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Regulation S: Regulation S (Rules 901-905) promulgated by the Commission under the Securities
Act, as such rules may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the same effect as such
regulation.
Regulation S Shares: Shares initially resold by FBR pursuant to the Purchase/Placement
Agreement to “non-U.S. persons” (in accordance with Regulation S) in an “offshore transaction” (in
accordance with Regulation S).
Restricted Period: As defined in Section 7 hereof.
Rule 144: Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 144A Shares: Shares initially resold by FBR pursuant to the Purchase/Placement Agreement
to “qualified institutional buyers” (as such term is defined in Rule 144A).
Rule 158: Rule 158 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
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Rule 415: Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Rule 429: Rule 429 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder.
Shares: The shares of Common Stock being offered and sold pursuant to the terms and
conditions of the Purchase/Placement Agreement.
Shelf Registration Statement: As defined in Section 2(a) hereof.
Suspension Event: As defined in Section 5(b) hereof.
Suspension Notice: As defined in Section 5(b) hereof.
Underwritten Offering: A sale of securities of the Company to an underwriter or underwriters
for re-offering to the public.
2. Registration Rights
(a) Mandatory Shelf Registration. As set forth in Section 4 hereof, the Company agrees to
file with the Commission as soon as reasonably practicable following the date of this Agreement
(but in no event later than the date that is 90 days after the date of this Agreement) a shelf
Registration Statement on Form S-1 or such other form under the Securities Act then available to
the Company providing for the resale of any Registrable Shares pursuant to Rule 415 from time to
time by the Holders (a “Shelf Registration Statement”). The Company
shall use its commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the Commission as soon as reasonably practicable. Any Shelf Registration
Statement shall provide for the resale from time to time, and pursuant to any method or combination
of methods legally available (including, without limitation, an Underwritten Offering, a direct
sale to purchasers or a sale through brokers or agents, which may include sales over the internet)
by the Holders of any and all Registrable Shares.
(b) IPO Registration. If the Company proposes to file a registration statement on Form S-1 or
such other form under the Securities Act providing for the initial public offering of shares of
Common Stock (the “IPO Registration Statement”), the Company will notify in writing
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each Holder of
the filing, within the ten Business Days after the filing thereof, and afford each Holder an
opportunity by the time designated in the notice to include in the IPO Registration Statement all
or any part of the Registrable Shares then held by such Holder. Each Holder desiring to include in
the IPO Registration Statement all or part of the Registrable Shares held by such Holder shall,
within 20 days after receipt of the above-described notice from the Company, so notify the Company
in writing, and in such notice shall inform the Company of the number of Registrable Shares such
Holder wishes to include in the IPO Registration Statement. Any election by any Holder to include
any Registrable Shares in the IPO Registration Statement will not affect the inclusion of such
Registrable Shares in the Shelf Registration Statement until such Registrable Shares have been sold
under the IPO Registration Statement.
(i) Right to Terminate IPO Registration. The Company in its sole discretion shall have
the right to terminate or withdraw the IPO Registration Statement initiated by it referred
to in this Section 2(b) prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Shares in such registration.
(ii) Selection of Underwriter. The Company shall have the sole right to select the
managing underwriter(s) for its initial public offering, regardless of whether any
Registrable Securities are included in the IPO Registration Statement or otherwise.
(iii) Shelf Registration not Impacted by IPO Registration Statement. The Company’s
obligation to file the Shelf Registration Statement pursuant to Section 2(a) hereof shall
not be affected by the filing or effectiveness of the IPO Registration Statement.
(c) Issuer Free Writing Prospectus. The Company represents and agrees that, unless it obtains
the prior consent of Holders of a majority of the Registrable Shares that are registered under a
Registration Statement at such time or the consent of the managing underwriter in connection with
any Underwritten Offering of Registrable Shares, and each Holder represents and agrees that, unless
it obtains the prior consent of the Company and any such underwriter in connection with an
Underwritten Offering, it will not make any offer relating to the Shares that would constitute an
“issuer free writing prospectus,” as defined in Rule 433 (an “Issuer Free Writing Prospectus”), or
that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be
filed with the Commission. The
Company represents that any Issuer Free Writing Prospectus prepared by it will not include any
information that conflicts with the information contained in any Registration Statement or the
related Prospectus and, any Issuer Free Writing Prospectus, when taken together with the
information in such Registration Statement and the related Prospectus, will not include any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(d) Underwriting. The Company shall advise all Holders of the underwriter for the
Underwritten Offering proposed under the IPO Registration Statement. The right of any such
Holder’s Registrable Shares to be included in the IPO Registration Statement pursuant to Section
2(b) shall be conditioned upon such Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Shares in the underwriting to the extent provided herein.
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All Holders
proposing to distribute their Registrable Shares through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter(s) selected for such
underwriting and complete and execute any questionnaires, powers of attorney, indemnities, custody
agreements, securities escrow agreements and other documents reasonably required under the terms of
such underwriting, and furnish to the Company such information as the Company may reasonably
request in writing for inclusion in the Registration Statement; provided, however, that no Holder
shall be required to make any representations or warranties to or agreements with the Company or
the underwriters other than representations, warranties or agreements regarding such Holder and
such Holder’s intended method of distribution and any other representation required by law or
reasonably requested by the underwriters. Notwithstanding any other provision of this Agreement,
if the managing underwriter(s) determine(s) in good faith that marketing factors require a
limitation on the number of shares to be included, then the managing underwriter(s) may exclude
shares (including Registrable Shares) from the IPO Registration Statement and Underwritten
Offering, and any shares included in such IPO Registration Statement and Underwritten Offering
shall be allocated first, to the Company, second, to each of the Holders requesting inclusion of
their Registrable Shares in such IPO Registration Statement (on a pro rata basis based on the total
number of Registrable Shares then held by each such Holder who is requesting inclusion), third, to
the Executives, and fourth, to other holders of the Company’s capital stock with registration
rights; provided, however, that the number of Registrable Shares to be included in the IPO
Registration Statement shall not be reduced unless all other securities of the Company held by (i)
officers, directors, other employees of the Company and consultants; and (ii) other holders of the
Company’s capital stock with registration rights that are inferior (with respect to such reduction)
to the registration rights of the Holders set forth herein, are first entirely excluded from the
underwriting and registration; provided, further, however, that Holders of Registrable Shares shall
be permitted to include Registrable Shares comprising at least 25% of the total securities included
in the Underwritten Offering proposed under the IPO Registration Statement.
By electing to include the Registrable Shares in the IPO Registration Statement, the Holder of
such Registrable Shares shall be deemed to have agreed not to effect any public sale or
distribution of securities of the Company of the same or similar class or classes of the
securities included in the IPO Registration Statement or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act, during such periods as reasonably requested (but in no event for a period
longer than 30 days prior to and 180 days following the effective date of the IPO Registration
Statement) by the representatives of the underwriters, if an Underwritten Offering, or by the
Company in any other registration.
If any Holder disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing underwriter(s), delivered at
least 15 Business Days prior to the expected effective date of the IPO Registration Statement. Any
Registrable Shares excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration.
(e) Expenses. The Company shall pay all Registration Expenses in connection with the
registration of the Registrable Shares pursuant to this Agreement. Each Holder participating
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in a
registration pursuant to this Section 2 shall bear such Holder’s proportionate share (based on the
total number of Registrable Shares sold in such registration) of all discounts and commissions
payable to underwriters or brokers in connection with a registration of Registrable Shares pursuant
to this Agreement.
(f) Executive Bonuses. If the Company does not file a Registration Statement registering the
resale of the Accredited Investor Shares, the Rule 144A Shares, and the Regulation S Shares within
90 days after the Closing Date, other than as a result of the Commission being unable to accept
such filings (a “Registration Default”), then, for each day the Registration Default continues,
each of Xxxx Xxxxxx, President and Chief Executive Officer, and Xxxxxxx X. Xxxxxx, Executive Vice
President and Chief Financial Officer, shall forfeit 1.0% of any bonus that would otherwise be
payable to him in the 2006 fiscal year (or to which he became entitled as a result of performance
during the 2006 fiscal year), whether under an employment agreement with the Company, a bonus plan
or any other bonus arrangement, including any bonus compensation for which payment would otherwise
be deferred until after 2006. No bonuses, compensation, awards, equity compensation or other
amounts shall be payable or granted in lieu of or to make such Chief Executive Officer or Chief
Financial Officer whole for any such forfeited bonuses.
3. Rules 144 and 144A Reporting
With a view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of the Registrable Shares to the public without
registration, the Company agrees to:
(a) use commercially reasonable efforts to make and keep adequate current public information
available, as those terms are understood and defined in Rule 144(c) at all times;
(b) use commercially reasonable efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company under the Securities Act and the
Exchange Act;
(c) so long as a Holder owns any Registrable Shares, to furnish to the Holder promptly upon
request (i) a written statement by the Company as to its compliance with the reporting requirements
of Rule 144 (at any time after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company, and (iii) such other reports and documents of the Company, and take such further
actions as a Holder may reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such Registrable Shares without registration; provided,
however, that the filing of any of the items listed in clauses (i) through (iii) with the
Commission shall constitute furnishing such items to the Holder.
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4. Registration Procedures
In connection with the obligations of the Company with respect to any registration pursuant to
this Agreement, the Company shall use its commercially reasonable efforts to effect or cause to be
effected the registration of the Registrable Shares under the Securities Act to permit the sale of
such Registrable Shares by the Holder or Holders in accordance with the Holder’s or Holders’
intended method or methods of distribution, and the Company shall:
(a) notify FBR and Selling Holders’ Counsel, in writing, at least ten Business Days prior to
filing a Registration Statement, of its intention to file a Registration Statement with the
Commission and, at least five Business Days prior to filing, provide a copy of the Registration
Statement to FBR, its counsel and Selling Holders’ Counsel for review and comment; prepare and file
with the Commission, as specified in this Agreement, a Registration Statement(s), which
Registration Statement(s) shall (i) comply as to form in all material respects with the
requirements of the applicable form and include all financial statements required by the Commission
to be filed therewith and (ii) be reasonably acceptable to FBR, its counsel and Selling Holders’
Counsel; notify FBR and Selling Holders’ Counsel in writing, at least five Business Days prior to
filing of any amendment or supplement to such Registration Statement and, at least three Business
Days prior to filing, provide a copy of such amendment or supplement to FBR, its counsel and
Selling Holders’ Counsel for review and comment; promptly following receipt from the Commission,
provide to FBR, its counsel and Selling Holders’ Counsel copies of any comments made by the staff
of the Commission relating to such Registration Statement and of the Company’s responses thereto
for review and comment; and use its commercially reasonable efforts to cause such Registration
Statement to become effective as soon as practicable after filing and to remain effective, subject
to Section 5 hereof, until the earlier of (i) such time as all Registrable Shares covered thereby
have been sold in accordance with the intended distribution of such Registrable Shares, (ii) all of
the Registrable Shares covered by such Registration Statement are eligible for sale pursuant to
Rule 144(k), or
(iii) the second anniversary of the initial effective date of such Registration Statement (subject
to extension as provided in Section 5(c) hereof); provided, however, that if the Company has an
effective Shelf Registration Statement on Form S-1 under the Securities Act and becomes eligible to
use Form S-3 or such other short-form registration statement form under the Securities Act, the
Company may, upon 30 Business Days prior written notice to all Holders, register any Registrable
Shares registered but not yet distributed under the effective Shelf Registration Statement on such
a short-form Shelf Registration Statement and, once the short-form Shelf Registration Statement is
declared effective, de-register such shares under the previous Registration Statement or transfer
the filing fees from the previous Registration Statement (such transfer pursuant to Rule 429, if
applicable);
(b) subject to Section 4(i) hereof, (i) prepare and file with the Commission such amendments
and post-effective amendments to each such Registration Statement as may be necessary to keep such
Registration Statement effective for the period described in Section 4(a) hereof; (ii) cause each
Prospectus contained therein to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the
Securities Act; and (iii) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by each Registration
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Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling Holders thereof;
(c) furnish to the Holders, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such other documents as such
Holder may reasonably request, in order to facilitate the public sale or other disposition of the
Registrable Shares; the Company consents to the use of such Prospectus, including each preliminary
Prospectus, by the Holders, if any, in connection with the offering and sale of the Registrable
Shares covered by any such Prospectus;
(d) use its commercially reasonable efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Shares by the time the applicable Registration
Statement is declared effective by the Commission under all applicable state securities or “blue
sky” laws of such jurisdictions as FBR or any Holder of Registrable Shares covered by a
Registration Statement shall reasonably request in writing, keep each such registration or
qualification or exemption effective during the period such Registration Statement is required to
be kept effective pursuant to Section 4(a) and do any and all other acts and things that may be
reasonably necessary to enable such Holder to consummate the disposition in each such jurisdiction
of such Registrable Shares owned by such Holder; provided, however, 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(d), except as may be required by the Securities Act,
or to register as a broker or dealer in any jurisdiction, (ii) subject itself to taxation in any
such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;
(e) use its commercially reasonable efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other governmental
agencies or authorities as may be necessary to enable the Holders thereof to consummate the
disposition of such Registrable Shares;
(f) (i) notify FBR and each Holder promptly and, if requested by FBR or any Holder, confirm
such advice in writing (A) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (B) of the issuance by the
Commission or any state securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose, (C) of any request by
the Commission or any other federal, state or foreign governmental authority for (I) amendments or
supplements to a Registration Statement or related Prospectus or (II) additional information and
(D) of the happening of any event during the period a Registration Statement is effective as a
result of which such Registration Statement or the related Prospectus or any document incorporated
by reference therein contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading (which information shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) and (ii) at the request of any such Holder,
promptly to furnish to such Holder a reasonable number of copies of a supplement to or an amendment
of such Prospectus as may be necessary so that, as thereafter delivered to the purchaser of such
securities, such Prospectus shall not include an untrue
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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;
(g) make every reasonable effort to avoid the issuance of, or if issued, to obtain the
withdrawal of, any order enjoining or suspending the use or effectiveness of a Registration
Statement or suspending of the qualification (or exemption from qualification) of any of the
Registrable Shares for sale in any jurisdiction, as promptly as practicable;
(h) upon written request, furnish to each requesting Holder of Registrable Shares, without
charge, at least one conformed copy of each Registration Statement and any post-effective amendment
or supplement thereto (without documents incorporated therein by reference or exhibits thereto,
unless requested);
(i) except as provided in Section 5, upon the occurrence of any event contemplated by Section
4(f)(i)(D) hereof, as promptly as practicable prepare and file with the Commission a supplement or
post-effective amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such Prospectus will 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, in the light of the circumstances under which they were
made, not misleading;
(j) if requested by the representative of the underwriters, if any, or any Holders of
Registrable Shares being sold in connection with such offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the representative of the
underwriters, if any, or such Holders indicate relates to them or that they reasonably
request be included therein and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective amendment; provided,
however, that the company shall not be required to prepare or file a Prospectus supplement or
post-effective amendment to name additional selling stockholders therein more than once in any
30-day period;
(k) in the case of an Underwritten Offering, use its commercially reasonable efforts to
furnish to the underwriters a signed counterpart, addressed to the underwriters, of: (i) an opinion
of counsel for the Company, dated the date of each closing under the underwriting agreement,
reasonably satisfactory to the underwriters; and (ii) a “comfort” letter, dated the effective date
of such Registration Statement and the date of each closing under the underwriting agreement,
signed by the independent public accountants who have certified the Company’s financial statements
included in such Registration Statement, covering substantially the same matters with respect to
such Registration Statement (and the Prospectus included therein) and with respect to events
subsequent to the date of such financial statements, as are customarily covered in accountants’
letters delivered to underwriters in underwritten public offerings of securities and such other
financial matters as the underwriters may reasonably request;
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(l) enter into customary agreements (including in the case of an Underwritten Offering, an
underwriting agreement in customary form) and take all other action in connection therewith in
order to expedite or facilitate the distribution of the Registrable Shares included in such
Registration Statement and, in the case of an Underwritten Offering, make representations and
warranties to the underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent customary if and when
requested;
(m) make available for inspection by representatives of the Holders and the representative of
any underwriters participating in any disposition pursuant to a Registration Statement and any
special counsel or accountants retained by such Holders or underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and cause the respective
officers, directors and employees of the Company to supply all information reasonably requested by
any such representatives, the representative of the underwriters, counsel thereto or accountants in
connection with a Registration Statement; provided, however, that such records, documents or
information that the Company determines, in good faith, to be confidential and notifies such
representatives, representative of the underwriters, counsel thereto or accountants are
confidential shall not be disclosed by the representatives, representative of the underwriters,
counsel thereto or accountants unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a misstatement or omission in a Registration Statement or
Prospectus, (ii) the release of such records, documents or information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or (iii) such records, documents or
information have been generally made available to the public;
(n) use its commercially reasonable efforts (including, without limitation, seeking to cure
any deficiencies cited by the exchange or market in the Company’s listing or inclusion application)
to list or include all Registrable Shares on the New York Stock Exchange or the NASDAQ Global
Market;
(o) prepare and file in a timely manner all documents and reports required by the Exchange Act
and, to the extent the Company’s obligation to file such reports pursuant to Section 15(d) of the
Exchange Act expires prior to the expiration of the effectiveness period of the Registration
Statement as required by Section 4(a) hereof, the Company shall register the Registrable Shares
under the Exchange Act and shall maintain such registration through the effectiveness period
required by Section 4(a) hereof;
(p) provide a CUSIP number for all Registrable Shares, not later than the effective date of
the Registration Statement;
(q) (i) otherwise use its commercially reasonable efforts to comply with all applicable rules
and regulations of the Commission, (ii) make generally available to its shareholders, as soon as
reasonably practicable, earnings statements covering at least 12 months that satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder, but in no event later than 90 days after the end of each fiscal year of
the Company and (iii) not file any Registration Statement or Prospectus or amendment or supplement
to such Registration Statement or Prospectus to which any Holder of
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Registrable Shares covered by
any Registration Statement shall have reasonably objected on the grounds that such Registration
Statement or Prospectus or amendment or supplement does not comply in all material respects with
the requirements of the Securities Act, such Holder having been furnished with a copy thereof at
least two Business Days prior to the filing thereof;
(r) provide and cause to be maintained a registrar and transfer agent for all Registrable
Shares covered by any Registration Statement from and after a date not later than the effective
date of such Registration Statement;
(s) in connection with any sale or transfer of the Registrable Shares (whether or not pursuant
to a Registration Statement) that will result in the securities being delivered no longer being
Registrable Shares, cooperate with the Holders and the representative of the underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing the Registrable
Shares to be sold, which certificates shall not bear any restrictive transfer legends and to enable
such Registrable Shares to be in such denominations and registered in such names as the
representative of the underwriters, if any, or the Holders may request;
(t) in connection with the initial filing of a Shelf Registration Statement and each amendment
thereto with the Commission pursuant to Section 2(a) hereof, cooperate with FBR in connection with
the filing with the NASD of all forms and information required or requested by the NASD in order to
obtain written confirmation from the NASD that the NASD does not object to the fairness and
reasonableness of the underwriting terms and arrangements (or any
deemed underwriting terms and arrangements) relating to the resale of Registrable Shares pursuant
to the Shelf Registration Statement, including, without limitation, information provided to the
NASD through its COBRADesk system, and pay all reasonable costs, fees and expenses incident to the
NASD’s review of the Shelf Registration Statement and the related underwriting terms and
arrangements, including, without limitation, all filing fees associated with any filings or
submissions to the NASD and the reasonable legal expenses, filing fees and other disbursements of
FBR and any other NASD member that is the holder of, or is affiliated or associated with an owner
of, Registrable Shares included in the Shelf Registration Statement (including in connection with
any initial or subsequent member filing);
(u) in connection with the initial filing of a Shelf Registration Statement and each amendment
thereto with the Commission pursuant to Section 2(a) hereof, provide to FBR and its
representatives, the opportunity to conduct due diligence, including, without limitation, an
inquiry of the Company’s financial and other records, and make available members of its management
for questions regarding information which FBR may request in order to fulfill any due diligence
obligation on its part; and
(v) upon effectiveness of the first Registration Statement filed under this Agreement, take
such actions and make such filings as are necessary to effect the registration of the Common Stock
under the Exchange Act simultaneously with or immediately following the effectiveness of the
Registration Statement.
The Company may require the Holders to furnish to the Company such information regarding the
proposed distribution by such Holder of such Registrable Shares as the Company
- 13 -
may from time to
time reasonably request in writing or as shall be required to effect the registration of the
Registrable Shares, and no Holder shall be entitled to be named as a selling shareholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus forming a part thereof
if such Holder does not provide such information to the Company. Each Holder further agrees to
furnish promptly to the Company in writing all information required from time to time to make the
information previously furnished by such Holder not misleading.
Each Holder agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 4(f)(i)(C)(I) or 4(f)(i)(D) hereof, such Holder will
immediately discontinue disposition of Registrable Shares pursuant to a Registration Statement
until such Holder’s receipt of the copies of the supplemented or amended Prospectus. If so
directed by the Company, such Holder will deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Registrable Shares current at the time of receipt of such notice.
5. Black-Out Period
(a) Subject to the provisions of this Section 5, following the effectiveness of a Registration
Statement (and the filings with any international, federal or state securities commissions), the
Company, by written notice to FBR and the Holders, may direct the Holders to suspend sales of the
Registrable Shares pursuant to a Registration Statement for such times as the Company reasonably
may determine is necessary and advisable (but in no event for more than an aggregate of 90 days in
any rolling 12-month period commencing on the Closing Date or more than 60 days in any rolling
90-day period), if any of the following events shall occur: (i) the representative of the
underwriters of an Underwritten Offering of primary shares by the Company has advised the Company
that the sale of Registrable Shares pursuant to the Registration Statement would have a material
adverse effect on the Company’s primary offering; (ii) the Board of Directors of the Company shall
have determined in good faith that (A) the offer or sale of any Registrable Shares would materially
impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition,
merger, tender offer, business combination, corporate reorganization or other significant
transaction involving the Company, or (B) after the advice of counsel, the sale of Registrable
Shares pursuant to the Registration Statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law, and (C) (I) the Company
has a bona fide business purpose for preserving the confidentiality of such transaction or
information, (II) disclosure would have a material adverse effect on the Company, including the
Company’s ability to consummate such transaction, or (III) renders the Company unable to comply
with Commission requirements, in each case under circumstances that would make it impractical or
inadvisable to cause the Registration Statement (or such filings) to become effective or to
promptly amend or supplement the Registration Statement on a post-effective basis, as applicable;
or (iii) the Board of Directors of the Company shall have determined in good faith, after the
advice of counsel, that it is required by law, rule or regulation or that it is in the best
interests of the Company to supplement the Registration Statement or file a post-effective
amendment to the Registration Statement in order to incorporate information into the Registration
Statement for the purpose of (A) including
- 14 -
in the Registration Statement any prospectus required
under Section 10(a)(3) of the Securities Act; (B) reflecting in the prospectus included in the
Registration Statement any facts or events arising after the effective date of the Registration
Statement (or of the most recent post-effective amendment) that, individually or in the aggregate,
represents a fundamental change in the information set forth therein; or (C) including in the
prospectus included in the Registration Statement any material information with respect to the plan
of distribution not disclosed in the Registration Statement or any material change to such
information. Upon the occurrence of any such suspension, the Company shall use commercially
reasonable efforts to cause the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such action as is
necessary to make resumed use of the Registration Statement compatible with the Company’s best
interests, as applicable, so as to permit the Holders to resume sales of the Registrable Shares as
soon as possible.
(b) In the case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension Event”), the Company shall give written notice (a “Suspension Notice”) to
FBR and the Holders to suspend sales of the Registrable Shares and such notice shall state
generally the basis for the notice and that such suspension shall continue
only for so long as the Suspension Event or its effect is continuing and the Company is using
commercially reasonable efforts and taking all reasonable steps to terminate suspension of the use
of the Registration Statement as promptly as possible. The Holders shall not effect any sales of
the Registrable Shares pursuant to such Registration Statement (or such filings) at any time after
it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension
Notice (as defined below). If so directed by the Company, each Holder will deliver to the Company
(at the expense of the Company) all copies other than permanent file copies then in such Holder’s
possession of the Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the Registrable Shares pursuant
to the Registration Statement (or such filings) following further notice to such effect (an “End of
Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company
to the Holders and FBR in the manner described above promptly following the conclusion of any
Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees that it shall extend the period of
time during which the applicable Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days during the period from the date of receipt by the Holders of
the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension
Notice and copies of the supplemented or amended Prospectus necessary to resume sales.
6. Indemnification and Contribution
(a) The Company agrees to indemnify and hold harmless (i) each Holder of Registrable Shares
and any underwriter (as determined in the Securities Act) for such Holder (including, if
applicable, FBR), (ii) each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) any such Person described
- 15 -
in clause (i) (any
of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling
Person”), and (iii) the respective officers, directors, partners, employees, representatives and
agents of any such Person or any Controlling Person (any Person referred to in clause (i), (ii) or
(iii) above may hereinafter be referred to as a “Purchaser Indemnitee”), to the fullest extent
lawful, from and against any and all losses, claims, damages, judgments, actions, out-of-pocket
expenses, and other liabilities (the “Liabilities”), including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or defending any claim
or action, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any Purchaser Indemnitee,
joint or several, directly or indirectly related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), any Prospectus (or any amendment or supplement
thereto) or any Issuer Free Writing Prospectus prepared by the Company (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such Liabilities arise
out of or are based upon (i) any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to any Purchaser
Indemnitee furnished to the Company or any underwriter in writing by such Purchaser Indemnitee
expressly for use therein, or (ii) any untrue statement or omission or alleged untrue statement or
omission if a copy of the Prospectus (as then amended or supplemented) was not sent or given by or
on behalf of any such Purchaser Indemnitee to the Person asserting such Liabilities and the untrue
statement or omission or alleged untrue statement or omission was corrected in such Prospectus (as
then amended or supplemented). The Company shall notify the Holders promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental investigation), or
litigation of which it shall have become aware in connection with the matters addressed by this
Agreement which involves the Company or a Purchaser Indemnitee. The indemnity provided for herein
shall remain in full force and effect regardless of any investigation made by or on behalf of any
Purchaser Indemnitee.
(b) In connection with any Registration Statement in which a Holder of Registrable Shares is
participating, such Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each Person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and the respective partners, directors, officers, members,
representatives, employees and agents of such Person or Controlling Person to the same extent as
the foregoing indemnity from the Company to each Purchaser Indemnitee, but only with reference to
untrue statements or omissions or alleged untrue statements or omissions made in reliance upon and
in strict conformity with information relating to such Holder furnished to the Company in writing
by such Holder expressly for use in such Registration Statement (or any amendment thereto),
Prospectus (or any amendment or supplement thereto), or Issuer Free Writing Prospectus (or any
amendment or supplement thereto). Absent gross negligence or willful misconduct, the liability of
any Holder pursuant to this paragraph shall in no event exceed the net proceeds received by such
Holder from sales of Registrable Shares pursuant to such Registration Statement (or any amendment
thereto),
- 16 -
Prospectus (or any amendment or supplement thereto), Issuer Free Writing Prospectus (or
any amendment or supplement thereto) or any preliminary Prospectus.
(c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnity may
be sought pursuant to Section 6(a) or 6(b) above, such Person (the “Indemnified Party”) shall
promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in
writing of the commencement thereof (but the failure to so notify an Indemnifying Party shall not
relieve it from any liability which it may have under this Section 6, except to the extent the
Indemnifying Party is materially prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may
reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually
incurred by such counsel related to such proceeding. Notwithstanding the foregoing, in any such
proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party, unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the Indemnifying
Party failed within a reasonable time after notice of commencement of the action to assume the
defense and employ counsel reasonably satisfactory to the Indemnified Party, (iii) the Indemnifying
Party and its counsel do not pursue the defense of such action or (iv) the named parties to any
such action (including any impleaded parties) include both such Indemnified Party and Indemnifying
Party, or any Affiliate of the Indemnifying Party, and such Indemnified Party shall have been
reasonably advised by counsel that, either (A) there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnifying Party or such
Affiliate of the Indemnifying Party which defenses are not being involved on behalf of the
Indemnified Party, or (B) a conflict may exist between such Indemnified Party and the Indemnifying
Party or such Affiliate of the Indemnifying Party (in which case the Indemnifying Party shall not
have the right to assume nor direct the defense of such action on behalf of such Indemnified Party;
it being understood, however, that the Indemnifying Party shall not, in connection with any one
such action or separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel) for all such
Indemnified Parties, which firm shall be designated in writing by those Indemnified Parties who
sold a majority of the Registrable Shares sold by all such Indemnified Parties and any such
separate firm for the Company, the directors, the officers and such control Persons of the Company
as shall be designated in writing by the Company). The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent or if there is a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify any Indemnified Party from and against any
loss or liability by reason of such settlement or judgment. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims that are
the subject matter of such proceeding.
- 17 -
(d) If the indemnification provided for in Sections 6(a) and 6(b) is for any reason held to be
unavailable to an Indemnified Party in respect of any Liabilities referred to therein (other than
by reason of the exceptions provided therein) or is insufficient to hold harmless a party
indemnified thereunder, then each Indemnifying Party under such paragraphs, in lieu of indemnifying
such Indemnified Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Liabilities (i) in such proportion as is appropriate to
reflect the relative benefits of the Indemnified Party on the one hand and the Indemnifying
Party(ies) on the other in connection with the statements or omissions that resulted in such
Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Indemnifying Party(ies) and the Indemnified
Party, as well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and any Purchaser Indemnitees on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company or by such Purchaser Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if such Indemnified Parties were treated as
one entity for such purpose), or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 6(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to Section 6(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or other expenses
actually incurred by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which the net proceeds
received by such Purchaser Indemnitee from sales of Registrable Shares exceeds the amount of any
damages that such Purchaser Indemnitee has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. For purposes of this Section 6, each
Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act) FBR or a Holder of Registrable Shares shall have the same rights to
contribution as FBR or such Holder, as the case may be, and each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) the
Company, and each officer, director, partner, employee, representative, agent or manager of the
Company shall have the same rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this Section 6 or
otherwise, except to the extent that any party is materially prejudiced by the failure to give
notice. 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.
- 18 -
(f) The indemnity and contribution agreements contained in this Section 6 will be in addition
to any liability which the Indemnifying Parties may otherwise have to the Indemnified Parties
referred to above. The Purchaser Indemnitee’s obligations to contribute pursuant to this Section 6
are several in proportion to the respective number of Shares sold by each of the Purchaser
Indemnitees hereunder and not joint.
7. Market Stand-off Agreement
Subject to the additional restrictions applicable in Section 2(d), each Holder hereby agrees
that it shall not, to the extent requested by the Company or an underwriter of securities of the
Company, directly or indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any Registrable Shares or other shares of
Common Stock of the Company or any securities convertible into or exchangeable or exercisable for
shares of Common Stock of the Company owned by such Holder as of the effective date of an IPO
Registration Statement (other than to donees or partners of the Holder who agree to be similarly
bound) for a period of 60 days following the effective date of such IPO Registration Statement of
the Company filed under the Securities Act; provided, however, that:
(a) the restrictions above shall not apply to Registrable Shares sold pursuant to the IPO
Registration Statement;
(b) all executive officers and directors of the Company then holding shares of Common Stock of
the Company or securities convertible into or exchangeable or exercisable for shares of Common
Stock of the Company enter into agreements that are no less restrictive;
(c) the Holders shall be allowed any concession or proportionate release allowed to any
officer or director that entered into agreements that are no less restrictive (with such proportion
being determined by dividing the number of shares being released with respect to such officer or
director by the total number of issued and outstanding shares held by such officer or director);
provided, that nothing in this Section 7(c) shall be construed as a right to proportionate release
for the executive officers and directors of the Company upon the expiration of the 60-day period
applicable to all Holders other than the executive officers and directors of the Company; and
(d) this Section 7 shall not be applicable if a Shelf Registration Statement of the Company
filed under the Securities Act has been declared effective prior to the filing of an IPO
Registration Statement.
In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the securities subject to this Section 7 and
to impose stop transfer instructions with respect to the Registrable Shares and such other
securities of each Holder (and the securities of every other Person subject to the foregoing
restriction) until the end of such period.
- 19 -
8. Termination of the Company’s Obligation
The Company shall have no obligation pursuant to this Agreement with respect to any
Registrable Shares proposed to be sold by a Holder in a registration pursuant to this Agreement if,
in the opinion of counsel to the Company, all such Registrable Shares proposed to be sold
by a Holder may be sold in a three month period without registration under the Securities Act
pursuant to Rule 144 under the Securities Act.
9. Limitations on Subsequent Registration Rights
From and after the date of this Agreement, the Company shall not, without the prior written
consent of Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares (provided, however, that for purposes of this Section 9, Registrable Shares that are owned,
directly or indirectly, by an Affiliate of the Company shall not be deemed to be outstanding),
enter into any agreement with any holder or prospective holder of any securities of the Company
that would allow such holder or prospective holder (a) to include such securities in any
Registration Statement filed pursuant to the terms hereof, unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of its securities will not reduce the amount of Registrable
Shares of the Holders that is included, or (b) to have equity securities registered on a
registration statement that initially could be declared effective prior to the earlier of (i) 180
days after the initial effective date of any Registration Statement filed pursuant to this
Agreement, and (ii) the one-year anniversary of this Agreement.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise all rights provided herein or, in
the case of FBR, in the Purchase/Placement Agreement, or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Agreement. Subject to
Section 6, the Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further
agree that, in the event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, without the written consent of the Company
and Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares; provided, however, that for purposes of this Section 10(b), Registrable Shares that are
owned, directly or indirectly, by an Affiliate of the Company shall not be deemed to be
outstanding. No amendment shall be deemed effective unless it applies
- 20 -
uniformly to all Holders.
Notwithstanding the foregoing, a waiver or consent to or departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders may be given by such Holder; provided that the
provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the immediately preceding
sentence.
(c) Notices. All notices and other communications, provided for or permitted hereunder, shall
be made in writing and delivered by facsimile (with receipt confirmed), overnight courier or
registered or certified mail, return receipt requested, or by telegram:
(i) if to a Holder, at the most current address given by the transfer agent and
registrar of the Shares to the Company; and
(ii) if to the Company at the offices of the Company at Xxxxxxx Cable, Inc., 0000
Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx Xxxxxx (facsimile (000) 000-0000);
and
(iii) if to FBR, at the offices of FBR at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx, Esq. (facsimile (000) 000-0000); with a copy
(which shall not constitute notice) to Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, 000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxxx X.
Xxxxxxx, Esq. (facsimile (000) 000-0000).
(d) 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, without limitation and without
the need for an express assignment or assumption, subsequent Holders. The Company agrees that the
Holders shall be third party beneficiaries to the agreements made hereunder by FBR and the Company,
and each Holder shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights hereunder; provided, however, that
such Holder fulfills all of its obligations hereunder.
(e) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.
(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. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT IN THE STATE OF NEW YORK OR
- 21 -
ANY FEDERAL
COURT SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(h) Severability. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their commercially reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties hereto that
they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Purchase/Placement Agreement, is
intended by the parties hereto as a final expression of their agreement, and is 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 and therein.
(j) Registrable Shares Held by the Company or its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required hereunder,
Registrable Shares held by the Company or its Affiliates shall not be counted in determining
whether such consent or approval was given by the Holders of such required percentage.
(k) Adjustment for Stock Splits, etc. Wherever in this Agreement there is a reference to a
specific number of shares, then upon the occurrence of any subdivision, combination, or stock
dividend of such shares, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the effect on the outstanding shares of such
class or series of stock by such subdivision, combination, or stock dividend.
(l) Survival. This Agreement is intended to survive the consummation of the transactions
contemplated by the Purchase/Placement Agreement. The indemnification and contribution obligations
under Section 6 of this Agreement shall survive the termination of the Company’s obligations under
Section 2 of this Agreement.
(m) Attorneys’ Fees. In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the
prevailing
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party, as determined by the court, shall be entitled to recover its reasonable
attorneys’ fees in addition to any other available remedy.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| XXXXXXX CABLE, INC. |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxxx | ||||
| Executive Vice President, Chief Financial Officer, Secretary and Treasurer |
||||
| FRIEDMAN, BILLINGS, XXXXXX & CO., INC. |
||||
| /s/ Xxxxx X. Xxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxx | ||||
| Senior Managing Director | ||||
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