Exhibit 10.18
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of November 23, 1999, by and among XXXXXX.XXX LTD., a Delaware
corporation (the "Company"), and OMNICOM GROUP INC., a New York corporation (the
"Stockholder").
RECITALS
A. The Stockholder owns (together with its affiliates) 12,528,278
shares of Common Stock (the "Currently Owned Shares") and warrants (the
"Warrants") to acquire an additional 6,000,000 shares of Common Stock (the
"Warrant Shares"). The Currently Owned Shares, the Warrant Shares and any Other
Equity Securities from time to time owned by the Stockholder or any of its
Affiliates are collectively referred to herein as the "Shares."
B. The Company has agreed to provide certain registration rights with
respect to the Registrable Securities on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. DEFINITIONS. For purposes of this Agreement, in addition to the
terms defined elsewhere herein, the following terms have the following meanings
when used herein with initial capital letters:
"AFFILIATE" has the meaning given to that term in Rule 405 under the
Securities Act.
"COMMON STOCK" means the common stock of the Company.
"OTHER EQUITY SECURITIES" means any shares of capital stock of the
Company and any other securities issued by the Company that are exercisable to
purchase, convertible into or exchangeable for shares of capital stock of the
Company that are owned of record or beneficially by the Stockholder or any of
its owned of record or beneficially by the Stockholder or any of its Affiliates,
whether acquired prior to, on or after the date hereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including without limitation a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including without limitation post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.
"REGISTRABLE SECURITIES" means the Shares that are issued to the
Stockholder, any of its Affiliates, and any other securities issued to any of
the foregoing upon any stock split, stock
dividend, recapitalization or other distribution with respect to, conversion or
exchange of or in replacement of such Shares or other securities, until, in the
case of any such security, (i) it is effectively registered under the Securities
Act and disposed of in accordance with the Registration Statement covering it,
(ii) it is saleable by the holder thereof pursuant to Rule 144 (k) without any
limitation at to volume, or (iii) it is distributed to the public pursuant to
Rule 144.
"REGISTRATION STATEMENT" means any registration statement under the
Securities Act that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including without limitation the related
Prospectus, all amendments and supplements to such registration statement
(including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL COUNSEL" has the meaning set forth in Section 7 (b) hereof.
"UNDERWRITTEN REGISTRATION" OR "UNDERWRITTEN OFFERING" means a
distribution, registered pursuant to the Securities Act in which securities of
the Company are sold to an underwriter for reoffering to the public.
2. HOLDERS OF REGISTRABLE SECURITIES. Whenever a number or percentage
of Registrable Securities is to be determined hereunder, each then-outstanding
other Equity Security that is exercisable to purchase, convertible into or
exchangeable for shares of capital stock of the Company will be deemed to be
equal to the number of shares of Common Stock for which such Other Equity
Security (or the security into which such Other Equity Security is then
convertible) is then so purchasable, convertible or exercisable.
3. DEMAND REGISTRATION. (a) REQUESTS FOR REGISTRATION. At any time and
from time to time after one hundred and eighty days (180) after the date on
which a registration statement filed by the Company becomes effective, the
holders of Registrable Securities constituting at least 10% of the total number
of Registrable Securities then outstanding will have the right by written notice
delivered to the Company (a "Demand Notice") to require the Company to register
(a "Demand Registration") under and in accordance with the provisions of the
Securities Act the number of Registrable Securities requested to be so
registered (but not less than 10% of the total number of Registrable Securities
then outstanding); PROVIDED, HOWEVER, that no Demand Notice may be given prior
to 60 calendar days after the effective date of the immediately preceding Demand
Registration. The number of Demand Registrations pursuant to this Section 3 (a)
may not exceed three; PROVIDED, HOWEVER, that (i) in determining the number of
Demand Registrations to which the holders of Registrable Securities are
entitled, there shall be excluded (A) any Demand Registration that is an
underwritten registration if the managing underwriter or underwriters have
advised the holders of Registrable Securities that the total number of
Registrable Securities requested to be included therein exceeds the number of
Registrable Securities that can be sold in such offering in accordance with the
provisions of this Agreement
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without materially and adversely affecting the success of such offering, (B) any
Demand Registration that does not become effective or is not maintained
effective for the period required pursuant to Section 3 (b) hereof, unless in
the case of this clause (C) such Demand Registration does not become effective
after being filed by the Company solely by reason of the refusal to proceed by
the holders of Registrable Securities unless (1) the refusal to proceed is based
upon the advice of counsel relating to a matter with respect to the Company or
(2) the holders of the Registrable Securities elect to pay all Registration
Expenses in connection with such Demand Registration, (D) any Demand
Registration in connection with which any other stockholder of the Company
exercises a right of first refusal which it may otherwise have and purchases all
the stock registered and to be sold pursuant to the Demand Registration, and (E)
any Demand Registration as to which the Company exercises any rights under
Sections 3 (d) or 4 (b) hereof and (ii) in connection with the issuance of more
than 10% of the then-outstanding Common Stock in any acquisition, business
combination or other transaction (an "Acquisition"), any holder of Registerable
Securities (regardless of the amount of Registerable Securities so held) may by
notice given to the Company within 30 calendar days after the first public
announcement by the Company that it has entered into a definitive agreement
providing for such Acquisition require that the Company register for resale to
the public pursuant to any Registration Statement for the issuance of securities
in such Acquisition the number of Registerable Securities requested to be so
registered (and such registration will not be deemed to be one of the five
demand registrations provided for herein).
(b) FILING AND EFFECTIVENESS. The Company will file a Registration
Statement relating to any Demand Registration within 30 calendar days, and will
use its best efforts to cause the same to be declared effective by the SEC
within 90 calendar days, of the date on which the holders of Registrable
Securities first give the Demand Notice required by Section 3 (a) hereof with
respect to such Demand Registration. All requests made pursuant to this Section
3 will specify the number of Registrable Securities to be registered and will
also specify the intended methods of disposition thereof; PROVIDED, that if the
holder demanding such registration specifies one particular type of underwritten
offering, such method of disposition shall be type of underwritten offering or a
series of such underwritten offerings (as such demanding holders of Registrable
Securities may elect) during the period which the Registration Statement is
effective. If any Demand Registration is requested to be effected as a "shelf"
registration by the holders of Registrable Securities demanding such Demand
Registration or otherwise contemplated by Rule 415 under the Securities Act, the
Company will keep the Registration Statement filed in respect thereof effective
for such period as may be requested by the holder demanding such registration,
but will not be required to keep the Registration Statement effective in respect
of any single Demand Registration for longer than 6 months from the date on
which the SEC declares such Registration Statement effective (subject to
extension pursuant to Sections 5 and 6 hereof) or such shorter period that will
terminate when all Registrable Securities covered by such Registration Statement
have been sold pursuant to such Registration Statement. Within five calendar
days after receipt of such Demand Notice, the Company will serve written notice
thereof (the "Notice") to all other holders of Registrable Securities and will ,
subject to the provisions of Section 3 (c) hereof, include in such registration
all Registrable Securities with respect to which the Company receives written
requests for inclusion therein within 15 calendar days after the receipt of the
Notice by the applicable holder. The holders of Registrable Securities will be
permitted to withdraw Registrable Securities from a Registration at any time
prior to the effective date of such Registration provided that the remaining
number of Registrable Securities
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subject to a Demand Notice is at least 10% of the total number of Registrable
Securities then outstanding.
(c) PRIORITY ON DEMAND REGISTRATION. With respect to any Demand
Registration of Registrable Securities to be sold in one or more firm commitment
underwritten offerings, the Company may also provide written notice to holders
of its equity securities (other than Registrable Securities), if any, who have
piggyback registration rights with respect thereto and permit all such holders
who request to be included in the Demand Registration to include any or all
equity securities held by such holders in such Demand Registration on the same
terms and conditions as the Registrable Securities. Notwithstanding the
foregoing, if the managing underwriter or underwriters of the offering to which
such Demand Registration relates advise the holders of Registrable Securities
that the total amount of Registrable Securities and securities that such equity
security holders intend to include in such Demand Registration is in the
aggregate such as to adversely affect the success of such offering, then (i)
first, the amount of securities to be offered for the account of the holders of
such other equity securities (other than Registrable Securities until two
registrations have been effected to which this clause (i) applied) will be
reduced, to zero if necessary ( PRO RATA among such holders on the basis of the
amount of such other securities to be included therein by each such holder), and
(ii) second, the number of Registrable Securities included in such Demand
Registration will, if necessary, be reduced and there will be included in such
firm commitment underwritten offering only the number of Registrable Securities
and, after clause (i) ceases to be applicable, such other securities that, in
the opinion of such managing underwriter or underwriters, can be sold without
adversely affecting the success of such offering, allocated PRO RATA among the
holders of Registrable Securities and, after clause (i) ceases to be applicable,
the holders of such other securities on the basis of the amount of Registrable
Securities and, when applicable, other securities to be included therein by each
such holder.
(d) POSTPONEMENT OF DEMAND REGISTRATION. The Company will be entitled
to postpone the filing period (or suspend the effectiveness) of any Demand
Registration for a reasonable period of time not in excess of 90 calendar days,
if the Company determines, in the good faith exercise of its reasonable business
judgment, that such registration and offering would materially interfere with
BONA FIDE financing plans of the Company approved by its Board of Directors or
would require disclosure of information, the premature disclosure of which could
materially and adversely affect the Company. If the Company postpones the filing
of a Registration Statement, it will promptly notify the holders of Registrable
Securities in writing of the postponement, the reasons therefor and the proposed
length of the postponement and promptly notify such holders in writing when the
events or circumstances permitting such postponement have ended. The rights
provided hereunder may be exercised on not more than three occasions and in no
event more than once in any 12-month period, notwithstanding any other provision
hereto.
4. PIGGYBACK REGISTRATION. (a) RIGHT TO PIGGYBACK. If at any time the
Company proposes to file a registration statement under the Securities Act with
respect to an offering of any class of equity securities (other than a
registration statement (i) on Form X-0, X-0 or any successor form thereto or
(ii) filed solely in connection with an offering made solely to employees of the
Company), whether or not for its own account, then the Company will give written
notice of such proposed filing to the holders of Registrable Securities
promptly, but in
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any event at least 15 calendar days before the anticipated filing date. Such
notice will offer such holders the opportunity to register such amount of
Registrable Securities as each such holder may request (a "Piggyback
Registration"). Subject to Section 4 (b) hereof, the Company will include in
each such Piggyback Registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein. The
holders of Registrable Securities will be permitted to withdraw all or part of
the Registrable Securities from a Piggyback Registration at any time prior to
the effective date of such Piggyback Registration.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. The Company will cause the
managing underwriter or underwriters of a proposed underwritten offering to
permit holders of Registrable Securities requested to be included in the
registration for such offering to include therein all such Registrable
Securities requested to be so included on the same terms and conditions as any
similar securities, if any, of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering deliver
an opinion to the holders of Registrable Securities to the effect that the total
amount of securities which such holders, the Company and any other persons
having rights to participate in such registration propose to include in such
offering is such as to adversely affect the success of such offering, then:
(i) if such registration is a primary registration on behalf of
the Company, the amount of securities to be included therein for the
account of all persons other than the Company will be reduced (to zero
if necessary) PRO RATA in proportion to the respective amounts of
securities requested to be included --- ---- therein to the extent
necessary to reduce the total amount of securities to be included in
such underwriter or underwriters; PROVIDED, HOWEVER, that the Company
may exercise the right under this -------- ------- Section 4 (b) on not
more than three occasions (after which, any prorations provided for
herein will be calculated on a pro rata basis including in such
calculation the number of Shares sought to be sold by the Company); and
(ii) if such registration is an underwritten secondary
registration on behalf of holders of securities of the Company other
than the Company or holders of Registrable Securities, then the
priority provisions applicable to demand registrations under Section 3
(c) will apply.
(c) REGISTRATION OF SECURITIES OTHER THAN REGISTRABLE SECURITIES.
Without the written consent of the holders of a majority of then-outstanding
Registrable Securities, the Company will not grant to any person the right to
request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject to the prior rights of
the holders of Registrable Securities set forth herein and, if exercised, would
not otherwise conflict or be inconsistent with the provisions of, this
Agreement.
5. RESTRICTIONS ON SALE BY HOLDERS OF REGISTRABLE SECURITIES. Each
holder of Registrable Securities whose Registrable Securities are covered by a
Registration Statement filed pursuant to Section 3 or Section 4 hereof agrees,
and will confirm such agreement in writing if such holder is so requested
(pursuant to a timely written notice) by the managing underwriter or
underwriters in an underwritten offering, not to effect any public sale or
distribution of any of the Company's equity securities (except as part of such
underwritten offering), including a sale pursuant to Rule 144, during the
10-calendar day period prior to, and during the 180-calendar day period (or such
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shorter period as to which the managing underwriter or underwriters may require
of any officer, director or other stockholder to be bound by any similar
limitation in connection with any underwritten public offering) beginning on,
the closing date of each underwritten offering made pursuant to such
Registration Statement.
6. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations pursuant to Sections 3 and 4 hereof, the Company will
use its reasonable commercial efforts to effect such registrations to permit the
sale of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company will as use its
reasonable commercial efforts to expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the holders thereof in
accordance with the intended method or methods of distribution thereof , and
cause each such Registration Statement to become effective and remain effective
as provided herein; PROVIDED, HOWEVER, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto (including
documents that would be incorporated or deemed to be incorporated therein by
reference), the Company will furnish to the holders of the Registrable
Securities covered by such Registration Statement, the Special Counsel and the
managing underwriters, if any, copies of all such documents proposed to be
filed, and will provide such holders, the Special Counsel and such underwriters
a reasonable period of time to review and comment on such documents. The Company
will not file any such Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (including such documents which, upon
filing, would or would be incorporated or deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable Securities
covered by such Registration Statement, the Special Counsel or the managing
underwriter, if any, shall reasonably object on a timely basis;
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 3; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
the Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
as so amended or to such Prospectus as so supplemented;
(c) Notify the selling holders of Registrable Securities, the Special
Counsel and the managing underwriters, if any, promptly, and (if requested by
any such person) confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any other federal
or state governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or
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exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of any event which makes any statement made in
such Registration Statement or related Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or which requires the making of any changes in a Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and, in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or is necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, and (vi) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate;
(d) Use every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment;
(e) If requested by the managing underwriters, if any, or the holders
of a majority of the Registrable Securities being registered, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such holders reasonably
agree should be included therein as may be required by applicable law 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 will not be required to take any
actions under this Section 6 (e) that are not, in the opinion of counsel for the
Company, in compliance with applicable law;
(f) Furnish to each selling holder of Registrable Securities, the
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements (but excluding schedules, all
documents incorporated or deemed incorporated therein by reference and all
exhibits, unless requested in writing by such holder, counsel or underwriter);
(g) Deliver to each selling holder of Registrable Securities, the
Special Counsel and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such persons reasonably may request; and the Company hereby consents to the
use of such Prospectus or each preliminary prospectus) and any amendment or
supplement thereto as such persons may reasonably request; and the Company
hereby consents to the use of such Prospectus or each amendment or supplement
thereto by each of the selling holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto;
(h) Prior to any public offering of Registrable Securities, to register
or qualify or cooperate with the selling holders of Registrable Securities, the
underwriters, if any, and their
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respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as any seller or underwriter reasonably
requests in writing; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdiction of the Registrable
Securities covered by the applicable Registration Statement; PROVIDED, HOWEVER
that the Company will not be required to (i) qualify generally to do business in
any jurisdiction in which it is not then so qualified or (ii) take any action
that would subject it to general service of process in any such jurisdiction in
which it is not then so subject;
(i) Cooperate with the selling holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates will not bear any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, shall request at least two business days prior to
any sale of Registrable Securities to the underwriters;
(j) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States except as may be
required solely as a consequence of the nature of such selling holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) Upon the occurrence of any event contemplated by Section 6 (c) (vi)
or 6 (c) (vii) hereof, prepare a supplement or post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document so that as
thereafter delivered to the Stockholders of the Registrable Securities being
sold thereunder, such Prospectus will not contain 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 light of the circumstances under
which they were made, not misleading;
(l) Use its best efforts to cause all Registrable Securities covered by
such Registration Statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed;
(m) Enter into such agreements (including, in the event of an
underwritten offering, an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other actions in
connection therewith (including those reasonably requested by the holders of a
majority of the Registrable Securities being sold or, in the event of an
underwritten offering, those requested by the managing underwriters) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, if the registration is an underwritten registration, (i) make
such representations and warranties to the holders of such Registrable
Securities and the underwriters, if any, with respect to the business of the
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Company and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if any,
in each case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the holders of a majority
of the Registrable Securities being sold) addressed to such selling holders of
Registrable Securities and each of the underwriters, if any, covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such holders and
underwriters, including without limitation the matters referred to in clause (i)
above; (iii) use its reasonable commercial efforts to obtain "comfort" letters
and updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data is, or is required to be, included in
the Registration Statement), addressed to each of the underwriters, if any, such
letters to be in customary form and covering matters of the type customarily
covered in "comfort" letters in connection with underwritten offerings; and (iv)
deliver such documents and certificates as may reasonably be requested by the
holders of a majority of the Registrable Securities being sold, the Special
Counsel and the managing underwriters, if any, to evidence the continued
validity of the representations and warranties of the Company and its
subsidiaries made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or similar
agreement entered into by the Company. The foregoing actions will be taken in
connection with each closing under such underwriting or similar agreement as and
to the extent required thereunder;
(n) Make available for inspection by a representative of the holders of
Registrable Securities being sold, any underwriter participating in any
disposition of Registrable Securities, and any attorney or accountant retained
by such selling holders or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company and
its subsidiaries to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement; PROVIDED, HOWEVER, that any records, information or
documents that are designated by the Company in writing as confidential at the
time of delivery of such records, information or documents will be kept
confidential by such persons unless (i) such records, information or documents
are in the public domain or otherwise publicly available, (ii) disclosure of
such records, information or documents is required by court or administrative
order or (iii) disclosure of such records, information or documents, in the
reasonable opinion of counsel to the Company, is otherwise required by law
(including without limitation pursuant to the requirements of the Securities
Act);
(o) In connection with an underwritten offering, cause the officers of
the Company to participate in, and assist in the preparation of, any "road show"
presentation to potential investors as the managing underwriter may determine;
and
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities
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Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 calendar days after the end of any 12-month
period (or 90 calendar days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering, and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company, after the effective date of a Registration Statement, which statements
shall cover said 12-month period.
The Company may require each seller of Registrable Securities as to
which any registration is being effect to furnish to the Company such
information regarding the distribution of such Registrable Securities
as the Company may, from time to time, reasonably request in writing
and the Company may exclude from such registration the Registrable
Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
Each holder of Registrable Securities will be deemed to have agreed by
virtue of its acquisition of such Registrable Securities that, upon
receipt of any notice from the Company of the occurrence of any event
of the kind described in Section 6(c)(ii), 6(c)(iii), 6(c)(v), 6(c)(vi)
or 6(c)(vii) hereof, such holder shall forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or Prospectus until such holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(k)
hereof, or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
Prospectus. In the event the Company shall give any such notice, the
time period prescribed in Section 3(a) hereof will be extended by the
number of days during the time period from and including the date of
the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement shall
have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 6(k) hereof or (y) the Advice.
7. REGISTRATION EXPENSES. (a) All Registration Expenses will be borne
by the Company whether or not any of the Registration Statements become
effective. "Registration Expenses" will mean all fees and expenses incident to
the performance of or compliance with this Agreement by the Company, including
without limitation (i) all registration and filing fees (including without
limitation fees and expenses (x) with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and (y) in compliance
with securities or "blue sky" laws (including without limitation reasonable fees
and disbursements of counsel for the underwriters or selling holders in
connection with "blue sky" qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the managing underwriters, if any, or
holders of a majority of the Registrable Securities being sold may designate)),
(ii) printing expenses (including printing of prospectuses if requested by the
holders of a majority of the Registrable Securities included in any Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable
fees and disbursements of counsel for the Company and the Special Counsel for
the sellers of the Registrable Securities, (v) fees and disbursements of all
independent certified public accountants referred to in Section 6(m)(iii) hereof
(including the expenses of any special audit and "comfort" letters required by
or incident to such performance), (vi) Securities Act liability insurance if the
10
Company so desires such insurance, and (vii) fees and expenses of all other
persons retained by the Company, PROVIDED, HOWEVER, that Registration Expenses
will not include fees and expenses of counsel for the holders of Registrable
Securities other than as provided herein nor shall it include underwriting
discounts and commissions relating to the offer and sale of Registrable
Securities, all of which shall be borne by such holders. In addition, the
Company will pay its internal expenses (including without limitation all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange on which similar securities issued by the Company are
then listed and the fees and expenses of any person, including special experts,
retained by the Company.
(b) In connection with any Demand Registration of Piggy back
Registration hereunder, the Company will reimburse the holders of the
Registrable Securities being registered in such registration for the reasonable
fees and disbursements of not more than one counsel (the "Special Counsel"),
together with appropriate local counsel, chosen by the holders of a majority of
the Registrable Securities being registered.
8. INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. The Company
will, without limitation as to time, indemnify and hold harmless, to the fullest
extent permitted by law, each holder of Registrable Securities registered
pursuant to this Agreement, the officers, directors and agents and employees of
each of them, each person who controls such holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of any such controlling person, from
and against all losses, claims, damages, liabilities, costs (including without
limitation the costs of investigation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or form of Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon 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,
except insofar as the same are based solely upon information furnished in
writing to the Company by such holder expressly for use therein; PROVIDED,
HOWEVER, that the Company will not be liable to any holder of Registrable
Securities to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if either (A) (i) such holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such holder of a Registrable Security to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have completely corrected such untrue statement or alleged untrue statement or
such omission or alleged omission; or (B) such untrue statement or alleged
untrue statement or such omission or alleged omission is completely corrected in
an amendment or supplement to the Prospectus previously furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, and such holder thereafter fails to deliver such Prospectus as so
amended or supplemented prior to or concurrently with the sale of a Registrable
Security to the person asserting the claim from which such Losses arise.
The rights of any holder of Registrable Securities hereunder will not
be exclusive of the rights of any holder of Registrable Securities under any
other agreement or instrument of any
11
holder of Registrable Securities to which the Company is a party. Nothing in
such other agreement or instrument will be interpreted as limiting or otherwise
adversely affecting a holder of Registrable Securities hereunder and nothing in
this Agreement will be interpreted as limiting or otherwise adversely affecting
the holder of Registrable Securities' rights under any such other agreement or
instrument, PROVIDED, HOWEVER, that no indemnified party will be entitled
hereunder to recover more than its indemnified Losses.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In connection
with any Registration Statement in which a holder of Registrable Securities is
participating, such holder of Registrable Securities will furnish to the Company
in writing such information as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and will severally
indemnify, to the fullest extent permitted by law, the Company, its directors
and officers, agents and employees, each person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, from and against all Losses arising out of or based upon any untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or arising out of or based upon any omission of 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 omission was relied upon by the Company in the preparation of such
Registration Statement, Prospectus or preliminary prospectus. In no event will
the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds (net of payment of all
expenses and underwriter's discounts and commissions) received by such holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any person shall become
entitled to indemnify hereunder (an "indemnified party"), such indemnified party
shall give prompt notice to the party from which such indemnity is sought (the
"indemnifying party") of any claim or of the commencement of any action or
proceeding with respect to which such indemnified party seeks indemnification or
contribution pursuant hereto; PROVIDED, HOWEVER, that the failure to so notify
the indemnifying party will not relieve the indemnifying party from any
obligation or liability except to the extent that the indemnifying party has
been prejudiced materially by such failure. All fees and expenses (including any
fees and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) will be paid to the indemnified party, as
incurred, within five calendar days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined that an
indemnified party is not entitled to indemnification hereunder). The
indemnifying party will not consent to entry of any judgment or enter into any
settlement or otherwise seek to terminate any action or proceeding in which any
indemnified party is or could be a party and as to which indemnification or
contribution could be sought by such indemnified party under this Section 8,
unless such judgment, settlement or other termination includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance satisfactory to the
indemnified party, from all liability in respect of such claim or litigation for
which such indemnified party would be entitled to indemnification hereunder.
(d) CONTRIBUTION. If the indemnification provided for in this Section 8
is unavailable to an indemnified party under Section 8(a) or 8(b) hereof in
respect of any Losses or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in
12
lieu of indemnifying such indemnifying party, will, jointly and severally,
contribute to the amount paid or payable by such indemnified party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or indemnifying parties, one the one hand, and
such indemnified party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
or indemnifying parties, on the one hand, and such indemnified party, on the
other hand, will 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 of a material fact, has been taken
or made by, or related 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, statement or
omission. The amount paid or payable by a party as a result of any Losses will
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any action or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provision of this Section
8(d), an indemnifying party that is a selling holder of Registrable
Securities will not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities
sold by such indemnifying party and distributed to the public exceeds
the amount of any damages which such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The provisions of this Section 8 will survive so long as Registrable
Securities remain outstanding, notwithstanding any transfer of the
Registrable Securities by any holder thereof or any termination of this
Agreement.
9. RULES 144 AND 144A. The Company will file the reports required to be
filed by it under the Securities Act and the Exchange Act in a timely manner,
and will cooperate with any holder of Registrable Securities (including without
limitation by making such representations as any such holder 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 limitations of the exemptions provided by Rules 144 and 144A (including
without limitation the requirements of Rule 144A(d)(4)). Upon the request of any
holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such filing requirements.
10. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by any Demand Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Company; provided, that such
investment banker or manager shall be reasonably satisfactory to the holder of
Registrable Securities that gave the Demand Notice with respect to such
offering.
14
If any Piggyback Registration is an underwritten offering, the Company will have
the right to select the investment banker or investment bankers and managers to
administer the offering.
11. MISCELLANEOUS. (a) REMEDIES. In the event of a breach by the
Company of its obligations under this Agreement, each holder of Registrable
Securities, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The 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 agrees that, in the
event of any action for specific performance in respect of such breach, it will
waive the defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, and will not, on or after the date hereof, enter into any agreement with
respect to its securities which is inconsistent with the rights granted to the
holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof.
(c) 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 departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of holders of a
majority of the then-outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other holders of
Registrable Securities may be given by holders of at least 51% of the
Registrable Securities being sold by such holders; PROVIDED, HOWEVER, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing and will be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by fax, or (iii)
one business day after being deposited with a reputable next-day courier,
postage prepaid, to the parties as follows:
(1) If to the Company:
XXXXXX.XXX LTD.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
With a copy to:
XXXXXX.XXX LTD.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
14
and thereafter at such other address, notice of which is given to the
holders of Registrable Securities in accordance with the provisions of
this Section 11(d);
(2) If to the Stockholder:
Communicade Inc.
c/o Omnicom Group Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
and thereafter at such other address, notice of which is given to the
holders of Registrable Securities in accordance with the provisions of
this Section 11(d); and
(3) if to any other holder of Registrable Securities, at
the most current address given by such holder to the
Company in accordance with the provisions of this
Section 11(d).
(e) OWNER OF REGISTRABLE SECURITIES. The Company will maintain, or will
cause its registrar and transfer agent to maintain, a stock book with respect to
the Common Stock, in which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may deem and treat the
person in whose name Registrable Securities are registered in the stock book of
the Company as the owner thereof for all purposes, including without limitation
the giving of notices under this Agreement.
(f) SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by any
party hereto without the prior written consent of the other party hereto.
(g) 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 will be deemed to be an original and all of which taken
together will constitute one and the same instrument.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and will not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
15
(j) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein will remain in full force and effect and will in
no way be affected, impaired or invalidated, and the parties hereto will use
their best 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 that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties 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 registration rights granted by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such registration rights.
(l) 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, or where any provision hereof is validly asserted as a defense,
the prevailing party, as determined by the court, will be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
[Remainder of the page intentionally blank]
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
XXXXXX.XXX LTD.
By: _____________________________________
Name:____________________________________
Title:___________________________________
OMNICOM GROUP INC.
By: _____________________________________
Name:____________________________________
Title:___________________________________
17
