CONFIDENTIAL TREATMENT REQUESTED Exhibit 7.03
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of 12:01 a.m. on October 29, 2001, by and among Xxx Communications, Inc., a
Delaware corporation ("CCI"), Xxx Enterprises, Inc., a Delaware corporation
("CEI") and ********** (the "Stockholder").
WHEREAS, pursuant to a Stock Purchase Agreement, dated October 22,
2001 (the "Purchase Agreement"), by and among Xxx Holdings, Inc. ("CHI"), CEI
and the Stockholder, the Stockholder has agreed to purchase from CHI 8,100,000
shares of the Class A Common Stock, par value $1.00 per share (the "Common
Stock"), of CCI in a transaction exempt from registration under the Securities
Act of 1933, as amended (the "Securities Act"); and
WHEREAS, pursuant to a Stock Purchase Agreement, dated October 22,
2001 (the "Other Purchase Agreement"), by and among CHI, CEI and **********
(the "Other Stockholder"), the Other Stockholder has agreed to purchase from
CHI 5,400,000 shares of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
Section 1. Definitions. As used herein, the following terms
shall have the following meanings:
(a) "CCI Securities" shall mean shares of Common Stock
or any other securities of CCI.
(b) "Registrable Securities" shall mean (i) the shares
of Common Stock to be acquired by the Stockholder pursuant to the
Purchase Agreement and the shares of Common Stock to be acquired by
the Other Stockholder pursuant to the Other Purchase Agreement and
(ii) any securities of CCI issued or issuable with respect to any
Common Stock referred to in subdivision (i) by way of stock dividend
or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, spin-off, split-up or other
reorganization or otherwise, or issued in respect of such other
securities. As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (A) a
registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such
securities shall
********** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment, and the omitted portions have been filed separately
with the Securities and Exchange Commission.
have been disposed of in accordance with such registration statement,
(B) such securities shall have been distributed to the public pursuant
to Rule 144 (or any successor provision) under the Securities Act or
(C) such securities shall have ceased to be outstanding.
(c) "Registration Expenses" shall mean all expenses
incident to CCI's performance of, or compliance with, this Agreement,
including, without limitation, all registration, filing and National
Association of Securities Dealers, Inc. fees, all fees and expenses of
complying with securities or blue sky laws, the fees and disbursements
of counsel for CCI and of its independent public accountants,
including the expenses of any special audits or "comfort" letters
required by or incident to such performance and compliance, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the costs and expenses of CCI, its officers, directors,
employees, counsel and other agents related to participation by CCI in
any "road show," premiums and other costs of policies of insurance
obtained by CCI against liabilities arising out of the public offering
of Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers, but
excluding fees and disbursements of counsel retained by the
Stockholder, premiums and other costs of policies of insurance
obtained by the Stockholder against liabilities arising out of the
public offering of the Registrable Securities being registered, all
underwriting discounts and commissions and transfer taxes, if any,
relating to the Registrable Securities.
Section 2. Registration on Request.
(a) Request. During the period commencing on September
16, 2002 and terminating on the earlier of (i) October 29, 2009 and
(ii) with respect to any holder of registration rights, the time at
which all Registrable Securities of such holder may be sold pursuant
to Rule 144(k) (the "Registration Period"), the Stockholder (alone, or
together with one or more other holders of Registrable Securities)
shall have the right upon written notice to CCI (a "Request") to
request that CCI effect the registration under the Securities Act of
all or part of the Registrable Securities then owned by the
Stockholder and such other holders (but in any event not less than an
aggregate number of shares of Common Stock, as adjusted to reflect any
stock splits, combinations of shares, reclassifications or comparable
transactions, as shall constitute at least 30% of the Registrable
Securities outstanding as of the date of such Request, or such lesser
number of shares as shall then constitute all of the Registrable
Securities then held by the Stockholder); provided, however, CCI shall
not under any circumstance be obligated to effect any such
registration if the Registrable Securities which are the subject of
any such Request as of the date of such Request have a value of less
than Fifty Million Dollars ($50,000,000). Upon
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receipt of any such Request, CCI will use all reasonable efforts (subject to
Section 5(b) hereof) to effect such registration of the Registrable Securities
which CCI has been so requested to register in the Request. Notwithstanding any
other provision of this Agreement, the Stockholder shall be entitled to three
(3) Requests during the Registration Period pursuant to this Section 2, provided
that, the number of permitted Requests shall be reduced by any demand
registrations requested by the Other Stockholder under Section 2(a) of its
registration rights agreement with CCI (the "Other Registration Rights
Agreement") that are not part of a Request under this Section 2(a). Subject to
clause (y) in the succeeding paragraph of this Section 2(a), regardless of
whether any securities are offered or sold pursuant to a Request (other than as
a result of any action by CCI pursuant to Section 5(b) hereof), no more than one
(1) Request shall be made in the aggregate by the Stockholder under this Section
2(a) and the Other Stockholder under Section 2(a) of the Other Registration
Rights Agreement during any twelve month period during the Registration Period.
CCI may include in any such registration other securities for
sale for its own account or for the account of any other person; provided that,
if the managing underwriter for a firm commitment underwritten offering shall
determine that the number of shares proposed to be offered in such offering
would be reasonably likely to adversely affect such offering, then the
Registrable Securities to be sold by the Stockholder and, if applicable, the
Other Stockholder shall be included in such registration before any securities
proposed to be sold for the account of CCI or any other person; provided
further that, following any transfer in accordance with Section 12 hereof, the
Stockholder agrees that any reduction in the number of securities to be offered
by holders of Registrable Securities other than the holder making a request
pursuant to this Section 2 (such initiating holder, the "Electing Holder")
shall be on a pro rata basis, except that the securities offered by the
Electing Holder shall not be reduced to less than 50% of such securities
included in the initial Request unless no securities of any other holder of
Registrable Securities are included therein. The Electing Holder shall be
responsible for any calculations relating to the foregoing and shall set forth
such calculations in a certificate to be delivered to CCI, on which certificate
CCI shall be entitled to rely. If the Stockholder disapproves of the terms of
any such underwriting, the Stockholder may elect to withdraw therefrom by
written notice to CCI and the underwriter, delivered at least ten (10) days
prior to the effective date of the registration statement, provided that in the
event the Stockholder withdraws in accordance with the foregoing, (x) the
Stockholder shall pay all Registration Expenses if Registrable Securities are
the only CCI Securities subject to such underwriting or the Registration
Expenses relating to the withdrawn Registrable Securities if other CCI
Securities are also subject to such underwriting and (y) if all Registrable
Securities included in such registration are withdrawn, such registration
request will not count against the limitations on Requests set forth in the
last two sentences of
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paragraph one of this Section 2(a). Any Registrable Securities excluded and
withdrawn from such underwriting shall be withdrawn from the registration.
(b) Registration Statement Form. CCI shall effect any
registration requested under this Section 2 by the filing of a registration
statement on such form as CCI may determine; provided that CCI shall not be
obligated to register any securities on a "shelf" registration statement
pursuant to Rule 415 under the Securities Act (or any successor provisions of
such Act) or otherwise to register securities on a continuous or delayed basis
for a period exceeding that provided in Section 4(ii) hereof.
(c) Expenses. The Registration Expenses in connection
with any registration which may be requested under this Section 2 shall be
borne by CEI. The Stockholder shall bear the expense of fees and disbursements
of counsel retained by the Stockholder, premiums and other costs of policies of
insurance obtained by the Stockholder against liabilities arising out of the
public offering of the Registrable Securities being offered, all underwriting
discounts and commissions and transfer taxes, if any, relating to the
Registrable Securities and any other expenses that do not constitute
Registration Expenses.
(d) Selection of Underwriters. The book-running lead
managing underwriter for any registration requested under this Section 2
effected by means of a firm commitment underwriting shall be selected by the
Stockholder, and shall be reasonably acceptable to CCI and CCI shall have the
right to select the co-lead managing underwriter, which underwriter shall be
reasonably acceptable to the Stockholder.
Section 3. Piggyback Registration.
(a) Request for Registration. If prior to the expiration
of the Registration Period, CCI proposes to file a registration statement or
prospectus supplement under the Securities Act with respect to an offering by
CCI or any holder of any CCI Securities (other than in connection with the
registration of CCI Securities issuable pursuant to an employee stock option,
stock purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act),
then CCI shall in each case give written notice of such proposed filing to the
Stockholder at least twenty (20) business days before the anticipated filing
date, and such notice shall describe in detail the proposed registration and
distribution (including those jurisdictions in which registration under the
securities or blue sky laws is intended) and shall offer the Stockholder the
opportunity to register all or a portion of its Registrable Securities pursuant
to such registration. The Stockholder shall have the right to include any of
its Registrable Securities in such offering by giving written notice thereof to
CCI within ten (10) business days after receipt of CCI's notice associated with
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such offering. If the Stockholder elects to include any of its Registrable
Securities in such offering, CCI shall use all reasonable efforts to register
such Registrable Securities under the Securities Act and include such
Registrable Securities in such offering on the same terms and conditions as any
CCI Securities that are similar to such Registrable Securities which are
included therein and otherwise on terms that constitute the economic equivalent
of the terms of inclusion of any CCI Securities in such offering (each, a
"Piggyback Registration"); provided, however, that CCI shall not be required
under this Section 3 to include any Registrable Securities in any such offering
on the single occasion, to be determined by CEI, of one (1) public offering of
Common Stock held by CHI following the date hereof; provided further, that CCI
shall not be required under this Section 3 to permit the Stockholder to sell
its Registrable Securities in a registered underwritten offering covered by
this Section 3(a) unless the Stockholder accepts the terms of the underwriting
as agreed upon between CCI and the underwriter or underwriters selected by CCI
for such offering (collectively, the "CCI Underwriter") and the Stockholder
performs its obligations thereunder. Notwithstanding the foregoing, if the CCI
Underwriter delivers a written opinion that the total amount or kind of
securities which the Stockholder, CCI and any other persons intended to be
included in such offering is sufficiently large to affect materially and
adversely the distribution of such securities, then the number of shares of
Registrable Securities to be offered for the account of the Stockholder shall
be reduced pro rata with the other holders of CCI Securities participating in
such Piggyback Registration to the extent necessary to reduce the aggregate
amount of securities included in such offering to the amount recommended by the
CCI Underwriter, subject to the rights of any holder of CCI Securities
requesting and initiating such registration pursuant to a separate registration
rights agreement. The Stockholder shall be permitted to withdraw all or any
portion of its Registrable Securities from a Piggyback Registration at any time
prior to the effective date of such Piggyback Registration. CEI shall bear all
Registration Expenses in connection with any Piggyback Registration whether or
not such Piggyback Registration becomes effective.
(b) Cumulative Rights; No Registration of CCI
Securities. The rights of the Stockholder pursuant to Sections 2 and 3 hereof
are cumulative, and the exercise of rights under one such Section shall not
exclude any subsequent exercise of rights under the other such Section (except
to the extent expressly provided otherwise herein or in the Other Registration
Rights Agreement). CCI may, without the consent of the Stockholder, delay,
suspend, abandon or withdraw any registration by CCI that is not a registration
pursuant to Section 2 hereof and any related proposed offering or other
distribution in which the Stockholder has requested inclusion of its
Registrable Securities pursuant to this Section 3; provided that the
Stockholder shall be entitled to continue such registration as a registration
requested pursuant to Section 2 hereof following any such withdrawal by CCI to
the extent that such registration by the Stockholder making such election would
otherwise satisfy the requirements of Section 2 hereof and, provided
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further, that CEI shall be obligated to pay the Registration Expenses to the
extent incurred in connection with such proposed registration.
Section 4. Registration Procedures. If CCI is required to use
all reasonable efforts to effect the registration of Registrable Securities
under the Securities Act as provided in Section 2 hereof, CCI will as
expeditiously as possible:
(i) prepare and file with the Securities and
Exchange Commission (the "SEC") as promptly as reasonably practicable
(but in any event within forty-five (45) days after the receipt of a
Request) the requisite registration statement to effect such
registration and use all reasonable efforts to cause such registration
statement to become effective, provided that before filing such
registration statement or any amendments thereto, CCI will furnish to
the Stockholder copies of all such documents proposed to be filed,
which documents will be subject to the review of the Stockholder and
its counsel before any such filing is made, and CCI will comply with
any reasonable request made by such counsel to make changes in any
information contained in such documents relating to the Stockholder;
(ii) prepare and file with the SEC such
amendments, post-effective amendments and supplements to such
registration statement and the prospectus used in connection therewith
as may be necessary to maintain the effectiveness of such registration
and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration
statement until the earliest of (A) the termination of this Agreement
pursuant to Section 13 hereof, (B) such time as all of such securities
have been disposed of and (C) the date which is ninety (90) days after
the date of initial effectiveness of such registration statement;
(iii) furnish to the Stockholder such number of
conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits
filed therewith), such number of copies of the prospectus contained in
such registration statements and any supplements thereto and any other
prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including documents incorporated by reference, as the
Stockholder may reasonably request;
(iv) use all reasonable efforts to register or
qualify all Registrable Securities registered pursuant to such
registration statement under such other securities laws or blue sky
laws of such jurisdictions as the Stockholder shall reasonably
request, to keep such registration or qualification in effect for so
long as such registration statement
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remains in effect, and take any other action which may be reasonably
necessary or advisable to enable the Stockholder to consummate the
disposition in such jurisdictions of the securities owned by the
Stockholder, except that CCI shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subdivision (iv) be obligated to be so qualified, to be subject
to taxation or to consent to general service of process in any such
jurisdiction;
(v) use all reasonable efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the Stockholder to
consummate the disposition of such Registrable Securities;
(vi) if such registration includes an
underwritten public offering, furnish to the Stockholder a signed
counterpart, addressed to the Stockholder (and the underwriters), of
(A) an opinion of counsel for CCI, dated the date of the closing under
the underwriting agreement, and (B) a "comfort letter," dated the
effective date of such registration statement (and a supplement to
such letter as of the closing date of such offering), signed by the
independent public accountants who have certified CCI'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, in the case of
the accountants' letter, (x) with respect to events subsequent to the
date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of securities and
(y) such other financial matters as the Stockholder (or the
underwriters, if any) may reasonably request;
(vii) in connection with any underwritten
offering, deliver such documents and certificates as may be reasonably
requested by the Stockholder participating in such underwritten
offering and the underwriters, if any, including, without limitation,
certificates to evidence compliance with any material conditions
contained in the underwriting agreement or other agreements entered
into by CCI;
(viii) promptly notify the Stockholder at any time
when CCI becomes aware of any of the following (and confirm such
advice in writing if so requested by the Stockholder):
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(A) when the registration statement
and any amendment thereto has been filed with the SEC and
when the registration statement or any post-effective
amendment thereto has become effective;
(B) of any request by the SEC for
amendments or supplements to the registration statement or
the prospectus included therein or for additional
information;
(C) of the issuance by the SEC of any
stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for such
purpose;
(D) of the receipt by CCI of any
notification with respect to the suspension of the
qualification of the securities included in the registration
statement for sale in any jurisdiction or the initiation of
any proceeding for such purpose; and
(E) following the effectiveness of any
registration statement, of the happening of any event or the
existence of any state of facts that requires the making of
any changes in the registration statement or the prospectus
included therein so that, as of such date, such registration
statement and prospectus do not contain an untrue statement
of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light
of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to the Stockholder to suspend the use of the
prospectus until the requisite changes have been made), and,
at the request of the Stockholder (and subject to Section
5(b) hereof), promptly prepare and furnish to the Stockholder
a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they
were made;
(ix) use all reasonable efforts to prevent the
issuance, and if issued, 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 in which they have been qualified for sale, in either
case at the earliest possible moment;
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(x) otherwise use all reasonable efforts to comply
with the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and with all applicable rules and
regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act,
and not file any amendment or supplement to such registration statement
or prospectus to which the Stockholder shall have reasonably objected
on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act;
(xi) provide a CUSIP number and a transfer agent and
registrar for all Registrable Securities covered by such registration
statement not later than the effective date of such registration
statement;
(xii) use all reasonable efforts to list all Common
Stock covered by such registration statement on any securities
exchange on which any of the Common Stock is then listed or quoted;
and
(xiii) upon written request, furnish to the Stockholder,
without charge, at least one copy of the registration statement and all
post-effective amendments thereto, including financial statements and
schedules, and all reports, other documents and exhibits that are filed
with or incorporated by reference in the registration statement.
In the case of any underwritten offering involving at least
$200 million in fair market value of shares of Common Stock (as estimated by
CCI in good faith based on the market value of the Common Stock at the time of
the Request) held by the Stockholder and the other holders of Registrable
Securities, upon the request of the Stockholder, CCI will participate in
customary "road show" presentations as reasonably requested by the book-running
lead managing underwriter. The identity of the officers of CCI participating
therein (which shall include senior executive officers) and the number of
cities visited shall be reasonably acceptable to CCI.
CCI may require the Stockholder to furnish CCI such
information regarding the Stockholder and the distribution of such securities
as CCI may from time to time reasonably request for the purpose of registering
the Registrable Securities pursuant to a Request hereunder.
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The Stockholder agrees, by acquisition of the Registrable
Securities, that upon receipt of any notice from CCI of the happening of any
event of the kind described in subdivision (viii)(C) or (E) of this Section 4,
the Stockholder will forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the withdrawal of the stop order or the Stockholder's receipt
of the copies of the supplemented or amended prospectus contemplated by
subdivision (viii)(E) of this Section 4, as the case may be, and, if so
directed by CCI, will deliver to CCI (at CEI's expense) all copies of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice under Section 4(viii)(E) hereof. Any delay pursuant to
this paragraph shall toll on a day-for-day basis the running of the 90-day
period referred to in Section 4(ii) hereof.
Section 5. Requested Underwritten Offerings; Postponement.
(a) Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering of Registrable Securities by the
Stockholder under a registration requested pursuant to Section 2 hereof, CCI
will enter into a customary underwriting agreement with such underwriters for
such offering, to contain such representations and warranties by CCI and such
other terms as are customarily contained in agreements of this type, including,
without limitation, indemnities substantially to the effect and to the extent
provided in Section 7 hereof. The Stockholder shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, CCI
to and for the benefit of such underwriters shall also be made to and for the
benefit of the Stockholder and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of the Stockholder. The Stockholder
shall not be required to make any representations or warranties to, or
agreement with, CCI or the underwriters other than representations, warranties
or agreements regarding the Stockholder, its ownership of the Registrable
Securities and its intended method of distribution and any other representation
required by law.
(b) Postponement. CCI may postpone any registration
which is requested pursuant to Section 2 hereof or delivery of a prospectus or
supplement or amendment pursuant to Section 4(viii)(E) hereof (i) when, in view
of the advisability of deferring public disclosure of material corporate
developments, CCI determines that the disclosures required to be made pursuant
thereto would not be in the best interests of CCI at that time. In the event
CCI makes any such election, the Stockholder agrees to keep confidential the
fact of such election and any information provided by CCI in connection
therewith. No one or more postponements pursuant to this Section 5(b) of any
registration which is requested pursuant to Section 2 hereof or
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delivery of a prospectus or supplement or amendment pursuant to Section
4(viii)(E) hereof shall exceed ninety (90) days in any 180-day period.
Section 6. Preparation of Registration Statement. In connection
with the preparation and filing of the registration statement under the
Securities Act, CCI will give the Stockholder, its underwriters, if any, and
its respective counsel, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto. Such opportunity to
participate shall include reasonable access for purposes of due diligence,
subject to the execution and delivery of appropriate confidentiality
agreements.
CCI acknowledges and agrees that a possible application of
the rights set forth in this Agreement may be in connection with a transaction
in which securities are issued which may be convertible into or exchangeable
for Registrable Securities, or have rights which are determined by reference to
Registrable Securities. In such a transaction, it may be necessary to register
the underlying Registrable Securities and to attach or incorporate by reference
to the offering document for such securities, the registration statement and
prospectus relating to the Registrable Securities; provided, however, that the
use of any such registration statement pursuant to the foregoing shall not
exceed the period provided in Section 4(ii) hereof.
Section 7. Indemnification.
(a) Indemnification by CCI. In the event of any
registration of any Registrable Securities of CCI under the Securities Act, CCI
will, and hereby does, indemnify and hold harmless the Stockholder, each of its
officers, directors, partners, trustees and settlors, each other person who
participates as an underwriter in the offering or sale of such securities and
each other person who controls the Stockholder or any such underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the indemnified person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto or (ii)
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.
CCI will reimburse each indemnified person for any legal or any other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such
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losses, claims, damages, liabilities, actions or proceedings; provided that CCI
shall not be liable in any such case to the extent that any such losses,
claims, damages, liabilities (or actions or proceedings in respect thereof) or
expense arises out of or is based upon (x) an untrue statement or alleged
untrue statement or omission or alleged omission in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement that was made in reliance upon and in
conformity with written information furnished to CCI by the Stockholder
specifically for use in the preparation thereof, (y) the use by such
indemnified person of any prospectus after such time as the obligation of CCI
to keep the same effective and current has expired or (z) the use by such
indemnified person of any prospectus after the elapse of a reasonable period of
time following such time as CCI has advised the Stockholder that the filing of
a post-effective amendment or supplement thereto is required, except for the
use of such prospectus as so amended or supplemented, and provided, further,
that CCI shall not be liable to any person who participates as an underwriter
in the offering or sale of Registrable Securities or any other person, if any,
who controls such underwriter within the meaning of the Securities Act in any
such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises solely out of such person's
failure to send or give a copy of the final prospectus or supplement at or
prior to the written confirmation of the sale of Registrable Securities to the
persons asserting an untrue statement or alleged untrue statement or omission
or alleged omission if such statement or omission was corrected in such final
prospectus or supplement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Stockholder or any
such underwriter or controlling person and shall survive the transfer of such
securities by the Stockholder.
(b) Indemnification by the Stockholder. CCI may require,
as a condition to including any Registrable Securities of the Stockholder in
any registration statement filed pursuant to Section 2 or Section 3 hereof,
that CCI shall have received an undertaking reasonably satisfactory to it from
the Stockholder to indemnify and hold harmless (in the same manner and to the
same extent as set forth in subdivision (a) of this Section 7) CCI, each
director and officer of CCI and each other person, if any, who controls CCI,
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, with respect to any untrue statement or alleged untrue
statement of a material fact in, or omission or alleged omission to state a
material fact required to be stated in, such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to CCI by the
Stockholder specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, that the Stockholder shall not be
liable to the extent that the losses, liabilities or expenses (i) exceed the
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net proceeds received by the Stockholder from the sale of Registrable
Securities in such registration or (ii) arise out of or are based upon (A) the
use by CCI of any prospectus after such time as the obligation of CCI hereunder
to keep the same effective and current has expired or (B) the use by CCI of any
prospectus after such time as the Stockholder has advised CCI that the filing
of a post-effective amendment or supplement thereto is required with respect to
any information contained in such prospectus concerning the Stockholder, except
for the use of such prospectus as so amended or supplemented. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of CCI, or any such director, officer, or controlling person and
shall survive the transfer of such securities by the Stockholder.
(c) Notice of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 7,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 7, except to
the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgement a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, which consent shall not unreasonably be withheld, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 5 for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof, other than reasonable costs
of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 any claims that are the subject matter
of such action.
(d) Other Indemnification. Indemnification similar to
that specified in the preceding subdivisions of this Section 7 (with
appropriate modifications) shall be given by CCI and the Stockholder with
respect to any required registration or other qualification of securities
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under any Federal or state law or regulation of governmental authority other
than the Securities Act.
(e) Payments. The indemnification and contribution
required by this Section 7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred.
(f) Contribution. If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold harmless an indemnified
party from the expenses, losses, claims, damages and liabilities referred to
therein, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such expenses, losses, claims,
damages or liabilities, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other (determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 7(f) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim
that is the subject of this Section. Notwithstanding the provisions of this
Section, the Stockholder shall not be required to contribute any amount in
excess of the amount by which the total net proceeds (net of commissions)
received by the Stockholder from the sale of the securities pursuant to this
Agreement exceeds the amount of any damages or expenses that the Stockholder
has otherwise been required to pay, or has incurred, by reason of such untrue
or alleged untrue statement or omission or alleged omission. No indemnified
party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.
Section 8. Covenants Relating to Rule 144. CCI will prepare and
file in a timely manner, all required information, documents and reports in
compliance with the Exchange Act so as to comply with the requirements of such
Exchange Act and the rules and regulations thereunder and will, at CEI's
expense, forthwith upon the request of the Stockholder, deliver to the
Stockholder a certificate, signed by CCI's principal financial officer, stating
(a) CCI's name, address and telephone number (including area code), (b) CCI's
Internal Revenue Service identification number, (c) CCI's SEC file number, (d)
the number of shares of Common Stock outstanding as shown by the most recent
report or statement published by CCI and (e) whether
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CCI has filed the reports required to be filed under the Exchange Act for a
period of at least ninety (90) days prior to the date of such certificate and,
in addition, has filed the most recent annual report required to be filed
thereunder. If at any time CCI is not required to file reports in compliance
with either Section 13 or Section 15(d) of the Exchange Act, CCI (at CEI's
expense) will forthwith, upon the written request of the Stockholder, make
available adequate current public information with respect to CCI within the
meaning of paragraph (c)(2) of Rule 144 under the Securities Act.
Section 9. CCI's Representations and Warranties. CCI represents
and warrants to the Stockholder as follows:
(a) Organization. CCI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
(b) Authority. CCI has the requisite corporate power and
authority, and has taken all necessary corporate action, required for the due
authorization, execution, delivery and performance by it of this Agreement and
all other documents and instruments contemplated by this Agreement, and to
consummate the transactions contemplated hereby. This Agreement, and all
documents and instruments contemplated by this Agreement, have been duly and
validly executed and delivered by CCI, and constitute the valid and binding
obligations of CCI, enforceable against CCI in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy or similar laws
affecting the rights of creditors or by general equitable principles.
(c) Consents. The execution, delivery and performance of
this Agreement by CCI and the consummation by CCI of the obligations and
transactions contemplated hereby do not require any consent of, authorization
by, exemption from, filing with, or notice to, any national, federal, state,
municipal, local, territorial, foreign or other government or any department,
commission, board, bureau, agency, regulatory authority or instrumentality
thereof, or any court, judicial, administrative or arbitral body or public or
private tribunal exercising executive, legislative, judicial, regulatory or
administrative functions pertaining to government, any stock exchange or any
other individual, corporation, partnership, joint venture, limited liability
company, limited partnership, association, joint-stock company, trust,
unincorporated organization, or other organization, whether or not a legal
entity, except for such reports with respect to this transaction as may be
required to be filed by CCI with the SEC under the Exchange Act and the rules
and regulations of the SEC promulgated thereunder.
(d) No Conflict With Other Agreements. The execution,
delivery and performance of this Agreement and any other related documents and
instruments contemplated
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herein, and the consummation of the transactions contemplated hereunder, by CCI
will not (i) conflict with or result in a breach of any provision of CCI's
certificate of incorporation or bylaws, (ii) conflict with or result in the
breach of the terms, conditions or provisions of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give rise to any right of termination, acceleration or cancellation under,
any material agreement, lease, mortgage, license, indenture or other contract
to which CCI is a party or by which any of its properties or assets are bound
or (iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including, without limitation, U.S. federal and state laws and
regulations) applicable to CCI or by which any of its properties or assets are
bound or affected, except in the case of clauses (ii) or (iii) above, where
such conflicts or violations would not prevent or materially delay its ability
to consummate the transactions contemplated herein.
Section 10. Notices. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered (a) personally (by courier service or otherwise) on the date of such
personal delivery, (b) by telecopy, on the date of such telecopy if receipt is
confirmed by return telecopy or (c) by registered or certified mail, return
receipt requested, on the date five (5) days after being mailed, in each such
case to the applicable addresses or telecopy information set forth below, or to
such other address or telecopy information as such party shall have designated
by notice so given to each other party.
If to CCI: Xxx Communications, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Secretary
Telecopy: (000) 000-0000
with a copy to: Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
If to CEI: Xxx Enterprises, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Treasurer
Telecopy: (000) 000-0000
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with a copy to: Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Stockholder: **********
**********
**********
Attention: **********
Telecopy: **********
with a copy to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
Section 11. Amendments, Waivers, etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by written instrument signed by the party against whom enforcement is
sought or as expressly provided in Section 13 hereof. The failure of any party
to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
Section 12. Transfer of Rights. The registration rights granted
pursuant to this Agreement shall be transferable only to successors, assigns
and affiliates, provided that such transferee receives at least 30% of the
Registrable Securities in such transfer or, if less, all of the Registrable
Securities owned by the Stockholder immediately prior to such transfer.
Section 13. Termination. This Agreement shall terminate and be
of no further force and effect upon the expiration of the Registration Period;
provided that, notwithstanding this Section 13, the provisions of Section 2(c),
Section 7 and the last sentence of each of Section 3(a) and Section 3(b) hereof
shall survive the termination of this Agreement.
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********** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment, and the omitted portions have been filed separately
with the Securities and Exchange Commission.
Section 14. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. The provisions of this Agreement do not conflict with any other
registration rights agreement to which CCI is a party (it being understood that
CCI makes no representation with respect to any registration rights or similar
agreements to which Stockholder or any of its affiliates is subject).
Section 15. Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such term to the other parties or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
applicable law.
Section 16. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the
parties and their respective successors and assigns; provided that, except as
provided in Section 12 hereof, neither the rights nor the obligations of any
party may be assigned (other than to a successor) or delegated without the
prior written consent of the other parties.
Section 17. Governing Law. This Agreement and all disputes
hereunder shall be governed by and construed and enforced in accordance with
the laws of the State of Delaware, excluding that body of law pertaining to
conflicts of law.
Section 18. Title; Section Headings. The title assigned this
Agreement and the section headings used herein are for convenience of reference
only and shall not affect the interpretation or construction hereof.
Section 19. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one instrument. Each counterpart may
consist of a number of copies each signed by less than all, but together signed
by all, the parties hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this Registration
Rights Agreement as of the date first above written.
XXX COMMUNICATIONS, INC.
By: /s/ Xxxx X. Major
----------------------------------------
Name: Xxxx X. Major
Title: Treasurer
XXX ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
**********
By: /s/ **********
----------------------------------------
Name: **********
Title: **********
********** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment, and the omitted portions have been filed separately
with the Securities and Exchange Commission.
