REGISTRATION RIGHTS AGREEMENT
Exhibit 10.4
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
[ ] day of [ , 2007], by and among HCM Acquisition Company, a Delaware corporation
(the “Company”) and the undersigned parties listed under the heading “Investors” on the
signature page hereto (each, an “Investor” and collectively, the “Investors”).
WHEREAS, the Initial Stockholders (as defined below) collectively beneficially own all of the
issued and outstanding securities of the Company immediately prior to the Company’s initial public
offering (“IPO”);
WHEREAS, HCM Acquisition Holdings, LLC, a Delaware limited liability company (the
“Founding Stockholder”), and Highland Capital Management L.P., a Delaware limited liability
partnership (“Highland”), each an Investor, are parties to the Limit Order Agreement (as
defined below) pursuant to which the Founding Stockholder or, under limited circumstances,
Highland, may be required to purchase Limit Order Common Stock (as defined below);
WHEREAS, the Initial Stockholders may, in certain circumstances and subject to certain
transfer restrictions and other restrictions, transfer (or cause to be transferred) to Permitted
Transferees (as defined below) some or all of the securities held by such Initial Stockholders; and
WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the
Investors with certain rights relating to the registration of the Registrable Securities (as
defined below) held by them and to provide for any Permitted Transferee who receives Registrable
Securities from an Initial Stockholder from time to time to accede to this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms used herein have the following meanings:
“Adverse Disclosure” means public disclosure of material non-public information, which
disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of
the Company after consultation with counsel to the Company, (i) would be required to be made in any
Registration Statement or prospectus in order for the applicable Registration Statement or
prospectus not to contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein (in the case of any prospectus and any preliminary
prospectus, in the light of the circumstances under which they were made) not misleading, (ii)
would not be required to be made at such time if the Registration Statement were not being filed,
and (iii) the Company has a bona fide business purpose for not publicly making it.
“Agreement” means this Agreement, as amended, restated, supplemented, or otherwise
modified from time to time.
“Business Day” means any day, except a Saturday, Sunday or legal holidays on which the
banking institutions in the city of New York are authorized or obligated by law or executive order
to close.
“Commission” means the Securities and Exchange Commission, or any other federal agency
then administering the Securities Act or the Exchange Act.
“Common Stock” means the common stock, par value $0.001 per share, of the Company.
“Company” is defined in the preamble to this Agreement and shall include the Company’s
successors by merger, acquisition, reorganization or otherwise.
“Demanding Holder” is defined in Section 2.1.1.
“Demand Registration” is defined in Section 2.1.1.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Form S-3” is defined in Section 2.3.
“Founding Stockholder” is defined in the recitals to this Agreement.
“Founders’ Common Stock” means the 7,187,500 shares of Common Stock underlying the
Founders’ Units held by the Initial Stockholders prior to the IPO.
“Founders’ Securities” means the Founders’ Common Stock, Founders’ Units, Founders’
Warrants and the shares of Common Stock underlying the Founders’ Warrants.
“Founders’ Units” means the 7,187,500 units of the Company, each consisting of one
share of Founders’ Common Stock and one Founders’ Warrant, held by the Initial Stockholders prior
to the IPO.
“Founders’ Warrants” means the 7,187,500 warrants of the Company to purchase shares of
Common Stock underlying the Founders’ Units held by the Initial Stockholders prior to the IPO.
“Highland” is defined in the recitals to this Agreement.
“Highland Group” means Highland and its affiliates.
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Initial Business Combination” shall have the same meaning ascribed to such term in
the Company’s Registration Statement with respect to its IPO.
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“Initial Stockholders” means collectively the Founding Stockholder, Xxxxxxx X. Xxx,
Xxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxx, and Xxxxx X. Xxxx.
“Investor” is defined in the preamble to this Agreement.
“Investor Indemnified Party” is defined in Section 4.1.
“Limit Order Agreement” means the Rule 10b5-1 Stock Purchase Plan entered into by and
among the Founding Stockholder, Highland and Citigroup Global Markets Inc.
“Limit Order Common Stock” means the shares of Common Stock purchased pursuant to the
Limit Order Agreement.
“Maximum Number of Shares” is defined in Section 2.1.4.
“Notices” is defined in Section 7.3.
“Permitted Transferee” means (a) officers, directors and employees of the Company and
(b) persons or entities affiliated or associated with the Highland Group.
“Person” shall be construed as broadly as possible and shall include an individual,
corporation, association, partnership (including a limited liability partnership or a limited
liability limited partnership), limited liability company, estate, trust, joint venture,
unincorporated organization or a government or any department, agency or political subdivision
thereof.
“Piggy-Back Registration” is defined in Section 2.2.1.
“Private Placement Warrants” means the 5,000,000 warrants of the Company to purchase
shares of Common Stock being purchased privately by the Founding Stockholder simultaneously with
the consummation of the Company’s IPO, pursuant to that certain Founders’ Securities Purchase
Agreement, dated as of October 4, 2007, between the Company and the Founding Stockholder.
“Private Placement Securities” means the Private Placement Warrants and the shares of
Common Stock underlying the Private Placement Warrants.
“Register,” “Registered” and “Registration” mean a registration
effected by preparing and filing a registration statement or similar document in compliance with
the requirements of the Securities Act, and the applicable rules and regulations promulgated
thereunder, and such registration statement becoming effective.
“Registrable Securities” means the Founders’ Securities, the Private Placement
Securities and the Limit Order Common Stock. Registrable Securities include any warrants, shares of
capital stock or other securities of the Company issued as a dividend or other distribution with
respect to or in exchange for or in replacement of such shares of Common Stock. As to any
particular Registrable Securities, such securities shall cease to be Registrable Securities when:
(a) a Registration Statement with respect to the sale of such securities shall have
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become effective under the Securities Act and such securities shall have been sold,
transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred pursuant to Rule 144 under the Securities Act (or
any similar rule or regulation then in force), new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration under the Securities Act; or (c) such
securities shall have ceased to be outstanding. For purposes of this Agreement, (i) prior to the
applicable Release Date for the Founders’ Securities, the Limit Order Common Stock or the Private
Placement Securities, as the case may be, (x) the Founders’ Securities shall constitute a single
class of Registrable Securities, (y) the Limit Order Common Stock shall constitute a single class
of Registrable Securities, (z) the Private Placement Securities shall constitute a single class of
Registrable Securities, and (ii) after the applicable Release Date for Founders’ Securities, the
Limit Order Common Stock or the Private Placement Securities, as the case may be, (x) the Founders’
Common Stock, the Limit Order Common Stock, the shares of Common Stock issuable upon exercise of
the Founders’ Warrants and the shares of Common Stock issuable upon exercise of the Private
Placement Warrants shall constitute a single class of Registrable Securities, (y) the Founders’
Warrants and the Private Placement Warrants shall constitute a single class of Registrable
Securities, and (z) the Founders’ Units will constitute a single class of Registrable Securities. A
“percentage” (or a “majority”) of the Registrable Securities or any class thereof (or, where
applicable, of any other securities) shall be determined based on the total number of such
securities outstanding at the relevant time.
“Registration Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations promulgated
thereunder for a public offering and sale of Common Stock including the prospectus, amendments and
supplements to such registration statement, including post-effective amendments and all exhibits
and all material incorporated by reference in such registration statement (other than a
registration statement on Form S-4 or Form S-8, or their successors, or any registration statement
covering only securities proposed to be issued in exchange for securities or assets of another
entity).
“Release Date” means (a) with respect to the Founders’ Securities, the date that is
the earliest of (i) the 180th day from the date on which the Company completes its Initial Business
Combination, (ii) subsequent to the Company’s consummation of its Initial Business Combination, the
date immediately following the date on which the last sales price of the Common Stock equals or
exceeds $13.75 per share for any 20 trading days within any 30-trading day period commencing 90
days after the date on which the Company consummates such initial Business Combination or (iii)
subsequent to the Company’s consummation of an Initial Business Combination, the date on which the
Company consummates a liquidation, merger, stock exchange or other similar transaction which
results in all of the Company’s stockholders having the right to exchange their shares of Common
Stock for cash, securities or other property,
(b) with respect to the Private Placement Securities, the date immediately following the date
of which the Company completes its Initial Business Combination, and
(c) with respect to the Limit Order Securities, the date that is the 180th day after the date
on which the Company consummates its Initial Business Combination.
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“Released Registrable Securities” shall mean, as of any date, the Registrable
Securities with respect to which the Release Date has occurred.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Underwriter” means a securities dealer who purchases any Registrable Securities as
principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Offering” means a registration in which securities of the Company are
sold to an Underwriter or Underwriters on a firm commitment basis for reoffering to the public.
“Unreleased Registrable Securities” shall mean, as of any date, the Registrable
Securities with respect to which the Release Date has not occurred.
2. REGISTRATION RIGHTS.
2.1. Demand Registration.
2.1.1. Request for Registration. At any time and from time to time on or after
the date that is thirty (30) days after the Company consummates an Initial Business
Combination, the holders of a majority-in-interest of any class of Registrable Securities,
held by the Investors or the Permitted Transferees of the Investors, may make a written
demand for registration under the Securities Act of all or part of each such class of
Registrable Securities held by such holders; provided that the estimated market
value of Registrable Securities of all classes to be so registered thereunder is at least
$500,000 in the aggregate; and provided further that any Registration
Statement for Unreleased Registrable Securities may not become effective until after such
Registrable Securities have become Released Registrable Securities. Any such requested
registration shall be referred to as a “Demand Registration”. Any demand for a
Demand Registration shall specify the number of shares of Registrable Securities proposed to
be sold and the intended method(s) of distribution thereof. Within five (5) Business Days
following receipt of any request for a Demand Registration, the Company will notify in
writing all holders of Registrable Securities of the class or classes to be registered of
the demand, and each holder of Registrable Securities who wishes to include all or a portion
of such holder’s Registrable Securities in the Demand Registration (each such holder
including shares of Registrable Securities in such registration, a “Demanding
Holder”) shall so notify the Company in writing; provided that such notice shall
be received by the Company within ten (10) Business Days of the Company’s having sent the
applicable notice to such holder or holders. All such requests shall specify the class and
aggregate amount of Registrable Securities to be registered and the intended method of
distribution. The Company may include in such registration additional securities of the
class or classes of the Registrable Securities to be registered thereunder, including
securities to be sold for the Company’s own account or the account of Persons who are not
holders of Registrable Securities. Upon any such request, the Demanding Holders shall be
entitled to have their Registrable Securities included in the Demand Registration, subject
to
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Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be
obligated to effect more than an aggregate of three (3) Demand Registrations under this
Section 2.1.1 in respect of each class of Registrable Securities. In addition, the Company
shall not be required to file a Registration Statement for a Demand Registration at any time
during the 12-month period following the effective date of another Registration Statement
filed pursuant to this Section 2.1.
2.1.2. Effective Registration. A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with respect to such
Demand Registration has been declared effective and remains effective for not less than 180
days (or such shorter period as will terminate when all Registrable Securities covered by
such Registration Statement have been sold or withdrawn); provided, however,
that if, after such Registration Statement has been declared effective, the offering of
Registrable Securities pursuant to a Demand Registration is interfered with by any stop
order or injunction of the Commission or any other governmental agency or court, the
Registration Statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until, (i) such stop order or injunction is removed,
rescinded or otherwise terminated and (ii) a majority-in-interest of the Demanding Holders
thereafter elects to continue the offering; provided, further, that the
Company shall not be obligated to file a second Registration Statement until a Registration
Statement that has been filed is counted as a Demand Registration or is terminated.
2.1.3. Underwritten Offering. If a majority-in-interest of the Demanding
Holders so elect and such holders so advise the Company as part of their written demand for
a Demand Registration, the offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of an Underwritten Offering. In such event, the right of
any holder to include its Registrable Securities in such registration shall be conditioned
upon such holder’s participation in such Underwritten Offering and the inclusion of such
holder’s Registrable Securities in such Underwritten Offering to the extent provided herein.
The holders of a majority of the class of Registrable Securities included in such
Underwritten Offering shall, in consultation with the Company, have the right to select the
managing Underwriter or Underwriters for the offering, subject to the right of the Company
should it so choose to select one co-managing Underwriter reasonably acceptable to such
holders. All Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Underwritten Offering by a
majority-in-interest of the holders initiating the Demand Registration and consistent with
Section 3.2.1.
2.1.4. Reduction of Offering. If the managing Underwriter or Underwriters for a
Demand Registration that is to be an Underwritten Offering advises the Company and the
Demanding Holders in writing that the dollar amount or number of shares of Registrable
Securities which the Demanding Holders desire to sell, taken together with all other shares
of Common Stock or other securities which the Company desires to sell and the shares of
Common Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights held by other stockholders of the
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Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering
price, the timing, the distribution method, or the probability of success of such offering
(such maximum dollar amount or maximum number of shares, as applicable, the “Maximum
Number of Shares”), then the Company shall include in such registration: (i) first, the
Registrable Securities as to which Demand Registration has been requested by the Demanding
Holders (pro rata among the holders who have requested participation in the Demand
Registration based, for each such holder, on the percentage derived by dividing (x) the
number of Registrable Securities of such class which such holder has requested to include in
such Demand Registration by (y) the aggregate number of Registrable Securities of such class
which all such holders have requested to include) (such proportion is referred to herein as
“Pro Rata”) that can be sold without exceeding the Maximum Number of Shares; (ii)
second, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii)
third, to the extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i) and (ii), the shares of Common Stock or other securities for the
account of other Persons that the Company is obligated to register pursuant to written
contractual arrangements with such Persons, Pro Rata, and that can be sold without exceeding
the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of
Shares have not been reached under the foregoing clauses (i), (ii), and (iii), securities
that other security holders of the Company desire to sell, Pro Rata, that can be sold
without exceeding the Maximum Number of Shares. To the extent that any Registrable
Securities requested to be registered are excluded pursuant to the foregoing provisions, the
holders shall have the right to one additional Demand Registration under this Section 2.1.4.
2.1.5. Withdrawal. A holder may withdraw its Registrable Securities from a
Demand Registration at any time. If any holder or holders withdraw Registrable Securities
from a Demand Registration in such amounts that the Registrable Securities of all classes
that remain covered by the relevant Registration Statement have an estimated market value of
less than $500,000, the Company shall cease all efforts to secure registration and such
withdrawn registration shall be deemed a Demand Registration for purposes of Section 2.1
unless the withdrawal is based on the reasonable determination of the Demanding Holders that
there has been, since the date of such request, a material adverse change in the business or
prospects of the Company or in general market conditions and the Demanding Holders who
requested such registration shall have paid or reimbursed the Company for all of the
reasonable out-of-pocket fees and expenses incurred by the Company in connection with the
withdrawn registration.
2.1.6. Suspension of Registration. If the filing, initial effectiveness or
continued use of a Registration Statement in respect of a Demand Registration at any time
would require the Company to make an Adverse Disclosure or would require the inclusion in
such Registration Statement of financial statements that are unavailable to the Company for
reasons beyond the Company’s control, the Company may, upon giving prompt written notice of
such action to the holders, delay the filing or initial effectiveness of, or suspend use of,
such Registration Statement for the shortest possible period of time
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determined in good faith by the Company to be necessary for such purpose. In the event
the Company exercises its rights under the preceding sentence, the holders agree to suspend,
immediately upon their receipt of the notice referred to above, their use of the prospectus
relating to the Demand Registration in connection with any sale or offer to sell Registrable
Securities. The Company shall immediately notify the holders of the expiration of any period
during which it exercised its rights under this Section 2.1.6.
2.1.7. Registration Statement Form. Registrations under this Section 2.1 shall
be on such appropriate registration form of the Commission (i) as shall be selected by the
Company and as shall be reasonably acceptable to the holders of a majority-in-interest of
each class of Registrable Securities requesting participation in the Demand Registration and
(ii) as shall permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the applicable holders’ requests for
such registration. Notwithstanding the foregoing, if, pursuant to a Demand Registration, (x)
the Company proposes to effect registration by filing a Registration Statement on Form S-3,
(y) such registration is in connection with an Underwritten Offering, and (z) the managing
Underwriter or Underwriters shall advise the Company in writing that, in its or their
opinion, the use of another form of registration statement (or the inclusion, rather than
the incorporation by reference, of information in the prospectus related to a Registration
Statement on Form S-3) is of material importance to the success of such proposed offering,
then such registration shall be effected on such other form (or such information shall be so
included in such prospectus).
2.2. Piggy-Back Registration.
2.2.1. Piggy-Back Rights. If at any time on or after the date the Company
consummates an Initial Business Combination the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering of equity securities, or
securities or other obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for stockholders of the Company for their
account (or by the Company and by stockholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with
an offering of securities to employees or directors of the Company pursuant to any employee
stock option or other benefit plan, (ii) filed on Form S-4 or S-8 or any successor to such
forms, (iii) for an exchange offer or offering of securities solely to the Company’s
existing stockholders, (iv) for an offering of debt that is convertible into equity
securities of the Company, (v) for a dividend reinvestment plan, or (vi) solely in
connection with a merger, consolidation or non-capital raising bona fide business
transaction, then the Company shall (x) give written notice of such proposed filing to the
holders of Released Registrable Securities as soon as practicable but in no event less than
ten (10) Business Days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of
the offering, and (y) offer to the holders of Released Registrable Securities in such notice
the opportunity to register the sale of such number of shares of Registrable Securities as
such holders may request in writing within five (5) Business Days following receipt by such
holder of such notice (a “Piggy-Back
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Registration”). Subject to Section 2.2.2., the Company shall include in such
Registration Statement such Released Registrable Securities requested to be included therein
within five (5) Business Days after the receipt by such holder of any such notice, on the
same terms and conditions as any similar securities of the Company. If at any time after
giving written notice of its intention to register any securities and prior to the effective
date of the Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such securities,
the Company may, at its election, give written notice of such determination to each holder
of Released Registrable Securities and, (x) in the case of a determination not to register,
shall be relieved of its obligation to register any Released Registrable Securities in
connection with such registration, and (y) in the case of a determination to delay
registering, shall be permitted to delay registering any Released Registrable Securities for
the same period as the delay in registering such other securities. If the offering pursuant
to a Piggy-Back Registration is to be an Underwritten Offering, then each holder making a
request for its Released Registrable Securities to be included therein must, and the Company
shall use commercially reasonable efforts to cause the managing Underwriter or Underwriters
of a proposed Underwritten Offering to permit the Released Registrable Securities requested
to be included in a Piggy-Back Registration on the same terms and conditions as any similar
securities of the Company and other Persons selling securities in such Underwritten Offering
and to permit the sale or other disposition of such Released Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders of Released
Registrable Securities proposing to distribute their securities through a Piggy-Back
Registration that involves an Underwriter or Underwriters shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for such
Piggy-Back Registration.
2.2.2. Reduction of Offering. If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an Underwritten Offering advises the Company and the
holders of Released Registrable Securities in writing that the dollar amount or number of
shares of Common Stock which the Company desires to sell, taken together with shares of
Common Stock, if any, as to which registration has been demanded pursuant to written
contractual arrangements with Persons other than the holders of Released Registrable
Securities hereunder, the Released Registrable Securities as to which registration has been
requested under this Section 2.2, and the shares of Common Stock, if any, as to which
registration has been requested pursuant to the written contractual piggy-back registration
rights of other stockholders of the Company, exceeds the Maximum Number of Shares, then the
Company shall include in any such registration:
(a) If the registration is undertaken for the Company’s account: (A) first, the
shares of Common Stock or other securities that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities, if any, comprised of Released
Registrable Securities, pro rata, as to which registration has been requested
pursuant to this Section 2.2, that can be sold without exceeding the Maximum Number
of Shares; and (C) third, to the extent that the Maximum Number of shares has not
been reached under the foregoing
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clauses (A) and (B), the shares of Common Stock or other securities for the
account of other Persons that the Company is obligated to register pursuant to
written contractual piggy-back registration rights with such Persons, pro rata, and
that can be sold without exceeding the Maximum Number of Shares; and
(b) If the registration is a “demand” registration undertaken at the demand of
Persons other than the holders of Registrable Securities, (A) first, the shares of
Common Stock or other securities for the account of the demanding Persons that can
be sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (C) third, to the
extent that the Maximum Number of Shares has not been reached under the foregoing
clauses (A) and (B), the shares of Common Stock or other securities, if any,
comprised of Released Registrable Securities, Pro Rata, as to which registration has
been requested pursuant to this Section 2.2, that can be sold without exceeding the
Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clauses (A), (B) and (C), the shares
of Common Stock or other securities for the account of other Persons that the
Company is obligated to register pursuant to written contractual arrangements with
such Persons, pro rata, that can be sold without exceeding the Maximum Number of
Shares.
2.2.3. Withdrawal. Any holder of Released Registrable Securities may elect to
withdraw such holder’s request for inclusion of Released Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request to withdraw
prior to the effectiveness of the Registration Statement. The Company (whether on its own
determination or as the result of a withdrawal by Persons making a demand pursuant to
written contractual obligations) may withdraw a registration statement at any time prior to
the effectiveness of the Registration Statement. Notwithstanding any such withdrawal, the
Company shall pay all expenses incurred by the holders of Released Registrable Securities in
connection with such Piggy-Back Registration as provided in Section 3.3.
2.3. Registrations on Form S-3.
(a) Filing. The holders of Released Registrable Securities may at any
time and from time to time, request in writing that the Company register the resale
of any or all of such Released Registrable Securities on Form S-3 or any similar
short-form registration which may be available at such time (“Form S-3”);
provided, however, that (i) the Company shall not be obligated to
effect such request through an Underwritten Offering and (ii) the Company shall not
be obligated to effect such a request if the Company has within the preceding twelve
(12) months effected a registration on Form S-3. Upon receipt of such written
request, the Company will promptly give written notice of the proposed registration
to all other holders of Released Registrable Securities, and, as soon as
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practicable thereafter, effect the registration of all or such portion of such
holder’s or holders’ Released Registrable Securities as are specified in such
request, together with all or such portion of the Released Registrable Securities or
other securities of the Company, if any, of any other holder or holders joining in
such request as are specified in a written request given within fifteen (15)
Business Days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect
any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available
for such offering; or (ii) if the holders of the Released Registrable Securities,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Released Registrable Securities and
such other securities (if any) at any aggregate price to the public of less than
$500,000. Registrations effected pursuant to this Section 2.3 shall not be counted
as Demand Registrations effected pursuant to Section 2.1.
(b) Suspension of Registration. If the filing, initial effectiveness,
or continued use of Form S-3 at any time would require the Company to make an
Adverse Disclosure or would require the inclusion in such Form S-3 of financial
statements that are unavailable to the Company for reasons beyond the Company’s
control, the Company may, upon giving prompt written notice of such actions to the
holders, delay the filing or initial effectiveness of, or suspend use of, the Form
S-3 for the shortest period of time determined in good faith by the Company to be
necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the holders agree to suspend, immediately upon their receipt of
the notice referred to above, their use of the prospectus relating to the
registration on such Form S-3 in connection with any sale or offer to sell Released
Registrable Securities and agree not to disclose to any other Person the fact that
the Company has exercised such rights or any related facts. The Company shall
immediately notify the holders upon the expiration of any period during which it
exercised its rights under this Section 2.3(b).
3. REGISTRATION PROCEDURES.
3.1. Filings; Information. Whenever the Company is required to effect the registration
of any Registrable Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance with the intended
method(s) of distribution thereof as expeditiously as reasonably practicable, and in connection
with any such request:
3.1.1. Filing Registration Statement. The Company shall, as expeditiously as
reasonably possible, prepare and file with the Commission a Registration Statement on any
form for which the Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of all Registrable Securities to
be registered thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its best efforts to cause such Registration Statement to become and remain
effective for the period required by Section 3.1.3; provided, however, that
the Company shall have the right to defer any Demand Registration for up to thirty
11
(30) calendar days, and any Piggy-Back Registration for such period as may be
applicable to deferment of any demand registration to which such Piggy-Back Registration
relates, in each case if the Company shall furnish to the holders a certificate signed by
the Chairman of the Board or Chief Executive Officer of the Company stating that, in the
good faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company and its stockholders for such Registration Statement to be
effected at such time; provided further, however, that the Company shall not have
the right to exercise the right set forth in the immediately preceding proviso more than
once in any 365-day period in respect of a Demand Registration hereunder.
3.1.2. Copies. The Company shall, prior to filing a Registration Statement or
prospectus, or any amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such registration, and such holders’ legal counsel,
copies of such Registration Statement as proposed to be filed, each amendment and supplement
to such Registration Statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such Registration Statement
(including each preliminary prospectus), and such other documents as the holders of
Registrable Securities included in such registration or legal counsel for any such holders
may reasonably request in order to facilitate the disposition of the Registrable Securities
owned by such holders.
3.1.3. Amendments and Supplements. The Company shall use best efforts to
prepare and file with the Commission such amendments, including post-effective amendments,
and supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until all Registrable Securities and
other securities covered by such Registration Statement have been disposed of in accordance
with the intended method(s) of distribution set forth in such Registration Statement (which
period shall not exceed the sum of one hundred
eighty (180) calendar days plus any period
during which any such disposition is interfered with by any stop order or injunction of the
Commission or any governmental agency or court) or such securities have been withdrawn.
3.1.4. Notification. After the filing of a Registration Statement, the Company
shall as soon as reasonably practical, notify the holders of Registrable Securities included
in such Registration Statement of such filing and the managing Underwriter or Underwriters,
and shall further notify such holders and such managing Underwriter or Underwriters and, if
requested, confirm such advice in writing, in all events as soon as reasonably practical
after the occurrence of any of the following: (i) when such Registration Statement becomes
effective; (ii) when any post-effective amendment to such Registration Statement becomes
effective; (iii) the issuance or threatened issuance by the Commission of any stop order
(and the Company shall use best efforts to take all actions required to prevent the entry of
such stop order or to remove it if entered); and (iv) any request by the Commission for any
amendment or supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to the
purchasers of the securities covered
12
by such Registration Statement, such prospectus will not contain an 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 promptly make available to the
holders of Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a Registration
Statement or prospectus or any amendment or supplement thereto, including documents
incorporated by reference, except in the case of registration under Section 2.2; the Company
shall furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such documents
proposed to be filed sufficiently in advance of filing to provide such holders and legal
counsel with a reasonable opportunity to review such documents and comment thereon, and the
Company shall not file any Registration Statement or prospectus or amendment or supplement
thereto, including documents incorporated by reference, to which such holders or their legal
counsel shall reasonably object.
3.1.5. State Securities Laws Compliance. The Company, on or prior to the date
on which the applicable Registration Statement is declared effective, shall use its best
efforts to (i) register or qualify the Registrable Securities covered by the Registration
Statement under such securities or “blue sky” laws of such jurisdictions in the United
States as the holders of Registrable Securities included in such Registration Statement (in
light of their intended plan of distribution) or Underwriter, if any, or their respective
counsel may reasonably request in writing and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered with or
approved by such other Governmental Authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable Securities in such
jurisdictions; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph or subject itself to taxation in any such jurisdiction.
3.1.6. Cooperation. The principal executive officer of the Company, the
principal financial officer of the Company, the principal accounting officer of the Company,
and all other officers and members of the management of the Company shall cooperate fully in
any offering of Registrable Securities hereunder, which cooperation shall include, without
limitation, the preparation of the Registration Statement with respect to such offering and
all other offering materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
3.1.7. Records. The Company shall make available for inspection by the holders
of Registrable Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and any attorney,
accountant, or other professional retained by any holder of Registrable Securities included
in such Registration Statement or any Underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause all of the Company’s
officers, directors, and employees and the independent public accountants
13
who have certified its financial statements to make themselves available to discuss the
business of the Company and to supply all information reasonably requested by any such
seller, Underwriter, attorney, accountant or agent in connection with such Registration
Statement as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors, and employees to supply all
information requested by any of them in connection with such Registration Statement.
3.1.8. Opinions and Comfort Letters. The Company shall furnish to each holder
of Registrable Securities included in any Registration Statement a signed counterpart,
addressed to such holder, of (i) any opinion of counsel to the Company delivered to any
Underwriter dated the effective date of the Registration Statement or, in the event of an
Underwritten Offering, the date of the closing under the applicable underwriting agreement,
in customary form, scope, and substance, at a minimum to the effect that the Registration
Statement has been declared effective and that no stop order is in effect, which counsel and
opinions shall be reasonably satisfactory to a majority of the holders of each such class
and Underwriter or Underwriters, if any, and their respective counsel and (ii) any comfort
letter from the Company’s independent public accountants delivered to any Underwriter in
customary form and covering such matters of the type customarily covered by comfort letters
as the managing Underwriter or Underwriters reasonably request. In the event no legal
opinion is delivered to any Underwriter, the Company shall furnish to each holder of
Registrable Securities included in such Registration Statement, at any time that such holder
elects to use a prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective and that no
stop order is in effect.
3.1.9. Earnings Statement. The Company shall comply with all applicable rules
and regulations of the Commission and the Securities Act, and make available to its
stockholders, as soon as reasonably practicable but not more than fifteen (15) months after
the effective date of the Registration Statement, an earnings statement which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
3.1.10. Listing. The Company shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such exchanges or
otherwise designated for trading in the same manner as similar securities issued by the
Company are then listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority-in-interest of the
Registrable Securities included in such registration and on each inter-dealer quotation
system on which any of the Company’s securities of such class are then quoted.
3.1.11. Withdrawal of Stop Order. The Company shall make every reasonable
effort to prevent or obtain at the earliest possible moment the withdrawal of any stop order
with respect to the applicable Registration Statement or other order suspending the use of
any preliminary or final prospectus.
3.1.12. CUSIP Number. The Company shall, not later than the effective date of
the applicable Registration Statement, provide a CUSIP number for all Registrable
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Securities and provide the applicable transfer agent with printed certificates for the
Registrable Securities which certificates shall be in a form eligible for deposit with The
Depository Trust Company.
3.1.13. FINRA. The Company shall cooperate with each seller of Registrable
Securities and each Underwriter or agent, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any filings required
to be made with the Financial Industry Regulatory Authority.
3.1.14. Transfer Agent. The Company shall provide and cause to be maintained a
transfer agent and registrar for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the effective date of such
Registration Statement.
3.1.15. Road Show. The Company shall, in the case of an Underwritten Offering,
cause senior executive officers of the Company to participate in customary “road show”
presentations that may be reasonably requested by the managing Underwriter in any such
Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each
proposed offering contemplated herein and customary selling efforts related thereto.
3.2. Underwritten Offerings.
3.2.1. Underwriting Agreements. If requested by the Underwriters for any
Underwritten Offering requested by holders pursuant to Sections 2.1 or 2.3, the Company and
the holders of Registrable Securities to be included therein shall enter into an
underwriting agreement with such Underwriters, such agreement to be reasonably satisfactory
in substance and form to the Company, the holders of a majority-in-interest of each class of
the Registrable Securities to be included in such Underwritten Offering and the
Underwriters, and to contain such terms and conditions as are generally prevailing in
agreements of that type, including, without limitation, indemnities no less favorable to the
recipient thereof than those provided in Section 2.4. The holders of any Registrable
Securities to be included in any Underwritten Offering pursuant to Section 2.2 shall enter
into such an underwriting agreement at the request of the Company. All of the
representations and warranties and the other agreements by and on the part of the Company to
and for the benefit of the Underwriters included in any such underwriting agreement shall
also be made to and for the benefit of such holders, and any or all of the conditions
precedent to the obligations of the Underwriters under such underwriting agreement shall be
conditions precedent to the obligations of such holders. No holder shall be required in any
such underwriting agreement to make any representations or warranties to or agreements with
the Company or the Underwriters other than representations, warranties or agreements
regarding such holder, such holder’s Registrable Securities, such holder’s intended method
of distribution and any other representations required by law.
3.2.2. Price and Underwriting Discounts. In the case of an Underwritten
Offering requested by holders pursuant to Sections 2.1 or 2.3, the price, underwriting
discount and other financial terms of the related underwriting agreement for each class of
Registrable
15
Securities shall be determined by the holders of a majority-in-interest of such class
of Registrable Securities. In the case of any Underwritten Offering pursuant to Section 2.2,
such price, discount and other terms shall be determined by the Company, subject to the
right of the holders to withdraw their request to participate in the registration pursuant
to Section 2.3 after being advised of such price, discount and other terms.
3.2.3. Participation in Underwritten Offerings. No Person may participate in an
Underwritten Offering unless such Person (i) agrees to sell such Person’s securities on the
basis provided in the underwriting arrangements approved by the Persons entitled to approve
such arrangements and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the terms of such
underwriting arrangements.
3.3. Obligation to Suspend Distribution. Upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3.1.4(iii) or 3.1.4(iv), or, in the
case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by
the Company, pursuant to a written xxxxxxx xxxxxxx compliance program adopted by the Company’s
Board of Directors, of the ability of all “insiders” covered by such program to transact in the
Company’s securities because of the existence of material non-public information, such holder of
Registrable Securities included in any registration shall immediately discontinue disposition of
such Registrable Securities pursuant to the Registration Statement covering such Registrable
Securities in the case of Section 3.1.4(iv) until such holder receives the supplemented or amended
prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of “insiders” to
transact in the Company’s securities is removed, as applicable, or in any case until the holder is
advised in writing by the Company that the use of the prospectus may be resumed, and receives
copies of any additional or supplemental filings that are incorporated by reference in the
prospectus and, if so directed by the Company, each such holder will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such holder’s possession,
of the most recent prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give any such notice in respect of a Demand
Registration, the period during which the applicable Registration Statement is required to be
maintained effective shall be extended by the number of days during the 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 either receives the copies of the supplemented or
amended prospectus contemplated by Section 3.1.4(iv) or is advised in writing by the Company that
the use of the prospectus may be resumed.
3.4. Registration Expenses. The Company shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 2. 1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all
expenses incurred in performing or complying with its other obligations under this Agreement,
including, without limitation: (i) all registration and filing fees and any other fees and expenses
associated with filings required to be made with the SEC; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses, duplicating, word
processing, messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities in a form eligible for
deposit with
16
The Depository Trust Company and of printing prospectuses); (iv) the Company’s
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1.11; (vi) National Association of Securities Dealers fees;
(vii) fees and disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii)
the fees and disbursements not to exceed $150,000 of any special experts retained by the Company in
connection with such registration; (ix) the reasonable fees and expenses of one legal counsel
selected by the holders of a majority-in-interest of the Registrable Securities included in such
registration; and (x) Securities Act liability insurance if the Company so desires. The Company
shall have no obligation to pay any other costs or expenses in the course of the transactions
contemplated hereby, including underwriting discounts or selling commissions attributable to the
Registrable Securities being sold by the holders thereof, which underwriting discounts or selling
commissions shall be borne by such holders. Additionally, in an Underwritten Offering, all selling
stockholders and the Company shall bear the expenses of the Underwriter pro rata in proportion to
the respective amount of shares each is selling in such offering.
3.5. Information. The holders of Registrable Securities shall provide such information
as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection
with the preparation of any Registration Statement, including amendments and supplements thereto,
in order to effect the registration of any Registrable Securities under the Securities Act pursuant
to Section 2 and in connection with the Company’s obligation to comply with federal and applicable
state securities laws. The Company shall have the right to exclude any holder that does not comply
with the preceding sentence from the applicable registration.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1. Indemnification by the Company. The Company agrees to indemnify and hold harmless
to the extent permitted by law each Investor and each other holder of Registrable Securities, and
each of their respective officers, employees, affiliates, directors, partners, members, attorneys,
and agents, and each person, if any, who controls an Investor and each other holder of Registrable
Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) (each, an “Investor Indemnified Party”), from and against any expenses (including
reasonable costs of investigation and legal expenses), losses, claims, damages, or liabilities (or
actions or proceedings in respect thereof, whether or not such indemnified party is a party
thereto), whether joint or several, arising out of or based upon any untrue statement (or allegedly
untrue statement) of a material fact contained in any Registration Statement under which the sale
of such Registrable Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus, or summary prospectus contained in the Registration Statement, or any amendment
or
supplement to such Registration Statement, or arising out of or based upon any omission (or
alleged omission) to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not be
liable in any such case to the extent that any such expense, loss, claim, damage, or liability
arises out of or is based upon any untrue statement or allegedly untrue statement or omission or
alleged omission made in such Registration Statement,
preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or
17
supplement, in reliance upon and in conformity with information furnished to the Company, in
writing, by such selling holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates, directors, partners,
members, and agents on substantially the same basis as that of the indemnification provided above
in this Section 4.1.
4.2. Indemnification by Holders of Registrable Securities. Each selling holder of
Registrable Securities will severally and not jointly, in the event that any registration is being
effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by
such selling holder, indemnify and hold harmless to the fullest extent permitted by law the
Company, each of its directors, officers, employees, and agents and each Person who controls the
Company within the meaning of the Securities Act, against any losses, claims, judgments, damages,
liabilities, or expenses (including reasonable costs of investigation and legal expenses) whether
joint or several, insofar as such losses, claims, damages, liabilities, or expenses (or actions or
proceedings in respect thereof, whether or not such indemnified party is a party thereto) arise out
of or are based upon any untrue statement or allegedly untrue statement of a material fact
contained in any Registration Statement under which the sale of such Registrable Securities was
registered under the Securities Act, any preliminary prospectus, final prospectus, or summary
prospectus contained in the Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any omission or the alleged omission to
state a material fact required to be stated therein or necessary to make the statement therein not
misleading, to the extent and only to the extent that the statement or omission was made in
reliance upon and in conformity with information furnished in writing to the Company by such
selling holder expressly for use therein, and shall reimburse the Company, its directors and
officers, and each other selling holder or controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending any such loss,
claim, damage, liability or action. Each selling holder’s indemnification obligations hereunder
shall be several and not joint and shall be limited to the amount of any net proceeds actually
received by such selling holder. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any indemnified party.
4.3. Conduct of Indemnification Proceedings. Promptly after receipt by any person of
any notice of any loss, claim, damage, or liability or any action in respect of which indemnity may
be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a
claim in respect thereof is to be made against any other person for indemnification hereunder,
notify such other person (the “Indemnifying Party”) in writing of the loss, claim,
judgment, damage, liability, or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from
any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and
solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action brought against
the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim
or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to
assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of
such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for
any
18
legal or other expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation; provided, however, that in
any action in which both the Indemnified Party and the Indemnifying Party are named as defendants,
the Indemnified Party shall have the right to employ separate counsel (but no more than one such
separate counsel) to represent the Indemnified Party and its controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be
paid by the Indemnifying Party based upon the written opinion of counsel of such Indemnified Party,
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them (in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that such Indemnified Party elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the
defense of such claim on behalf of such Indemnified Party). If such defense is not assumed by the
Indemnifying Party, the Indemnifying Party will not be subject to any liability for any settlement
made without its consent, but such consent may not be unreasonably withheld; provided,
however, that an Indemnifying Party shall not be required to consent to any settlement involving
the imposition of equitable remedies or involving the imposition of any material obligations on
such Indemnifying Party other than financial obligations for which such Indemnified Party will be
indemnified hereunder. If the Indemnifying Party assumes the defense, the Indemnifying Party shall
have the right to settle such action without the consent of the Indemnified Party;
provided, however, that the Indemnifying Party shall be required to obtain such consent
(which consent shall not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the Indemnified Party or any restriction on the Indemnified Party or its
officers or directors. No Indemnifying Party shall consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the giving by the claimant
or plaintiff to each Indemnified Party of an unconditional release from all liability in respect to
such claim or litigation. The Indemnifying Party or Parties shall not, in connection with any
proceeding or related proceedings, be liable for the reasonable fees, disbursements and other
charges of more than one separate firm at any one time for all such Indemnified Party or Parties
unless (x) the employment of more than one counsel has been authorized in writing by the
Indemnifying Party or parties, (y) a conflict or potential conflict exists or may exist (based on
advice of counsel to an Indemnified Party) between such Indemnified Party and the other Indemnified
Parties or (z) based on advice of counsel, an Indemnified Party has reasonably concluded that there
may be legal defenses available to it that are different from or in addition to those available to
the other Indemnified Parties, in each of which cases the Indemnifying Party shall be obligated to
pay the reasonable fees and expenses of such additional counsel or counsels.
4.4. Contribution.
4.4.1. If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3
is unavailable to any Indemnified Party or insufficient to hold it harmless in respect of
any loss, claim, damage, liability, or action referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative fault
of the Indemnified Parties and the Indemnifying Parties in connection with the actions
or
19
omissions which resulted in such loss, claim, damage, liability, or action, as well as
any other relevant equitable considerations. The relative fault of any Indemnified Party and
any Indemnifying Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such Indemnified Party or such
Indemnifying Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
4.4.2. The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations referred to in the
immediately preceding Section 4.4.1. The amount paid or payable by an Indemnified Party as a
result of any loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no holder of Registrable Securities shall be required to contribute any amount
in excess of the dollar amount of the net proceeds (after payment of any underwriting fees,
discounts, commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. If indemnification is available under this Section 4, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in Sections 4.1
and 4.2 hereof without regard to the relative fault of said Indemnifying Parties or
Indemnified Party.
5. UNDERWRITING AND DISTRIBUTION.
5.1. Rule 144. The Company covenants that it shall file any reports required to be
filed by it under the Securities Act and the Exchange Act and shall take such further action as the
holders of Registrable Securities may reasonably request, all to the extent required from time to
time to enable such holders to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities
Act, as such Rules may be amended from time to time, or any similar Rule or regulation hereafter
adopted by the Commission.
6. NO INCONSISTENT AGREEMENTS; ADDITIONAL RIGHTS.
6.1. The Company will not enter into, and is not currently a party to, any agreement that is
inconsistent with the rights granted to the holders of Registrable Securities by this Agreement.
20
7. MISCELLANEOUS.
7.1. Term. This Agreement shall terminate upon earlier of (a) the tenth anniversary of
the date of this Agreement or (b) the date as of which (i) all of the Registrable Securities have
been sold pursuant to a Registration Statement (but in no event prior to the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder) or (ii) the holders are
permitted to sell their Registrable Securities under Rule 144(k) under the Securities Act (or any
similar provision then in force permitting the sale of restricted securities without limitation on
the amount of securities sold or the manner of sale). The provisions of Section 4 and Section 5
shall survive any termination.
7.2. Assignment; No Third Party Beneficiaries. The registration rights of any holder
under this Agreement with respect to any Registrable Securities may be transferred and assigned,
provided, however, that no such transfer or assignment shall be binding upon or
obligate the Company to any such assignee unless and until the Company shall have received written
notice of such transfer or assignment as herein provided and a written agreement of the assignee to
be bound by the provisions of this Agreement. Any transfer or assignment made other than as
provided in the first sentence of this Section 7.2 shall be null and void. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and
the permitted assigns of the Investor or holder of Registrable Securities or of any assignee of the
Investor or holder of Registrable Securities. This Agreement is not intended to confer any rights
or benefits on any persons that are not party hereto other than as expressly set forth in Article 4
and this Section 7.2.
7.3. Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or permitted to be given hereunder or
which are given with respect to this Agreement shall be in writing and shall be either personally
served, delivered by reputable air courier service with charges prepaid guaranteeing overnight
delivery, or transmitted by hand delivery, telegram, telex, facsimile, or by mailing in the same
sealed envelope, or registered first-class mail, postage prepaid, return receipt requested
addressed as set forth below, or to such other address as such party shall have specified most
recently by written notice. Notice shall be deemed given (i) on the date of delivery if personally
served, (ii) when receipt is acknowledged in writing by addressee, if transmitted by telegram,
telex or facsimile, provided, that if such service or transmission is not on a Business Day or is
after normal business hours, then such notice shall be deemed given on the next Business Day, and
(iii) five (5) Business Days after having been deposited in the mail, postage prepaid, if mailed by
first-class mail. Notice otherwise sent as provided herein shall be deemed given on the next
Business Day following timely delivery of such notice to a reputable air courier service with an
order for next-day delivery, provided, however, that notice of a change in address shall be
effective only upon receipt.
If to the Company:
21
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxxxxx
Fax No.:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxxxxx
Fax No.:
If to an Investor, to the addressee and address set forth on the signature page hereto.
7.4. Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible that is valid and enforceable.
7.5. Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, and all of which taken together shall constitute one and the
same instrument.
7.6. Entire Agreement. This Agreement (including all agreements entered into pursuant
hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
7.7. Modifications and Amendments. No amendment, modification or termination of this
Agreement shall be binding upon any party unless executed in writing by such party and signed by
the Company and the holders of a majority of Registrable Securities of each class then outstanding.
Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by
any amendment, modification, waiver or consent authorized by this Section 7.7 whether or not such
Registrable Securities shall have been marked accordingly.
7.8. Titles and Headings. Titles and headings of sections of this Agreement are for
convenience only and shall not affect the construction of any provision of this Agreement.
7.9. Waivers and Extensions. Any party to this Agreement may waive any right, breach
or default which such party has the right to waive, provided that such waiver will not be
effective against the waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of
any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding
or succeeding breach thereof nor of any other agreement or provision herein
22
contained. No waiver or extension of time for performance of any obligations or acts shall be
deemed a waiver or extension of the time for performance of any other obligations or acts. Except
as otherwise expressly provided herein, no failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof
at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power, or remedy.
7.10. Governing Law.
(a) This Agreement shall be governed by, interpreted under, and construed in accordance with
the internal laws of the State of New York applicable to agreements made and to be performed within
the State of New York, without giving effect to any choice-of-law provisions thereof that would
compel the application of the substantive laws of any other jurisdiction.
(b) To the fullest extent permitted by applicable law, each party hereto (i) agrees that any
claim, action or proceeding by such party seeking any relief whatsoever arising out of, or in
connection with, this Agreement or the transactions contemplated hereby shall be brought only in
the United States District Court for the Southern District of New York and in any New York State
court located in the Borough of Manhattan and not in any other State or Federal court in the United
States of America or any court in any other country, (ii) agrees to submit to the exclusive
jurisdiction of such courts located in the State of New York for purposes of all legal proceedings
arising out of, or in connection with, this Agreement or the transactions contemplated hereby, and
(iii) irrevocably waives any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
and delivered by their duly authorized representatives as of the date first written above.
| THE COMPANY:
HCM ACQUISITION COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| INVESTORS:
HCM ACQUISTION HOLDINGS, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| HIGHLAND CAPITAL MANAGEMENT, L.P.
By: Strand Advisors, Inc. its General Partner |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Xxxxxxx X. Xxx | ||||
| Address for Notice: | ||||
| Xxxxx X. Xxxxxxxxx | ||||
| Address for Notice: | ||||
| Xxxxx X. Xxxxx | ||||
| Address for Notice: | ||||
| Xxxxx X. Xxxx | ||||
| Address for Notice: | ||||
SCHEDULE I
FOUNDERS SECURITIES:
| Investor | Founders’ Units | |||
HCM ACQUISTION HOLDINGS, LLC |
7,153,000 | |||
Xxxxxxx X. Xxx |
8,625 | |||
Xxxxx X. Xxxxxxxxx |
8,625 | |||
Xxxxx X. Xxxxx |
8,625 | |||
Xxxxx X Xxxx |
8,625 | |||
Total |
7,187,500 | |||
| Investor | Founders’ Common Stock | |||
HCM ACQUISTION HOLDINGS, LLC |
7,153,000 | |||
Xxxxxxx X. Xxx |
8,625 | |||
Xxxxx X. Xxxxxxxxx |
8,625 | |||
Xxxxx X. Xxxxx |
8,625 | |||
Xxxxx X Xxxx |
8,625 | |||
Total |
7,187,500 | |||
| Investor | Founders’ Warrants | |||
HCM ACQUISTION HOLDINGS, LLC |
7,153,000 | |||
Xxxxxxx X. Xxx |
8,625 | |||
Xxxxx X. Xxxxxxxxx |
8,625 | |||
Xxxxx X. Xxxxx |
8,625 | |||
Xxxxx X Xxxx |
8,625 | |||
Total |
7,187,500 | |||
PRIVATE PLACEMENT WARRANTS: | ||||
| Investor | Private Placement Warrants | |||
HCM ACQUISTION HOLDINGS, LLC |
5,000,000 | |||
Total |
5,000,000 | |||
