Exhibit 4.2
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 Xxxx & Xxxxxxx Xxxxx Foundation, a philanthropic trust organized
under the laws of the State of Washington (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 5,400,000 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 Cascade Investment
LLC (the "Other Stockholder"), the Other Stockholder has agreed to purchase from
CHI 8,100,000 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 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
-2-
the date of such Request have a value of less than Fifty Million Dollars
($50,000,000). Upon 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
-3-
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
-4-
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
-5-
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
-6-
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):
-7-
(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;
-8-
(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.
-9-
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
-10-
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
-11-
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
-12-
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
-13-
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
-14-
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
-15-
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
-16-
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: Xxxx & Xxxxxxx Xxxxx Foundation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
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.
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
-17-
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]
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
XXXX & XXXXXXX XXXXX FOUNDATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Agent of Xxxxxxx X. Xxxxx III, Trustee
