EXHIBIT 6
REGISTRATION RIGHTS AGREEMENT
by and between
MOSCOW CABLECOM CORP.
and
COLUMBUS NOVA INVESTMENTS VIII LTD.
Dated January 13, 2005
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
ARTICLE II REGISTRATION......................................................3
SECTION 2.1 Requested Registration........................................3
SECTION 2.2 Incidental Registrations......................................5
SECTION 2.3 Expenses......................................................5
SECTION 2.4 Effective Registration Statement..............................5
SECTION 2.5 Jurisdictional Limitations....................................6
SECTION 2.6 Conversion of Other Securities................................6
SECTION 2.7 Adjustments Affecting Registrable Securities..................6
ARTICLE III REGISTRATION PROCEDURES..........................................6
SECTION 3.1 Company Obligations...........................................6
SECTION 3.2 Holder Obligations............................................8
ARTICLE IV UNDERWRITTEN OFFERINGS............................................9
SECTION 4.1 Underwritten Offerings........................................9
SECTION 4.2 Holdback Agreements..........................................12
ARTICLE V INDEMNIFICATION AND CONTRIBUTION..................................12
SECTION 5.1 Indemnification..............................................12
SECTION 5.2 Contribution.................................................14
ARTICLE VI COMPANY COVENANTS................................................15
SECTION 6.1 Covenants Relating to Rule 144; Reports Under Exchange Act...15
SECTION 6.2 Other Registration Rights....................................15
ARTICLE VII MISCELLANEOUS...................................................15
SECTION 7.1 Amendments and Waivers.......................................15
SECTION 7.2 Successors and Assigns.......................................16
SECTION 7.3 Entire Agreement.............................................16
SECTION 7.4 Notices......................................................16
SECTION 7.5 Governing Law................................................16
SECTION 7.6 Arbitration..................................................17
SECTION 7.7 Equitable Remedies...........................................17
SECTION 7.8 Parties in Interest..........................................17
SECTION 7.9 Severability.................................................17
SECTION 7.10 No Inconsistent Agreements..................................17
SECTION 7.11 Headings....................................................17
SECTION 7.12 Construction; Adequate Counsel..............................18
SECTION 7.13 Counterparts................................................18
SECTION 7.14 Interpretation..............................................18
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of January 13, 2005, by and between Moscow CableCom Corp., a
Delaware corporation (the "Company"), and Columbus Nova Investments VIII Ltd.,
a Bahamas company ("CNI").
WHEREAS, the parties hereto have entered into a Series B Convertible
Preferred Stock Subscription Agreement dated August 26, 2004, as amended
December 1, 2004 (the "Subscription Agreement"), and a Series B Convertible
Preferred Stock Warrant Agreement dated as of the date hereof (the "Warrant
Agreement");
WHEREAS, pursuant to the Subscription Agreement, CNI has acquired
4,500,000 shares of Series B Convertible Preferred Stock, par value $.01 per
share of the Company ("Series B Preferred Stock"), which are currently
convertible into 4,500,000 shares of Common Stock (as defined herein) of the
Company; and
WHEREAS, pursuant to the Warrant Agreement, CNI has acquired warrants
that are currently exercisable for 8,283,000 shares of Series B Preferred
Stock of the Company (the "Warrants");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth in this Article I:
"Agreement" has the meaning specified in the preface.
"Commission" means the United States Securities and Exchange Commission or any
successor governmental agency that administers the Securities Act and the
Exchange Act.
"Commission Registration Form" means a registration statement complying with
the rules and regulations of the Commission.
"Common Stock" means the Common Stock, par value $.01 per share of the
Company, as constituted on the date hereof, any shares of the Company's
capital stock into which such Common Stock shall be changed, and any shares of
the Company's capital stock resulting from any reclassification of such Common
Stock or any recapitalization of the Company.
"Company" has the meaning specified in the preface.
"CNI" has the meaning specified in the preface.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated from time to time thereunder, all as the same shall be in effect
at the time.
"Holders" means CNI and any other Person who holds or may hold Registrable
Securities in the future under this Agreement or under any other agreement
with the Company granting rights to register Registrable Securities.
"Incidental Registration" has the meaning specified in Section 2.2(a).
"Indemnified Parties" has the meaning specified in Section 5.1(a).
"Indemnifying Party" has the meaning specified in Section 5.1(c).
"Person" means any individual, partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization and
any government, governmental department or agency or political subdivision
thereof.
"Registrable Securities" means, in each case as adjusted for stock splits,
recapitalizations and other similar events, (i) shares of Common Stock and
(ii) securities issued in replacement or exchange of any shares of Common
Stock; provided, however, that any and all shares described in clauses (i) and
(ii) above shall cease to be Registrable Securities upon any sale pursuant to
a registration statement declared effective under the Securities Act, or any
sale exempt from registration under the Securities Act pursuant to section
4(1) of the Securities Act or Rule 144 promulgated under the Securities Act.
"Registration Expenses" means all expenses incurred by the Company incident to
the Company's performance of or compliance with this Agreement in connection
with each Registration, regardless of whether such registration statement is
declared effective, including without limitation (i) all registration, filing,
listing and National Association of Securities Dealers, Inc. fees, (ii) all
fees and expenses of complying with securities or blue sky laws, (iii) all
word processing, duplicating and printing expenses, (iv) all messenger and
delivery expenses, (v) any transfer taxes, (vi) the fees and expenses of the
Company's legal counsel and independent public accountants, including the
expenses of any "comfort" letters, (vii) all expenses incurred in connection
with making "roadshow" presentations and holding meetings with potential
investors to facilitate the distribution and sale of Registrable Shares,
(viii) the reasonable fees and disbursements of counsel and accountants
retained by CNI, (ix) any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting discounts
and commissions as described below, and (x) all of the internal expenses
incurred by the Company, including, without limitation, salaries and expenses
of officers and employees performing legal and accounting duties, expenses of
conducting the annual audit of the Company's financial statements by its
independent public accountants, and costs in obtaining liability insurance on
behalf of the Company, its officers and directors; provided, however, that
each Holder shall be responsible for the underwriting discounts and
commissions with respect to the Registrable Shares being sold by such Holder.
"Registration" means any of a Requested Registration or an Incidental
Registration.
"Registration Request" has the meaning set forth in Section 2.1(a).
"Requested Registration" has the meaning specified in Section 2.1(a).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated from time to time thereunder, all as the same shall be in effect
at the time.
"Underwriter's Maximum Number" means a specified maximum number of securities
that could be successfully included in a Registration pursuant to an
underwritten offering within a price range acceptable to Holders and the
Company as determined in writing by the representative of the underwriters.
ARTICLE II
REGISTRATION
SECTION 2.1 Requested Registration.
(a) Request for Registration. Subject to Section 2.1(b), if at any
time following the first anniversary of this Agreement the Company shall
receive a written request from CNI (a "Registration Request") that the Company
effect a registration under the Securities Act of all or any part of the
Registrable Securities held by CNI (a "Requested Registration") in accordance
with the terms of this Section 2.1, then the Company shall use its best
efforts to effect the registration under the Securities Act (and any related
qualification under blue sky laws or other compliance) of the offering and
sale of such Registrable Securities within 90 days after receipt of the
Registration Request. The Company may also include in any Requested
Registration other securities of the Company offered for the account of the
Company or any other Person, including Registrable Securities held by other
Holders entitled to include such securities in such Requested Registration
pursuant to Section 2.2. A Requested Registration may be accomplished on Form
S-3 under the Securities Act, if available, at the option of the Company;
provided, however, that if, in connection with any Requested Registration that
is proposed by the Company to be on Form S-3 or any similar short form
registration statement that is a successor to Form S-3, the managing
underwriters, if any, shall advise the Company in writing that in their
opinion the use of another permitted form is of material importance to the
success of the offering, then such registration shall be on such other
permitted form. CNI shall have the right to terminate or withdraw any
Requested Registration requested by it under this Section 2.1 prior to the
effectiveness of such registration, whether or not the Company or any Holder
has elected to include Registrable Securities in such Requested Registration.
The Registration Expenses of such terminated or withdrawn registration shall
be borne by the Company in accordance with Section 2.3 if CNI shall have
terminated or withdrawn such registration (i) following a breach by the
Company of any of its covenants or obligations under this Agreement or (ii) as
a result of disagreement between CNI and the Company on the offering price per
share and underwriting discounts, if applicable, in connection with such
registration; provided, however, that if CNI terminates or withdraws such
registration other than pursuant to (i) or (ii) above, the Registration
Expenses of such terminated or withdrawn registration shall be borne by CNI.
(b) Limitation on Requested Registrations.
(i) Share Limitation. The Company shall not be obligated
to effect a Requested Registration unless such
registration involves the greater of (i) an aggregate
offering price of $1,000,000 or (ii) one percent of
the Common Stock issued or outstanding as of the date
of such Registration Request.
(ii) Limitation on the Number of Requested Registrations.
The Company shall only be obligated to effect one
Requested Registration hereunder in any six month
(calendar) period.
(iii) Prior Registration Limitation. If a registration
statement related to another Registration has been
declared effective under the Securities Act within the
preceding six calendar months and the participating
Holders have not sold all Registrable Securities
included in such registration statement, then the
Company shall have the right to defer a Requested
Registration for a period of not more than 90 days.
(iv) Delay Limitation. If the Company shall furnish to CNI
a certificate signed by the chief executive officer or
chairman of the board of directors of the Company
stating that, in the good faith judgment of the board
of directors, the effecting of the Requested
Registration at the time requested would be
detrimental to the Company or its stockholders, then
the Company shall have the right to defer such
Requested Registration for a period of not more than
180 days; provided, however, that the Company may only
assert such delay once during any 12-month period.
(v) Simultaneous Company Registration Limitation. From the
date of filing of any registration statement under the
Securities Act by the Company until the date 180 days
following the effective date of such registration
statement, the Company shall not be obligated to
effect a Requested Registration without the consent of
the representative of the underwriters of the offering
as to which such registration statement is filed, so
long as the Company is actively employing in good
faith all reasonable efforts to cause such
registration statement to become or remain effective.
(vi) Termination. The right to request a Requested
Registration shall terminate on the tenth anniversary
of this Agreement.
(vii) Allocation. The inclusion of Registrable Securities in
a Requested Registration, in addition to the
Registrable Securities to be included by CNI, shall be
made on a pro rata basis among all other Holders. In
the event that any Holder withdraws his Registrable
Securities from a Requested Registration, then the
Company shall promptly notify other Holders of such
withdrawal. In such event, other Holders shall be
entitled to increase the number of Registrable
Securities to be included in such Requested
Registration on a pro rata basis based on the number
of Registrable Securities that each such Holder
desires to include in such Requested Registration.
(viii) Price Determination. If CNI requests the Registration,
it shall have the sole right to determine the offering
price per share and underwriting discounts, if
applicable, in connection with any resales of
Registrable Securities pursuant to this Section 2.1,
after consultation with the Company and with due
regard for the Company's views relating thereto.
SECTION 2.2 Incidental Registrations.
(a) Incidental Registration. If the Company, for itself or any of its
security holders other than pursuant to a Requested Registration, at any time
after the date hereof and through the tenth anniversary hereof, undertakes to
effect a registration under the Securities Act of the offering and sale of any
shares of its capital stock or other securities (other than (i) the
registration of an offer, sale or other disposition of securities solely to
employees of, or other Persons providing services to, the Company or any
subsidiary of the Company pursuant to an employee or similar benefit plan or
(ii) in connection with a merger, acquisition or other transaction of the type
described in Rule 145 under the Securities Act or a comparable or successor
rule, registered on Form S-4 or similar or successor forms promulgated by the
Commission), then on each such occasion the Company shall notify Holders of
such undertaking at least 30 days prior to the filing of a registration
statement relating thereto. In such event, upon the written request of any
Holder within 20 days after the receipt of such notice, subject to Section
4.1(d), the Company shall use its best efforts as soon as practicable
thereafter to cause any Registrable Securities specified by such Holder to be
included in such registration statement (an "Incidental Registration"). If a
Holder desires to include less than all Registrable Securities held by it in
any Incidental Registration, then such Holder shall nevertheless continue to
have the right to include any remaining Registrable Securities in any
subsequent Incidental Registration upon the terms and conditions set forth
herein. The Company shall have the right to terminate or withdraw any
Incidental Registration initiated by it under this Section 2.2 prior to the
effectiveness of such registration, whether or not any Holder has elected to
include Registrable Securities in such Incidental Registration. The
Registration Expenses of such terminated or withdrawn registration shall be
borne by the Company in accordance with Section 2.3.
(b) Price Determination. The Company shall have the sole right to
determine the offering price per share and underwriting discounts in
connection with any resale by Holders of Registrable Shares pursuant to an
underwriting offering in connection with an Incidental Registration, after
consultation with the Holders and due regard for Holders' views relating
thereto. If CNI disagrees with the Company's determination of the offering
price per share, CNI shall have the right to withdraw its Registrable
Securities from the Incidental Registration.
(c) Effect of Incidental Registration. No Incidental Registration
effected by the Company shall relieve the Company from its obligations to
effect any Requested Registration.
SECTION 2.3 Expenses. The Company shall pay all Registration Expenses incurred
in connection with any Registration, including if a Registration is not deemed
to have been effected pursuant to Section 2.4 hereof.
SECTION 2.4 Effective Registration Statement. No Registration shall be deemed
to have been effected unless the registration statement filed with respect
thereto in accordance with the Securities Act has been declared effective by
the Commission with respect to the disposition of all Registrable Securities
covered by such Registration and remains effective in accordance with Section
3.1. Notwithstanding the foregoing, no Registration shall be deemed to have
been effected if (a) after the related registration statement has been
declared effective by the Commission, such Registration is made subject to any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or any court proceeding for any reason, other than
solely by reason of a misrepresentation or omission by CNI, or (b) the
conditions to closing specified in the underwriting agreement entered into in
connection with such Registration are not satisfied, other than solely by
reason of an act or omission by CNI.
SECTION 2.5 Jurisdictional Limitations. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated to take any
action to effect registration, qualification or compliance with respect to
Registrable Securities: (a) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process,
unless the Company is already subject to service in such jurisdiction and
except as required by the Securities Act; (b) that would require it to qualify
generally to do business in any jurisdiction in which it is not already so
qualified or obligated to qualify; or (c) that would subject it to taxation in
a jurisdiction in which it is not already subject generally to taxation.
SECTION 2.6 Conversion of Other Securities. If CNI holds any options, rights,
warrants or other securities that are directly or indirectly convertible into
or exercisable or exchangeable for any Registrable Shares, the Registrable
Shares underlying such options, rights, warrants or other securities shall be
eligible for registration pursuant to this Article II. This includes, without
limitation, the Series B Preferred Stock and the Warrants.
SECTION 2.7 Adjustments Affecting Registrable Securities. The Company will not
effect or permit to occur any combination or subdivision of securities that
would adversely affect the ability of Holders to include any Registrable
Securities in any registration of the Company's securities contemplated by
this Article II or the marketability of such Registrable Securities under any
such Registration.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1 Company Obligations. If and whenever the Company is required to
use its efforts to effect a Registration as provided in Article II, then as
expeditiously as possible and subject to the terms and conditions of Article
II, the Company shall:
(a) Prepare and file with the Commission the appropriate registration
statement to effect such Registration and use its best efforts to cause such
registration statement to become and remain effective for the period set forth
in Section 3.1(c);
(b) Permit any Holder that, in the reasonable judgment of the
Company's counsel, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration
statement (including by making available for inspection by any such Person and
any attorney, accountant or other agent retained by such Person, all financial
and other records, pertinent corporate documents and all other information
reasonably requested in connection therewith), furnish to all Holders, the
underwriters, if any, and their respective counsel and accountants advance
draft copies of such registration statement and each prospectus included
therein or filed with the Commission at least five business days prior to the
filing thereof with the Commission, and any amendments and supplements thereto
promptly as they become available, and provide each such Person such access to
the books and records of the Company and such opportunities to discuss the
business of the Company with its officers and the independent public
accountants that have certified the financial statements of the Company as is
necessary, in the opinion of such Person, to conduct a reasonable
investigation within the meaning of the Securities Act;
(c) Promptly prepare and file with the Commission such 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 to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement,
until the earlier of such time as all of such securities have been disposed of
in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement or the expiration of
180 days after such registration statement becomes effective (such period of
180 days to be extended one day for each day or portion thereof during such
period that such registration statement is subject to any stop order
suspending the effectiveness of the registration statement, any order
suspending or preventing the use of any related prospectus or any order
suspending the qualification of any Registrable Securities included in such
registration statement for sale in any jurisdiction);
(d) Promptly furnish to CNI, in the case of a Requested Registration
or an Incidental Registration in which it participates, copies of drafts and a
final conformed version of such registration statement as proposed to be filed
and a copy of any amendment or supplement to such registration statement or
prospectus (after initial filing of the registration statement), prior to the
filing of any such registration statement, amendment, supplement or
prospectus, and make the Company's representatives available for discussion of
such document and in good faith consider such changes in such document prior
to the filing thereof as CNI or its counsel may reasonably request;
(e) If requested by the underwriter or underwriters or CNI in
connection with an underwritten offering of Registrable Shares, immediately
incorporate in a prospectus supplement or post-effective amendment such
information as the underwriters and CNI agree should be included therein
relating to the plan of distribution with respect to such Registrable Shares,
including, without limitation, information with respect to the principal
amount of Registrable Shares being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of such underwritten offering of Registrable Shares, and the Company
shall make all required filings of the prospectus supplement or post-effective
amendment promptly upon being notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(f) Immediately notify when or if any registration statement,
amendment, supplement or prospectus has been filed and furnish to Holders that
participate in such Registration, without charge to such Holders, such number
of conformed copies of such registration statement and each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) 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 as the
purchaser or any such Holder may reasonably request;
(g) Use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the United States
state securities or blue sky laws of such jurisdictions as any Holder that
participates in such Registration reasonably requests, keep such registration
or qualification in effect for the time period set forth in Section 3.1(c) and
take such other action as may be reasonably necessary or advisable to enable
such Holders to sell the Registrable Securities covered by such Registration
in such jurisdictions;
(h) Use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other United States state governmental agencies or
authorities as may be necessary to enable any Holder that participates in such
Registration to sell the Registrable Securities covered by such Registration
as intended by such registration statement;
(i) Use its best efforts to obtain the withdrawal of any stop order
suspending the effectiveness of such registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction;
(j) Immediately notify Holders that participate in such Registration,
at any time during which a prospectus relating to such registration statement
is required to be delivered under the Securities Act, if the Company becomes
aware of any event as a result of which such prospectus, as then in effect,
would include an untrue statement of material fact or would omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, and at the request of such Holders promptly prepare and
furnish to such Holders 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 Registrable Securities, such prospectus
would 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 the light of the circumstances under
which they were made;
(k) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months but not more than 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 Rule 158 thereunder;
(l) Provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement; and
(m) Use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which the same
class of securities issued by the Company are then listed or to secure
designation and quotation of all Registrable Securities covered by such
Registration on the Nasdaq National Market System and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. as such
with respect to such Registrable Securities and pay all fees and expenses in
connection with the satisfaction of the obligations set forth in this Section
3.1(m).
SECTION 3.2 Holder Obligations.
(a) Each Holder that participates in a Registration shall furnish to
the Company, upon its written request, such information as it may reasonably
request in writing (i) regarding the proposed distribution by such Holder of
the Registrable Securities held by such Holder and (ii) as required in
connection with any registration (including an amendment to a registration
statement or prospectus), qualification or compliance referred to in this
Article III.
(b) Upon receipt of any notice from the Company, or upon a Holder's
otherwise becoming aware, of the happening of any event of the kind described
in Section 3.1(j), such Holder shall discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to the
offering and sale of such Registrable Securities until the receipt by such
Holder of the supplemented or amended prospectus contemplated by Section
3.1(j). If so directed by the Company, such Holder shall deliver to the
Company all copies other than permanent file copies then in possession of such
Holder of the prospectus relating to the offering and sale of such Registrable
Securities current at the time of receipt of such notice. In addition, each
Holder shall immediately notify the Company, at any time during which a
prospectus relating to the registration of such Registrable Securities is
required to be delivered under the Securities Act, of the happening of any
event as a result of which information previously furnished in writing by such
Holder to the Company specifically for inclusion in such prospectus contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. In
the event that the Company or any such Holder shall give any such notice, the
period referred to in Section 3.1(c) shall be extended by a number of days
equal to the number of days during the period from and including the giving of
notice pursuant to Section 3.1(c) to and including the date on which such
Holder receives copies of the supplemented or amended prospectus contemplated
by Section 3.1(c).
ARTICLE IV
UNDERWRITTEN OFFERINGS
SECTION 4.1 Underwritten Offerings.
(a) In connection with any (i) Requested Registration with respect to
which CNI proposes to dispose of the Registrable Shares in an underwritten
offering or (ii) Incidental Registration the Company undertakes to effect as
an underwritten offering, the Company shall enter into an underwriting
agreement (and any other customary agreements) with the underwriters for such
offering, such agreement to be in form and substance reasonably satisfactory
to such underwriters in their reasonable judgment and to contain such
representations and warranties by the Company and such other terms as are
customarily contained in agreements of that type, including without limitation
indemnities to the effect and to the extent provided in Section 5.1.
(b) In connection with any underwritten offering in which CNI
participates, the Company shall furnish CNI with (i) an opinion (and updates
thereto) of the Company's counsel to the effect that the registration
statement complies as to form with the Securities Act and any other securities
or blue sky laws and that such counsel has no knowledge or reason to know of
any material misstatement or omission in the registration statement and (ii) a
"comfort" letter (and updates thereof) signed by the independent public
accountants that have certified the Company's financial statements included or
incorporated by reference in such registration statement covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and with respect to events subsequent to
the date of such financial statements, as are customarily covered in
accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(c) Each Holder that participates in the Registration shall be a
party to such underwriting agreement and may, at such Holder's option, require
that any or all representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters be made
to and for the benefit of such Holder and that any or all conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder. No such Holder
participating in any such underwritten offering shall be required by the
provisions hereof to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder and its intended method of distribution and
any other representation required by law.
(d) Participation in Underwritten Offerings.
(i) If a Requested Registration is an underwritten
offering, and the representative of the underwriters
gives written advice to the Holder(s) requesting the
Registration and the Company that, in its opinion,
market conditions dictate that no more than an
Underwriter's Maximum Number could successfully be
included in such Requested Registration, then the
Company shall be required by this Section 4.1(d)(i) to
include in such Requested Registration only such
number of securities as equals the Underwriter's
Maximum Number. In such event, the Holder(s)
requesting the Registration, the Company and any other
Person participating in such Requested Registration
shall participate in such Requested Registration as
follows:
(1) First, there shall be included in such
Requested Registration that number of
securities that the Holder(s) requesting the
Registration requested to be included in such
registration to the full extent of the
Underwriter's Maximum Number;
(2) Second, if the Underwriter's Maximum Number
has not yet been reached, there shall be
included in such Requested Registration that
number of Registrable Securities that the
Company proposes to offer and sell for its own
account in such registration to the full
extent of the Underwriter's Maximum Number;
and
(3) Third, if the Underwriter's Maximum Number has
not yet been reached, there shall be included
in the Requested Registration that number of
Registrable Securities that any Holders other
than the Holder(s) requesting the Registration
and the Company have requested to be included
in the Requested Registration to the full
extent of the remaining portion of the
Underwriter's Maximum Number, allocated pro
rata among such other Holders based on the
number of Registrable Securities that each
such Holder desires to offer.
(ii) If an Incidental Registration is an underwritten
offering, and the representative of the underwriters
gives written advice to the Holders participating in
the Incidental Registration and the Company that, in
its opinion, market conditions dictate that no more
than an Underwriter's Maximum Number could
successfully be included in such Incidental
Registration, then the Company shall be required by
this Section 4.1(d)(ii) to include in such Incidental
Registration only such number of securities as equals
the Underwriter's Maximum Number. In such event, the
Holders, the Company and any other Person
participating in such Incidental Registration shall
participate in such Incidental Registration as
follows:
(1) First, there shall be included in such
Incidental Registration that number of
securities that the Company proposes to offer
and sell for its own account in such
registration to the full extent of the
Underwriter's Maximum Number;
(2) Second, if the Underwriter's Maximum Number
has not yet been reached, there shall be
included in such Incidental Registration that
number of Registrable Securities that Holders
have requested to be included in such
Incidental Registration to the full extent of
the remaining portion of the Underwriter's
Maximum Number, allocated pro rata among such
Holders based on the number of Registrable
Securities that each such Holder desires to
offer; and
(3) Third, if the Underwriter's Maximum Number has
not yet been reached, there shall be included
in the Incidental Registration that number of
Registrable Securities that any Persons other
than Holders and the Company have requested to
be included in the Incidental Registration to
the full extent of the remaining portion of
the Underwriter's Maximum Number, allocated
pro rata among such other Persons based on the
number of Registrable Securities that each
such Person desires to offer.
(e) The Company shall promptly notify each Holder if any of its
Registrable Securities will not be included in a Registration pursuant to
Section 4.1(d). If any securities are withdrawn from a Registration and if the
number of Registrable Securities to be included in such Registration was
previously reduced pursuant to Section 4.1(d), then the Company shall then
offer to all Holders the right to include additional Registrable Securities in
such Registration equal to the number of securities so withdrawn, with such
Registrable Securities to be allocated among the Holders requesting additional
inclusion on a pro rata basis.
(f) Selection of Underwriters. In a Requested Registration, the
Holder(s) requesting the Registration shall notify the Company that it
proposes to dispose of the Registrable Shares in an underwritten offering and
the Company and such Holder(s) shall agree, with each party acting in good
faith, to jointly select the representative of the underwriters from
underwriting firms of national reputation in the United States. In an
Incidental Registration, the Company shall select the representative of the
underwriters from underwriting firms of national reputation in the United
States that are reasonably acceptable to Holders participating in the
Incidental Registration.
SECTION 4.2 Holdback Agreements.
(a) In connection with any underwritten public offering of
Registrable Securities by the Company under the Securities Act, no Holder
shall effect directly or indirectly (except as part of such underwritten
Registration in accordance with the provisions hereof or pursuant to a
transaction exempt from registration other than pursuant to Rule 144 or Rule
145 of the Securities Act) any sale, distribution, short sale, loan, grant of
options for the purchase of or other disposition of any Registrable Securities
for such period as the representative of the underwriters requests, which
period shall in no event commence earlier than seven days prior to, or end
more than 180 days after, the date on which the registration statement related
to such offering is declared effective. The Company shall be entitled to
instruct its transfer agent to place stop transfer notations in its records to
enforce this Section 4.2(a).
(b) The Company agrees (i) not to effect any public sale or
distribution of any Common Stock (other than pursuant to a registration
statement on Form S-8 or any successor form), during the seven days prior to,
and during the 180 days after, the date on which the registration statement
related to a Registration is declared effective (except as part of such
registration statement); and (ii) that any agreement entered into after the
date of this Agreement pursuant to which the Company issues or agrees to issue
any privately placed securities shall contain a provision under which the
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in (i) above, in each case
including a sale pursuant to Rule 144; provided, however, that the provisions
of this paragraph 4.2(b) shall not prevent the conversion or exchange of any
securities pursuant to their terms into or for other securities.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
SECTION 5.1 Indemnification.
(a) Indemnification by the Company. In connection with any
Registration, to the extent permitted by law, the Company shall and hereby
does indemnify and hold harmless each Holder that participates in such
Registration, each such Holder's legal counsel and independent accountants,
each other Person who participates as an underwriter in the offering or sale
of securities (if so required by such underwriter as a condition to including
the Registrable Securities of such Holders in such registration) and each
other Person, if any, who controls any such Holder or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any losses, claims, damages, liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) or expenses,
joint or several, to which such Holder, underwriter or other Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) or expenses arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which the offering and sale of such
securities were registered under the Securities Act, any registration
statement or prospectus, or any document incorporated therein by reference, or
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, or arise out of any violation by the Company of any rule
or regulation promulgated under the Securities Act or state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration. The Company shall reimburse
the Indemnified Parties for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof); provided, however, that the
indemnity agreement contained in this Section 5.1(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability (or
action or proceeding, whether commenced or threatened, in respect thereof) or
expense if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld); and provided, further,
that the Company shall not be liable to any Indemnified Party 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 or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, prospectus, or any document
incorporated therein by reference, or any such amendment or supplement
thereto, in reliance upon and in conformity with information furnished to the
Company in writing by any Indemnified Party specifically for use therein.
(b) Indemnification by Holders. As a condition to including any
Registrable Securities in any Registration, to the extent permitted by law,
each Holder shall and does hereby indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 5.1(a)) the Company,
each director of the Company, each officer of the Company and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any statement or alleged statement in or omission or
alleged omission from any registration statement under which the offering and
sale of such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if and only if and to the
extent that such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with information
furnished in writing to the Company directly by such Person for use in
connection with the registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto; provided, however, that the obligation of any such Holder
under this Section 5.1(b) shall be limited to an amount equal to the gross
proceeds received by such Holder upon the sale of Registrable Securities sold
in such Registration, unless such liability arises out of or is based upon
such Holder's willful misconduct.
(c) Notices of Claims, etc. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action, proceeding, claim,
investigation or other similar event involving a claim referred to in this
Section 5.1, if a claim in respect thereof is to be made against a party
required to provide indemnification (an "Indemnifying Party"), the Indemnified
Party shall give written notice to the latter of the commencement of such
action; provided, however, that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligation under this Section 5.1, 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 the reasonable
judgment of such Indemnified Party a conflict of interest between such
Indemnified Party and the Indemnifying Party may exist in respect of such
claim, then each 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. After notice from the Indemnifying
Party to such Indemnified Party of its election so to assume the defense
thereof, the Indemnifying Party shall not be liable to such Indemnified Party
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 consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party if such
judgment or settlement does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified
in this Section 5.1 (with appropriate modifications) shall be given by the
Company and each Holder that participates in a Registration to each other and
to any underwriter, as applicable, with respect to any required registration
or other qualification of securities under any United States federal or state
law or regulation, other than the Securities Act, of any United States
governmental authority.
(e) Indemnification Payment. The indemnification required by this
Section 5.1 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received and
as a loss, claim, damage, liability or expense is incurred.
(f) Survival of Obligations. The obligations of the Company and
Holders under this Section 5.1 and Section 5.2 shall survive the completion of
any offering of Registrable Securities.
SECTION 5.2 Contribution. If the indemnification provided for in Section 5.1
is unavailable or insufficient to hold harmless an Indemnified Party, then
each Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in Section 5.1 an amount or additional amount, as the case may be,
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or Indemnifying Parties, on the one hand, and the
Indemnified Party, on the other, in connection with the statements or
omissions that resulted in such losses, claims, demands or liabilities as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Indemnifying
Party or Indemnifying Parties, on the one hand, or the Indemnified Party, on
the other, and the relative intent, knowledge, access to information and
opportunity of the parties to correct or prevent such untrue statement or
omission. The Company and CNI agree that it would not be just and equitable if
contribution pursuant to this Section 5.2 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
sentence. The amount paid to an Indemnified Party pursuant to this Section 5.2
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any
action or claim subject to this Article V. 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 that was not guilty of such
fraudulent misrepresentation.
ARTICLE VI
COMPANY COVENANTS
SECTION 6.1 Covenants Relating to Rule 144; Reports Under Exchange Act. With a
view to (a) making available the benefits of certain rules and regulations of
the Commission that may at any time permit the sale of securities of the
Company to the public without registration after such time as a public market
exists for the Common Stock and (b) causing the Company to be and remain
eligible to use Form S-3 under the Securities Act, the Company shall:
(i) Make and keep public information available in accordance with
Rule 144 under the Securities Act at all times after the
effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to
the general public;
(ii) Take such action, including the voluntary registration of the
Common Stock under Section 12 of the Exchange Act, as
necessary to enable the Company to utilize Form S-3 for the
sale of Registrable Securities;
(iii) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(iv) Furnish to each Holder forthwith upon request, so long as such
Holder owns any Registrable Securities, a written statement by
the Company as to its compliance with the reporting
requirements of Rule 144 under the Securities Act, the
Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company and such other
reports and documents of the Company as such Holder may
reasonably request in availing itself of any rule or
regulation of the Commission that may allow such Holder to
sell any Registrable Securities without registration.
SECTION 6.2 Other Registration Rights. The Company may from time to time grant
additional registration rights to other holders of Common Stock, provided that
no such registration rights shall be senior to the rights granted under this
Agreement with respect to registration and cutback (but that such rights may
at all times be pari passu).
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
parties. Either party to this Agreement may (i) extend the time for the
performance of any of the obligations or other acts of the other party, or
(ii) waive compliance with any of the agreements or conditions of the other
party contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
Any waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
SECTION 7.2 Successors and Assigns. All covenants and agreements contained in
this Agreement by or on behalf of either party hereto shall bind and inure to
the benefit of the respective successors and assigns of such party hereto,
whether so expressed or not, including subsequent Holders of Registrable
Securities.
SECTION 7.3 Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof.
SECTION 7.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt (or, the
first business day following such receipt if the date is not a business day or
the receipt is after 5 p.m.) of transmission by facsimile, or (iii) on the
date of confirmation of receipt (or, the first business day following such
receipt if the date is not a business day or the receipt is after 5 p.m.) if
delivered by courier. Subject to the foregoing, all notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
If to CNI: With a courtesy copy (which shall not
Columbus Nova Investments VIII Ltd. constitute notice to CNI) to:
000 Xxxxxxx Xxxxxx Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
38th Floor An der Welle 5
Xxx Xxxx, XX 00000 60322 Frankfurt am Main
United States Germany
Attention: Xxxx Xxxxxx Attention: Xxxxxx Xxxxxxx
Facsimile: x0-000-000-0000 Facsimile: x00-00-00000000
If to Company: With a courtesy copy (which shall not
Moscow CableCom Corp. constitute notice to the Company) to:
000 Xxxx Xxxxxx
Xxxxx 0000 Xxxxxx X. Xxxxx, Xx.
Xxx Xxxx, XX 00000 00 Xxxxxxxxxx Xxxx
Attention: Xxxxxx Xxxxx Xxxx Xxxx, XX 00000
Facsimile: x0-000-000-0000 Facsimile: x0-000-000-0000
Any party may change the address to which notices, requests, demands and other
communications hereunder are to be delivered by giving the other party notice
in the manner herein set forth.
SECTION 7.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect
to any choice or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the
Laws of any jurisdiction other than the State of New York.
SECTION 7.6 Arbitration. Any dispute, controversy or claim between the parties
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be referred to and finally resolved by arbitration in
New York, New York, to the exclusion of all other procedures, in accordance
with the rules then in force of the American Arbitration Association, which
are deemed to be incorporated by reference into this Section 7.6. In any such
arbitration, three arbitrators shall be appointed in accordance with the such
rules. Where the rules of the American Arbitration Association do not provide
for a particular situation, the arbitrators shall determine the course of
action to be followed. To the maximum extent permitted by applicable law, the
parties agree not to assert any rights to have any court rule on a question of
law affecting the arbitration or to hear any appeal from or entertain any
judicial review of the arbitral award.
SECTION 7.7 Equitable Remedies. The parties agree that irreparable harm would
occur in the event that any of the agreements and provisions of this Agreement
were not performed fully by the parties in accordance with their specific
terms or conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining and quantifying the amount of damage that would be suffered by
the parties in the event that this Agreement were not performed in accordance
with its terms or conditions or were otherwise breached. It is accordingly
hereby agreed that the parties shall be entitled to an injunction or
injunctions to restrain, enjoin and prevent breaches of this Agreement by the
other party and to enforce specifically such terms and conditions of this
Agreement, such remedy being in addition to and not in lieu of any other
rights and remedies to which the other party is entitled to at law or in
equity.
SECTION 7.8 Parties in Interest. This Agreement is for the benefit of any
Holder irrespective of whether such Holder is a signatory to this Agreement,
subject to (a) the provisions respecting the minimum numbers or percentages of
shares of Registrable Securities required in order to entitle Holders to
certain rights, or take certain actions, contained herein and (b) the
limitations set forth in the agreement with the Company granting rights to
register Registrable Securities to which any such Holder is a party.
SECTION 7.9 Severability. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and
effect and the application of such provision to other Persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties
hereto so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
SECTION 7.10 No Inconsistent Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to CNI in this Agreement.
SECTION 7.11 Headings.
The descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
SECTION 7.12 Construction; Adequate Counsel.
(a) Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event that an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
(b) Adequate Counsel. Each of the Company and CNI hereby represents
and warrants that it and its legal counsel have adequate information regarding
the terms of this Agreement, the scope and effect of the transactions
contemplated hereby and all other matters encompassed by this Agreement to
make an informed and knowledgeable decision with regard to entering into this
Agreement.
SECTION 7.13 Counterparts.
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
SECTION 7.14 Interpretation.
References in this Agreement to articles, sections, paragraphs, clauses and
exhibits are to articles, sections, paragraphs, clauses and exhibits in or to
this Agreement unless otherwise indicated. Whenever the context may require,
any pronoun includes the corresponding masculine, feminine and neuter forms.
Any term defined by reference to any agreement, instrument or document has the
meaning assigned to it whether or not such agreement, instrument or document
is in effect. Any reference to any federal, state, local or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The words "include",
"includes" and "including" are deemed to be followed by the phrase "without
limitation". Unless the context otherwise requires, any agreement, instrument
or other document defined or referred to herein refers to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified from time to time. Unless the context otherwise requires,
references herein to any Person include its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
MOSCOW CABLECOM CORP.
By: /s/ Xxxxxx X'Xxxx
--------------------------
Name: /s/ Xxxxxx X'Xxxx
Title: Chief Financial Officer
COLUMBUS NOVA INVESTMENTS VIII LTD.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
