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Exhibit 10.1
GENERAL DATACOMM INDUSTRIES, INC.
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REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of the Closing Date (as defined herein) by and among General DataComm
Industries, Inc., a Delaware corporation, and the Purchaser as defined below
whose signatures appear on the execution pages of this Agreement.
This Agreement is made pursuant to the 7-3/4% Convertible Senior
Subordinated Debenture Purchase Agreement between the Company, the Placement
Agent and each of the purchasers as defined below listed therein (the "Purchase
Agreement" and the "Purchasers"). In order to induce the Purchasers to enter
into the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement by the
Company is a condition to closing under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Closing Date: The date assigned thereto in the Purchase Agreement.
Common Stock: The Common Stock, $.10 par value per share of the
Company.
Company: General DataComm Industries, Inc., a Delaware corporation.
Debentures: The 7-3/4%Convertible Senior Subordinated Debentures due
2002 of the Company sold pursuant to the Purchase Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Expiration Date: Two (2) years from the issuance of the Debentures or
such shorter period of time under Rule 144(k) if the two (2) year holding period
thereunder is shortened.
Filing Date: The date of filing of a registration statement effected
pursuant to Section 3(a) hereof.
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Holders: The Persons with a beneficial interest in the Registrable
Securities.
Indenture: The Indenture dated as of September 26, 1997, between the
Company and Continental Stock Transfer & Trust Company, as trustee (the
"Trustee"), pursuant to which the Debentures are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
Majority Holders: The Holders of a majority of the aggregate
principal amount or number of shares of outstanding Registrable Securities at
any given time as applicable.
Person: Shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government agency or political subdivision
thereof.
Placement Agent: Xxxxxxxx Capital Partners, L.P.
Prospectus: The prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
Purchase Agreement: The 7-3/4% Convertible Senior Subordinated
Debenture Purchase Agreement by and among the Company, the Placement Agent and
the Purchasers thereunder pursuant to which the Debentures were or will be
issued.
Registration Expenses: All expenses incurred by the Company in
complying with Section 3 hereof, including, but not limited to, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, internal expenses, fees and disbursements of all independent certified
public accountants of the Company, any listing fees and expenses and blue sky
fees and expenses in such states reasonably requested but otherwise excluding
all fees and expenses of counsel for the Holders and Purchasers.
Registrable Securities: All Debentures which are Restricted
Securities, and the shares of Common Stock into which the Debentures may be
converted which are Restricted Securities.
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Registration Statement: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Restricted Securities: The Debentures and the underlying Common Stock
into which the Debentures may be converted, and at all times subsequent thereto
until, in the case of any such security it (i) has been transferred pursuant to
the Registration Statement or another registration statement covering it that
has been filed with the SEC pursuant to the Securities Act, in either case after
such registration statement has become effective under the Securities Act, (ii)
has been transferred pursuant to Rule 144 under the Securities Act, (iii) may be
sold or transferred pursuant to Rule 144(k) under the Securities Act (or any
similar provisions then in force) under the Securities Act or otherwise or (iv)
ceases to be outstanding.,
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Shelf Registration: A registration effected pursuant to Section 3(a)
hereof.
Suspension Period: The time period in Sections 4(b)(3)(b)(iii) and
4(b)(9).
Underwritten registration or underwritten offering: A registration in
which securities of the Company are sold to or through an underwriter for
reoffering to the public on a firm commitment or best efforts basis.
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2. Securities Subject to this Agreement
The securities entitled to the benefits of this Agreement are the
Registrable Securities.
3. Shelf Registration
(a) Shelf Registration. The Company shall not later than the 90th day
after the Closing Date (the "Filing Date"), prepare and file with the SEC a
Registration Statement relating to the offer and sale of the Registrable
Securities (including securities deemed registered pursuant to Rule 416 under
the Securities Act) by the Holders from time to time to be made on a continuous
basis pursuant to Rule 415 (or any appropriate similar rule that may be adopted
by the SEC) under the Securities Act (the "Shelf Registration"). The Shelf
Registration shall be on a Form S-3 or other appropriate form (unless the
holders of the Registrable Securities offered thereby reasonably request a
specific form) permitting registration of such Registrable Securities for resale
by the Holders in a public offer and sale.
(b) Effectiveness. The Company shall use its reasonable best efforts
to cause the Shelf Registration to become effective under the Securities Act as
soon as practicable following the Filing Date and in any event no later than 150
days after the Closing Date. Subject to the requirements of the Securities Act
including, without limitation, requirements relating to updating prospectuses
through post-effective amendments or otherwise, the Company shall use its
reasonable best efforts to keep the Shelf Registration continuously effective
until the Expiration Date, provided, that in the event of a Suspension Period,
as set forth in Section 4(b)(3)(b)(9) hereof, the Company shall extend the
period of effectiveness of such Shelf Registration by the number of days of each
such Suspension Period.
(c) Underwriting. The Majority Holders of Registrable Securities
covered by the Shelf Registration Statement who wish to do so may sell such
Registrable Securities in one underwritten offering. In any such underwritten
offering, the investment banker(s) and manager(s) that will manage the offering
will be selected by the holders of a majority of the then outstanding
Registrable Securities included in such offering (with Holders of shares of
Common Stock constituting Registrable Securities being deemed to be Selling
Holders of the aggregate principal amount of Debentures converted into Common
Stock for purposes of such calculation) (after consultation with the Company as
to such selection and upon the written consent of the Company, which consent
shall not be unreasonably withheld or delayed). If such underwritten agreement
is not requested within 90 days after the date hereof, if at the time such
Majority Holders request an underwritten offering the managing underwriters in a
separate written offering on behalf of the Company (to the extent timely
notified in writing by the Company or such managing underwriters) request the
Holders participating in the underwritten offering not to effect any public sale
or distribution of Registrable Securities pursuant to such underwritten
offering, then no such sales will be
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made by the Holders pursuant to the underwritten Shelf Registration Statement
during the 10 day period prior to and the 90 day period beginning on the
effective date of such underwritten offering. If requested by the underwriters,
the Company will promptly enter into an underwriting agreement reasonably
acceptable to the Company with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and such
other terms and conditions as are customary for underwriting agreements with
respect to secondary offerings, including without limitation, indemnities to the
effect and to the extent provided in Section 5 hereof. The Holders of
Registrable Securities on whose behalf such securities are being distributed
shall be party to any such underwriting agreement. Such Holders shall not be
required by the Company to make any representations or warranties to the
underwriters with respect to the Company or the Registrable Securities (other
than that the Holders are conveying such securities free and clear of all
pledges, security interests, liens, charges, encumbrances, agreements, equities,
claims and options of whatever nature), and the Holders shall not be required to
indemnify the Company or the underwriters (other than with respect to the
matters, and to the extent, provided in Section 5).
No Holder of Registrable Securities may participate in any
underwritten distribution hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved in accordance with the terms hereof, and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
4. Expenses and Procedures
(a) Expenses of Registration. The Company shall bear all Registration
Expenses regardless of whether a Registration Statement becomes effective. Each
Holder shall bear all selling commissions, underwriting discounts, sales
concessions and similar type deductions applicable to the sale of securities
attributable to the Registrable Securities sold by such Holder and expenses of
its counsel.
(b) Registration Procedures. In connection with the one Shelf
Registration Statement required by the Company, the following provisions shall
apply:
(1) The Company shall furnish to the Purchasers, prior to the
filing thereof with the Commission, a copy of any Shelf Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall each use reasonable efforts to reflect in
each such document, when so filed with the Commission, such comments as the
Placement Agent reasonably may propose.
(2) The Company shall take such action as may be necessary so
that (i) the Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto (and
each report or
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other document incorporated therein by reference in each case) complies in all
material respects with the Securities and the Exchange Act and the respective
rules and regulations thereunder, (ii) the Shelf Registration Statement and any
amendment thereto remains effective and usable for resale of Registrable
Securities during the period the Shelf Registration Statement is required under
this Agreement to be effective and usable, (iii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statements 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 and (iv) any Prospectus forming part of any Shelf Registration
Statement, and any amendment or supplement to such Prospectus, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading, it being understood the Company is
not responsible for an untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with written information
furnished to the Company by such Purchasers, any Holder or any underwriter in
writing expressly for use in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(3)(a) The Company shall advise the Purchasers and, in the case
of clause (i) below, the Holders and, if requested by the Purchasers or any such
Holder, confirm such advice in writing:
i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
and
ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus included
therein or for additional information.
(b) The Company shall advise the Purchasers and the Holders
and, if requested by the Purchasers or any such Holder, confirm such advice in
writing of:
i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
ii) the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities included
therein for sale in any jurisdiction or the initiation of any proceeding
for such purpose; and
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iii) the happening of any event that requires the making
of any changes in the Shelf Registration Statement or the Prospectus so
that, as of such date, the Shelf Registration Statement and the 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 suspend the use of the
Prospectus until the requisite changes have been made).
(4) The Company shall use its best efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of any Shelf Registration Statement at the earliest possible time.
(5) The Company shall furnish to each Holder of Registrable
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
Post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(6) The Company shall, until the Expiration Date, deliver to
each Holder of Registrable Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus or amendment or supplement to a
Prospectus) included in such Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request.
(7) Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of Registrable Securities included therein and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any such Holders reasonably request in writing and do
any and all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Registrable Securities covered by such Shelf
Registration Statement; provided, however, that in no event shall the Company be
obligated to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to so qualify but
for this Section 4, (ii) file any general consent to service of process in any
jurisdiction where it is not as of the date hereof then so subject or (iii)
subject itself to taxation in any such jurisdiction if it is not so subject.
(8) Unless any Registrable Securities shall be in book-entry
only form, the Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such permitted
denominations and registered in such names as Holders
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may request in connection with the sale of Registrable Securities pursuant to
such Shelf Registration Statement.
(9) Upon the occurrence of any event contemplated by paragraph
4(b)(3)(b)(iii) above, the Company shall promptly prepare a post-effective
amendment to the Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Registrable Securities included
therein, the Prospectus will not include an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company notifies the Holders of the occurrence
of any event contemplated by paragraph 4(b)(3)(b)(iii) above, the Holders shall
suspend the use of the Prospectus until the requisite changes to the Prospectus
have been made.
(10) If required, not later than the effective date of the
Shelf Registration Statement hereunder, the Company shall provide CUSIP numbers
as appropriate for the Securities registered under such Shelf Registration
Statement.
(11) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the Shelf Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.
(12) The Company shall cause the Indenture and the Debentures
to be qualified under the Trust Indenture Act of 1939, as amended, in a timely
manner as and to extent required thereby. In the event that such qualification
would require the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
(13) The Company may require each Holder of Registrable
Securities to be sold pursuant to the Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably require
for inclusion in such Shelf Registration Statement and the Company may exclude
from such registration the Registrable Securities of any Holder that fails to
furnish such information within a reasonable time after receiving such request.
(14) The Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement, such information as the underwriters (in an underwritten
offering undertaken in accordance with the provisions of Section 4 hereto)
reasonably agree, should be included therein and to which the Company does not
reasonably object
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and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after they are notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(15) The Company shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration or the
disposition of the Registrable Securities pursuant to the Shelf Registration
Statement reasonably required of the Company thereunder.
(16) The Company shall in connection with an underwritten
public offering of the Registrable Securities (i) make reasonably available for
inspection by the Holders of Registrable Securities to be registered thereunder,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent retained by
such Holders or any such underwriter all relevant non-privileged financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries; (ii) cause the Company's officers, directors and employees to
make reasonably available for inspection all relevant non-privileged information
reasonably requested by such Holders or any such underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement, in
each case, as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential and not used by such Holders or any such underwriter,
attorney, accountant or agent except as permitted by law and in connection with
the Shelf Registration Statement, unless such disclosure is made in connection
with a court proceeding or required by law, or such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided further that the
foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of the Holders and the other parties entitled
thereto by one counsel designated by and on behalf of such Holders and other
parties; (iii) make such representations and warranties to the Holders of
Registrable Securities registered thereunder and the underwriters, if any, in
form, substance and scope as are customarily made by the Company to underwriters
in primary underwritten offerings and covering matters including, but not
limited to, those set forth in the Underwriting Agreement; (iv) obtain opinions
of counsel to the Company and updates thereof (which opinions (in form, scope
and substance) shall be reasonably satisfactory to the underwriters, if any)
addressed to each selling Holder and the underwriters, if any, covering such
matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by Majority
Holders and underwriters (it being agreed that the matters to be covered by such
opinion or written statement by such counsel delivered in connection with such
opinions shall include in customary form, without limitation, as of the date of
the opinion and as of the effective date of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, that such
counsel has no
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reason to believe such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, including the documents incorporated
by reference therein, contained an untrue statement of a material fact or
omitted to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (v) obtain "cold
comfort" letters and updates thereof from the independent public accountants of
the Company (and, if necessary, any other independent public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Shelf Registration Statement or incorporated by reference), addressed to
each such Holder of Registrable Securities registered thereunder and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; (vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders and the underwriters, if any,
including those to evidence compliance with this Section and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company. The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 4(b)(16) shall be performed at the closing of the one
underwritten offering to the extent required thereunder.
(17) The Company will use its best efforts to cause the shares
of Common Stock issuable upon conversion of the Debentures to be listed on the
New York Stock Exchange upon effectiveness of any Shelf Registration Statement
hereunder.
(18) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as a
member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the By-Laws
of the National Association of Securities Dealers, Inc. ("NASD")) thereof,
whether as a Holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise,
the Company will assist such broker-dealer in complying with the requirements of
such Rules and By-Laws, including, without limitation, by (A) such Rules or
By-Laws, including Schedule E thereto, shall so require, engaging a "qualified
independent underwriter" (as defined in Schedule E) to participate in the
preparation of the Shelf Registration Statement relating to such Registrable
Securities and to exercise usual standards of due diligence in respect thereto,
(B) indemnifying any such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair Practice of
the NASD.
(19) The Company will use its best efforts to cause the
Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the
"TIA"), and, in connection therewith, cooperate with the Trustee and the Holders
to
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effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use its
best efforts to cause the Trustee to execute, all documents as may be required
to effect such changes and all other forms and documents required to be filed
with the SEC to enable such Indenture to be so qualified in a timely manner;
(20) The Company shall use its best efforts to take all other
steps reasonable and necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
(21) The Company shall not be obligated to bear any extra
expenses relating to an additional underwritten offering of the Shelf
Registration if the underwriters selected by the Holders breach their
obligations to purchase the Registrable Securities or exercise market out rights
under the Underwriting Agreement, which additional expenses shall be borne by
the Holders.
5. Indemnification
(a) Indemnification by Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the full extent permitted by law,
each Purchaser or Holder of Registrable Securities, each underwriter who
participates in an offering of Registrable Securities and their respective
officers, directors, agents and employees, each person who controls such
Purchaser, Holder or underwriter (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), and the officers, directors,
agents or employees of any such controlling person, from and against all losses,
claims, damages, liabilities, costs (including, without limitation, all
reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus, or supplement or amendment thereto including all
documents incorporated by reference therein or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made (in the case of any Prospectus or preliminary prospectus)
not misleading; provided that this indemnity shall not apply to any Losses to
the extent arising out of an untrue statement or omission or alleged untrue
statement or omission based upon and in conformity with written information
furnished to the Company by such Purchasers, any Holder or any underwriter in
writing expressly for use in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) and
provided, further however, that the Company shall not be liable in any such case
to the extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus or Prospectus if (i) such Holder failed to send or
deliver a copy of the Prospectus or Prospectus supplement provided by the
Company in requisite quantities on a timely
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basis with or prior to the delivery of written confirmation of the sale of
Registrable Securities and (ii) the Prospectus or Prospectus supplement would
have corrected such untrue statement or omission. If requested, the Company
shall also indemnify selling brokers and similar securities industry
professionals participating in the distribution, their officers, directors,
agents and employees and each person who controls such persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent as provided above with respect to the indemnification of the
Purchasers, Holders and underwriters of Registrable Securities subject to this
Section 5(a).
(b) Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities shall furnish
to the Company in writing such information as the Company may reasonably request
for use in connection with the Shelf Registration Statement and any Prospectus
or Preliminary Prospectus or supplement or amendment thereto issued in
connection thereto. Such Holder hereby agrees to indemnify and hold harmless, to
the full extent permitted by law, the Company, and its officers, directors,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents or employees of any such controlling person, from
and against all Losses, as incurred, arising out of or based upon any untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus, or arising out of or based upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made (in the case of
any Prospectus) not misleading, to the extent, but only to the extent, that such
untrue statement or omission contained in any Registration Statement or any
Prospectus or preliminary Prospectus or supplement or amendment thereto was
based upon and in conformity with information so furnished in writing by such
Holder to the Company expressly for use in such Shelf Registration Statement,
Prospectus or preliminary Prospectus. The Company shall be entitled to receive
indemnities from accountants, selling brokers and similar securities industry
professionals participating in the distribution to the same extent as provided
above with respect to information furnished in writing by such persons
specifically for inclusion in the Shelf Registration Statement, Prospectus or
preliminary prospectus, provided, that the failure of the Company to obtain any
such indemnity shall not relieve the Company of any of its obligations
hereunder.
(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation or inquiry) shall be
brought or any claim shall be asserted against any person entitled to indemnity
hereunder (an "indemnified party"), such indemnified party shall promptly notify
the party from which such indemnity is sought (the "indemnifying party") in
writing, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have other than unless and to
the extent such failure results in the
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forfeiture by the Company of substantial defenses. The indemnifying party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and expenses
incurred in connection with the defense thereof. Any such indemnified party
shall have the right to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the expense of such indemnified party unless (a) the
indemnifying party has agreed to pay such fees and expenses, (b) the
indemnifying party shall have failed promptly to assume the defense of such
action, claim or proceeding and to employ counsel reasonably satisfactory to the
indemnified party in any such action, claim or proceeding, or (c) the named
parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action, claim or
proceeding on behalf of such indemnified party, it being understood, however,
that the indemnifying party shall not, in connection with any one such action,
claim or proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such indemnified parties, unless in the opinion of
counsel for such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
action, claim or proceeding, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or counsels.
No indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the release
of such indemnified party from all liability in respect to such claim or
litigation without the written consent of the indemnified party. No indemnified
party shall consent to entry of any judgment or enter into any settlement
without the written consent of the indemnifying party from which indemnity or
contribution is sought.
(d) Contribution. If the indemnification provided for in this Section
5 is unavailable to an indemnified party under Section 5(a) or 5(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any Losses, then each applicable indemnifying party in lieu of indemnifying such
indemnified party shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether any untrue statement
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or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in Section 5(c), any legal or
other fees or expenses reasonably incurred by such party in connection with any
action, suit, claim, investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5(d), each director, officer, employee,
trustee, agent and Person, if any, who controls an indemnified party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such an indemnified party and each
director, officer, employee, trustee and agent of the Company, and each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
The indemnity and contribution agreements contained in this Section 5
(i) are in addition to any contractual liability that any indemnifying party may
otherwise have to any indemnified party and (ii) shall apply to any underwritten
offering under a Registration Statement except to the extent the same are
explicitly stated not to apply in an underwriting agreement to which the Holders
in such underwritten offering are parties.
6. Rule l44
The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, to the extent required from time to time, to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemptions provided by Rule l44 and Rule 144A.
Upon the request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether the Company has
complied with such information and requirements.
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7. Miscellaneous
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company obtains the written consent of Holders of at
least a majority of the principal amount or number of then outstanding
Registrable Securities as applicable affected by such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which does not directly or indirectly
affect the rights of Holders of Registrable Securities whose securities are not
being sold pursuant to such Registration Statement may be given by Holders of a
majority of the Registrable Securities being sold by such Holders.
(b) Notices, All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, certified
first-class mail, next day air courier, or telecopy: (i) If to a Holder of
Registrable Securities, at the most current address given by such holder to the
Company in accordance with the provisions of this Section 7(b), which address
initially is, with respect to each Purchaser, the address set forth on the
signature page attached hereto; and (ii) If to the Company initially at the
address set forth on the first page of the Purchase Agreement, attention: Senior
Vice President, Finance, and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 9(b), with a copy to
Xxxxxxx Celler Spett & Xxxxxx, P.C., 000 Xxxx Xxxxxx, Xxx Xxxx, XX x0000,
Attention: Xxxxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given when received by hand or overnight courier or receipt by certified mail,
return receipt requested.
(c) Transfer of Registration Rights. Without any further action on
the part of the Company, the right granted to the Holders pursuant to this
Agreement may be assigned in connection with the transfer, assignment or sale of
any Registrable Security to the extent such securities and rights may be
transferred, assigned, or sold pursuant to applicable laws and to the agreements
to which the particular holder is a party or exchanged.
(d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflict of laws.
(g) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest extent
permitted by law.
(h) AGENT FOR SERVICE OF PROCESS, SUBMISSION TO JURISDICTION. The
Company and each Holder agree that any legal suit, action or proceeding brought
by any party to enforce any rights under or with respect to this Agreement shall
be instituted in any state or federal court in the City of New York, State of
New York having subject matter jurisdiction, and each waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding and irrevocably submits
it to the non-exclusive jurisdiction of any such court in any such suit, action
or proceeding. The Company hereby irrevocably designates and appoints Xxxxxxx
Celler Spett & Xxxxxx, P.C. as the Company's authorized agent to receive and
forward on its behalf service of any and all process which may be served in any
such suit, action or proceeding in any such court and agrees that service of
process upon General DataComm Industries, Inc. (or any successor) c/o such agent
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other address in the
Borough of Manhattan, The City of New York as the Company may designate by
written notice to the Holders) and written notice of said service to the Company
mailed or delivered to General DataComm Industries, Inc., shall be deemed in
every respect effective service of process upon the Company in any such suit,
action or proceeding and shall be taken and held to be valid personal service
upon the Company. Said designation and appointment shall be irrevocable. Nothing
in this Section 7(h) shall affect the right of any party hereto or any Holder to
serve process in any manner permitted by law. The Company agrees to take any and
all action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
Xxxxxxx Celler Spett & Xxxxxx, P.C. in full force and effect so long as this
Agreement or any of the Debentures and/or shares of Common Stock into which the
Debentures may be converted shall be outstanding. To the extent that the Company
or any Holder, has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service of notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Company and each Holder,
respectively hereby irrevocably waive
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such immunity in respect of its obligations under this Agreement and the
Securities, to the extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the parties to be
a final expression of their agreement and a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties nor
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Shares sold
pursuant to the Purchase Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties have executed this agreement as of
the date first written above.
GENERAL DATACOMM INDUSTRIES, INC.
By: ____________________________________
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SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
PURCHASER
________________________________
[Please Print]
By: ____________________________
Name:
Title:
Address: _______________________
________________________________
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