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Exhibit 10.1
GENERAL DATACOMM INDUSTRIES, INC.
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 9% Cumulative Convertible
Exchangeable Preferred Stock 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 Convertible Subordinated Debentures of the
Company for which the 9% Preferred Stock may be exchanged at the option of the
Company.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Expiration Date: Three (3) years from the issuance of the Shares
or such shorter period of time under Rule 144(k) if the three (3) 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.
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.
Losses: See Section 6(a) hereof.
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.
Preferred Stock: The 9% Cumulative Convertible Exchangeable
Preferred Stock, $l.00 par value per share of the Company sold pursuant to the
Purchase Agreement.
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 9% Cumulative Convertible Exchangeable
Preferred Stock Purchase Agreement by and among the Company, the Placement Agent
and the Purchasers thereunder pursuant to which the Shares were or will be
issued.
Registration Expenses: All reasonable expenses incurred by the
Company in complying with Section 3 hereof, including all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, internal 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 Shares of the 9% Preferred Stock
which are Restricted Securities, any Preferred Stock and/or Common Stock issued
or issuable in respect to the Shares as applicable pursuant to any stock split,
stock dividend, recapitalization, or similar event, the Debentures for which the
Preferred Stock may be exchanged and the Shares of Common Stock into which the
Shares of 9% Preferred Stock and the Debentures may be converted.
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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 Shares, the Debentures, issuable upon
exchange thereof, the underlying Common Stock into which the Shares and
Debentures may be converted, and at all times subsequent thereto, until, in the
case of any such security, it is no longer required to bear the legend set forth
on such security pursuant to the terms of the security, the Purchase Agreement
and applicable law.
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: The 9% Preferred Stock, the Debentures and the
Shares of Common Stock issuable upon conversion thereof.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Shares: The 9% Preferred Stock issued to the Purchasers pursuant
to the Purchase Agreement.
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 an underwriter for
reoffering to the public.
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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
l20th 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 180 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 (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 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
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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. Each Holder shall bear all selling commissions,
underwriting discounts, sales concessions and similar expenses 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 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) any Shelf Registration
Statement and any amendment
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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 (iii) 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
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
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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 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
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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 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
Securities 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 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.
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(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 required of the Company hereunder.
(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 o reason to believe such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented, including the
documents incorporated by reference therein, omitted an untrue statement of a
material fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
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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 Securities 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 6 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 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.
(20) 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
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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 not misleading; provided that this indemnity shall not
apply to any loss, liability, claim, damage or expense to the extent arising out
of 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) 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 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
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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 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 made in the Shelf Registration Statement or any Prospectus or
Preliminary Prospectus or supplement or amendment thereto issued in connection
thereto in reliance 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 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
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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 6 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 actions, 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 action in question,
including any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact, has been taken or made by, or
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 action, 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)
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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.
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.
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 9(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,
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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. 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.
(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
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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 Securities
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 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: /s/ Xxxxxxx Xxxxxxxx
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Sr. V.P. Finance
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PURCHASER
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[Please Print]
By:
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Name:
Title:
Address: ------------------------
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