Exhibit 4.2
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REGISTRATION RIGHTS AGREEMENT
between
PORTA SYSTEMS CORP.
and
THE HOLDERS DESCRIBED HEREIN
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Dated as of October 10, 1997
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TABLE OF CONTENTS
Page
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1. Definitions ........................................................... 1
2. Initial Registration Under the Securities Act ......................... 3
(a) Shelf Registration .............................................. 3
(b) Rights Under Sections 3 and 4 Conditional ....................... 3
3. Securities Act Registration on Request ................................ 3
(a) Request ......................................................... 3
(b) Registration Statement Form ..................................... 4
(c) Effective Registration Statement ................................ 5
(d) Priority in Requested Registration .............................. 5
(e) Shelf Registrations ............................................. 6
(f) Continuing Obligation to Register ............................... 6
4. Piggyback Registration ................................................ 6
5. Expenses .............................................................. 7
6. Registration Procedures ............................................... 8
7. Underwritten Offerings ................................................ 11
(a) Underwriting Agreement .......................................... 11
(b) Piggyback Underwritten Offerings; Priority ...................... 12
(c) Holders of Registrable Common Stock to be
Parties to Underwriting Agreement ............................... 12
(d) Selection of Underwriters for Piggyback
Underwritten Offering ........................................... 13
8. Preparation; Reasonable investigation ................................. 13
(a) Registration Statements ......................................... 13
(b) Confidentiality ................................................. 13
9. Indemnification ....................................................... 13
(a) Indemnification by the Company .................................. 13
(b) Indemnification by the Offerors and Sellers ..................... 14
(c) Notices of Losses, etc .......................................... 15
(d) Contribution .................................................... 15
(e) Other Indemnification ........................................... 16
(f) Indemnification Payments ........................................ 16
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10. Registration Rights to Others ......................................... 16
11. Adjustments Affecting Registrable Common Stock ........................ 16
12. Rule 144 and Rule 144A ................................................ 16
13. Amendments and Waivers ................................................ 17
14. Nominees for Beneficial Owners ........................................ 17
15. Assignment
16. Calculation of Percentage or Number of Shares
of Registrable Common Stock ........................................... 17
17. Miscellaneous ......................................................... 18
(a) Further Assurances .............................................. 18
(b) Headings ........................................................ 18
(c) No Inconsistent Agreements ...................................... 18
(d) Remedies ........................................................ 18
(e) Entire Agreement ................................................ 18
(f) Notices ......................................................... 18
(g) Governing Law ................................................... 19
(h) Severability .................................................... 19
(i) Counterparts .................................................... 19
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 10, 1997 (this
"Agreement"), by and among Porta Systems Corp., a Delaware corporation (the
"Company"), and those security holders of the Company who, in connection with
their conversion of Zero Coupon Senior Subordinated Notes due January 2, 1998
("Notes"), become Affiliates of the Company as a result of their conversion of
the Notes (the "Holders").
To induce the holders of the Notes who, as a result of their conversion of
the Notes, become Affiliates of the Company, to convert the Notes and receive
shares of Common Stock issued by the Company, the Company has undertaken to
register Registrable Common Stock (as hereinafter defined) under the Securities
Act (as hereinafter defined) and to take certain other actions with respect to
the Registrable Common Stock. This Agreement sets forth the terms and conditions
of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the shares of common stock, $0.01 par value per share,
of the Company.
"Exchange" means the principal stock exchange or market on which the Common
Stock is traded, which is presently the American Stock Exchange, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
"Excusable Reason" means the occurrence of negotiations with respect to
material agreements prior to the announcement of the execution of the agreement
or the termination of the negotiations and other similar material corporate
events to which the Company is a party or expects to be a party if, in the
reasonable judgment of the Company, disclosure of the negotiations or other
event would be adverse to the best interests of the Company provided that the
Company is continuing to treat such negotiations as confidential and provided
further that the period during which the Company is precluded from filing the
registration statement (or
suspended the use of an effective registration statement) as a result thereof
has not exceeded 60 days and provided further that the Company shall not be
permitted to avoid filing a registration statement (or to suspend the use of an
effective registration statement) for an Excusable Reason more than twice in any
one-year period.
"Expenses" means, except as set forth in Section 5 hereof, all expenses
incident to the Company's performance of or compliance with its obligations
under this Agreement, including, without limitation, all registration, filing,
listing, stock exchange and NASD fees, all fees and expenses of complying with
state securities or blue sky laws (including fees, disbursements and other
charges of counsel for the underwriters only in connection with blue sky
filings), all word processing, duplicating and printing expenses, messenger and
delivery expenses, all rating agency fees, the fees, disbursements and other
charges of counsel for the Company and of its independent public accountants,
including the expenses incurred in connection with "cold comfort" letters
required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by issuers of securities and,
with respect to registration statements other than a Shelf Registration, up to
$15,000 of the reasonable fees, disbursements and other charges of one firm of
counsel (per registration statement prepared) to the Holders of Registrable
Common Stock (selected by the Holders holding a majority of the shares of
Registrable Common Stock covered by such registration), but excluding from the
definition of Expenses underwriting discounts and commissions and applicable
transfer taxes, if any, which discounts, commissions and transfer taxes shall be
borne by the seller or sellers of Registrable Common Stock in all cases.
"Initiating Holders" has the meaning set forth in Section 3(a) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the Nasdaq Stock Market and includes The Nasdaq National
Market and The Nasdaq SmallCap Market.
"Notes" means the Company's Zero Coupon Senior Subordinated Convertible
Notes due January 2, 1998.
"Person" means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental or regulatory body or subdivision
thereof or other entity.
"Public Offering" means a public offering and sale of Common Stock pursuant
to an effective registration statement under the Securities Act.
"Registrable Common Stock" means any shares of Common Stock held by the
Holders immediately following the conversion of the Notes as to which and only
for so long as registration pursuant to the Securities Act is required for
public sale without regard to volume limitations, as adjusted to reflect any
merger, consolidation, recapitalization, reclassification, split-up, stock
dividend, rights offering or reverse stock split made, declared or effected with
respect to the Common Stock.
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"Requesting Holders" has the meaning set forth in Section 4 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Selling Holders" means the Holders of Registrable Common Stock requested
to be registered pursuant to Section 3(a) hereof.
"Shelf Registration" means a shelf registration statement pursuant to Rule
415 promulgated under the Securities Act.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation or
other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
2. Initial Registration Under the Securities Act.
(a) Shelf Registration. The Company shall (i) cause to be filed not
later than 45 days after the date hereof a Shelf Registration statement
providing for the sale by the Holders of all of the Registrable Common Stock and
(ii) use its best efforts to have such Shelf Registration thereafter declared
effective by the Commission not later than 60 days after the date of filing,
subject to any delay for an Excusable Reason. The Shelf Registration shall
register the Registrable Common Stock for resale by the Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The Company agrees to use its best efforts to keep the
Shelf Registration continuously effective until the end of the eighteenth month
following the date such Shelf Registration is declared effective by the
Commission or such shorter period which will terminate when all of the
Registrable Common Stock covered by the Shelf Registration has been sold
pursuant to the Shelf Registration, excluding from the calculation of such
eighteen-month period any period of time during which the Shelf Registration was
unavailable for use by the Holders due to any stop order, injunction or other
order or requirement of the Commission or other governmental or regulatory
agency or court as contemplated by Section 2(b)(ii) or for any other reason
including an Excusable Reason.
(b) Rights Under Sections 3 and 4 Conditional. So long as the Company
has complied and continues to remain in compliance with Section 2(a) of this
Agreement, the Holders shall have no right to cause the filing of a registration
statement pursuant to Section 3 hereof or to participate in an offering under a
registration statement pursuant to Section 4 hereof.
3. Securities Act Registration on Request.
(a) Request. If at any time after March 31, 1998, the Company does not
make available to the Holders for any reason (other than an Excusable Reason)
the Shelf Registration statement contemplated by Section 2 hereof, one or more
Holders (the "Initiating Holders") may make a written request (the "Initiating
Request") to the Company for the registration with the Commission under the
Securities Act of all or part of such Initiating
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Holders' Registrable Common Stock; provided, however, that such request shall be
made by one or more Holders of at least 10% of the outstanding shares of
Registrable Common Stock, which request shall specify the number of shares to be
disposed of and the proposed plan of distribution therefor. Upon the receipt of
any Initiating Request for registration pursuant to this paragraph, the Company
promptly shall notify in writing all other Holders of the receipt of such
request and will use its best efforts to effect, at the earliest possible date
(taking into account any delay that may result from any special audit required
by applicable law), such registration under the Securities Act, including a
Shelf Registration (if then eligible), of
(i) the Registrable Common Stock which the Company has been so
requested to register by such Initiating Holder, and
(ii) all other Registrable Common Stock which the Company has
been requested to register by any other Holders by written request given to
the Company within 30 days after the giving of written notice by the
Company to such other Holders of the Initiating Request,
all to the extent necessary to permit the disposition (in accordance with
Section 3(b) hereof) of the Registrable Common Stock so to be registered;
provided, that,
(A) if the intended method of distribution is an
underwritten public offering, the Company shall not be required to
effect such registration pursuant to this Section 3(a) unless such
underwriting shall be conducted on a "firm commitment" basis,
(B) subject to the last sentence of Section 5 hereof, any
Holder whose Registrable Common Stock was to be included in any such
registration, by written notice to the Company, may withdraw such
request and, on receipt of such notice of the withdrawal of such
request from Holders holding a percentage of Common Stock, such that
the Holders that have not elected to withdraw do not hold, in the
aggregate, the requisite percentage of the Common Stock to initiate a
request under this Section 3(a), the Company need not effect such
registration, and
(C) the Company shall not be required to effect any
registration to be effected pursuant to this Section 3(a) unless at
least 10% of the shares of Registrable Common Stock outstanding at the
time of such request is to be included in such registration.
(b) Registration Statement Form. Registrations under Section 3(a)
hereof shall be on such appropriate registration form prescribed by the
Commission under the Securities Act as shall be selected by the Company and as
shall permit the disposition of the Registrable Common Stock pursuant to an
underwritten offering unless the Selling Holders holding at least a majority of
the shares of Registrable Common Stock requested to be included in such
registration statement determine otherwise, in which case pursuant to the method
of disposition determined by such Selling Holders. The Company agrees to include
in any such
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registration statement filed pursuant to Section 3(a) hereof all information
which any Selling Holder, upon advice of counsel, shall reasonably request.
(c) Effective Registration Statement. A registration requested
pursuant to Section 3(a) hereof shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has been
declared effective by the Commission and remains effective in compliance
with the provisions of the Securities Act and the laws of any state or
other jurisdiction applicable to the disposition of all Registrable Common
Stock covered by such registration statement until such time as all of such
Registrable Common Stock have been disposed of in accordance with such
registration statement,
(ii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental or regulatory agency or court for
any reason other than a violation of applicable law solely by the Selling
Holders and has not thereafter become effective, or
(iii) if, in the case of an underwritten offering, the conditions
to closing specified in an underwriting agreement to which the Company is a
party are not satisfied other than by reason of any breach or failure by
the Selling Holders, or are not otherwise waived.
The Holders of Registrable Common Stock to be excluded in a registration
statement may at any time terminate a request for registration made pursuant to
Section 3(a) in accordance with Section 3(a)(ii)(B). Expenses incurred in
connection with a request for registration terminated pursuant to this paragraph
shall be paid in accordance with the last sentence of Section 5 hereof.
(d) Priority in Requested Registration. If a registration under
Section 3(a) hereof involves an underwritten public offering, and the managing
underwriter of such underwritten offering shall advise the Company in writing
(with a copy to each Holder requesting that Registrable Common Stock be included
in such registration statement) that, in its opinion, the number of shares of
Registrable Common Stock requested to be included in such registration exceeds
the number of such securities that can be sold in such offering within a price
range stated to such managing underwriter by Selling Holders owning at least a
majority of the shares of Registrable Common Stock requested to be included in
such registration to be acceptable to such Selling Holders, the Company shall
include in such registration, to the extent of the number and type of securities
which the Company is advised can be sold in such offering, all Registrable
Common Stock requested to be registered pursuant to Section 3(a) hereof, pro
rata among the Selling Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such holders, and no
other shares of Common Stock, whether to be sold by the Company or any other
Person.
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(e) Shelf Registrations. If a demand made pursuant to Section 3(a)
hereof is for a Shelf Registration, the period for which such Shelf Registration
must remain effective need not extend beyond the period set forth in Section
2(a) hereof or such shorter period which will terminate when all of the
Registrable Common Stock covered by the Shelf Registration has been sold
pursuant thereto.
(f) Continuing Obligation to Register. No registration effected under
this Section 3 shall relieve the Company of its obligation to effect the Shelf
Registration under Section 2 hereof or of its obligation to permit the
registration of Registrable Common Stock under Section 4 hereof.
4. Piggyback Registration. If at any time after March 31, 1998, the Company
does not make available to the Holders for any reason (other than an Excusable
Reason) the Shelf Registration statement contemplated by Section 2(a) hereof and
at any time proposes to register any of its securities under the Securities Act
by registration on any forms other than Form S-4 or S-8 (or any successor or
similar form(s)), whether or not pursuant to registration rights granted to
other holders of its securities and whether or not for sale for its own account,
it shall give prompt written notice to all of the Holders of its intention to do
so and of such Holders' rights (if any) under this Section 4, which notice, in
any event, shall be given at least 10 Business Days prior to such proposed
registration. Upon the written request of any Holder receiving notice of such
proposed registration that is a Holder of Registrable Common Stock (a
"Requesting Holder") made within 5 Business Days after the receipt of any such
notice (3 Business Days if the Company states in such written notice or gives
telephonic notice to the relevant securityholders, with written confirmation to
follow promptly thereafter, stating that (i) such registration will be on Form
S-3 and (ii) such shorter period of time is required because of a planned filing
date), which request shall specify the Registrable Common Stock intended to be
disposed of by such Requesting Holder and the minimum offering price per share
at which the Holder is willing to sell its Registrable Common Stock, the Company
shall, subject to Section 7(b) hereof, effect the registration under the
Securities Act of all Registrable Common Stock which the Company has been so
requested to register by the Requesting Holders thereof; provided, that,
(A) prior to the effective date of the registration
statement filed in connection with such registration, promptly
following receipt of notification by the Company from the managing
underwriter of the price at which such securities are to be sold, the
Company shall so advise the attorney-in-fact for the Requesting
Holders of such price, and if such price is below the minimum price
which any Requesting Holder shall have indicated to be acceptable to
such Requesting Holder, such Requesting Holder shall then have the
right irrevocably to withdraw its request to have its Registrable
Common Stock included in such registration statement, by delivery of
written notice of such withdrawal to the Company promptly but in any
event before the execution of the underwriting agreement on behalf of
such Holder, without prejudice to the rights of any Holder or Holders
of Registrable Common Stock to include Registrable Common Stock in any
future registration (or registrations) pursuant to this Section 4 or
to cause
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such registration to be effected as a registration under Section 2 or
Section 3(a) hereof, as the case may be;
(B) if at any time after giving written notice of its
intention to register any securities and prior to the effective date
of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may,
at its election, give written notice of such determination to each
Requesting Holder and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any
Registrable Common Stock in connection with such registration (but not
from any obligation of the Company to pay the Expenses in connection
therewith), without prejudice, however, to the rights of any Holder to
include Registrable Common Stock in any future registration (or
registrations) pursuant to this Section 4 or to cause such
registration to be effected as a registration under Section 2 or 3(a)
hereof, as the case may be, and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any
Registrable Common Stock, for the same period as the delay in
registering such other securities; and
(C) if such registration involves an underwritten offering,
each Requesting Holder shall sell its Registrable Securities on the
same terms and conditions as those that apply to the Company, if the
Company is offering Common Stock.
No registration effected under this Section 4 shall relieve the Company of
its obligation to effect any registration upon request under Section 3(a) hereof
or of its obligation to effect the Shelf Registration under Section 2 hereof.
5. Expenses. The Company shall pay all Expenses in connection with any
registration initiated pursuant to Section 2(a), 3(a) or 4 hereof, whether or
not such registration shall become effective and whether or not all or any
portion of the Registrable Common Stock originally requested to be included in
such registration is ultimately included in such registration. Notwithstanding
the foregoing, if any request for registration made pursuant to Section 3(a)
hereof is withdrawn or terminated by the Selling Holders prior to the
registration becoming effective, the Expenses incurred in connection with such
request shall be borne by the Selling Holders pro rata on the basis of the
number of shares of Registrable Common Stock requested to be registered pursuant
to such demand by each Selling Holder, provided, however, that, in the case of
an underwritten Public Offering, if such request for registration is withdrawn
or terminated by the Selling Holders prior to the registration becoming
effective because the offering price of the Registrable Common Stock requested
to be registered would, in the opinion of the managing underwriter of such
offering, be less than 90% of the estimated offering price of the Common Stock
as indicated in writing by the managing underwriter prior to the initial filing
of such registration statement with the Commission, the Company shall pay 50% of
the Expenses in connection with such registration and the Selling Holders shall
pay the remaining 50% on a pro rata basis.
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6. Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Sections 2(a),
3(a) and 4 hereof, the Company shall, as expeditiously as possible:
(a) subject to Section 6(c) hereof, prepare and file with the
Commission (promptly and, in the case of any registration pursuant to Section
3(a), in any event within 45 days) the requisite registration statement to
effect such registration and thereafter use its best efforts to cause such
registration statement to become effective; provided, however, that the Company
may discontinue any registration of its securities that are not shares of
Registrable Common Stock (and, under the circumstances specified in Section 4
hereof, its securities that are shares of Registrable Common Stock) at any time
prior to the effective date of the registration statement relating thereto;
(b) notify each seller of Registrable Common Stock and other
securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and
subject to Section 6(c) hereof, prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Common Stock
covered by such registration statement until such time as all of such
Registrable Common Stock has been disposed of in accordance with the method of
disposition set forth in such registration statement;
(c) before filing any registration statement or prospectus or any
amendments or supplements thereto, furnish to and afford the Holders of the
Registrable Common Stock, one firm of counsel for the Holders designated by the
Holders of a majority of the Registrable Common Stock included in the
registration statement (the "Holders Counsel") and the managing underwriters, if
any designated by the Holders, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (at least ten
(10) Business Days prior to such filing). The Company shall not file any
registration statement or prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document, if the Holders of a majority of the shares of
Registrable Common Stock covered by such registration statement, the Holders
Counsel, or the managing underwriters, if any, shall reasonably object. Any
registration statement, when declared effective by the Commission or when
subsequently amended (by an amendment which is declared effective by the
Commission) or any prospectus in the form included in the registration statement
as declared effective by the Commission or when subsequently supplemented will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
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(d) use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness of a registration statement, and in any event
shall, within thirty (30) days of such cessation of effectiveness, use its best
efforts to amend the registration statement in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional registration statement pursuant to Rule 415 covering all of the
Registrable Common Stock and use its best efforts to cause the subsequent Shelf
Registration to be declared effective as soon as practicable after such filing
and to remain effective;
(e) if requested by the managing underwriters, if any, or the Holders
of a majority of the Registrable Common Stock being sold in connection with an
underwritten offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
or such Holders or counsel reasonably request to be included therein, (ii) make
all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement. or post-effective
amendment, and (iii) supplement or make amendments to such registration
statement;
(f) furnish to each seller of Registrable Common Stock covered by such
registration statement such number of copies of such drafts and final conformed
versions of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits and any documents
incorporated by reference), such number of copies of such drafts and final
versions of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such seller may
reasonably request in writing;
(g) use its best efforts (i) to register or qualify all Registrable
Common Stock under such other securities or blue sky laws of such states or
other jurisdictions of the United States of America as the sellers of
Registrable Common Stock covered by such registration statement shall reasonably
request in writing, (ii) to keep such registration or qualification in effect
for so long as such registration statement remains in effect, (iii) to prevent
the issuance of any order suspending the effectiveness of a registration
statement or of any order preventing or suspending the use of a prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Common Stock for sale in any jurisdiction, and, if any such order is
issued, to use its best efforts to obtain the withdrawal of any such order at
the earliest possible moment, and (iv) to take any other action that may be
reasonably necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such sellers,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this subsection (g) be obligated to be so
qualified, to subject itself to taxation in such jurisdiction or to consent to
general service of process in any such jurisdiction;
(h) use its best efforts to cause all Registrable Common Stock and
other securities covered by such registration statement to be registered with or
approved by such
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other federal or state governmental agencies or authorities as may be necessary
in the opinion of counsel to the Company and counsel to the seller or sellers of
Registrable Common Stock to enable the seller or sellers thereof to consummate
the disposition of such Registrable Common Stock in the manner set forth in the
registration statement;
(i) in connection with any underwritten offering, use its best efforts
to obtain and, if obtained, furnish to each seller of Registrable Common Stock,
and each such seller's underwriters, if any, a signed
(i) opinion of counsel for the Company, dated the date of the
closing under the underwriting agreement, reasonably satisfactory in form
and substance to the Holders Counsel, and
(ii) "comfort" letter, dated the effective date of such
registration statement and signed by the independent public accountants who
have certified the Company's financial statements included or incorporated
by reference in such registration statement, reasonably satisfactory in
form and substance to the Holders Counsel,
in each case, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
the accountants' comfort letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to underwriters in
underwritten public offerings of securities and, in the case of the accountants'
comfort letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as the sellers of the Registrable Common
Stock covered by such registration statement or the underwriters, if any, may
reasonably request;
(j) otherwise comply with all applicable rules and regulations of the
Commission and any other governmental agency or authority having jurisdiction
over the offering, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder, and furnish to each seller
of Registrable Common Stock at least ten days prior to the filing thereof a copy
of any amendment or supplement to such registration statement or prospectus;
(k) use its best efforts to cause all such Registrable Common Stock
covered by such registration statement (i) to be listed on the Exchange, if the
listing of such Registrable Common Stock is then permitted under the rules
thereof or (ii) if the Company is not required pursuant to clause (i) above to
list such securities covered by such registration statement on such Exchange,
use its best efforts to secure designation of all Registrable Common Stock
covered by such registration statement as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-l of the Commission or, failing that,
to secure NASDAQ authorization for such Registrable Common Stock and, without
limiting the generality of the
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foregoing, to arrange for at least two market makers to register with the NASD
as such with respect to such Registrable Common Stock;
(1) file all annual and quarterly reports required by the Exchange
Act, and, in the event that the Company is no longer subject to the reporting
requirements of the Exchange Act, file the reports required to be filed by it
under the Exchange Act and the rules and regulations adopted by the Commission
thereunder in the same manner as if it were subject to such reporting
requirements; and
(m) provide a transfer agent for such Registrable Common Stock covered
by such Registration Statement no later than the effective date thereof (which
transfer agent shall also maintain the share register for the Common Stock).
The Company may require each seller of Registrable Common Stock as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of the securities covered by such
registration statement as the Company may from time to time reasonably request
in writing and as is required by applicable laws and regulations.
Each Holder agrees that as of the date that a final prospectus is made
available to it for distribution to prospective purchasers of Registrable Common
Stock it shall cease to distribute copies of any preliminary prospectus prepared
in connection with the offer and sale of such Registrable Common Stock. Each
Holder further agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (b) of this Section
6, such Holder shall forthwith discontinue such Holder's disposition of
Registrable Common Stock pursuant to the registration statement relating to such
Registrable Common Stock until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (b) of this
Section 6 and, if so directed by the Company, shall deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the prospectus relating to such Registrable Common
Stock current at the time of receipt of such notice.
7. Underwritten Offerings.
(a) Underwriting Agreement. In the event of an underwritten offering
of Registrable Common Stock, the Company shall enter into an underwriting
agreement as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriters in order to
expedite or facilitate the registration or the disposition of such Registrable
Common Stock, and in such connection, (i) make such representations and
warranties to the underwriters, with respect to the business of the Company and
its subsidiaries and the registration statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, as is reasonable, and (ii) include in such underwriting agreement
indemnification provisions and procedures no less favorable than those set forth
in Section 9 of this Agreement (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of Registrable
Common Stock covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties
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to be indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(b) Piggyback Underwritten Offerings; Priority. If the Company
proposes to register any of its securities under the Securities Act as
contemplated by Section 4 hereof and such securities are to be distributed by or
through one or more underwriters, the Company shall, if requested by any
Requesting Holders, use its best efforts to arrange for such underwriters to
include all of the Registrable Common Stock to be offered and sold by such
Requesting Holders among the securities of the Company to be distributed by such
underwriters; provided, that, if the managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to the Requesting
Holders) that if all the Registrable Common Stock requested to be included in
such registration (together with all other shares of Common Stock of other
stockholders of the Company requested to be so included pursuant to "piggyback'
rights granted to such stockholders) were so included, in its opinion, the
number and type of securities proposed to be included in such registration would
exceed the number and type of securities which could be sold in such offering
within a price range acceptable to the Company (such writing to state the basis
of such opinion and the approximate number and type of securities which may be
included in such offering without such effect), then the Company shall include
in such registration, to the extent of the number and type of securities which
the Company is so advised can be sold in such offering, (i) first, securities
that the Company proposes to issue and sell for its own account and (ii) second,
Registrable Common Stock requested to be registered by Requesting Holders
pursuant to Section 4 hereof and Common Stock of any other stockholders of the
Company requesting registration as aforesaid, pro rata, among such holders on
the basis of the number of shares of Common Stock requested to be registered by
all such holders.
Any Requesting Holder may withdraw its request to have all or any portion
of its Registrable Common Stock included in any such offering by notice to the
Company within 1O Business Days after receipt of a copy of a notice from the
managing underwriter pursuant to this section 7(b).
(c) Holders of Registrable Common Stock to be Parties to Underwriting
Agreement. The Holders of Registrable Common Stock to be distributed by
underwriters in an underwritten offering contemplated by subsections (a) or (b)
of this Section 7 shall be parties to the underwriting agreement between the
Company and such underwriters and any such Holder, at its option, may require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holders and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such Holders. No such Holder shall be required to make any representations or
warranties to or agreements with the Company or the underwriters except that
each such Holder shall be required to make representations, warranties and
agreements regarding such Holder, such Holder's Registrable Common Stock and
such Holder's intended method of distribution. The Selling Holders shall appoint
an attorney-in-fact who shall
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be authorized to negotiate with the underwriter on behalf of the Selling Holders
and to execute the underwriting agreement and related documentation on their
behalf.
(d) Selection of Underwriters for Underwritten Offering. The
underwriter or underwriters of each underwritten offering, if any, of the
Registrable Common Stock to be registered pursuant to Section 2(a) or 3(a)
hereof (i) shall be a nationally recognized underwriter (or underwriters), (ii)
shall be selected by the Selling Holders owning at least a majority of the
shares of Registrable Common Stock to be registered and (iii) shall be
reasonably acceptable to the Company. The underwriter or underwriters of each
piggyback underwritten offering pursuant to Section 4 shall be a nationally
recognized underwriter (or underwriters) selected by the Company.
8. Preparation; Reasonable Investigation.
(a) Registration Statements. In connection with the preparation and
filing of each registration statement under the Securities Act pursuant to this
Agreement, the Company shall give each Holder of Registrable Common Stock
registered under such registration statement, the underwriter, if any, and its
respective counsel and accountants the reasonable opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and shall give each of them such reasonable access to its books and records and
such reasonable opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the reasonable opinion of any such Holders'
and such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
(b) Confidentiality. Each Holder of Registrable Common Stock shall
maintain the confidentiality of any confidential information received from or
otherwise made available by the Company to such Holder of Registrable Common
Stock and identified in writing by the Company as confidential. Information that
(i) is or becomes available to a Holder of Registrable Common Stock from a
public source, (ii) is disclosed to a Holder of Registrable Common Stock by a
third-party source who the Holder of Registrable Common Stock reasonably
believes has the right to disclose such information or (iii) is or becomes
required to be disclosed by a Holder of Registrable Common Stock by law,
including by court order, shall not be deemed to be confidential information for
purposes of this Agreement.
9. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2(a), 3(a) or 4
hereof, the Company shall, and hereby agrees to, indemnify and hold harmless,
each Holder and seller of any Registrable Common Stock covered by such
registration statement and each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls such Holder or seller or any such underwriter, and their respective
directors, officers, partners, agents and Affiliates (each, a "Company
Indemnitee" for purposes of this Section 9(a)), against any losses, claims,
damages, liabilities (or actions or proceedings,
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whether commenced or threatened, in respect thereof and whether or not such
Indemnified Party is a party thereto), joint or several, and expenses,
including, without limitation, the reasonable fees, disbursements and other
charges of one legal counsel for all of such Company Indemnitees (which counsel
shall be reasonably acceptable to all such Company Indemnitees) and reasonable
costs of investigation, to which such Company Indemnitee may become subject
under the Securities Act or otherwise (collectively, a "Loss" or "Losses"),
insofar as such Losses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered or otherwise offered or
sold under the Securities Act or otherwise, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto (collectively, "Offering Documents"), or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances in
which they were made not misleading; provided, 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 such Offering Documents in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by or on behalf of such Company Indemnitee specifically
stating that it is expressly for use therein; and provided, further, that the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Common Stock or any other Person, if any,
who controls such underwriter, in any such case to the extent that any such Loss
arises out of such Person's failure to send or give a copy of the final
prospectus (including any documents incorporated by reference therein), as the
same may be then supplemented or amended, to the person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Common Stock to
such Person if such statement or omission was corrected in such final
prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Company Indemnitee and shall
survive the transfer of such securities by such Company Indemnitee.
(b) Indemnification by the Offerors and Sellers. In connection with
any registration statement filed by the Company pursuant to Section 2(a), 3(a)
or 4 hereof in which a Holder has registered for sale Registrable Common Stock,
each such Holder or seller of Registrable Common Stock shall, and hereby agrees
to, indemnify and hold harmless the Company and each of its directors, officers,
employees and agents, each other Person, if any, who controls the Company and
each other seller and such seller's directors, officers, stockholders, partners,
employees, agents and affiliates (each, a "Holder Indemnitee" for purposes of
this Section 9(b)), against all Losses insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Offering Documents (or any document incorporated by
reference therein) or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in the light of circumstances in which they were made not misleading, if
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such Holder or
seller of Registrable Common Stock specifically stating that it is expressly for
use therein; provided, however, that the liability of such
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indemnifying party under this Section 9(b) shall be limited to the amount of the
net proceeds received by such indemnifying party in the offering giving rise to
such liability. Such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Holder Indemnitee and shall
survive the transfer of such securities by such Holder.
(c) Notices of Losses, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a Loss
referred to in the preceding subsections of this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this Section 9, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Loss, to assume and control
the defense thereof, in each case at its own expense, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after its
assumption of the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable for any settlement of any
such action or proceeding effected without its written consent, which shall not
be unreasonably withheld. No indemnifying party shall, without the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such Loss or which requires action on the part of such
indemnified party or otherwise subjects the indemnified party to any obligation
or restriction to which it would not otherwise be subject
(d) Contribution. If the indemnification provided for in this Section
9 shall for any reason be unavailable to an indemnified party under subsection
(a) or (b) of this Section 9 in respect of any Loss, then, in lieu of the
amount paid or payable under subsection (a) or (b) of this Section 9, the
indemnified party and the indemnifying party under subsection (a) or (b) of this
Section 9 shall contribute to the aggregate Losses (including legal or other
expenses reasonably incurred in connection with investigating the same) (i) in
such proportion as is appropriate to reflect the relative fault of the Company
and the prospective sellers of Registrable Common Stock covered by the
registration statement which resulted in such Loss or action in respect thereof,
with respect to the statements, omissions or action which resulted in such Loss
or action in respect thereof, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and such
prospective sellers, on the other hand, from their sale of Registrable Common
Stock; provided, that, for purposes of this clause (ii), the relative benefits
received by the prospective sellers shall be deemed not to exceed the amount
received by such sellers. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
-15-
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The obligations, if any, of the Selling Holders of
Registrable Common Stock to contribute as provided in this subsection (d) are
several in proportion to the relative value of their respective Registrable
Common Stock covered by such registration statement and not joint. In addition,
no Person shall be obligated to contribute hereunder any amounts in payment for
any settlement of any action or Loss effected without such Personal consent.
(e) Other Indemnification. The Company and, in connection with any
registration statement filed by the Company pursuant to Section 2(a) each Holder
shall, and, in connection with any registration statement filed by the Company
pursuant to Section 3(a) or 4, each Holder who has registered for sale
Registrable Common Stock, shall, with respect to any required registration or
other qualification of securities under any Federal or state law or regulation
of any governmental authority other than the Securities Act, indemnify Holder
indemnitees and Company Indemnitees, respectively, against Losses, or, to the
extent that indemnification shall be unavailable to a Holder Indemnitee or
Company Indemnitee, contribute to the aggregate Losses of such Holder Indemnitee
or Company Indemnitee in a manner similar to that specified in the preceding
subsections of this Section 9 (with appropriate modifications), provided, that,
the Holder shall be liable only if and to the extent that such Loss arises out
of or is based upon written information furnished to the Company through an
instrument duly executed by or on behalf of such Holder specifically stating
that it is expressly for use in connection with such registration or
qualification; and provided, further, that the aggregate liability of such
Holder under this Section 9 shall be limited to the amount of the net proceeds
received by such Holder in the offering giving rise to such liability.
(f) Indemnification Payments. The indemnification and contribution
required by this Section 9 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any Loss is incurred.
10. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act or the
Exchange Act, such rights shall not be in conflict with or adversely affect any
of the rights provided in this Agreement to the Holders of Registrable Common
Stock.
11. Adjustments Affecting Registrable Common Stock. The Company shall not
effect or permit to occur any combination, subdivision or reclassification of
Registrable Common Stock that would materially adversely affect the ability of
the Holders to include such Registrable Common Stock in any registration of its
securities under the Securities Act contemplated by this Agreement or the
marketability of such Registrable Common Stock under any such registration or
other offering.
12. Rule 144 and Rule 144A. The Company shall take all actions required to
be taken on the part of the Company in order to enable Holders to sell
Registrable Common Stock without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to
-16-
time, (b) Rule 144A under the Securities Act, as such Rule may be amended from
time to time, or (c) any similar rules or regulations hereafter adopted by the
Commission, including, without limiting the generality of the foregoing, filing
on a timely basis all reports required to be filed under the Exchange Act. Upon
the request of any Holder, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements.
13. Amendments and Waivers. Any provision of this Agreement may be amended,
modified or waived if, but only if, the written consent to such amendment,
modification or waiver has been obtained from (i) except as provided in clause
(ii) below, the Holder or Holders of at least 66-2/3% of the shares of
Registrable Common Stock affected by such amendment, modification or waiver and
(ii) in the case of any amendment, modification or waiver of any provision of
Section 5 hereof or this Section 13, or as to the percentages of Holders
required for any amendment, modification or waiver, or any amendment,
modification or waiver which adversely affects any right and/or obligation under
this Agreement of any Holder, the written consent of each Holder so affected.
14. Nominees for Beneficial Owners. In the event that any Registrable
Common Stock is held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the Holder of such Registrable Common Stock for purposes
of any request or other action by any Holder or Holders pursuant to this
Agreement or any determination of the number or percentage of shares of
Registrable Common Stock held by any Holder or Holders contemplated by this
Agreement. If the beneficial owner of any Registrable Common Stock so elects,
the Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Common Stock.
15. Assignment. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Any Holder may assign to any Transferee of its
Registrable Common Stock its rights and obligations under this Agreement (except
with respect to shares of Registrable Common Stock sold pursuant to Rule 144
under the Securities Act, under any registration statement or otherwise in a
manner such that the shares are no longer subject to restrictions from further
public resale under the Securities Act without regard to volume limitations),
provided that the Company shall receive written notice of such transfer and that
such Transferee shall agree in writing with the parties hereto prior to the
assignment to be bound by this Agreement as if it were an original party hereto,
whereupon such assignee shall for all purposes be deemed to be a Holder under
this Agreement. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder without
the prior written consent of the other parties hereto. The Company may not
assign this Agreement or any right, remedy, obligation or liability arising
hereunder or by reason hereof.
16. Calculation of Percentage or Number of Shares of Registrable Common
Stock. For purposes of this Agreement, all references to percentage or number of
shares of Registrable Common Stock or Common Stock shall be calculated based
upon the number of
-17-
shares of Registrable Common Stock or Common Stock, as the case may be,
outstanding at the time such calculation is made and shall exclude any
Registrable Common Stock or Common Stock, as the case may be, owned by the
Company or any subsidiary of the Company.
17. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall execute such
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions of this Agreement and the
transactions contemplated hereby.
(b) Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
(c) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement which is inconsistent with the rights granted to the Holders
in this Agreement.
(d) Remedies. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and the Company
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(e) Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants, or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
hereto with respect to the subject matter hereof.
(f) Notices. Any notices or other communications to be given hereunder
by any party to another party shall be in writing, shall be delivered
personally, by telecopy, by certified or registered mall, postage prepaid,
return receipt requested, or by Federal Express or other comparable delivery
service, in the case of a Holder, to the address of such Holder as shown on the
Company's shareholder records, and in the case of the Company, as follows:
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Porta Systems Corp.
000 Xxxxxxxxx Xxxx.
Xxxxxxx, XX x0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Chairman of the Board and Chief Executive Officer
-and-
Xx. Xxxxxx X. Xxxxxxxx
Chief Financial Officer
Tel: 516 000-00X0
Fax: 000 000-0000
with a copy to:
Esanu Katsky Xxxxxx & Siger, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Tel: 000 000-0000
Fax: 000 000-0000
Notice shall be effective when delivered if given personally, when receipt is
acknowledged if telecopied, three Business Days after mailing if given by
registered or certified mail as described above, and one Business Day after
deposit if given by Federal Express or comparable delivery service.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made to be performed entirely in such State. Any action against the Company may
be brought solely in the Federal or State Courts located in New York County, New
York.
(h) Severability. Notwithstanding any provision of this Agreement,
neither the Company nor any other party hereto shall be required to take any
action which would be in violation of any applicable Federal or state securities
law. The invalidity or unenforceability of any provision of this Agreement in
any jurisdiction shall not affect the validity, legality or enforceability of
any other provision of this Agreement in such jurisdiction or the validity,
legality or enforceability of this Agreement, including any such provision, in
any other jurisdiction, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by law.
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PORTA SYSTEMS CORP.
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice president
Chief Financial Officer
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