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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 15, 1995
BETWEEN
CELLNET DATA SYSTEMS, INC.
AND
XXXXX XXXXXX INC.
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TABLE OF CONTENTS
SECTION PAGE
Section 1. Definitions.................................... 1
Section 2. Registration Rights............................ 6
2.1(a) Demand Registration After a Public
Equity Offering............................. 6
2.1(b) Effective Registration......................... 7
2.1(c) Restrictions on Sale by Holders................ 8
2.1(d) Underwritten Registrations..................... 9
2.1(e) Expenses....................................... 9
2.1(f) Priority in Demand Registration................ 9
2.2(a) Piggy-Back Registration........................ 10
2.2(b) Priority in Piggy-Back Registration............ 12
2.3 Limitations, Conditions and
Qualifications to Obligations
Under Registration Covenants................ 14
2.4 Restrictions on Sale by the Company and
Others...................................... 16
2.5 Rule 144 and Rule 144A......................... 16
2.6 Registration on Form S-3....................... 17
Section 3. [Intentionally Omitted]
Section 4. Registration Procedures........................ 18
Section 5. Indemnification and Contribution............... 26
Section 6. Miscellaneous.................................. 30
(a) No Inconsistent Agreements..................... 30
(b) Amendments and Waivers......................... 31
(c) Notices........................................ 31
(d) Successors and Assigns......................... 32
(e) Counterparts................................... 32
(f) Headings....................................... 32
(g) Governing Law; Jurisdiction.................... 32
(h) Severability................................... 32
(i) Entire Agreement............................... 33
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(j) Attorneys' Fees................................ 33
(k) Securities Held by the Company or
Its Affiliates............................... 33
(l) Remedies....................................... 33
-ii-
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of June 15, 1995, between CELLNET DATA SYSTEMS, INC., a
California corporation (the "COMPANY"), and XXXXX XXXXXX INC. (the "PURCHASER").
This Agreement is made pursuant to the Purchase Agreement, of even
date herewith, among the Company and the Purchaser (the "PURCHASE AGREEMENT"),
relating to, among other things, the sale by the Company to the Purchaser of an
aggregate of 235,000 Units, each Unit consisting of $1,000 principal amount at
maturity of 13% Senior Discount Notes due June 15, 2005 and four (4) warrants,
each initially exercisable for one (1) share of Common Stock, no par value per
share, of the Company. In order to induce the Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide to the Purchaser and the
Holders (as defined herein), among other things, the registration rights for the
Warrant Shares (as defined herein) set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the
Purchaser under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
Section 1. DEFINITIONS. As used in this Agreement, the following defined
terms shall have the following meanings:
"ADVICE" has the meaning ascribed to such term in the last paragraph
of Section 4 hereof.
"AFFILIATE" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person or such other Person,
as the case may be. For the purposes of this definition, the term
"CONTROL" when used with respect to any specified Person means the power to
direct or cause the direction of management or policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or
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otherwise; and the terms "AFFILIATED," "CONTROLLING" and "CONTROLLED" have
meanings correlative of the foregoing. None of the Purchaser or any of its
Affiliates shall be deemed to be an Affiliate of the Company or of any of
its subsidiaries or Affiliates.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
"CAPITAL STOCK" means any and all shares, interests, participations,
or other equivalents (however designated) of corporate stock of the
Company, including each class of common stock and preferred stock of the
Company, together with any warrants, rights, or options to purchase or
acquire any of the foregoing.
"COMMON STOCK" shall mean the Common Stock, no par value per share, of
the Company.
"COMPANY" shall have the meaning ascribed to that term in the preamble
of this Agreement and shall also include the Company's permitted successors
and assigns.
"DEMAND REGISTRATION" has the meaning ascribed to such term in Section
2.1(a) hereof.
"DTC" has the meaning ascribed to such term in Section 4(i) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"HOLDER" means each of the Purchaser, for so long as it owns any
Warrant Shares, and each of its successors, assigns and direct and indirect
transferees who become registered owners of such Warrant Shares.
"INCLUDED SECURITIES" has the meaning ascribed to such term in Section
2.1(a) hereof.
"INDEMNIFIED PARTY" has the meaning ascribed to such term
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in Section 5(c) hereof.
"INDEMNIFYING PARTY" has the meaning ascribed to such term in Section
5(c) hereof.
"INDENTURE" means the Indenture, of even date herewith, between the
Company and The Bank of New York, as Trustee, pursuant to which the Notes
are issued.
"INSPECTORS" has the meaning ascribed to such term in Section 4(a)
hereof.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
"NOTES" means the aggregate of $235,000,000 at maturity of 13% Senior
Discount Notes due June 15, 2005 of the Company issued under the Indenture.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PIGGY-BACK REGISTRATION" has the meaning ascribed to such term in
Section 2.2 hereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, 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.
"PUBLIC EQUITY OFFERING" means a primary public offering
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(whether or not underwritten, but excluding any offering pursuant to
Form S-4 or S-8 under the Securities Act) of capital stock of the Company
pursuant to an effective registration statement under the Securities Act.
"PURCHASE AGREEMENT" has the meaning ascribed to such term in the
preamble hereof.
"PURCHASER" has the meaning ascribed to such term in the preamble
hereof.
"REGISTRABLE SECURITIES" means any of (i) the Warrant Shares and
(ii) any other securities issued or issuable with respect to any
Registrable Securities by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, unless, in each case,
such Warrant Shares have been offered and sold to the Holder pursuant to
an effective registration statement under the Securities Act declared
effective prior to the exercisability of the Warrants. As to any
particular Registrable Securities held by a Holder, such securities shall
cease to be Registrable Securities when (i) a Registration Statement with
respect to the offering of such securities by the Holder thereof shall have
been declared effective under the Securities Act and such securities shall
have been disposed of by such Holder pursuant to such Registration
Statement, (ii) such securities may at the time of determination be sold to
the public pursuant to Rule 144 without any restriction on the amount of
securities which may be sold by such Holder or Rule 144(k) (or any similar
provision then in force, but not Rule 144A) promulgated under the
Securities Act without the lapse of any further time or the satisfaction of
any condition, (iii) such securities shall have been otherwise transferred
by such Holder and new certificates for such securities not bearing a
legend restricting further transfer shall have been delivered by the
Company or its transfer agent and subsequent disposition of such securities
shall not require registration or qualification under the Securities Act or
any similar state law then in force or (iv) such securities shall have
ceased to be outstanding.
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"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees
and expenses of compliance with securities or blue sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger, telephone and delivery expenses,
fees and disbursements of counsel for the Company and all independent
certified public accountants, the fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (but not including any
underwriting discounts or commissions or transfer taxes, if any,
attributable to the sale of Registrable Securities by Holders of such
Registrable Securities) and other reasonable out-of-pocket expenses of
Holders (it being understood that Registration Expenses shall not include,
as to the fees and expenses of counsel, the fees and expenses of more than
one counsel for the Holders).
"REGISTRATION STATEMENT" shall mean any appropriate registration
statement of the Company filed with the SEC pursuant to the Securities Act
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"REQUISITE SECURITIES" shall mean a number of Registrable Securities
equal to not less than 25% of the Registrable Securities held in the
aggregate by all Holders; PROVIDED, HOWEVER, that with respect to any
action to be taken at the request of the Holders of the Registrable
Securities prior to such time as the Warrants have expired pursuant to the
terms thereof and of the Warrant Agreement, each Warrant outstanding shall
be deemed to represent that number of Registrable Securities for which such
Warrant would be then exercisable (without giving effect to the Cashless
Exercise (as defined in
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the Warrant Agreement)).
"RULE 144" shall mean Rule 144 promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other
than Rule 144A) or regulation hereafter adopted by the SEC providing for
offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an issuer
of such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
"RULE 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other
than Rule 144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
"SELLING HOLDER" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of Section 2.1 or 2.2.
"SHAREHOLDERS' AGREEMENT" means the Shareholders' Agreement dated
August 15, 1994 by and among the Company and the other persons or entities
party thereto, as amended or supplemented from time to time.
"WARRANT AGENT" means The Bank of New York and any successor Warrant
Agent for the Warrants pursuant to the Warrant Agreement.
"WARRANT AGREEMENT" means the Warrant Agreement dated as of June 15,
1995 between the Company and The Bank of New York, as warrant agent, as
amended or supplemented from time to time in accordance with the terms
thereof.
"WARRANTS" means the 940,000 warrants of the Company issued pursuant
to the Warrant Agreement.
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"WARRANT SHARE PROSPECTUS" means the prospectus included in any
Warrant Share Registration Statement (including, without limitation, any
prospectus subject to completion and a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Warrant Share
Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Warrant Share Prospectus.
"WARRANT SHARE REGISTRATION STATEMENT" has the meaning ascribed to
that term in Section 5(a) hereof.
"WARRANT SHARES" means the shares of Common Stock deliverable upon
exercise of the Warrants.
Section 2. REGISTRATION RIGHTS.
2.1 (a) DEMAND REGISTRATION AFTER PUBLIC EQUITY OFFERING. At any
time and from time to time after the occurrence of a Public Equity Offering
Holders owning, individually or in the aggregate, not less than the Requisite
Securities may make a written request for registration under the Securities Act
of their Registrable Securities (a "DEMAND REGISTRATION"). Within 120 days of
the receipt of such written request for a Demand Registration, the Company shall
file with the SEC and use its best efforts to cause to become effective under
the Securities Act a Registration Statement with respect to such Registrable
Securities. Any such request will specify the number of Registrable Securities
proposed to be sold and will also specify the intended method of disposition
thereof. The Company shall give written notice of such registration request to
all other Holders of Registrable Securities within 15 days after the receipt
thereof. Within 20 days after receipt by any Holder of Registrable Securities
of such notice from the Company, such Holder may request in writing that such
Holder's Registrable Securities be included in such Registration Statement and
the Company shall include in such Registration Statement the Registrable
Securities of any such Holder requested to be so included (the "INCLUDED
SECURITIES"). Each such request by such
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other Holders shall specify the number of Included Securities proposed to be
sold and the intended method of disposition thereof. Subject to Sections 2.1(b)
and 2.1(f) hereof, the Company shall be required to register Registrable
Securities pursuant to this Section 2.1(a) on a maximum of three separate
occasions.
Subject to Section 2.1(f) hereof, no other securities of the Company
except (i) Registrable Securities held by any Holder, (ii) equity securities to
be offered and sold for the account of the Company and (iii) any equity
securities of the Company held by the parties to the Shareholders' Agreement or
by any Person having "piggy-back" registration rights pursuant to any
contractual obligation of the Company shall be included in a Demand
Registration; PROVIDED, HOWEVER, that no such securities for the account of the
Company or any other person (other than the parties to the Shareholders'
Agreement) shall be so included unless, in connection with any underwritten
offering, the managing underwriter or underwriters confirm to the Holders of
Registrable Securities to be included in such Demand Registration that the
inclusion of such other securities will not be likely to effect the price at
which the Registrable Securities may be sold. The inclusion of any such
securities for the account of the Company or any other Person shall be on the
same terms as that of the Registrable Securities.
(b) EFFECTIVE REGISTRATION. A Registration Statement will not be
deemed to have been effected as a Demand Registration unless it has been
declared effective by the SEC and the Company has complied in a timely manner
and in all material respects with all of its obligations under this Agreement
with respect thereto; PROVIDED, HOWEVER, that if, after such Registration
Statement has become effective, the offering of Registrable Securities pursuant
to such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the SEC or any other governmental or
administrative agency or court that prevents, restrains or otherwise limits the
sale of Registrable Securities pursuant to such Registration Statement for any
reason not attributable to any Holder participating in such registration and
such Registration Statement has not become effective within a reasonable time
period thereafter (not to exceed 30 days), such Registration Statement will be
deemed not to have been effected. If (i) a registration requested pursuant to
this Section 2.1 is
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deemed not to have been effected or (ii) a Demand Registration does not remain
effective under the Securities Act until at least the earlier of (A) an
aggregate of 90 days after the effective date thereof or (B) the consummation of
the distribution by the Holders of all of the Registrable Securities covered
thereby, then such registration shall not count towards determining if the
Company has satisfied its obligation to effect three Demand Registrations
pursuant to this Section 2.1. For purposes of calculating the 90-day period
referred to in the preceding sentence, any period of time during which such
Registration Statement was not in effect shall be excluded. The Holders of
Registrable Securities shall be permitted to withdraw all or any part of the
Registrable Securities from a Demand Registration at any time prior to the
effective date of such Demand Registration.
(c) RESTRICTIONS ON SALE BY HOLDERS. Each Holder of Registrable
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to this Section 2.1 and are to be sold thereunder agrees, if and
to the extent reasonably requested by the managing underwriter or underwriters
in an underwritten offering, not to effect any public sale or distribution of
Registrable Securities or of securities of the Company of the same class as any
securities included in such Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten offering), during the 30-day
period prior to, and during the 120-day period beginning on, the closing date of
each underwritten offering made pursuant to such Registration Statement, to the
extent timely notified in writing by the Company or such managing underwriter or
underwriters.
The foregoing provisions of Section 2.1(c) shall not apply to any
Holders of Registrable Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement; PROVIDED, HOWEVER,
that any such Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
Registrable Securities commencing on the date of sale of such Registrable
Securities unless it has provided 45 days' prior written notice of such sale or
distribution to the underwriter or underwriters.
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(d) UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by a Demand Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and will be reasonably acceptable
to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration pursuant to a Registration Statement filed under this
Agreement unless such Holder (a) agrees to (i) sell such Holder's Registrable
Securities on the basis provided in and in compliance with any underwriting
arrangements approved by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and (ii) comply with Rules 10b-6
and 10b-7 under the Exchange Act and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
(e) EXPENSES. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 2.1(a) hereof.
Each Holder of Registrable Securities shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to a Registration Statement
requested pursuant to this Section 2.1.
(f) PRIORITY IN DEMAND REGISTRATION. In a registration pursuant to
Section 2.1 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders who have requested such Demand
Registration or who have sought inclusion therein that in such underwriter's or
underwriters' opinion the total number of securities which the Selling Holders
and any other Person desiring to participate in such registration intend to
include in such offering is such as to adversely affect the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such
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registration. In such event, securities shall be registered in such
registration in the following order of priority: (i) FIRST, the securities
which have been requested to be included in such registration by the Holders of
Registrable Securities pursuant to this Agreement and the securities of the
parties to the Shareholders' Agreement in such proportion between the Holders
and such parties to the Shareholders' Agreement such that one-third of the
securities to be included shall be for the account of the Holders and two-thirds
shall be for the account of the parties to the Shareholders' Agreement (such
one-third for the account of the Holders to be allocated among the Holders pro
rata based on the amount of securities sought to be registered by the Holders),
(ii) SECOND, provided that no securities sought to be included by the Holders or
the parties to the Shareholders' Agreement have been excluded from such
registration, the securities of other Persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments of the Company (pro rata
based on the amount of securities sought to be registered by such Persons) and
(iii) THIRD, provided that no securities of any other Person sought to be
included therein have been excluded from such registration, securities to be
offered and sold for the account of the Company.
If any securities of a Holder have been excluded from a registration
statement pursuant to the provisions of the foregoing paragraph, then such
registration shall not count towards determining whether the Company has
satisfied its obligation to effect three Demand Registrations pursuant to
Section 2.1 hereof.
2.2 (a) PIGGY-BACK REGISTRATION. If at any time the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any of
its securityholders of any class of its common equity securities (other than
(i) a Registration Statement on Form S-4 or S-8 (or any substitute form that may
be adopted by the SEC) or (ii) a Registration Statement filed in connection with
an exchange offer or offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event fewer than 15 days before the anticipated filing date or 10 days if the
Company is subject to filing reports under the
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Exchange Act and able to use Form S-3 under the Securities Act), and such notice
shall offer such Holders the opportunity to register such number of shares of
Registrable Securities as each such Holder may request in writing within 15 (or
eight days if the Company is subject to filing reports under the Exchange Act
and able to use Form S-3 under the Securities Act) days after receipt of such
written notice from the Company (which request shall specify the Registrable
Securities intended to be disposed of by such Selling Holder and the intended
method of distribution thereof) (a "PIGGY-BACK REGISTRATION"). The Company
shall use its best efforts to keep such Piggy-Back Registration continuously
effective under the Securities Act until at least the earlier of (A) 90 days
after the effective date thereof or (B) the consummation of the distribution by
the Holders of all of the Registrable Securities covered thereby. The Company
shall use its best efforts to cause the managing underwriter or underwriters, if
any, of such proposed offering to permit the Registrable Securities requested to
be included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other securityholder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. Any
Selling Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement pursuant to this
Section 2.2 by giving written notice to the Company of its request to withdraw.
The Company may withdraw a Piggy-Back Registration at any time prior to the time
it becomes effective or the Company may elect to delay the registration;
PROVIDED, HOWEVER, that the Company shall give prompt written notice thereof to
participating Selling Holders. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 2.2, and each Holder of Registrable Securities shall
pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to a Registration Statement effected pursuant to this Section 2.2.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration
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upon the request of Holders of Registrable Securities pursuant to Section 2.1
hereof, and no failure to effect a registration under this Section 2.2 and to
complete the sale of securities registered thereunder in connection therewith
shall relieve the Company of any other obligation under this Agreement.
(b) PRIORITY IN PIGGY-BACK REGISTRATION. In a registration pursuant
to Section 2.2 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders requesting inclusion in such
offering that in such underwriter's or underwriters' opinion the total number of
securities which the Company, the Selling Holders and any other Persons desiring
to participate in such registration intend to include in such offering is such
as to adversely affect the success of such offering, including the price at
which such securities can be sold, then the Company will be required to include
in such registration only the amount of securities which it is so advised should
be included in such registration. In such event: (x) in cases only involving
the registration for sale of securities for the Company's own account (other
than pursuant to the exercise of piggyback rights herein and in other
contractual commitments of the Company), securities shall be registered in such
offering in the following order of priority: (i) FIRST, the securities which
the Company proposes to register, (ii) SECOND, provided that no securities
sought to be included by the Company have been excluded from such registration,
the securities which have been requested to be included in such registration by
the Holders of Registrable Securities pursuant to this Agreement and by the
parties to the Shareholders' Agreement pro rata between the Holders and the
parties to the Shareholders' Agreement based upon the aggregate amount of
securities held (such securities for the account of the Holders to be allocated
among the Holders pro rata based on the amount of securities sought to be
registered by the Holders) and (iii) THIRD, provided that no securities sought
to be included by the Company or the Holders or the parties to the Shareholders'
Agreement have been excluded from such registration, the securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities sought to be registered by such Persons); (y) in cases not involving
the
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registration for sale of securities for the Company's own account only or not
for the account of any party to the Shareholders' Agreement, securities shall
be registered in such offering in the following order of priority: (i) FIRST,
the securities of any Person whose exercise of a "demand" registration right
pursuant to a contractual commitment of the Company is the basis for the
registration (provided that if such Person is a Holder of Registrable
Securities, as among Holders of Registrable Securities there shall be no
priority and Registrable Securities sought to be included by Holders of
Registrable Securities shall be included pro rata based on the amount of
securities sought to be registered by such Persons), (ii) SECOND, provided that
no securities of such Person referred to in the immediately preceding clause (i)
have been excluded from such registration, the securities requested to be
included in such registration by the Holders of Registrable Securities pursuant
to this Agreement and the parties to the Shareholders' Agreement in such
proportion between the Holders and the parties to the Shareholders' Agreement
such that one-third of the securities permitted to be included pursuant to this
clause (ii) shall be for the account of the Holders and two-thirds shall be for
the account of the parties to the Shareholders' Agreement (such one-third for
the account of the Holders to be allocated among the Holders pro rata based on
the total amount of securities sought to be registered by the Holders) and
(iii) THIRD, provided that no securities of such Person referred to in the
immediately preceding clause (i) or of the Holders or of the parties to the
Shareholders' Agreement have been excluded from such registration, securities of
other Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments (pro rata based on the amount of securities sought to be
registered by such Persons) and (iv) FOURTH, provided that no securities of any
other Person have been excluded from such registration, the securities which the
Company proposes to register; and (z) in cases involving the registration for
sale of securities for the account of any party to the Shareholders' Agreement,
securities shall be registered in such offering in the following order of
priority: (i) FIRST, the securities requested to be included in such
registration by the Holders pursuant to this Agreement and the parties to the
Shareholders' Agreement in such proportion between the Holders and the parties
to the Shareholders' Agreement such that one-third shall be for the account of
the Holders and
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two-thirds shall be for the account of the parties to the Shareholders'
Agreement (such one-third for the account of the Holders to be allocated among
the Holders pro rata based on the amount of securities sought to be registered
by the Holders), (ii) SECOND, provided that no securities of the Holders or of
the parties to the Shareholders' Agreement have been excluded from such
registration, securities of other Persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments (pro rata based on the
amount of securities sought to be registered by such Persons) and (iii) THIRD,
provided that no securities of any other Person has been excluded from such
registration, the securities which the Company proposes to register.
If, as a result of the provisions of this Section 2.2(b), any Selling
Holder shall not be entitled to include all Registrable Securities in a Piggy-
Back Registration that such Selling Holder has requested to be included, such
Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration.
2.3 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company set forth in Sections
2.1 and 2.2 hereof are subject to each of the following limitations, conditions
and qualifications:
(i) Subject to the next sentence of this paragraph, the Company shall
be entitled to postpone, for a reasonable period of time, the filing or
effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, any Registration Statement otherwise required to be prepared,
filed and made and kept effective by it hereunder; PROVIDED, HOWEVER, that
the duration of such postponement or suspension may not exceed the earlier
to occur of (A) 15 days after the cessation of the circumstances described
in the next sentence of this paragraph on which such postponement or
suspension is based or (B) 90 days after the date of the determination of
the Board of Directors referred to in the next sentence, and the duration
of such postponement or suspension shall be excluded from the calculation
of the 90-day period described in Section 2.1(b) hereof. Such postponement
or suspension may be effected only
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if the Board of Directors of the Company determines reasonably and in good
faith that the filing or effectiveness of, or sales pursuant to, such
Registration Statement would materially impede, delay or interfere with any
financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Company or
any of its affiliates or require disclosure of material information which
the Company has a bona fide business purpose for preserving as
confidential; PROVIDED, HOWEVER, that the Company shall not be entitled to
such postponement or suspension more than twice in any twelve-month period.
If the Company shall so postpone the filing of a Registration Statement it
shall, as promptly as possible, deliver a certificate signed by the Chief
Executive Officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the
case of a postponement of the filing or effectiveness of a Registration
Statement, upon the affirmative vote of the Holders of not less than a
majority of the Registrable Securities to be included in such Registration
Statement, to withdraw the request for registration by giving written
notice to the Company within 10 days after receipt of such notice or (z) in
the case of a suspension of the right to make sales, receive an extension
of the registration period equal to the number of days of the suspension.
Any Demand Registration as to which the withdrawal election referred to in
the preceding sentence has been effected shall not be counted for purposes
of the three Demand Registrations the Company is required to effect
pursuant to Section 2.1 hereof.
(ii) The Company shall not be required by this Agreement to effect a
Demand Registration within 90 days immediately following the effective date
of any registration statement pertaining to a firmly underwritten offering
of equity securities of the Company for its own account; PROVIDED, HOWEVER,
that this clause (ii) shall not apply if the underwriter of such offering
consents to the request for such Demand Registration pursuant to Section
2.1(a).
(iii) The Company shall not be required by this Agreement to effect a
Demand Registration within 60 days
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immediately following the effective date of any registration statement
pertaining to a firmly underwritten offering of equity securities of the
Company for the account of any securityholder of the Company; PROVIDED,
HOWEVER, that this clause (ii) shall not apply if the underwriter of such
offering consents to the request for such Demand Registration pursuants to
Section 2.1(a).
(iv) The Company's obligations shall be subject to the obligations of
the Selling Holders, which the Selling Holders acknowledge, to furnish all
information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations
to permit the Company to comply with all applicable requirements of the SEC
and to obtain any acceleration of the effective date of such Registration
Statement.
(v) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant to this
Agreement unless such audit is required by the SEC or requested by the
underwriters with respect to such registration.
2.4 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The Company
covenants and agrees that (i) it shall not, and that it shall not cause or
permit any of its subsidiaries to, effect any public sale or distribution of any
securities of the same class as any of the Registrable Securities or any
securities convertible into or exchangeable or exercisable for such securities
(or any option or other right for such securities) during the 30-day period
prior to, and during the 90-day period beginning on, the commencement of any
underwritten offering of Registrable Securities pursuant to a Demand
Registration which has been requested pursuant to this Agreement, or a Piggy-
Back Registration which has been scheduled, prior to the Company or any of its
subsidiaries publicly announcing its intention to effect any such public sale or
distribution; (ii) the Company will not, and the Company will not cause or
permit any subsidiary of the Company to, after the date hereof, enter into any
agreement or contract that conflicts with or limits or prohibits the full and
timely exercise by the Holders of Registrable Securities of the rights herein to
request a Demand
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Registration or to join in any Piggy-Back Registration subject to the other
terms and provisions hereof; and (iii) that it shall use its reasonable best
efforts to secure the written agreement of each of its officers and directors to
not effect any public sale or distribution of any securities of the same class
as the Registrable Securities (or any securities convertible into or
exchangeable or exercisable for any such securities), or any option or right for
such securities during the period described in clause (i) of this Section 2.4.
2.5 RULE 144 AND RULE 144A. The Company covenants that it will 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 in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder or beneficial owner of Registrable
Securities, make available such information necessary to permit sales pursuant
to Rule 144A under the Securities Act. The Company further covenants that it
will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144(k) and Rule
144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the SEC (it being
expressly understood that the foregoing shall not create any obligation on the
part of the Company to file periodic reports or other reports under the Exchange
Act at any time that it is not then required to file such reports pursuant to
the Exchange Act). Upon the request of any Holder of Registrable Securities,
the Company will in a timely manner deliver to such Holder a written statement
as to whether it has complied with such information requirements.
2.6 REGISTRATION ON FORM S-3. (a) In addition to the rights set
forth in Section 2.1 and 2.2 hereof, if a Holder requests that the Company file
a registration statement on Form S-3 (or any successor to Form S-3) for a public
offering of shares of Registrable Securities the reasonably anticipated
aggregate price to the public of which would be at least $1,000,000, and the
Company is a registrant entitled to use Form S-3 to register the
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Shares for such an offering, the Company shall use its best efforts to cause
such shares to be registered for the offering as soon as practicable on Form S-3
(or any successor form to Form S-3).
(b) The Holders' right to register shares under Section 2.6 shall be
shared pro rata among all Holders of Registrable Securities and all other
holders of securities of the Company who have a right to request inclusion
therein based on the number of shares of Registrable Securities held by each
Holder.
(c) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.6 in the following situations:
(i) if the Company, within ten (10) days of the receipt of the request of the
Holders, gives notice of its bona fide intention to effect the filing of a
registration statement with the SEC within forty-five (45) days of receipt of
such request (other than with respect to a registration statement relating to a
Rule 145 transaction, an offering solely to employees or any other registration
which is not appropriate for the registration of Registrable Securities); (ii)
during the period starting with the date of filing of, and ending on a date
ninety (90) days following the effective date of, a registration statement
described in (i) above or pursuant to Section 2.1 or 2.2 hereof; PROVIDED,
HOWEVER, that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective; PROVIDED,
HOWEVER, that no other person or entity could require the Company to file a
registration statement in such period; or (iii) more than once in any six-month
period.
Section 3. [Intentionally Omitted]
Section 4. REGISTRATION PROCEDURES. In connection with the obligations of
the Company with respect to any Registration Statement pursuant to Sections 2.1,
2.2 and 2.6 hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each such
Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and cause such Registration
Statement to become effective and remain effective as provided herein;
PROVIDED, HOWEVER, that
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before filing any such Registration Statement or any Prospectus (for
registrations pursuant to Sections 2.1 and 2.2 hereof) or any amendments or
supplements thereto (only for registrations pursuant to Section 2.1 hereof)
(including documents that would be incorporated or deemed to be
incorporated therein by reference, including such documents filed under the
Exchange Act that would be incorporated therein by reference), the Company
shall afford promptly to the Holders of the Registrable Securities covered
by such Registration Statement, their counsel and the managing underwriter
or underwriters, if any, an opportunity to review copies of all such
documents proposed to be filed a reasonable time prior to the proposed
filing thereof. The Company shall not file any Registration Statement or
Prospectus (for registrations pursuant to Sections 2.1 and 2.2 hereof) or
any amendments or supplements thereto (only for registrations pursuant to
Section 2.1 hereof) if the Holders of a majority of the Registrable
Securities covered by such Registration Statement, their counsel, or the
managing underwriter or underwriters, if any, shall reasonably object in
writing unless failure to file any such amendment or supplement would
involve a violation of the Securities Act or other applicable law.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods
prescribed hereby; cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities, their counsel and
the managing underwriter or underwriters, if any, promptly (but in any
event within two (2) Business Days), and
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confirm such notice in writing, (i) when a Prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to
a Registration Statement or any post-effective amendment, when the same has
become effective (including in such notice a written statement that any
Holder may, upon request, obtain, without charge, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules and exhibits), (ii) of the issuance by the SEC of
any stop order suspending the effectiveness of such Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the initiation or threatening of any proceedings for that
purpose, (iii) if at any time when a prospectus is required by the
Securities Act to be delivered in connection with sales of the Registrable
Securities the representations and warranties of the Company contained in
any agreement (including any underwriting agreement) contemplated by
Section 4(m) below, to the knowledge of the Company, cease to be true and
correct in any material respect, (iv) of the receipt by the Company of any
notification with respect to (A) the suspension of the qualification or
exemption from qualification of the Registration Statement or any of the
Registrable Securities covered thereby for offer or sale in any
jurisdiction, or (B) the initiation of any proceeding for such purpose,
(v) of the happening of any event, the existence of any condition or
information becoming known that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of
such Registration Statement, it will conform in all material respects with
the requirements of the Securities Act and it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, not
misleading, and that in the case of the Prospectus, it will conform in all
material respects with the requirements of the Securities Act and it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the Company's reasonable determination
that a post-effective amendment to such Registration Statement
-22-
would be appropriate.
(d) Use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the 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
Securities covered thereby for sale in any jurisdiction, and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If requested by the managing underwriter or underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold in
connection with an underwriting offering (only for registrations pursuant
to Section 2.1 hereof), (i) promptly incorporate in a prospectus supplement
or post-effective amendment such information as the managing underwriter or
underwriters, if any, or such Holders reasonably request to be included
therein to comply with applicable law, (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 Holder of Registrable Securities who so requests
and to counsel for the Holders of Registrable Securities and each managing
underwriter, if any, without charge, upon request, one conformed copy of
the Registration Statement and each post-effective amendment thereto,
including financial statements and schedules, and of all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits (including exhibits incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their counsel
and each underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and, subject to
the last
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paragraph of this Section 4, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the Holders
of Registrable Securities and the underwriter or underwriters or agents, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, to register or
qualify, and cooperate with the Holders of Registrable Securities, the
underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions within
the United States as the managing underwriter or underwriters reasonably
request in writing, or, in the event of a non-underwritten offering, as the
Holders of a majority of the Registrable Securities may request; PROVIDED,
HOWEVER, that where Registrable Securities are offered other than through
an underwritten offering, the Company agrees to cause its counsel to
perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 4(h); keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the securities
covered thereby; PROVIDED, HOWEVER, that the Company will not be required
to (A) qualify generally to do business in any jurisdiction where it is not
then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject
or (C) become subject to taxation in any jurisdiction where it is not then
so subject.
(i) Cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive
legends whatsoever
-24-
and shall be in a form eligible for deposit with The Depository Trust
Company ("DTC"); and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request at least two
business days prior to any sale of Registrable Securities in a firm
commitment underwritten public offering.
(j) [Intentionally Omitted]
(k) Upon the occurrence of any event contemplated by Section
4(c)(v) or 4(c)(vi) above, as promptly as practicable prepare a
supplement or post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and, subject to Section
4(a) hereof, file such with the SEC so that, as thereafter delivered to
the purchasers of Registrable Securities being sold thereunder, such
Prospectus 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.
(l) Prior to the effective date of a Registration Statement,
(i) provide the registrar for the Registrable Securities with certificates
for such securities in a form eligible for deposit with DTC and
(ii) provide a CUSIP number for such securities.
(m) Enter into an underwriting agreement in form, scope and substance
as is customary in underwritten offerings and take all such other actions
as are reasonably requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or disposition of such
Registrable Securities in any underwritten offering to be made of the
Registrable Securities in accordance with this Agreement, and in such
connection, (i) make such representations and warranties to the underwriter
or underwriters, with respect to the business of the Company and the
subsidiaries of the Company, and the Registration Statement, Prospectus and
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documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made
by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) use reasonable efforts to obtain opinions of
counsel to the Company and updates thereof, addressed to the underwriter or
underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably
requested by underwriters; (iii) use reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if applicable, the subsidiaries of the
Company) and, if necessary, any other independent certified 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 Registration Statement, addressed to each
of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as reasonably
requested by the managing underwriter or underwriters and as permitted by
the Statement of Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain customary indemnification
provisions and procedures (or such other provisions and procedures
acceptable to Holders of a majority of Registrable Securities covered by
such Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties 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.
(n) Make available for inspection by a representative of the Holders
of Registrable Securities being sold, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney or
accountant retained by such representative of the Holders or underwriter
(collectively, the "INSPECTORS"), at the offices where normally kept,
during reasonable business hours, all financial
-26-
and other records, pertinent corporate documents and properties of the
Company and the subsidiaries of the Company, and cause the officers,
directors and employees of the Company and the subsidiaries of the Company
to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement; PROVIDED,
HOWEVER, that all material non-public information shall be kept
confidential by such Inspector, except to the extent that (i) the
disclosure of such information is necessary or advisable to avoid or
correct a misstatement or omission in the Registration Statement or in any
Prospectus; PROVIDED, HOWEVER, that prior notice is given to the Company,
and the Company's legal counsel and such Holder's legal counsel concur that
disclosure is required, (ii) the release of such information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is necessary or
advisable in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such Inspector
and arising out of, based upon, relating to or involving this Agreement or
any of the transactions contemplated hereby or arising hereunder; PROVIDED,
HOWEVER, that prior notice shall be provided as soon as practicable to the
Company of the potential disclosure of any information by such Inspector
pursuant to clauses (ii) or (iii) of this sentence to permit the Company to
obtain a protective order (or waive the provisions of this paragraph (n))
and that such Inspector shall take all actions as are reasonably necessary
to protect the confidentiality of such information (if practicable) to the
extent such action is otherwise not inconsistent with, an impairment of or
in derogation of the rights and interests of the Holder or any Inspector,
or (iv) such information has been made generally available to the public.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than forty-five (45) days after the end of any 12-month period (or
ninety (90) days after the end of any 12-month period if
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such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to an underwriter or to
underwriters in a firm commitment or best efforts underwritten offering and
(ii) if not sold to an underwriter or to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of the relevant Registration Statement, which
statements shall cover said 12-month periods.
(p) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed.
(q) Cooperate with the Selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends
and registered in such names as the selling Holders may reasonably request
at least two business days prior to the closing of any sale of Registrable
Securities.
Each seller of Registrable Securities as to which any registration is
being effected agrees, as a condition to the registration obligations with
respect to such Holder provided herein, to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing
to comply with the Securities Act and other applicable law. The Company may
exclude from such registration the Registrable Securities of any seller for so
long as such seller fails to furnish such information within a reasonable time
after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in the Registration Statement, such seller shall
be permitted to include all information regarding such seller as it shall
reasonably request.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iv),
4(c)(v), or 4(c)(vi)
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hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by the Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof), or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable prospectus may be
resumed, and has received copies of any amendments or supplements thereto, and,
if so directed by the Company, such Holder will, at the Company's expense,
deliver to the Company all copies, other than permanent file copies, then in
such Holder's actual possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice; PROVIDED, HOWEVER,
that nothing herein shall create any obligation on the part of any Holder to
undertake to retrieve or return any such Prospectus not within the actual
possession of such Holder. In the event the Company shall give any such notice,
the period of time for which a Registration Statement is required hereunder to
be effective shall be extended by the number of days during such periods from
and including the date of the giving of such notice to and including the date
when each seller of Registrable Securities covered by such Registration
Statement shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by Section 4(k) hereof or (y) the Advice.
Section 5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Holder and each Person, if any, who controls
such Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or is
controlled by, such Holder, from and against all losses, claims, damages and
liabilities (including, without limitation, and subject to clause (c) of this
Section 5 below, the reasonable legal fees and other reasonable out-of-pocket
expenses actually incurred by any Holder or any such controlling or affiliated
Person in connection with any suit, action or proceeding or any claim asserted),
caused by, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were registered
under the Securities Act or in any registration statement filed by the Company
covering the issuance of Warrant Shares and resales thereof (a "WARRANT SHARE
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REGISTRATION STATEMENT"), or caused by any omission or alleged omission to state
in any such Registration Statement or Warrant Share Registration Statement a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, Prospectus
or Warrant Share Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state in any such preliminary prospectus, Prospectus or
Warrant Share Prospectus a material fact required to be stated in any such
preliminary prospectus, Prospectus or Warrant Share Prospectus or necessary to
make the statements in any such preliminary prospectus, Prospectus or Warrant
Share Prospectus in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in comformity with information relating to
any Holder furnished to the Company in writing by such Holder expressly for use
in any such Registration Statement, Warrant Share Registration Statement or
Prospectus; PROVIDED, HOWEVER, that the Company shall not be required to
indemnify any such Person if such untrue statement or omission or alleged untrue
statement or omission was contained or made in any preliminary prospectus and
corrected in the Prospectus or such Warrant Share Prospectus, as the case may
be, or any amendment or supplement thereto and the Prospectus or such Warrant
Share Prospectus, as the case may be, does not contain any other untrue
statement or omission or alleged untrue statement or omission of a material fact
that was the subject matter of the related proceeding and any such loss,
liability, claim, damage or expense suffered or incurred by such indemnified
Person resulted from any action, claim or suit by any Person who purchased
Registrable Securities which are the subject thereof from such indemnified
Person and it is established in the related proceeding that such indemnified
Person failed to deliver or provide a copy of the Prospectus or Warrant Share
Prospectus, as the case may be (as amended or supplemented) to such Person with
or prior to the confirmation of the sale of such Registrable Securities sold to
such Person if required by applicable law, unless such failure to deliver or
provide a copy of the Prospectus or Warrant Share Prospectus, as the case may be
(as
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amended or supplemented) was a result of noncompliance by the Company with
Section 4 hereof or as a result of the failure of the Company to provide such
Prospectus or Warrant Share Prospectus, as the case may be.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign any Registration
Statement or Warrant Share Registration Statement, as the case may be, and each
Person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement or Warrant Share
Registration Statement, as the case may be (or any amendment thereto) or any
Prospectus or Warrant Share Prospectus, as the case may be (or any amendment or
supplement thereto). The liability of any Holder under this paragraph shall in
no event exceed the proceeds received by such Holder from sales of Registrable
Securities giving rise to such obligations.
(c) In case any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) above, such Person (the "INDEMNIFIED PARTY") shall promptly notify
the Person against which such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
reasonably designate in such proceeding and shall pay the reasonable fees and
expenses actually incurred of such counsel relating to such proceeding;
PROVIDED, HOWEVER, that the failure to so notify the indemnifying party shall
not relieve it of any obligation or liability which it may have hereunder or
otherwise. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary,
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(ii) the indemnifying party shall have failed to retain within a reasonable
period of time counsel reasonably satisfactory to such indemnified party or
parties or (iii) the named parties to any such proceeding (including any
impleaded parties) include both such indemnified party or parties and the
indemnifying parties or an affiliate of the indemnifying parties or such
indemnified parties and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between the
indemnifying party or parties and the indemnified party or parties. It is
understood that the indemnifying parties shall not, in connection with any one
such proceeding or separate but substantially similar or related proceedings in
the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for such
indemnified party or parties and that all such fees and expenses shall be
reimbursed within reasonable time of the request after the incurrence thereof.
Any such separate firm for the Holders and such control Persons of the Holders
shall be designated in writing by Holders who sold a majority in interest of
Registrable Securities sold by all such Holders and reasonably acceptable to the
Company and any such separate firm for the Company, its directors, its officers
and such control Persons of the Company shall be designated in writing by the
Company and reasonably acceptable to the Holders. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its prior
written consent (which consent shall not be unreasonably withheld or delayed)
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify and hold harmless the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement or compliance of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party, or indemnity could have been sought hereunder by such indemnified party,
unless such settlement or compliance includes an unconditional written release
of such indemnified party in form and substance reasonably satisfactory to such
indemnified party of such indemnified party from all liability
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on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 5 is unavailable to, or insufficient to hold harmless, an
indemnified party in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect (i) the relative benefits received by
the Company on the one hand and the Holders on the other hand from the offering
of such Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, not only such relative benefits but
also the relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Holders on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of discounts and commissions but before
deducting expenses) of the Warrants sold pursuant to the Purchase Agreement
received by the Company bears to the total proceeds received by such Holder from
the sale of Registrable Securities, as the case may be. The relative fault of
the Company on the one hand and the Holders on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the equitable
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considerations referred to in Section 5(d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 5(d) above shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses actually
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 5, in
no event shall a Holder be required to contribute any amount in excess of the
amount by which proceeds received by such Holder from sales of Registrable
Securities exceeds the amount of any damages that such Holder has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Purchaser or any person who controls a
Purchaser, the Company, their respective directors or officers or any person
controlling the Company and (ii) any termination of this Agreement.
Section 6. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not entered into nor
will the Company on or after the date of this Agreement enter into, or cause or
permit any of its subsidiaries to enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement
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or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities, if any, under any such agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the Company has obtained the prior
written consent of Holders of not less than a majority of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; PROVIDED, HOWEVER, that Section 5 hereof and this Section
6(b) may not be amended, modified or supplemented without the prior written
consent of each Holder (including any Person who was a Holder of Registrable
Securities disposed of pursuant to any Registration Statement or a Warrant Share
Registration Statement) affected by such amendment, modification or supplement.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable Securities may be
given by the Holders of not less than a majority of the Registrable Securities
proposed to be sold by such Holders pursuant to such Registration Statement.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address of Holder as set forth
in the register for the Warrants or the Warrant Shares, which address initially
is, with respect to the Purchaser, the address set forth in the Purchase
Agreement; and (ii) if to the Company, initially at the address set forth below
the Company's name on the signature pages hereto and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(c), with a copy to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, Attention: Xxxxx X. Xxxxxx,
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Esq., and thereafter at such other address notice of which is given in
accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if Personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Warrants and/or Registrable Securities, in any manner, whether by
operation of law or otherwise, such Warrants and/or Registrable Securities shall
be held subject to all of the terms of this Agreement, and by taking and holding
such Warrants and/or Registrable Securities such Person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to receive the
benefits hereof.
(e) 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.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(h) SEVERABILITY. If any term, provision, covenant or
-36-
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, 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, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Warrant Agreement, is intended by the parties as a final
expression of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, the Purchase
Agreement and the Warrant Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter.
(j) ATTORNEYS' FEES. As between the parties to this Agreement, in
any action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to
its costs and expenses and any other available remedy.
(k) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities or Warrants is required hereunder, Registrable Securities or Warrants
held by the Company or by any of its affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted (in either the numerator or
the denominator) in determining whether such consent or approval was given by
the Holders of such required percentage.
(l) REMEDIES. In the event of a breach by the Company
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of any of its obligations under this Agreement, each Holder, in addition to
being entitled to exercise all rights provided herein, in the Purchase Agreement
or 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 any of the provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CELLNET DATA SYSTEMS, INC.
By: /s/ X. Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: CFO
Address for Notices:
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
XXXXX XXXXXX INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address for Notices:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
