Exhibit 10.31
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REGISTRATION RIGHTS AGREEMENT
by and among
USINTERNETWORKING, INC.,
as Issuer
and
THE INITIAL PURCHASERS NAMED HEREIN
Dated October 29, 1999
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THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as
of October 29, 1999 by and among USinternetworking, Inc., a Delaware corporation
(the "COMPANY"), and Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx &
Co. Incorporated, Bear, Xxxxxxx & Co. Inc., Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated, Xxxxxxxxxxx Xxxxxxx Securities, Inc., X.X. Xxxxxxxxx, Towbin and
The Xxxxxxxx-Xxxxxxxx Company, LLC (the "INITIAL PURCHASERS") pursuant to the
Purchase Agreement, dated October 25, 1999 (the "PURCHASE AGREEMENT"), among the
Company and the Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for their
benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Notes (as defined
herein) and the beneficial owners from time to time of the Underlying Common
Stock (as defined herein) issued upon conversion of the Notes (each of the
foregoing a "HOLDER" and, together, the "HOLDERS"), as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
ADDITIONAL INTEREST: See Section 2(e) hereof.
ADDITIONAL INTEREST ACCRUAL PERIOD: See Section 2(e) hereof.
ADDITIONAL INTEREST PAYMENT DATE: Each interest payment date
under the Indenture.
AFFILIATE: With respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.
AMENDMENT EFFECTIVENESS DEADLINE DATE: See Section 2(d)
hereof.
APPLICABLE CONVERSION PRICE: The Applicable Conversion Price
as of any date of determination means the Conversion Price in effect as of such
date of determination or, if no Notes are then outstanding, the Conversion Price
that would be in effect were Notes then outstanding.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
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COMMON STOCK: The shares of common stock, $0.001 par value, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.
COMPANY: The Company shall have the meaning set forth in the
first paragraph of this Agreement and shall also include the Company's
successors.
CONVERSION PRICE: Conversion Price shall have the meaning
assigned such term in the Indenture.
CSFBC: Credit Suisse First Boston Corporation.
DEFERRAL NOTICE: See Section 3(i) hereof.
DEFERRAL PERIOD: See Section 3(i) hereof.
EFFECTIVENESS DEADLINE DATE: See Section 2(a) hereof.
EFFECTIVENESS PERIOD: Two years from the date of the Initial
Shelf Registration Statement or, if a shorter period, from the date of the
Initial Shelf Registration Statement until either of (i) the sale pursuant to a
Shelf Registration Statement of all the Registrable Securities or (ii) the
expiration of the holding period applicable to the Registrable Securities held
by Holders that are not Affiliates of the Company under Rule 144(k) under the
Securities Act.
EVENT: See Section 2(e) hereof.
EVENT DATE: See Section 2(e) hereof.
EVENT TERMINATION DATE: See Section 2(e) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
FILING DEADLINE DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDENTURE: The Indenture dated as of the date hereof between
the Company and The Bank of New York, as trustee, pursuant to which the Notes
are being issued.
INITIAL PURCHASERS: Credit Suisse First Boston Corporation,
Xxxxxx Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx & Co. Inc., Xxxx Xxxxx Xxxx
Xxxxxx, Incorporated,
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Xxxxxxxxxxx Xxxxxxx Securities, Inc., X.X. Xxxxxxxxx, Towbin and The
Xxxxxxxx-Xxxxxxxx Company, LLC .
INITIAL SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
ISSUE DATE: October 29, 1999.
LOSSES: See Section 6 hereof.
MANAGING UNDERWRITERS: See Section 8 hereof.
MATERIAL EVENT: See Section 3(i) hereof.
NOTES: The Convertible Subordinated Notes due 2004 of the
Company to be purchased pursuant to the Purchase Agreement.
NOTICE AND QUESTIONNAIRE: A written notice delivered to the
Company by a Holder containing any information with respect to the Holder
necessary to amend the Registration Statement or supplement the related
Prospectus with respect to the intended distribution of Registrable Securities
by such Holder.
NOTICE HOLDER: On any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date and holds
Registrable Securities, as of such dates.
OFFERING CIRCULAR. The final offering circular dated October
25, 1999 relating to the issuance of the Notes.
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.
PURCHASE AGREEMENT: See the first paragraph of this Agreement.
RECORD HOLDER: The holder of record of such Note on the record
date with respect to the interest payment date under the Indenture on which such
Additional Interest Payment Date shall occur.
REGISTRABLE SECURITIES: The Notes, until such Notes have been
converted or exchanged into the Underlying Common Stock and, at all times
subsequent to any such
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conversion or exchange, the Underlying Common Stock and any securities into or
for which such Underlying Common Stock have been converted or exchanged, and any
security issued with respect thereto upon any stock dividend, split or similar
event until, in the case of any such security, (A) the earliest of (i) its
effective registration under the Securities Act and resale in accordance with
the Registration Statement covering it, (ii) expiration of the holding period
that would be applicable thereto under Rule 144(k) under the Securities Act were
it not held by an Affiliate of the Company or (iii) its sale to the public
pursuant to Rule 144, and (B) as a result of the event or circumstance described
in any of the foregoing clauses (i) through (iii), the legends with respect to
transfer restrictions required under the Indenture are removed or removable in
accordance with the terms of the Indenture.
REGISTRATION EXPENSES: See Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
RESTRICTED SECURITIES: As this term is defined in Rule 144.
RULE 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
SUBSEQUENT SHELF REGISTRATION STATEMENT: See Section 2(b)
hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The Bank of New York (or any successor entity), the
Trustee under the Indenture.
UNDERLYING COMMON STOCK: The Common Stock into which the Notes
are convertible or issued upon any such conversion.
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SECTION 2. SHELF REGISTRATION. (a) The Company shall prepare
and file or cause to be prepared and filed with the SEC, as soon as practicable
but in any event by the date (the "FILING DEADLINE DATE") sixty (60) days after
the Issue Date, a Registration Statement for an offering to be made on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF
REGISTRATION STATEMENT") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION
STATEMENT"). The Initial Shelf Registration Statement shall be on an appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
its best efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in
any event within one hundred and fifty (150) days after the Issue Date (the
"EFFECTIVENESS DEADLINE DATE"), and to keep the Initial Shelf Registration
Statement (or any Subsequent Shelf Registration Statement) continuously
effective under the Securities Act until the expiration of the Effectiveness
Period. At the time the Initial Shelf Registration Statement is declared
effective, each Holder that became a Notice Holder and that has provided the
Company with an appropriately completed Notice and Questionnaire on or prior to
the date five (5) Business Days prior to such time of effectiveness shall be
named as a selling securityholder in the Initial Shelf Registration Statement
and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Registrable Securities in accordance with
applicable law. Except as disclosed on SCHEDULE I hereto, none of the Company's
security holders (other than the Holders of Registrable Securities) shall have
the right to include any of the Company's securities in the Shelf Registration
Statement.
(b) If the Initial Shelf Registration Statement or any
Subsequent Shelf Registration Statement ceases to be effective for any reason at
any time during the Effectiveness Period, the Company shall use its best efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the
securities that as of the date of such filing are Registrable Securities (a
"SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a Subsequent Shelf Registration
Statement is filed, the Company shall use its best efforts to cause the
Subsequent Shelf Registration Statement to become effective as promptly as is
practicable after such filing and to keep such Registration Statement (or
subsequent Shelf Registration Statement) continuously effective until the end of
the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration
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form used by the Company for such Shelf Registration Statement, if required by
the Securities Act or, to the extent to which the Company does not reasonably
object, as reasonably requested by an Initial Purchaser in the event that it is
participating in the Shelf Registration Statement or by the Trustee on behalf of
a majority in interest of the registered Holders or by any Managing Underwriter
in the event of an underwritten offering.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(i). Each Holder of Registrable Securities wishing to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire to the Company
at least five (5) Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration Statement. From and after
the date the Initial Shelf Registration Statement is declared effective, the
Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered (i) if required by applicable law, file with the SEC
a post-effective amendment to the Shelf Registration Statement or prepare and,
if required by applicable law, file a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other document required under the Securities Act so that the Holder
delivering such Notice and Questionnaire is named as a selling securityholder in
the Shelf Registration Statement and the related Prospectus in such a manner as
to permit such Holder to deliver such Prospectus to purchasers of the
Registrable Securities in accordance with applicable law and, if the Company
shall file a post-effective amendment to the Shelf Registration Statement, use
commercially reasonable efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is practicable, but
in any event by the date (the "AMENDMENT EFFECTIVENESS DEADLINE DATE") that is
forty-five (45) days after the date such post-effective amendment is required by
this clause to be filed; (ii) provide such Holder copies of any documents filed
pursuant to Section 2(d)(i); and (iii) notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i); provided that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i), (ii) and (iii) above upon expiration
of the Deferral Period in accordance with Section 3(i). Notwithstanding anything
contained herein to the contrary, (i) the Company shall be under no obligation
to name any Holder that is not a Notice Holder as a selling securityholder in
any Registration Statement or related Prospectus; and the Company shall not be
obligated to file more than one (1) post-effective amendment or supplement for
the purpose of naming Holders as selling securityholders who were not named in
the Initial Shelf Registration Statement at the time of effectiveness in any
twenty (20) day period following the effectiveness of the Initial Shelf
Registration Statement. Any Holder who subsequently provides a Notice and
Questionnaire required by this Section 2(d) pursuant to the
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provisions of this Section (whether or not such Holder has supplied the Notice
and Questionnaire at the time the Initial Shelf Registration Statement was
declared effective) shall be named as a selling securityholder in the Shelf
Registration Statement and related Prospectus in accordance with the
requirements of this Section 2(d).
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date, (ii) the
Initial Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) within the time
period required therein or (iv) the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period
pursuant to Section 3(i) hereof or (each of the events of a type described in
any of the foregoing clauses (i) through (iv) are individually referred to
herein as an "EVENT," and the Filing Deadline Date in the case of clause (i),
the Effectiveness Deadline Date in the case of clause (ii), the date by which
the Company is required to perform its obligations set forth in Section 2(d) in
the case of clause (iii) (including the filing of any post-effective amendment
prior to the Amendment Effectiveness Deadline Date) and the date on which the
aggregate duration of Deferral Periods in any period exceeds the number of days
permitted by Section 3(i) hereof in the case of clause (iv) being referred to
herein as an "EVENT DATE"). Events shall be deemed to continue until the "EVENT
TERMINATION DATE," which shall be the following dates with respect to the
respective types of Events: the date the Initial Shelf Registration Statement is
filed in the case of an Event of the type described in clause (i), the date the
Initial Shelf Registration Statement is declared effective under the Securities
Act in the case of an Event of the type described in clause (ii), the date the
Company performs its obligations set forth in Section 2(d) in the case of an
Event of the type described in clause (iii) (including, without limitation, the
date the relevant post-effective amendment to the Shelf Registration Statement
is declared effective under the Securities Act), and termination of the Deferral
Period that caused the limit on the aggregate duration of Deferral Periods in a
period set forth in Section 3(i) to be exceeded in the case of the commencement
of an Event of the type described in clause (iv).
Accordingly, subject to the last sentence of Section 3(i),
commencing on (and including) any Event Date and ending on (but excluding) the
relevant Event Termination Date (an "ADDITIONAL INTEREST ACCRUAL PERIOD"), the
Company agrees to pay, as additional interest and not as a penalty, an amount
(the "ADDITIONAL INTEREST"), payable on the Additional Interest Payment Dates to
Record Holders of Registrable Securities, for each portion of such Additional
Interest Accrual Period beginning on and including an Additional Interest
Payment Date (or, in respect of the first time that the Additional Interest is
to be paid to Holders on an Additional Interest Payment Date as a result of the
occurrence
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of any particular Event, from the Event Date) and ending on but excluding the
first to occur of (A) the date of the end of the Additional Interest Accrual
Period or (B) the next Additional Interest Payment Date, with respect to Notes
at a rate per annum equal to one-half of one percent (0.5 %) of the aggregate
principal amount of such Notes, determined as of the Business Day immediately
preceding the next Additional Interest Payment Date; provided that in the case
of an Additional Interest Accrual Period that is in effect solely as a result of
an Event of the type described in clause (iii) of the immediately preceding
paragraph, such Additional Interest shall be paid only to the Holders that have
delivered Notice and Questionnaires that caused the Company to incur the
obligations set forth in Section 2(d) the non-performance of which is the basis
of such Event, provided, further, that any Additional Interest accrued with
respect to any Note or portion thereof called for redemption on a redemption
date prior to the Additional Interest Payment Date, shall, in any such event, be
paid instead to the Holder who submitted such Note or portion thereof for
redemption on the applicable redemption date on such date. Notwithstanding the
foregoing, no Additional Interest shall accrue as to any Registrable Security
from and after the earlier of (x) the date such security is no longer a
Registrable Security and (y) the expiration of the Effectiveness Period. The
rate of accrual of the Additional Interest with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events. Following the cure of all Events requiring the
payment by the Company of Additional Interests to the Holders of Registrable
Securities pursuant to this Section, the accrual of Additional Interests will
cease (without in any way limiting the effect of any subsequent Event requiring
the payment of Additional Interest by the Company).
The Trustee shall be entitled, on behalf of Holders of Notes
or Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Additional Interest.
Notwithstanding the foregoing, the parties agree that Additional Interest
payable for a violation of the terms of this Agreement shall be the sole quantum
of damages payable for breach of such provisions.
All of the Company's obligations set forth in this Section
2(e) that are outstanding with respect to any Registrable Security at the time
such security ceases to be a Registrable Security shall survive until such time
as all such obligations with respect to such security have been satisfied in
full (notwithstanding termination of this Agreement pursuant to Section 9(k)).
The parties hereto agree that the additional interest provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities by reason of the failure of
the Initial Shelf Registration Statement to be filed or declared effective or
available for effecting resales of Registrable Securities in accordance with the
provisions hereof.
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SECTION 3. REGISTRATION PROCEDURES. In connection with the
registration obligations of the Company under Section 2 hereof, the Company
shall:
(a) Before filing any Registration Statement or Prospectus or
any amendments or supplements thereto with the SEC, furnish to CSFBC and counsel
to the Initial Purchasers copies of all such documents proposed to be filed and
use its bests efforts to reflect in each such document when so filed with the
SEC such comments as the Initial Purchasers and counsel to the Initial Purchaser
reasonably shall propose within three (3) Business Days of the delivery
following such copies to CSFBC and counsel to the Initial Purchasers.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2(a); 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) under the
Securities Act; and use its best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.
(c) As promptly as practicable (i) give notice to the Holders,
counsel to the Notice Holders and the Initial Purchasers when any Registration
Statement or any post-effective amendment has been declared effective and (ii)
give notice to the Notice Holders, counsel to the Notice Holders and the Initial
Purchasers (A) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information, (B)
of the issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of any Registration Statement or
the initiation or threatening of any proceedings for that purpose, (C) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (D) of the occurrence of (but not the nature of or
details concerning) a Material Event and (E) of the determination by the Company
that a post-effective amendment to a Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in which
event the provisions of Section 3(i) shall apply.
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(d) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case as promptly as practicable.
(e) As promptly as practicable (if reasonably requested by any
Notice Holder or by an Initial Purchaser (with respect to any portion of an
unsold allotment from the original offering if such Initial Purchaser is
participating in the Shelf Registration Statement)), incorporate in a Prospectus
supplement or post-effective amendment to a Registration Statement such
information as such Notice Holder or Initial Purchaser shall, on the basis of an
opinion of nationally recognized counsel experienced in such matters, determine
to be required to be included therein and make any required filings of such
Prospectus supplement or such post-effective amendment; provided, that the
Company shall not be required to take any actions under this Section 3(e) that
are not, in the reasonable opinion of counsel for the Company, in compliance
with applicable law.
(f) As promptly as practicable furnish to each Notice Holder
and CSFBC, without charge, at least one (1) conformed copy of the Registration
Statement and any amendment thereto, including financial statements but
excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing to the
Company by such Notice Holder or CSFBC, as the case may be).
(g) During the Effectiveness Period, deliver to each Notice
Holder in connection with any sale of Registrable Securities pursuant to a
Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such Notice Holder may
reasonably request; and the Company hereby consents (except during such periods
that a Deferral Notice is outstanding and has not been revoked) to the use of
such Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.
(h) Prior to any public offering of the Registrable Securities
pursuant to a Shelf Registration Statement, register or qualify or cooperate
with the Notice Holders 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 any Notice Holder reasonably requests
in writing (which request may be included in the Notice and Questionnaire);
prior to any public offering of the Registrable Securities pursuant to a Shelf
Registration Statement, keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable
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Securities pursuant to such registration or qualification (or exemption
therefrom) and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of such Registrable Securities in
the manner set forth in the relevant Registration Statement and the related
Prospectus; provided, that the Company will not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Agreement or (ii) take
any action that would subject it to general service of process in suits or to
taxation in any such jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order
suspending the effectiveness of a Shelf Registration Statement or the initiation
of proceedings with respect to a Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "MATERIAL EVENT") as a result of which any Registration Statement
shall 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, or any Prospectus shall 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 the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development, public filing with the SEC or other
similar event with respect to the Company that, in the reasonable discretion of
the Company, makes it appropriate to suspend the availability of a Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
above, subject to the next sentence, as promptly as practicable prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does 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
such Prospectus does 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 the light of the circumstances under which they were
made, not misleading, and, in the case of a post-effective amendment to a
Registration Statement, subject to the next sentence, use its best efforts to
cause it to be declared effective as promptly as is practicable, and (ii) give
notice to the Notice Holders that the availability of the Shelf Registration
Statement is suspended (a "DEFERRAL NOTICE") and, upon receipt of any Deferral
Notice, each Notice Holder agrees not to sell any Registrable Securities
pursuant to the Registration Statement until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in clause (i)
above, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The
Company will use its best
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efforts to ensure that the use of the Prospectus may be resumed (x) in the case
of clause (A) above, as promptly as is practicable, (y) in the case of clause
(B) above, as soon as, in the sole judgment of the Company, public disclosure of
such Material Event would not be prejudicial to or contrary to the interests of
the Company or, if necessary to avoid unreasonable burden or expense, as soon as
practicable thereafter and (z) in the case of clause (C) above, as soon as, in
the discretion of the Company, such suspension is no longer appropriate. The
Company shall be entitled to exercise its right under this Section 3(i) to
suspend the availability of the Shelf Registration Statement or any Prospectus,
without incurring or accruing any obligation to pay Additional Interest pursuant
to Section 2(e), for one or more periods not to exceed 30 days in any
three-month period or not to exceed an aggregate 90 days in any 12-month period
(such period, during which the availability of the Registration Statement and
any Prospectus is suspended being a "DEFERRAL PERIOD").
(j) Use its best efforts to comply with all applicable rules
and regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) 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 45 days after the end of any
3-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said periods.
(k) In the case of registration of resales of the Notes, cause
the Indenture to be qualified under the Trust Indenture Act of 1939, as amended
(the "TIA"), cooperate with the Trustee and the Notice Holders to effect such
changes to the Indenture as may be required for the Indenture to be so qualified
in accordance with the terms of the TIA and execute, and use commercially
reasonable efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a timely
manner.
(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Registration Statement, which certificates
shall not bear any restrictive legends unless required by applicable law, and
cause such Registrable Securities to be in such denominations as are permitted
by the Indenture and registered in such names as such Notice Holder may request
in writing at least two (2) Business Days prior to any sale of such Registrable
Securities.
(m) Provide a CUSIP number for all Registrable Securities
covered by each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with printed certificates
-14-
for the Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.
(n) Use its best efforts to cause the Underlying Common Stock
to be listed on any securities exchange or any automated quotation system on
which similar securities issued by the Company are then listed, to the extent
the Underlying Common Stock satisfies applicable listing requirements.
(o) Provide such information as is required for any filings
required to be made with the National Association of Securities Dealers, Inc.
(p) In the event of an underwritten offering, enter into such
agreements and take all such other reasonable actions in connection therewith
(including those reasonably requested by the Managing Underwriters, if any, or
the Holders of a majority of the Registrable Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is entered into, and
if the registration is an underwritten registration, (i) make such
representations and warranties, subject to the Company's ability to do so, to
the Holders of such Registrable Securities and the underwriters with respect to
the business of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, 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) to obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the Managing Underwriters, if any, and the Holders
of a majority of the Registrable Securities being sold) addressed to each of the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
the Managing Underwriters; (iii) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company (and,
if necessary, any other certified public accountants of any subsidiary of the
Company or any business acquired or to be 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 Managing Underwriters, if
any, 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 (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable Securities being sold,
the Managing Underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made pursuant
to clause (i) above and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such underwriting or
similar agreement as and to the extent required thereunder.
-15-
(q) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of a majority of the Registrable
Securities being sold, any Managing Underwriter participating in any disposition
of Registrable Securities, if any, and any attorney or accountant retained by
such selling holders or underwriter, financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the executive officers, directors and employees of the Company and its
subsidiaries to supply all information reasonably requested by any such
representative, Managing Underwriter, attorney or accountant in connection with
such disposition; subject to reasonable assurances by each such person that such
information will be used only in connection with matters relating to such
Registration Statement, provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons, unless
(i) disclosure of such information is required by court or administrative order
or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to Federal securities laws in connection with the filing
of any Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement.
SECTION 4. HOLDER'S OBLIGATIONS. Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities pursuant
to a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company with a Notice and Questionnaire as
required pursuant to Section 2(d) hereof and the information set forth in the
next sentence. Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request.
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.
-16-
SECTION 5. REGISTRATION EXPENSES. The Company shall bear all
fees and expenses incurred in connection with the performance by the Company of
its obligations under this Agreement whether or not any of the Registration
Statements are declared effective. Such fees and expenses shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of counsel (x) with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and (y) of compliance
with federal and state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of the counsel specified in the
next sentence in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Notice Holders of a
majority of the Registrable Securities being sold pursuant to a Registration
Statement may designate), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company), (iii) duplication expenses
relating to copies of any Registration Statement or Prospectus delivered to any
Holders hereunder, (iv) fees and disbursements of counsel for the Company in
connection with the Shelf Registration Statement, (v) the fees and disbursements
of the independent public accountants of the Company, including the expenses of
any special audits or "cold comfort" letters required by or incident to such
performance and compliance, (vi) reasonable fees and disbursements of the
Trustee and of the registrar and transfer agent for the Common Stock and their
respective counsel and (vii) Securities Act liability insurance obtained by the
Company in its sole discretion. In addition, the Company shall bear or reimburse
the Notice Holders for the reasonable fees and disbursements (not to exceed
$25,000) of one firm of legal counsel for the Holders, which shall initially be
Xxxxxx Xxxxxx & Xxxxxxx, but which may, with the written consent of CSFBC (which
shall not be unreasonably withheld), be another nationally recognized law firm
experienced in securities law matters designated by the Company. In addition,
the Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed
and the fees and expenses of any person, including special experts, retained by
the Company. Notwithstanding the provisions of this Section 5, each seller of
Registrable Securities shall pay selling expenses and all registration expenses
to the extent the Company is prohibited from paying such expenses under
applicable law.
SECTION 6. INDEMNIFICATION. (a) INDEMNIFICATION BY THE
COMPANY. The Company shall indemnify and hold harmless each Holder and each
person, if any, who controls any Holder (within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act) from and against any
losses, liabilities, claims, damages and expenses (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (collectively,
-17-
"LOSSES"), arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company shall
not be liable in any such case to the extent that any such Losses arise out of
or are based upon an untrue statement or alleged untrue statement contained in
or omission or alleged omission from any of such documents in reliance upon and
conformity with any of the information relating to the Holders furnished to the
Company in writing by a Holder expressly for use therein; provided further that
the indemnification contained in this paragraph shall not inure to the benefit
of any Holder of Registrable Securities (or to the benefit of any person
controlling such Holder) on account of any such Losses arising out of or based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus provided in each case the Company
has complied with its several obligations under Section 3(a) hereof if, to the
extent that a prospectus relating to such Securities was required to be
delivered by such Holder under the Securities Act, either (A) (i) such Holder
failed to send or deliver a copy of the Prospectus with or prior to the delivery
of written confirmation of the sale by such Holder to the person asserting the
claim from which such Losses arise and (ii) the Prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged
omission, or (B) (x) such untrue statement or alleged untrue statement, omission
or alleged omission is corrected in an amendment or supplement to the Prospectus
and (y) having previously been furnished by or on behalf of the Company with
copies of the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, with or prior to
the delivery of written confirmation of the sale of a Registrable Security to
the person asserting the claim from which such Losses arise. The Company shall
also indemnify each underwriter and each person who controls such person (within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided above with
respect to the indemnification of the Holders of Registrable Securities.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. Each
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company and its respective directors and officers, 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) or any other Holder, from and against all
Losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or
-18-
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with information furnished to the Company in writing by
such Holder expressly for use in such Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of any selling
Holder of Registrable Securities hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the Registration Statement giving rise to
such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom 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 designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. 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 retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred. Such separate firm shall be
designated in writing by, in the case of parties indemnified pursuant to Section
6(a), the Holders of a majority (with Holders of Notes deemed to be the Holders,
for purposes of determining such majority, of the number of shares of Underlying
Common Stock into which such Notes are or would be convertible or exchangeable
as of the date on which such designation is made) of the Registrable Securities
covered by the Registration Statement held by Holders that are indemnified
parties pursuant to Section 6(a) and, in the case of parties indemnified
pursuant to Section 6(b), the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify 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, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought
-19-
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and does not include a statement
as to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(d) CONTRIBUTION. To the extent that the indemnification
provided for in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof in respect of any Losses or is insufficient to hold
such indemnified party harmless, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand or (ii) if the allocation provided in clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
to the relative fault of the indemnifying party or parties on the one hand and
of the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the initial placement pursuant
to the Purchase Agreement (before deducting expenses) of the Notes pursuant to
the Purchase Agreement. Benefits received by any Holder shall be deemed to be
equal to the value of receiving Registrable Securities that are registered under
the Securities Act. The relative fault of the Holders on the one hand and the
Company 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 Holders or by the Company, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Benefits received by any underwriter shall be deemed to
be equal to the total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Registration Statement
which resulted in such Losses. The Holders' respective obligations to contribute
pursuant to this paragraph are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method or allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
Losses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a
-20-
selling Holder of Registrable Securities shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
indemnifying party from Registrable Securities sold and distributed to the
public exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay 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.
(e) The indemnity, contribution and expense reimbursement
obligations of the parties hereunder shall be in addition to any liability any
indemnified party may otherwise have hereunder, under the Purchase Agreement or
otherwise.
(f) The indemnity and contribution provisions contained in
this Section 6 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Holder or any person controlling any Holder, or the Company, or
the Company's officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
SECTION 7. INFORMATION REQUIREMENTS. The Company covenants
that, if at any time before the end of the Effectiveness Period the Company is
not subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder 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
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.
The Company shall file the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth in
the instructions to Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3 as soon as is permissible under the
Securities Act. As soon as practicable after the Company first satisfies the
eligibility requirements for the use Form S-3, the Company shall convert any
Registration Statement on Form S-1 to Form S-3.
-21-
SECTION 8. UNDERWRITTEN REGISTRATIONS. If any of the
Registrable Securities covered by any Shelf Registration Statement are to be
sold in an underwritten offering, the investment banker or investment bankers
and manager or managers that will administer the offering ("MANAGING
UNDERWRITERS") will be selected by the Holders of a majority of the Registrable
Securities to be included in such offering, PROVIDED, HOWEVER, that such
Managing Underwriters must be reasonably satisfactory to the Company. No person
may participate in any underwritten registration hereunder unless such person
(i) agrees to sell such person's Registered Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
agreements.
SECTION 9. MISCELLANEOUS.
(a) NO CONFLICTING AGREEMENTS. Except for "piggy-back"
registration rights held by the security holders listed on Schedule I hereto or
as otherwise disclosed in the Offering Circular, (i) the Company is not, as of
the date hereof, a party to, nor shall it, on or after the date of this
Agreement, enter into, any agreement with respect to its securities that
conflicts with the rights granted to the Holders of Registrable Securities in
this Agreement or that permits other holders of the Company's outstanding
securities to offer such securities for resale under the Registration Statement,
and (ii) the Company represents and warrants that the rights granted to the
Holders of Registrable Securities hereunder do not in any way conflict with the
rights granted to the holders of the Company's securities under any other
agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible or exchangeable
as of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter 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 the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preced-
-22-
ing sentence. Each Holder of Registrable Securities outstanding at the time of
any such amendment, modification, supplement, waiver or consent or thereafter
shall be bound by any such amendment, modification, supplement, waiver or
consent effected pursuant to this Section 9(b), whether or not any notice,
writing or marking indicating such amendment, modification, supplement, waiver
or consent appears on the Registrable Securities or is delivered to such Holder.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, by telecopier,
by courier guaranteeing overnight delivery or by first-class mail, return
receipt requested, and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1) Business
Day after being deposited with such courier, if made by overnight courier or
(iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows:
(1) if to a Holder of Registrable Securities that is not a
Notice Holder, at the address for such Holder then appearing in the
Note Register (as defined in the Indenture);
(2) if to a Notice Holder, at the most current address given
by such Holder to the Company in a Notice and Questionnaire or any
amendment thereto;
(3) if to the Company, to:
USinternetworking, Inc.
Xxx XXx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(4) if to the Initial Purchasers to:
-23-
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Transaction Advisory Group
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(5) if to counsel for the Initial Purchasers, to Xxxxxx
Xxxxxx & Xxxxxxx at the above address and telecopy number (or as
otherwise requested by the Notice Holders),
or to such other address as such person may have furnished to the other persons
identified in this Section 9(c) in writing in accordance herewith.
(d) APPROVAL OF HOLDERS. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Initial Purchasers or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(e) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registrable Securities from the Initial Purchasers shall be deemed, for purposes
of this Agreement, to be an assignee of the Initial Purchasers. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(f) 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 original and all of which taken
together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
-24-
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(i) SEVERABILITY. If any term provision, covenant or
restriction of this Agreement is held 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 thereby, 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 being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent permitted
by law.
(j) ENTIRE AGREEMENT. This 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 the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights. No party hereto shall have any rights, duties or
obligations other than those specifically set forth in this Agreement.
(k) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 5 or 6 hereof and the
obligations to make payments of and provide for additional interest under
Section 2(e) hereof to the extent such damages have accrued prior to the end of
the Effectiveness Period, each of which shall remain in effect in accordance
with its terms.
-25-
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
USINTERNETWORKING, INC.
By:
----------------------------------------
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
X.X. XXXXXXXXX, TOWBIN
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By:
------------------------------------------
Name:
Title:
-26
SCHEDULE I TO THE
REGISTRATION RIGHTS AGREEMENT
NAME NUMBER OF SHARES OR
---- SHARE EQUIVALENTS
-------------------
Venrock Associates II, L.P.................................................................. 597,370
HAGC Partners .............................................................................. 74,999
Southeastern Technology Fund, L.P. ....................................................... 349,999
Account Management Corporation
Xxxxxxx X. Xxxxxxxx ..................................................................... 47,618
Xxxxx X. Xxxxxxxxxxx .................................................................... 47,618
Xxxxxxxx xx Xxxx ........................................................................ 47,618
Xxxxxxxxxxx de Roetth ................................................................... 38,243
Elisabeth de Roetth ..................................................................... 18,751
Xxxxx de Roetth ......................................................................... 28,867
Xxxxxxxxxxx Xxxx ........................................................................ 19,493
Xxxxxxx X. Xxxx ......................................................................... 19,493
Xxxxxxx X. Xxxx ......................................................................... 47,618
Xxxxxxx X. Xxxx and Xxxxxxx
X. Xxxx Grandchildren's Trust............................................................ 19,493
Xxxxxx X. Xxxx .......................................................................... 47,618
Xxxxx Xxxxxx ............................................................................ 38,243
Xxxxx X. Xxxxxx ......................................................................... 47,618
Xxxxxxx X. Xxxxxx ....................................................................... 38,243
Xxxxx X. Xxxxxxx ........................................................................ 38,243
Xxxxxxx X. Xxxxxx ....................................................................... 9,375
Xxxx X. Xxxxxxxxxx ...................................................................... 67,856
PNC Bank, N.A. Trustee ..................................................................... 282,737
PNC Bank, N.A. Custodian ................................................................... 282,737
AEH Profit Sharing Trust ................................................................... 29,762
Xxxxxxxxxx Management Company .............................................................. 596,237
Siebel Systems, Inc. ....................................................................... 192,000(1)
Arbor Venture Partners, L.L.C. ............................................................. 148,809
IIT Acquisition Warrants ................................................................... 50,000
ACR Acquisition Warrants ................................................................... 62,500
Leasing Technologies, Inc................................................................... 17,857
----------------------------
1 Represents $6,000,000 value of Common Stock estimated at $31.25 per share.
