EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
LEAP WIRELESS INTERNATIONAL, INC.
AND
THE PERSONS LISTED ON THE
SIGNATURE PAGES HEREOF
Dated as of August 16, 2004
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of August
16, 2004, by and among Leap Wireless International, Inc., a Delaware corporation
(the "COMPANY"), and the Holders (as hereinafter defined) of Registrable
Securities (as hereinafter defined) who are parties to this Agreement, including
any Additional Holders (as hereinafter defined) who subsequently become parties
to this Agreement.
RECITALS
A. Subject to and on the terms and conditions set forth in that certain
Fifth Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code, dated as of July 30, 2003 (the "PLAN"), which Plan was confirmed on
October 22, 2003 by order of the United States Bankruptcy Court for the Southern
District of California, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof, the Holders will receive
from the reorganized Company shares of the reorganized Company's new common
stock on the effective date of the Plan.
B. The Company and the Holders are entering into this Agreement
pursuant to, and as authorized by, the Bankruptcy Court order confirming the
Plan.
AGREEMENTS
In consideration of the foregoing, and the agreements set forth below, the
parties hereby agree with each other as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized terms (in their
singular and plural forms, as applicable) have the following meanings:
"Action" has the meaning assigned to such term in Section 7.3 hereof.
"Additional Holders" means the Permitted Assignees of Registrable
Securities who, from time to time, acquire Registrable Securities and own
Registrable Securities at the relevant time, agree to be bound by the terms
hereof and become Holders for purposes of this Agreement.
"Adverse Effect" has the meaning assigned to such term in Section 2.5
hereof.
"Affiliate" of a Person means any Person that, directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, such other Person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning assigned to such term in the introductory
paragraph to this Agreement, as the same may be amended, supplemented or
restated from time to time.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the Borough of Manhattan,
The City of New York are authorized or obligated by law or executive order to
close.
"Commission" means the United States Securities and Exchange Commission
and any successor United States federal agency or governmental authority having
similar powers.
"Common Stock" means the authorized common stock, par value $0.0001 per
share, of the Company.
"Company" has the meaning assigned to such term in the introductory
paragraph to this Agreement.
"Company Indemnified Person" has the meaning assigned to such term in
Section 7.2 hereof.
"Company Standstill Period" has the meaning assigned to such term in
Section 5.1 hereof.
"Demand Registration" has the meaning assigned to such term in Section 2.1
hereof.
"Demand Request" has the meaning assigned to such term in Section 2.1
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations of the Commission
thereunder.
"Holder" means any (i) Person who owns Registrable Securities at the
relevant time and is a party to this Agreement or (ii) Additional Holder.
"Indemnified Person" has the meaning assigned to such term in Section 7.1
hereof.
"Indemnitee" has the meaning assigned to such term in Section 7.3 hereof.
"Inspectors" has the meaning assigned to such term in Section 6.1(k)
hereof.
"Joining Holder" has the meaning assigned to such term in Section 2.2
hereof.
"Loss" and "Losses" have the meanings assigned to such terms in Section
7.1 hereof.
"Major Holder" means any Person or group of Affiliated Persons that hold a
minimum of 15% of the Registrable Securities as of the effective date of the
Plan.
"Majority Participating Holders" means, with respect to any registration
of Registrable Securities under this Agreement, the Holder or Holders at the
relevant time of at least a majority of the Registrable Securities to be
included in the registration statement in question.
"Material Disclosure Event" means, as of any date of determination, any
pending or imminent event relating to the Company or any of its subsidiaries,
which, in the good faith determination of the Company (i) requires disclosure of
material, non-public information relating
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to such event in any registration statement or related prospectus (including
documents incorporated by reference therein) so that such registration statement
would 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 are made, not
misleading, (ii) is otherwise not required to be publicly disclosed at that time
(e.g., on Forms 10-K, 8-K, or 10-Q) under applicable federal or state securities
laws and (iii) if publicly disclosed at the time of such event, could reasonably
be expected to have a material adverse effect on the business, financial
condition or prospects of the Company and its subsidiaries or would materially
adversely affect a pending or proposed acquisition, merger, recapitalization,
consolidation, reorganization, financing or similar transaction, or negotiations
with respect thereto.
"NASD" has the meaning assigned to such term in Section 6.1(n) hereof.
"Participating Holder" means any Holder on whose behalf Registrable
Securities are registered pursuant to Sections 2, 3 or 4 hereof.
"Permitted Assignee" means any (i) Affiliate of any Holder who acquires
Registrable Securities from such Holder or its Affiliates or (ii) any other
Person who acquires at least 20% (calculated at the time of such purchase) of
any Holder's Registrable Securities and who shall have been designated as a
Permitted Assignee by such Holder in a written notice to the Company; provided
that the rights of any Person designated as a Permitted Assignee referred to in
the foregoing clause (ii) shall be limited if, and to the extent, provided in
such notice.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Plan" has the meaning assigned to such term in the Recitals to this
Agreement.
"Records" has the meaning assigned to such term in Section 6.1(k) hereof.
The terms "register," "registered" and "registration" mean a registration
effected by preparing and filing with the Commission a registration statement on
an appropriate form in compliance with the Securities Act, and the declaration
or order of the Commission of the effectiveness of such registration statement
under the Securities Act.
"Registrable Securities" means the Shares and any additional Common Stock
issued with respect to Registrable Securities by way of a stock dividend, stock
split or reverse stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or otherwise, and any securities issued
in exchange for or in replacement of such Registrable Securities; provided,
however, that as to any Registrable Securities, such securities shall cease to
constitute "Registrable Securities" for purposes of this Agreement if and when
(i) a registration statement with respect to the sale of such securities shall
have been declared effective by the Commission and such securities shall have
been sold pursuant thereto, or (ii) such securities are sold or transferred in
accordance with the provisions of Rule 144, or (iii) such securities are sold or
transferred (other than in a transaction under clause (i) or (ii) above) by a
person in a transaction in which such person's rights under this Agreement are
not assigned, or (iv) such securities are
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no longer outstanding, or (v) such securities may be sold or transferred by the
beneficial owner of such securities pursuant to Rule 144(k).
"Requesting Holder" has the meaning assigned to such term in Section 2.1
hereof.
"Required Filing Date" has the meaning assigned to such term in Section
2.1 hereof.
"Required Period" has the meaning assigned to such term in Section 4.2(a)
hereof.
"Rule 144" means Rule 144 (or any similar provision then in force)
promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations of the Commission thereunder.
"Shares" means the shares of Common Stock issued to the Holders under the
Plan.
"Shelf Filing Deadline" has the meaning assigned to such term in Section
4.1 hereof.
"Shelf Registration Statement" has the meaning assigned to such term in
Section 4.1 hereof.
"Suspension Notice" has the meaning assigned to such term in Section 5.2
hereof.
"Suspension Period" has the meaning assigned to such term in Section 5.2
hereof.
The words "include," "includes" and "including," when used in this
Agreement, shall be deemed to be followed by the words "without limitation."
2. DEMAND REGISTRATION.
2.1 Request for Registration. Subject to the provisions contained in this
Section 2.1 and in Sections 3.2(b), 5.2 and 5.3 hereof, any Major Holder may,
from time to time (but in no event earlier than the date the Shelf Registration
Statement is required to be filed under Section 4.1 hereof), request (each, a
"REQUESTING HOLDER") in writing (a "DEMAND REQUEST") that the Company effect the
registration under the Securities Act of a specified number of Registrable
Securities held by the Requesting Holders (a "DEMAND REGISTRATION"); provided,
however, that the Company will in no event be required to effect more than three
(3) Demand Registrations in total; provided, further that the Company will in no
event be required to effect more than one (1) Demand Registration in any
12-month period; provided, further, that, subject to the Company's compliance
with its obligations under Article 3 hereof, the Company will not be obligated
to take any action to effect any Demand Registration during the period
commencing with the Company's issuance of a notice of a proposed registration of
an underwritten offering of equity securities of the Company for its own account
(except pursuant to registrations on Form S-4 or any successor form or on Form
S-8 or any successor form relating solely to securities issued pursuant to any
benefit plan) to the Holders pursuant to Section 3.1 hereof, continuing while
the Company uses reasonable best efforts to pursue such registered underwritten
offering, and ending upon the earliest to occur of: (i) 45 days immediately
following the Company's issuance
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of the notice of such proposed registered underwritten offering pursuant to
Section 3.1 hereof, unless, within such 45-day period, the Company shall have
filed the registration statement for such proposed underwritten offering, or
shall have issued a press release disclosing such proposed underwritten offering
pursuant to Rule 135 (or its successor) promulgated under the Securities Act
thereby enabling the Holders to sell their Registrable Securities pursuant to
the Shelf Registration Statement; (ii) the abandonment, cessation or withdrawal
of such proposed registered underwritten offering; or (iii) 90 days immediately
following the effective date of the registration statement pertaining to such
underwritten offering; and provided, further, that the Company shall not be
obligated to effect any Demand Registration if the Shelf Registration Statement
is then effective, and such Shelf Registration Statement may be utilized by the
Requesting Holder for the offering and sale of its Registrable Securities
without a requirement under the Commission's rules and regulations for a
post-effective amendment thereto. Subject to the provisions contained in this
Section 2.1 and in Sections 3.2(b), 5.2 and 5.3 hereof, upon receipt of a Demand
Request, the Company will cause to be included in a registration statement on an
appropriate form under the Securities Act, filed with the Commission as promptly
as practicable but in any event not later than 60 days after receiving a Demand
Request (the "REQUIRED FILING DATE"), such Registrable Securities as may be
requested by such Requesting Holders in their Demand Request together with any
other Registrable Securities of the same class as requested by Joining Holders
joining in such request pursuant to Section 2.2 hereof. The Company shall use
its reasonable efforts to cause any such registration statement to be declared
effective by the Commission as promptly as possible after such filing. If the
Company issues a notice of a proposed underwritten public offering of equity
securities of the Company for its own account pursuant to Section 3.1 hereof and
subsequently abandons, ceases or withdraws such offering, the Company will not
issue a notice of a subsequent proposed registration of an underwritten offering
of equity securities of the Company for its own account pursuant to Section 3.1
hereof until the Shelf Registration Statement is first declared effective.
2.2 Joining Holders. If at any time the Company proposes to register
Registrable Securities for the account of the Requesting Holders pursuant to
Section 2.1 hereof, then (i) the Company shall give, or cause to be given,
written notice of such proposed filing to all the Holders as soon as practicable
(but in no event less than 30 days before the anticipated filing date). Upon the
written request of any Holder, received by the Company no later than the 10th
Business Day after receipt by such Holder of the notice sent by the Company
(each such Holder, a "JOINING HOLDER"), to register, on the same terms and
conditions as the securities otherwise being sold pursuant to such Demand
Registration, any of its Registrable Securities of the same class as the
securities otherwise being sold pursuant to such Demand Registration, the
Company will use its reasonable best efforts to cause such Registrable
Securities to be included in the registration statement proposed to be filed by
the Company on the same terms and conditions as any securities of the same class
included therein.
2.3 Effective Registration. A registration will not count as a Demand
Registration (i) unless the related registration statement has been declared
effective and has remained effective until such time as all of such Registrable
Securities covered thereby have been disposed of in accordance with the intended
methods of disposition by the Participating Holders (but in no event for a
period of more than 180 days after such registration statement becomes effective
not including any Suspension Period); it being understood that if, after it has
become effective, an offering of Registrable Securities pursuant to a
registration statement is terminated by any stop
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order, injunction, or other order of the Commission or other governmental agency
or court, such registration pursuant thereto will be deemed not to have been
effected and will not count as a Demand Registration for purposes of Section
2.1, or (ii) if pursuant to Section 2.5 hereof, the Requesting Holders and Joint
Holders are cut back to fewer than 75% of the Registrable Securities requested
to be registered and at the time of the request there was not in effect a Shelf
Registration Statement.
2.4 Selection of Underwriters. With respect to any offering of Registrable
Securities pursuant to a Demand Registration in the form of an underwritten
offering, the Company shall select an investment banking firm of national
standing to be the managing underwriter for the offering, which firm shall be
reasonably acceptable to the Majority Participating Holders.
2.5 Priority on Demand Registrations. With respect to any offering of
Registrable Securities pursuant to a Demand Registration in the form of an
underwritten offering, no securities to be sold for the account of any Person
(including the Company) other than the Requesting Holders and Joining Holders
shall be included in a Demand Registration unless the managing underwriter
advises the Requesting Holders in writing that the inclusion of such securities
will not adversely affect the price or success of the offering (an "ADVERSE
EFFECT"). Furthermore, in the event that the managing underwriter advises the
Requesting Holders in writing that the amount of Registrable Securities proposed
to be included in such Demand Registration by Requesting Holders and Joining
Holders is sufficiently large (even after exclusion of all securities of any
other Person pursuant to the immediately preceding sentence) to cause an Adverse
Effect, the number of Registrable Securities to be included in such Demand
Registration shall be allocated among all such Requesting Holders and Joining
Holders pro rata based on the ratio that the number of Registrable Securities
that each such Holder requested to be included in such Demand Registration bears
to the total number of Registrable Securities that all Requesting Holders and
Joining Holders requested to be included in such Demand Registration; provided
that if, as a result of such pro-ration, any Requesting Holder or Joining Holder
shall not be entitled to include in a registration all Registrable Securities of
the class that such Holder had requested to be included, such Holder may elect
to withdraw its request to include such Registrable Securities in such
registration or may reduce the number requested to be included; provided,
however, that (a) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (b) such withdrawal or reduction
shall be irrevocable.
2.6 Cancellation of Registration. A majority in interest of the
participating Holders shall the right to cancel a proposed Demand Registration
of Registrable Securities pursuant to this Article 2 when the request for
cancellation is based upon material adverse information relating to the Company
that is different from the information known to the participating Holders at the
time of the Demand Request. Such cancellation of a registration shall not be
counted as one of the three (3) Demand Registrations and notwithstanding
anything to the contrary in the Agreement, the Company shall be responsible for
the expenses of the participating Holders incurred in connection with the
registration through the date that is seven days after the time such information
became known to the participating Holders, to the extent such expenses are as
described in clauses (i) through (x) of the first sentence of Section 8 hereof.
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3. PIGGYBACK REGISTRATIONS.
3.1 Holder Piggyback Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
any equity securities (except pursuant to registrations on Form S-4 or any
successor form or on Form S-8 or any successor form relating solely to
securities issued pursuant to any benefit plan) on a form that would permit
registration of Registrable Securities for sale to the public under the
Securities Act, then the Company shall give written notice of such proposed
filing to the Holders not less than 21 days before the anticipated filing date,
describing in reasonable detail the proposed registration (including the number
and class of securities proposed to be registered, the proposed date of filing
of such registration statement, any proposed means of distribution of such
securities, any proposed managing underwriter of such securities and a good
faith estimate by the Company of the proposed maximum offering price of such
securities as such price is proposed to appear on the facing page of such
registration statement), and offering such Holders the opportunity to register
such number of Registrable Securities of the same class as those being
registered by the Company as each such Holder may request. Upon the written
request of any Holder, received by the Company no later than 10 Business Days
after receipt by such Holder of the notice sent by the Company, to register, on
the same terms and conditions as the securities otherwise being sold pursuant to
such registration, any of such Holder's Registrable Securities of the same class
as those being registered (which request shall state the intended method of
disposition thereof if the securities otherwise being sold are being sold by
more than one method of disposition), the Company will use its reasonable
efforts to cause such Registrable Securities as to which registration shall have
been so requested to be included in the registration statement proposed to be
filed by the Company on the same terms and conditions as the securities
otherwise being sold pursuant to such registration; provided, however, that,
notwithstanding the foregoing, the Company may at any time, in its sole
discretion, without the consent of any other Holder, delay or abandon the
proposed offering in which any Holder had requested to participate pursuant to
this Section 3.1 or cease the filing (or obtaining or maintaining the
effectiveness) of or withdraw the related registration statement or other
governmental approvals, registrations or qualifications. In such event, the
Company shall so notify each Holder that had notified the Company in accordance
with this Section 3.1 of its intention to participate in such offering and the
Company shall incur no liability for its failure to complete any such offering.
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3.2 Priority on Piggyback Registrations.
(a) If the managing underwriter for the related underwritten
offering advises the Company in writing that the inclusion of such Registrable
Securities would cause an Adverse Effect, and the Company notifies the
requesting Holders in writing of such advice, then the Company will be obligated
to include in such registration statement only that number of Registrable
Securities which, in the judgment of the managing underwriter, would not have an
Adverse Effect; provided, however, that no such reduction shall reduce the
aggregate amount of Registrable Securities included in such registration
statement for the benefit of the requesting Holders to less than (i) prior to
such time as the Shelf Registration Statement is first declared effective, all
of the Registrable Securities requested by the Holders to be included in such
registration statement (subject to the maximum amount of the securities to be
sold in the related underwritten offering), and (ii) after such time as the
Shelf Registration Statement is first declared effective, fifty percent (50%) of
the total number of securities that are included in each such registration
statement thereafter. Any partial reduction in the number of Registrable
Securities to be included in a registration statement pursuant to the
immediately preceding sentence shall be affected pro rata based on the ratio
that the number of Registrable Securities that each such Holder requested to be
included in such registration statement bears to the total number of Registrable
Securities that all Holders requested to be included in such registration
statement.
(b) Subject to the Company's compliance with its obligations under
this Article 3, if after a Demand Request by the Holders pursuant to Section 2.1
hereof the Company initiates a proposal to register an underwritten offering of
equity securities for its own account pursuant to this Article 3 and the Holders
will be afforded the right (whether or not exercised by the Holders) to include
Registrable Securities in such underwritten offering in accordance with and
subject to the provisions of this Article 3, then the proposed registration for
the account of the Company pursuant to this Article 3 shall be given priority in
all respects.
(c) Subject to the Company's compliance with its obligations under
this Article 3, if prior to the filing or effectiveness of the Shelf
Registration Statement the Company initiates a proposal to register an
underwritten offering of equity securities for its own account pursuant to this
Article 3 and the Holders will be afforded the right (whether or not exercised
by the Holders) to include Registrable Securities in such underwritten offering
in accordance with and subject to the provisions of this Article 3, then the
proposed registration for the account of the Company pursuant to this Article 3
shall be given priority in all respects.
(d) Notwithstanding the foregoing, until the nine month anniversary
of the date that the Shelf Registration Statement is first declared effective,
the Company will not initiate a proposal to register or otherwise conduct an
underwritten public offering of equity securities of the Company for its own
account unless the aggregate public offering price of such equity securities
(including any Registrable Securities included in such offering) is at least
$125.0 million.
3.3 Withdrawals. Each Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any registration statement
pursuant to this Article 3 by giving written notice to the Company of its
request to withdraw; provided, however, that (i) such
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request must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect to
such registration and (ii) such withdrawal shall be irrevocable.
3.4 Underwritten Offerings.
(a) In connection with the exercise of any registration rights
granted to Holders pursuant to this Article 3, if the registration is to be
effected by means of an underwritten offering, the Company may condition
participation in such registration by any such Holder upon inclusion of the
Registrable Securities being so registered in such underwriting and such
Holder's entering into an underwriting agreement pursuant to Section 6.2(d)
hereof.
(b) With respect to any offering of Registrable Securities pursuant
to this Article 3 in the form of an underwritten offering, the Company shall
select an investment banking firm of national standing to be the managing
underwriter for the offering.
4. SHELF REGISTRATION.
4.1 Shelf Registration Filing. Subject to the provisions contained in this
Section 4.1 and in Sections 3.2(c), 5.2 and 5.3 hereof, within thirty (30) days
following the issuance by the Company's independent public accountants of their
audit report covering the Company's post-emergence "fresh-start" financial
statements (the "SHELF FILING DEADLINE"), the Company shall file with the
Commission a registration statement (the "SHELF REGISTRATION STATEMENT")
relating to the offer and sale of all Registrable Securities by the Holders to
the public, from time to time, on a delayed or continuous basis. The Company
shall use its reasonable best efforts to cause the Company's independent public
accountants to issue their audit report covering the Company's post-emergence
"fresh-start" financial statements as soon as practicable after the effective
date of the Plan and, subject to the provisions contained in this Section 4.1
and in Sections 3.2(c), 5.2 and 5.3 hereof, to cause the Shelf Registration
Statement to be declared effective by the Commission as soon as practicable
after the filing thereof with the Commission. The Shelf Registration Statement
shall specify the intended method of distribution of the subject Registrable
Securities substantially in the form of Exhibit A attached hereto. The Company
shall file the Shelf Registration Statement on Form S-3 or, if the Company or
the offering of the Registrable Securities does not satisfy the requirements for
use of such form, such other form as may be appropriate; provided, that if the
Shelf Registration Statement is not filed on Form S-3, the Company shall,
promptly upon meeting the requirements for use of such form, file an appropriate
amendment to the Shelf Registration Statement to convert it to Form S-3.
Notwithstanding the foregoing, subject to the Company's compliance with its
obligations under Article 3 hereof, (x) the Company will not be obligated to
take any action to effect the Shelf Registration Statement during the period
commencing with the Company's issuance of a notice of a proposed registration of
an underwritten offering of equity securities of the Company for its own account
(except pursuant to registrations on Form S-4 or any successor form or on Form
S-8 or any successor form relating solely to securities issued pursuant to any
benefit plan) to the Holders pursuant to Section 3.1 hereof, continuing while
the Company uses reasonable best efforts to pursue such registered underwritten
offering, and ending upon the earliest to occur of: (i) 45 days immediately
following the Company's issuance of the notice of such proposed registered
underwritten offering pursuant to Section 3.1 hereof, unless, within such 45-day
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period, the Company shall have filed the registration statement for such
proposed underwritten offering, or shall have issued a press release disclosing
such proposed underwritten offering pursuant to Rule 135 (or its successor)
promulgated under the Securities Act thereby enabling the Holders to sell their
Registrable Securities pursuant to the Shelf Registration Statement; (ii) the
abandonment, cessation or withdrawal of such proposed registered underwritten
offering; or (iii) 90 days immediately following the effective date of the
registration statement pertaining to such underwritten offering; and (y) the
Company will not be obligated to take any action to effect any amendment to the
Shelf Registration Statement during the period commencing on the effective date
of a registration statement for an underwritten offering of equity securities of
the Company for its own account (except pursuant to registrations on Form S-4 or
any successor form or on Form S-8 or any successor form relating solely to
securities issued pursuant to any benefit plan) and ending 90 days immediately
following the effective date of the registration statement pertaining to such
underwritten offering. If the Company issues a notice of a proposed underwritten
public offering of equity securities of the Company for its own account pursuant
to Section 3.1 hereof and subsequently abandons, ceases or withdraws such
offering, the Company will not issue a notice of a subsequent proposed
registration of an underwritten offering of equity securities of the Company for
its own account pursuant to Section 3.1 hereof until the Shelf Registration
Statement is first declared effective.
4.2 Required Period and Shelf Registration Procedures. The Company shall
(i) cause the Shelf Registration Statement to include a resale prospectus
intended to permit each Holder to sell, at such Holder's election, all or part
of the Registrable Securities held by such Holder without restriction, (ii) use
its reasonable efforts to prepare and file with the Commission such supplements,
amendments and post-effective amendments to the Shelf Registration Statement as
may be necessary to keep the Shelf Registration Statement continuously effective
(subject to Section 3.2(c) and to any Suspension Period(s) referred to below)
for so long as the securities registered thereunder constitute Registrable
Securities (the "REQUIRED PERIOD"), and (iii) use its reasonable efforts to
cause the resale prospectus to be supplemented by any required prospectus
supplement (subject to Section 3.2(c) and to any Suspension Period(s) referred
to below).
5. STANDSTILL AND SUSPENSION PERIODS.
5.1 Company Standstill Period. In the event of an underwritten public
offering of Registrable Securities on a firm commitment basis pursuant to
Section 2.1 hereof, the Company agrees not to, without the prior written consent
of the managing underwriter, offer, pledge, sell, contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any securities (except securities that may be held by
the Company for its own account under the relevant registration statement) that
are the same as, or similar to, the Registrable Securities, or any securities
convertible into, or exchangeable or exercisable for, any securities of the
Company that are the same as, or similar to, the Registrable Securities (except
pursuant to registrations on Form S-4 or any successor form, or otherwise in
connection with the acquisition of a business or assets of a business, a merger,
or an exchange offer for the securities of the issuer or another entity, or
pursuant to a Company dividend reinvestment plan, or for issuances of securities
pursuant to the conversion, exchange or exercise of then-outstanding convertible
or exchangeable securities, options, rights or warrants, or pursuant to
registrations on Form S-8 or any successor form or otherwise relating solely to
securities offered pursuant to any benefit plan), during the period commencing
15 days prior to the effective date of the registration
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statement relating to such Registrable Securities (to the extent timely notified
in writing by the Majority Participating Holders or the managing underwriter of
such distribution) and ending on the 90th day after such effective date (the
"COMPANY STANDSTILL PERIOD").
5.2 Suspension Period. The Company may, by notice in writing to each
Holder, postpone the filing or effectiveness of the Shelf Registration Statement
or any other registration requested pursuant to this Agreement, or otherwise
suspend the Demand Registration rights of the Holders and/or require the Holders
to suspend use of any resale prospectus included in the Shelf Registration
Statement for any period of time determined by the Company if there shall occur
a Material Disclosure Event (such period, a "SUSPENSION PERIOD").
Notwithstanding anything herein to the contrary, the Company shall not be
entitled to more than four (4) Suspension Periods, which Suspension Periods
shall have durations of not more than thirty (30) days each (but may at the
Company's determination run consecutively for a given Material Disclosure
Event), during any consecutive 12 month period, and which Suspension Periods
shall not exceed more than ninety (90) days in the aggregate in any consecutive
12 month period; provided, however, that if the Company deems in good faith that
it is necessary to file a post-effective amendment to the Shelf Registration
Statement in order to comply with Section 4 hereof, then such period of time
from the date of filing such post-effective amendment until the date on which
the Shelf Registration Statement is declared effective by the Commission shall
not be treated as a Suspension Period and the Company shall use its reasonable
best efforts to cause such post-effective amendment to be declared effective as
promptly as possible. Each Holder agrees that, upon receipt of notice from the
Company of the occurrence of a Material Disclosure Event (a "SUSPENSION
NOTICE"), such Holder will forthwith discontinue any disposition of Registrable
Securities pursuant to the Shelf Registration Statement or any public sale or
distribution, including pursuant to Rule 144, until the earlier of (i) the
expiration of the Suspension Period and (ii) such Holder's receipt of a notice
from the Company to the effect that such suspension has terminated. Any
Suspension Notice shall be accompanied by a certificate of the Chief Executive
Officer, Chief Financial Officer, President or any Vice President of the Company
confirming the existence of the Material Disclosure Event. If so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession, of
the most recent prospectus covering such Registrable Securities at the time of
receipt of such Suspension Notice. The Company covenants and agrees that it will
not deliver a Suspension Notice with respect to a Suspension Period unless
Company employees, officers and directors are also prohibited by the Company for
the duration of such Suspension Period from effecting any public sales of shares
of Common Stock beneficially owned by them. In the event of a Suspension Notice,
the Company shall, promptly after such time as the related Material Disclosure
Event no longer exists, provide notice to all Holders that the Suspension Period
has ended, and take any and all actions necessary or desirable to give effect to
any Holders' rights under this Agreement that may have been affected by such
notice, including the Holders' Demand Registration rights and rights with
respect to any Shelf Registration Statement.
5.3 Holder Standstill Period. Each Holder of Registrable Securities
(whether or not such Registrable Securities are covered by the Shelf
Registration Statement or by a Registration Statement filed pursuant to Section
2.1 or 3.1 hereof) agrees to enter into a customary lock-up agreement with the
managing underwriter for any underwritten offering of the Company's equity
securities for its own account, containing terms reasonably acceptable to such
managing
-12-
underwriter, covering the period commencing 15 days prior to the effective date
of any registration statement relating to such securities of the Company and
ending on the 90th day after such effective date (or such shorter period as
shall have been agreed to by the Company's executive officers and directors in
their respective lock-up agreements); provided, however, that the obligations of
each Holder under this Section 5.3 shall apply only if: (i) such Holder will be
afforded the right (whether or not exercised by the Holder) to include
Registrable Securities in such underwritten offering in accordance with and
subject to the provisions of Article 3 hereof; (ii) each of the Company's
executive officers and directors enter into lock-up agreements with such
managing underwriter, which agreements shall not contain terms more favorable to
such executive officers or directors than those contained in the lock-up
agreement entered into by such Holder; and (iii) the aggregate restriction
periods in such Holder's lock-up agreements entered into pursuant to this
Section 5.3 shall not exceed an aggregate of 180 days during any 365-day period.
6. REGISTRATION PROCEDURES.
6.1 Company Obligations. Whenever the Company is required pursuant to this
Agreement to register Registrable Securities, it will (it being understood and
agreed that except as otherwise expressly set forth in this Article 6, if any
other provision of this Agreement is more favorable to the Holders than the
provisions of this Article 6, such other provision shall apply):
(a) provide the Participating Holders with a reasonable opportunity
to review, and comment on, any registration statement to be prepared and filed
pursuant to this Agreement prior to the filing thereof with the Commission, and
make all changes thereto as any Participating Holder may request in writing to
the extent such changes are required, in the reasonable judgment of the
Company's counsel, by the Securities Act;
(b) cause any such registration statement and the related prospectus
and any amendment or supplement thereto, as of the effective date of such
registration statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission promulgated thereunder and (ii) not to contain
any 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;
(c) furnish, at its expense, to the Participating Holders such
number of conformed copies of such registration statement and of each such
amendment thereto (in each case including all exhibits thereto, except that the
Company shall not be obligated to furnish to any such Participating Holder more
than two (2) copies of such exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and each supplement thereto), and such number of the documents, if any,
incorporated by reference in such registration statement or prospectus, as the
Participating Holders reasonably may request;
(d) use its reasonable efforts to register or qualify the
Registrable Securities covered by such registration statement under such
securities or "blue sky" laws of the states of the United States as the
Participating Holders reasonably shall request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and to do
-13-
any and all other acts and things that may be necessary or advisable to enable
the Participating Holders to consummate the disposition in such jurisdictions of
the Registrable Securities covered by such registration statement, except that
the Company shall not, for any such purpose, be required to qualify generally to
do business as a foreign corporation in any jurisdiction in which it is not
obligated to be so qualified, or to subject itself to material taxation in any
such jurisdiction, or to consent to general service of process in any such
jurisdiction; and use its reasonable efforts to obtain all other approvals,
consents, exemptions or authorizations from such securities regulatory
authorities or governmental agencies as may be necessary to enable such
Participating Holders to consummate the disposition of such Registrable
Securities;
(e) promptly notify the Participating Holders, at any time when a
prospectus or prospectus supplement relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the occurrence of any
event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, which untrue statement or omission requires amendment
of the registration statement or supplementing of the prospectus, and, as
promptly as practicable (subject to Sections 3.2 and 5.2 hereof), prepare and
furnish, at its expense, to the Participating Holders a reasonable number of
copies of a supplement to such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include 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 the light of the circumstances under which they were
made, not misleading; provided, however, that with respect to Registrable
Securities registered pursuant to such registration statement, each Holder
agrees that it will not enter into any transaction for the sale of any
Registrable Securities pursuant to such registration statement during the time
after the furnishing of the Company's notice that the Company is preparing a
supplement to or an amendment of such prospectus or registration statement and
until the filing and effectiveness thereof;
(f) use its reasonable efforts to comply with all applicable rules
and regulations of the Commission, and make available to holders of its
securities, as soon as practicable, an earnings statement covering the period of
at least 12 months, but not more than 18 months, beginning with the first month
of the first fiscal quarter after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(g) provide, and cause to be maintained, a transfer agent and
registrar for the Registrable Securities covered by such registration statement
(which transfer agent and registrar shall, at the Company's option, be the
Company's existing transfer agent and registrar) from and after a date not later
than the effective date of such registration statement;
(h) notify the Participating Holders and the managing underwriter,
if any, promptly, and (if requested by any such Person) confirm such notice in
writing, (i) when a registration statement, prospectus, prospectus supplement or
post-effective amendment related to such registration statement has been filed,
and, with respect to such registration statement or any post-effective amendment
thereto, when the same has become effective, (ii) of any request by the
-14-
Commission or any other federal or state governmental authority for amendments
or supplements to such registration statement or related prospectus, (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose and (iv) 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;
(i) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such 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, as soon as
practicable;
(j) in the event of an underwritten public offering of Registrable
Securities pursuant to Section 2.1 hereof, enter into customary agreements
(including underwriting agreements in customary form, which may include, in the
case of an underwritten offering on a firm commitment basis, "lock-up"
obligations substantially similar to Section 5.1 hereof) and take such other
actions (including using its reasonable efforts to make such road show
presentations and otherwise engaging in such reasonable marketing support in
connection with any such underwritten offering, including the obligation to make
its executive officers available for such purpose if so requested by the
managing underwriter for such offering) as are reasonably requested by the
managing underwriter in order to expedite or facilitate the sale of such
Registrable Securities;
(k) make available for inspection by each Participating Holder, any
underwriter participating in any disposition pursuant to such registration, and
any attorney, accountant or other agent retained by such Participating Holder or
any such underwriter (collectively, the "INSPECTORS"), all financial and other
records, pertinent corporate documents and properties of the Company and any of
its subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary
to enable them to exercise their due diligence responsibility, and cause the
officers, directors and employees of the Company to supply all information
reasonably requested by any such Inspector in connection with such registration,
provided, however, that (i) in connection with any such inspection, any such
Inspectors shall cooperate to the extent reasonably practicable to minimize any
disruption to the operation by the Company of its business and shall comply with
all Company site safety rules, (ii) Records and information obtained hereunder
shall be used by such Inspectors only to exercise their due diligence
responsibility and (iii) Records or information furnished or made available
hereunder shall be kept confidential and shall not be disclosed by such
Participating Holder, underwriter or Inspectors unless (A) the disclosing party
advises the other party that the disclosure of such Records or information is
necessary to avoid or correct a misstatement or omission in a registration
statement or is otherwise required by law, (B) the release of such Records or
information is ordered pursuant to a subpoena or other order from a court or
governmental authority of competent jurisdiction (provided that such person
shall use its reasonable efforts to provide the Company with prior written
notice of such requirement to afford the Company with an opportunity to seek a
protective order or other appropriate remedy in response) or (C) such Records or
information otherwise become generally available to the public other than
through disclosure by such Participating Holder, underwriter or Inspector in
breach hereof or by any Person in breach of any other confidentiality
arrangement;
-15-
(l) in connection with any registration of an underwritten offering
of Registrable Securities hereunder, use all reasonable efforts to furnish to
each Participating Holder and to the managing underwriter, if any, a signed
counterpart, addressed to such Participating Holder and the managing
underwriter, if any, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company's independent public
accountants pursuant to Statement on Auditing Standards No. 72 (or any successor
thereto), each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as each
such Participating Holder and the managing underwriter, if any, reasonably
requests;
(m) in connection with any registration of an underwritten offering
of Registrable Securities hereunder, provide officers' certificates and other
customary closing documents;
(n) reasonably cooperate with each seller of Registrable Securities
and any underwriter in the disposition of such Registrable Securities and with
underwriters' counsel, if any, in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. (the "NASD"); and
(o) use its reasonable efforts to cause all such Registrable
Securities to be listed on each securities exchange on which securities of the
same class issued by the Company are then listed.
6.2 Holder Obligations. Each Holder agrees:
(a) that it shall furnish to the Company such information regarding
such Holder and the plan and method of distribution of Registrable Securities
intended by such Holder (i) as the Company may, from time to time, reasonably
request in writing and (ii) as shall be required by law or by the Commission in
connection therewith;
(b) that information obtained by it or by its Inspectors shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and until
such information is made generally available to the public;
(c) to use its reasonable efforts, prior to making any disclosure
allowed by Section 6.1(k)(iii)(A) or (B) hereof, to inform the Company that such
disclosure is necessary to avoid or correct a misstatement or omission in the
registration statement or ordered pursuant to a subpoena or other order from a
court or governmental authority of competent jurisdiction or otherwise required
by law; and
(d) in the case of an underwritten offering of Registrable
Securities pursuant to this Agreement, if requested by the managing underwriter,
to enter into an underwriting agreement with the underwriters for such offering
containing such representations and warranties by each Holder and such other
terms and provisions as are customarily contained in such underwriting
agreements, including customary indemnity and contribution provisions and
"lock-up" obligations substantially similar to Section 5.3 hereof.
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7. INDEMNIFICATION.
7.1 Indemnification by the Company. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to this Agreement,
the Company shall indemnify and hold harmless (i) each Holder and its
Affiliates, (ii) any selling agent selected by the Holders with respect to such
Registrable Securities, and (iii) each Person who controls any Holder or such
Affiliate, or selling agent, including directors and officers thereof (each such
Person being sometimes referred to as an "INDEMNIFIED PERSON"), within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages, expenses or liabilities, joint or several (each a "LOSS" and
collectively "LOSSES"), to which such Indemnified Person may become subject
under the Securities Act or otherwise, to the extent that such Losses (or
related actions or proceedings) arise out of or are based upon (A) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement in which such Registrable Securities were included for
registration under the Securities Act, or any preliminary prospectus or any
final prospectus included in such registration statement (or any amendment or
supplement to such registration statement or prospectus) or (B) any omission or
alleged omission to state therein 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; and the Company agrees to reimburse such
Indemnified Person for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall have no
obligation to provide any indemnification or reimbursement hereunder (i) to the
extent that any such Losses (or actions or proceedings in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary
prospectus, final prospectus, amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by the Holder, or
on the Holder's behalf, specifically for inclusion, respectively, in such
registration statement, preliminary prospectus, final prospectus, amendment or
supplement, or (ii) in the case of a sale directly by a Holder of Registrable
Securities (including a sale of such Registrable Securities through any
underwriter retained by such Holder engaging in a distribution solely on behalf
of such Holder), to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final, amended or supplemented prospectus provided
to such Holder prior to the confirmation of the sale of the Registrable
Securities to the person asserting any such Loss, and such Holder failed to
deliver a copy of the final, amended or supplemented prospectus at or prior to
such confirmation of sale in any case in which such delivery is required by the
Securities Act, or (iii) in the case of a sale directly by a Holder of
Registrable Securities (including a sale of such Registrable Securities through
any underwriter retained by such Holder engaging in a distribution solely on
behalf of such Holder), to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was contained in a final
prospectus but was corrected in an amended or supplemented final prospectus
provided to such Holder prior to the confirmation of the sale of the Registrable
Securities to the person asserting any such Loss, and such Holder failed to
deliver a copy of the amended or supplemented final prospectus at or prior to
such confirmation of sale in any case in which such delivery is required by the
Securities Act. The indemnity provided in this Section 7.1 shall survive the
transfer of the Registrable Securities by the Holder or any such other Persons.
-17-
7.2 Indemnification by the Holders. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to this Agreement,
each Holder shall indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 7.1 hereof) the Company, each director and
officer of the Company and each other Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act (each such person being
sometimes referred to as a "COMPANY INDEMNIFIED PERSON"), against Losses to
which the Company or any such Persons may become subject under the Securities
Act or otherwise, to the extent that such losses (or related actions or
proceedings) arise out of or are based upon (A) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement in
which Registrable Securities were included for registration under the Securities
Act, or any preliminary prospectus or any final prospectus included in such
registration statement (or any amendment or supplement to such registration
statement or prospectus), or (B) any omission or alleged omission to state
therein 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, in each case, only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, final prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Holder, or on such Holder's behalf, specifically for
inclusion, respectively, in such registration statement, preliminary prospectus,
final prospectus, amendment or supplement; and each Holder agrees to reimburse
such Company Indemnified Person for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that a Holder's
aggregate liability under this Agreement shall be limited to an amount equal to
the net proceeds (after deducting the underwriter's discount but before
deducting expenses) received by such Holder from the sale of such Holder's
Registrable Securities pursuant to such registration.
7.3 Notice of Claims, Etc. Promptly after receipt by any Person entitled
to indemnity under Section 7.1 or 7.2 hereof (an "INDEMNITEE") of notice of the
commencement of any action or proceeding (an "ACTION") involving a claim
referred to in such Sections, such Indemnitee shall, if indemnification is
sought against an indemnifying party, give written notice to such indemnifying
party of the commencement of such Action; provided, however, that the failure of
any Indemnitee to give said notice shall not relieve the indemnifying party of
its obligations under Sections 7.1 or 7.2 hereof, except to the extent that the
indemnifying party is actually prejudiced by such failure. In case an Action is
brought against any Indemnitee, and such Indemnitee notifies the indemnifying
party of the commencement thereof, each indemnifying party shall be entitled to
participate therein and, to the extent it elects to do so by written notice
delivered to the Indemnitee promptly after receiving the aforesaid notice, to
assume the defense thereof with counsel reasonably satisfactory to such
Indemnitee. Notwithstanding the foregoing, the Indemnitee shall have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnitee, unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying party,
(ii) the indemnifying party shall not have employed counsel to take charge of
the defense of such Action, reasonably promptly after notice of the commencement
thereof or (iii) such Indemnitee reasonably shall have concluded that there may
be defenses available to it which are different from or additional to those
available to the indemnifying party which, if the indemnifying party and the
Indemnitee were to be represented by the same counsel, could result in a
conflict of
-18-
interest for such counsel or materially prejudice the prosecution of the
defenses available to such Indemnitee. If any of the events specified in clauses
(i), (ii) or (iii) of the preceding sentence shall have occurred or otherwise
shall be applicable, then the fees and expenses of counsel for the Indemnitee
shall be borne by the indemnifying party; it being understood, however, that the
indemnifying party shall not, in connection with any one such claim or
proceeding, or separate but substantially similar or related claims or
proceedings 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 all Indemnitees
hereunder, or for fees and expenses that are not reasonable. Anything in this
Section 7.3 to the contrary notwithstanding, an indemnifying party shall not be
liable for the settlement of any action effected without its prior written
consent (which consent shall not unreasonably be withheld or delayed), but if
settled with the prior written consent of the indemnifying party, or if there
shall be a final judgment adverse to the Indemnitee, the indemnifying party
agrees to indemnify the Indemnitee from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior consent of the Indemnitee (which consent shall not be unreasonably
withheld or delayed), consent to entry of any judgment or enter into any
settlement or compromise, with respect to any pending or threatened action or
claim in respect of which the Indemnitee would be entitled to indemnification or
contribution hereunder (whether or not the Indemnitee is an actual party to such
action or claim), which (i) does not include as a term thereof the unconditional
release of the Indemnitee from all liability in respect of such action or claim
or (ii) includes an admission of fault, culpability or a failure to act by or on
behalf of the Indemnitee.
7.4 Contribution. If the indemnification provided for in this Article 7 is
unavailable or insufficient to hold harmless an Indemnitee in respect of any
Losses, then each indemnifying party shall, in lieu of indemnifying such
Indemnitee, contribute to the amount paid or payable by such Indemnitee as a
result of such Losses in such proportion as appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and the Indemnitee, on the
other hand, which relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by such Indemnitee or indemnifying party, and such parties' relative
intent, knowledge, access to information and opportunity to correct or mitigate
the damage in respect of or prevent the untrue statement or omission giving rise
to such indemnification obligation; provided, however, that a Holder's aggregate
liability under this Section 7.4 shall be limited to an amount equal to the net
proceeds (after deducting the underwriter's discount but before deducting
expenses) received by such Holder from the sale of such Holder's Registrable
Securities pursuant to such registration. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this Section 7.4 were
determined solely by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to above. 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 is not guilty of such fraudulent misrepresentation.
7.5 Indemnification Payments; Other Remedies.
(a) Periodic payments of amounts required to be paid pursuant to
this Article 7 shall be made during the course of the investigation or defense,
as and when reasonably itemized
-19-
bills therefor are delivered to the indemnifying party in respect of any
particular Loss as incurred.
(b) The remedies provided in this Article 7 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
Indemnitee at law or in equity.
8. REGISTRATION EXPENSES.
In connection with any offerings pursuant to a registration statement
hereunder, the Company will pay (i) all registration and filing fees, (ii) all
fees and expenses of compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel in connection with "blue
sky" laws qualifications of the Registrable Securities), (iii) printing and
duplicating expenses, (iv) internal expenses of the Company (including all
salaries and expenses of its officers and employees performing legal or
accounting duties), (v) fees and disbursements of counsel for the Company and
fees and expenses of independent certified public accountants retained by the
Company (including the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letters or with any required special audits), (vi) the reasonable fees
and expenses of any special experts retained by the Company, (vii) fees and
expenses in connection with any review of underwriting arrangements by the NASD,
including fees and expenses of any "qualified independent underwriter" in
connection with an underwritten offering, (viii) reasonable fees and expenses of
not more than one counsel for the Participating Holders (as a group), (ix) fees
and expenses in connection with listing, if applicable, the Registrable
Securities on a securities exchange or the Nasdaq National Market, and (x) all
duplicating, distribution and delivery expenses. In connection any offerings
pursuant to a registration statement, each Participating Holder will pay (i) any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities by such Participating Holder in connection with an
underwritten offering; (ii) any out-of-pocket expenses of such Participating
Holder including any fees and expenses of counsel to such Participating Holder
(other than as set forth in clause (viii) of the immediately preceding
sentence); and (iii) any applicable transfer taxes.
9. RULE 144.
With a view to making available to the Holders the benefits of Rule 144
and any other similar rule or regulation of the Commission that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company covenants
that, from and after the Shelf Filing Deadline and for so long as it is subject
to Section 13 or 15(d) of the Exchange Act thereafter, it shall use its
reasonable efforts to file in a timely manner all reports required to be filed
by it under the Exchange Act, and that it shall comply with the requirements of
Rule 144(c), as such Rule may be amended from time to time (or any similar rule
or regulation hereafter adopted by the Commission), regarding the availability
of current public information to the extent required to enable any Holder to
sell Registrable Securities without registration under the Securities Act
pursuant to the resale provisions of Rule 144 (or any similar rule or
regulation). Upon the request of any Holder, the Company will promptly deliver
to such Holder a written statement as to whether it has complied with such
requirements and, upon such Holder's compliance with the applicable provisions
of Rule 144 and its delivery of such documents and certificates as the Company's
transfer agent
-20-
may reasonably request in connection therewith, will take such reasonable action
as may be required (including using its reasonable efforts to cause legal
counsel to issue an appropriate opinion) to cause its transfer agent to
effectuate any transfer of Registrable Securities properly requested by such
Holder, in accordance with the terms and conditions of Rule 144.
10. MISCELLANEOUS.
10.1 Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Agreement shall be deemed sufficiently given or made if
in writing and signed by the party making the same, and either delivered in
person with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, or by telecopy and confirmed by telecopy
answerback, addressed, if to any Holder, at the address of such Holder as set
forth on the signature pages hereto, with copies to
Xxxxxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and if to the Company, at
Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other
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communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered, with receipt acknowledged, telecopied and
confirmed by telecopy answerback or three (3) Business Days after the same shall
have been deposited in the United States mail (by registered or certified mail,
return receipt requested, postage prepaid), whichever is earlier.
10.2 Successors and Assigns. This Agreement may not be assigned by any
Holder other than to a Permitted Assignee (provided such Permitted Assignee
agrees in writing to be bound by the terms of this Agreement), whereupon such
Permitted Assignee shall be deemed to be a Holder for all purposes of this
Agreement. Subject to the preceding sentence, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and all successors to the
Company and the Holders.
10.3 Amendments; Waivers. This Agreement may be amended or modified only
by a written agreement signed by the Company and Holders of a majority of the
Registrable Securities then outstanding. No provision of this Agreement may be
waived except pursuant to a writing signed by the Company and Holders of a
majority of the Registrable Securities then outstanding.
10.4 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10.5 Headings. The headings used in this Agreement are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Agreement.
10.6 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED
EXCLUSIVELY BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK. Each party to this Agreement hereby irrevocably agrees that any
legal action or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York and hereby expressly submits to the personal jurisdiction
and venue of such courts for the purposes thereof and expressly waives any claim
of improper venue and any claim that such courts are an inconvenient forum. Each
party hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the address
set forth in Section 10.1 hereof, such service to become effective 10 days after
such mailing.
10.7 Counterparts and Facsimile Execution. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument. This Agreement may be executed by
facsimile signatures.
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10.8 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and the Holders in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter of this
Agreement.
10.9 Further Assurances. Each of the parties hereto shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed and delivered as of the date first above
written.
LEAP WIRELESS INTERNATIONAL, INC.
By /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx , Xx.
Title: Senior Vice President
MHR INSTITUTIONAL PARTNERS II LP
MHR INSTITUTIONAL PARTNERS IIA LP
BY MHR INSTITUTIONAL HOLDINGS LLC, ITS GP
By /s/ X. Xxxxxxxxx
Name: X. Xxxxxxxxx
Title: Authorized Signatory
HIGHLAND CAPITAL MANAGEMENT, L.P.
By /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Chief Investment Officer
[Signature Page to Amended and Restated Registration Rights Agreement]
EXHIBIT A
PLAN OF DISTRIBUTION
The selling securityholders, or their pledgees, donees, transferees, or
any of their successors in interest selling shares received from a named selling
securityholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus (all of whom may be selling
securityholders), may sell the securities from time to time on any stock
exchange or automated interdealer quotation system on which the securities are
listed, in the over-the-counter market, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at prices
otherwise negotiated. The selling securityholders may sell the securities by one
or more of the following methods, without limitation:
(a) block trades in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by the broker
or dealer for its own account pursuant to this prospectus;
(c) an exchange distribution in accordance with the rules of any stock
exchange on which the securities are listed;
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchases;
(e) privately negotiated transactions;
(f) short sales;
(g) through the writing of options on the securities, whether or not the
options are listed on an options exchange;
(h) through the distribution of the securities by any selling
securityholder to its partners, members or stockholders;
(i) one or more underwritten offerings on a firm commitment or best
efforts basis; and
(j) any combination of any of these methods of sale.
The selling securityholders may also transfer the securities by gift. We
do not know of any arrangements by the selling securityholders for the sale of
any of the securities.
The selling securityholders may engage brokers and dealers, and any
brokers or dealers may arrange for other brokers or dealers to participate in
effecting sales of the securities. These brokers, dealers or underwriters may
act as principals, or as an agent of a selling securityholder. Broker-dealers
may agree with a selling securityholder to sell a specified number of the
securities at a stipulated price per security. If the broker-dealer is unable to
sell securities acting as agent for a selling securityholder, it may purchase as
principal any unsold securities at the stipulated price. Broker-dealers who
acquire securities as principals may thereafter resell the securities from time
to time in transactions on any stock exchange or automated interdealer quotation
system on which the securities are then listed, at prices and on terms then
prevailing at the time of sale, at prices related to the then-current market
price or in negotiated transactions. Broker-dealers may use block transactions
and sales to and through broker-dealers, including transactions of the nature
described above. The selling securityholders may also sell the securities in
accordance with Rule 144 under the Securities Act of 1933, as amended, rather
than pursuant to this prospectus, regardless of whether the securities are
covered by this prospectus.
From time to time, one or more of the selling securityholders may pledge,
hypothecate or grant a security interest in some or all of the securities owned
by them. The pledgees, secured parties or persons to whom the securities have
been hypothecated will, upon foreclosure in the event of default, be deemed to
be selling securityholders. As and when a selling securityholder takes such
actions, the number of securities offered under this prospectus on behalf of
such selling securityholder will decrease. The plan of distribution for that
selling securityholder's securities will otherwise remain unchanged. In
addition, a selling securityholder may, from time to time, sell the securities
short, and, in those instances, this prospectus may be delivered in connection
with the short sales and the securities offered under this prospectus may be
used to cover short sales.
To the extent required under the Securities Act of 1933, as amended, the
aggregate amount of selling securityholders' securities being offered and the
terms of the offering, the names of any agents, brokers, dealers or underwriters
and any applicable commission with respect to a particular offer will be set
forth in an accompanying prospectus supplement. Any underwriters, dealers,
brokers or agents participating in the distribution of the securities may
receive compensation in the form of underwriting discounts, concessions,
commissions or fees from a selling securityholder and/or purchasers of selling
securityholders' securities for whom they may act (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
The selling securityholders and any underwriters, brokers, dealers or
agents that participate in the distribution of the securities may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended,
and any discounts, concessions, commissions or fees received by them and any
profit on the resale of the securities sold by them may be deemed to be
underwriting discounts and commissions.
A selling securityholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the
securities in the course of hedging the positions they assume with that selling
securityholder, including, without limitation, in connection with distributions
of the securities by those broker-dealers. A selling securityholder may enter
into option or other transactions with broker-dealers that involve the delivery
of the securities offered hereby to the broker-dealers, who may then resell or
otherwise transfer those securities. A selling securityholder may also loan or
pledge the securities offered hereby to a broker-dealer and the broker-dealer
may sell the securities offered hereby so loaned or upon a default may sell or
otherwise transfer the pledged securities offered hereby.
A selling securityholder may enter into derivative transactions with third
parties, or sell securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus supplement
indicates, in connection with those derivatives, the third parties may sell
securities covered by this prospectus and the applicable prospectus supplement,
including in short sale transactions. If so, the third party may use securities
pledged by the selling securityholder or borrowed from the selling
securityholder or others to settle those sales or to close out any related open
borrowings of stock, and may use securities received from the selling
securityholder in settlement of those derivatives to close out any related open
borrowings of stock. The third party in such sale transactions will be an
underwriter and, if not identified in this prospectus, will be identified in the
applicable prospectus supplement (or a post-effective amendment).
The selling securityholders and other persons participating in the sale or
distribution of the securities will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, including Regulation M. This regulation may limit the timing of
purchases and sales of any of the securities by the selling securityholders and
any other person. The anti-manipulation rules under the Securities Exchange Act
of 1934 may apply to sales of securities in the market and to the activities of
the selling securityholders and their affiliates. Furthermore, Regulation M may
restrict the ability of any person engaged in the distribution of the securities
to engage in market-making activities with respect to the particular securities
being distributed for a period of up to five business days before the
distribution. These restrictions may affect the marketability of the securities
and the ability of any person or entity to engage in market-making activities
with respect to the securities.
We have agreed to indemnify in certain circumstances the selling
securityholders and any brokers, dealers and agents (who may be deemed to be
underwriters), if any, of the securities covered by the registration statement,
against certain liabilities, including liabilities under the Securities Act of
1933, as amended. The selling securityholders have agreed to indemnify us in
certain circumstances against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
The securities offered hereby were originally issued to the selling
securityholders pursuant to an exemption from the registration requirements of
the Securities Act of 1933, as amended. We agreed to register the securities
under the Securities Act of 1933, as amended, and to keep the registration
statement of which this prospectus is a part effective for a specified period of
time. We have agreed to pay all expenses in connection with this offering,
including the fees and expenses of counsel to the selling securityholders, but
not including underwriting discounts, concessions, commissions or fees of the
selling securityholders.
We will not receive any proceeds from sales of any securities by the
selling securityholders.
We cannot assure you that the selling securityholders will sell all or any
portion of the securities offered hereby.
