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EXHIBIT 1.3
HIGH SPEED ACCESS CORP.
STOCK PURCHASE AGREEMENT
APRIL 15, 1999
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TABLE OF CONTENTS
PAGE
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1. Purchase and Sale of Stock..........................................1
1.1 Sale and Issuance of Stock.................................1
1.2 The Closing................................................1
2. Representations and Warranties of the Company.......................1
2.1 Organization and Good Standing.............................1
2.2 Authorization..............................................1
2.3 Valid Issuance of Stock....................................2
2.4 Litigation.................................................2
2.5 Properties.................................................2
2.6 Compliance with Other Documents............................2
3. Representations and Warranties of the Investor......................2
3.1 Authorization..............................................2
3.2 Investigation..............................................2
3.3 Accredited Investor........................................3
3.4 Purchase Entirely for Own Account..........................3
4. Conditions to the Investor's Obligation at Closing..................3
4.1 Representations and Warranties.............................3
4.2 Securities Laws............................................3
4.3 Authorizations.............................................3
4.4 Initial Public Offering of Common Stock....................3
5. Conditions to the Company's Obligations at Closing..................3
5.1 Representations and Warranties.............................3
5.2 Securities Laws............................................3
5.3 Authorizations.............................................4
5.4 Initial Public Offering of Common Stock....................4
5.5 Payment of Purchase Price..................................4
6. Covenants of the Company and the Investor...........................4
6.1 Agreement Not to Transfer..................................4
6.2 Market Stand-Off...........................................4
6.3 Notice of Intention to Transfer............................5
6.4 Standstill.................................................5
6.5 Voting Agreements..........................................5
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6.6 Xxxx-Xxxxx-Xxxxxx..........................................6
6.7 Registration of Stock......................................6
7. Miscellaneous.......................................................6
7.1 Governing Law..............................................6
7.2 Survival; Additional Securities............................6
7.3 Successors and Assigns.....................................7
7.4 Entire Agreement...........................................7
7.5 Notices....................................................7
7.6 Amendments and Waivers.....................................7
7.7 Legal Fees.................................................7
7.8 Expenses...................................................7
7.9 Titles and Subtitles.......................................7
7.10 Counterparts...............................................8
7.11 Severability...............................................8
7.12 Confidentiality............................................8
Exhibit A...................................................................A-1
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 15th day of
April 1999 by and between High Speed Access Corp., a Delaware corporation (the
"Company") and COM21, Inc., a Delaware corporation (the "Investor").
WHEREAS, the Investor has indicated a desire to purchase such
number of shares of Common Stock from the Company equal to One Million Dollars
($1,000,000) divided by the price per share offered to the public, less any
underwriter discounts and commissions, in the Company's initial public offering
("IPO") and to have such shares registered under the Securities Act of 1933, as
amended (the "Securities Act") concurrently with the Company's IPO.
WHEREAS, the Company has indicated a desire to sell such
shares of Common Stock to the Investor and has agreed to register such shares
under the Securities Act on the terms set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Stock. Subject to the terms and
conditions of this Agreement, the Company agrees to sell to the Investor and the
Investor agrees to purchase from the Company such number of shares of Common
Stock from the Company equal to One Million Dollars ($1,000,000) divided by the
price per share offered to the public, less any underwriter discounts and
commissions, in the Company's IPO (the "Stock"), having the rights, preferences,
privileges and restrictions set forth in the form of Amended and Restated
Certificate of Incorporation of the Company (the "Restated Certificate") to be
filed with the Delaware Secretary of State prior to the Closing (as defined
below).
1.2 The Closing. The purchase and sale of the Stock shall
be held at the Company's offices concurrently with the closing of IPO or, if
later, upon satisfaction or waiver of each of the conditions set forth in
Sections 4 and 5 (the "Closing"). At the Closing, the Company will deliver the
Stock to the Investor against payment of the purchase price therefor by check
payable to the order of the Company or by wire transfer. The per share purchase
price for the Stock shall be equal to the per share price paid by the public for
the Company's Common Stock in the IPO, less any underwriter discounts and
commissions.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor that:
2.1 Organization and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted.
2.2 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder, and the
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authorization, issuance and delivery of the Stock has been taken or will be
taken prior to the Closing, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and by general principles of
equity.
2.3 Valid Issuance of Stock. The Stock, when issued, sold
and delivered in accordance with the terms hereof for the consideration
expressed, will be duly and validly issued, fully paid and nonassessable and,
based in part upon the representations of the Investor in this Agreement, will
be issued in compliance with all applicable federal and state securities laws.
2.4 Litigation. Except as set forth in the Company's
registration statement prepared in connection with the IPO, as filed with the
Securities and Exchange Commission ("SEC") and amended from time to time (the
"Registration Statement"), there are no actions, proceedings or investigations
pending or, to the best of Company's knowledge, any basis therefor or threat
thereof, against or affecting the Company, that, either in any case or in the
aggregate, would result in any material adverse change in the business,
financial condition, or results of operations of the Company.
2.5 Properties. To the best of the Company's knowledge (but
without having conducted any special investigation), the Company has (i) good
and marketable title to its properties and assets and has good title to all its
leasehold interests, and (ii) sufficient title, license and/or ownership of all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for its business as now
conducted on the date hereof.
2.6 Compliance with Other Documents. The execution and
delivery of this Agreement, consummation of the transactions contemplated
hereby, and compliance with the terms and provisions hereof will not conflict
with or result in a breach of the terms and conditions of, or constitute a
default under the Restated Certificate or Bylaws of the Company or of any
contract or agreement to which the Company is now a party, except where such
conflict, breach or default of any such contract or agreement, either
individually or in the aggregate, would not have a material adverse effect on
the Company's business, financial condition or results of operations.
3. Representations and Warranties of the Investor. The
Investor hereby represents and warrants that:
3.1 Authorization. This Agreement constitutes the valid and
legally binding obligation of the Investor, enforceable in accordance with its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and by general principles of equity.
3.2 Investigation. The Investor acknowledges that it has
had an opportunity to discuss the business, affairs and current prospects of the
Company with the Company's Vice Chairman. The Investor further acknowledges
having had access to information about the Company that it has requested or
considers necessary for purposes of purchasing the Stock.
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3.3 Accredited Investor. The Investor is an "accredited
investor" as such term is defined in Regulation D adopted by the SEC.
3.4 Purchase Entirely for Own Account. This Agreement is
made with the Investor in reliance upon the Investor's representation to the
Company, which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Stock will be acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
4. Conditions to the Investor's Obligation at Closing. The
obligation of the Investor to purchase the Stock at the Closing is subject to
the fulfillment to the Investor's satisfaction on or prior to the Closing of the
following conditions:
4.1 Representations and Warranties. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct
when made, and shall be true and correct as of the Closing with the same force
and effect as if they had been made on and as of such date, subject to changes
contemplated by this Agreement.
4.2 Securities Laws. The offer and sale of the Stock to the
Investor pursuant to this Agreement shall be either (i) registered under the
Securities Act, or (ii) exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all
applicable state securities laws.
4.3 Authorizations. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body that are
required in connection with the lawful issuance and sale of the Stock pursuant
to this Agreement (including, if applicable, the expiration of any waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act")) shall have been duly obtained and shall be effective on
and as of the Closing.
4.4 Initial Public Offering of Common Stock. The initial
public offering of the Company's Common Stock shall have occurred.
5. Conditions to the Company's Obligations at Closing. The
obligation of the Company to sell the Stock at the Closing is subject to the
fulfillment to the Company's satisfaction on or prior to the Closing of the
following conditions:
5.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 hereof shall be true as of the
Closing with the same force and effect as if they had been made on and as of
such date, subject to changes contemplated by this Agreement.
5.2 Securities Laws. The offer and sale of the Stock to the
Investor pursuant to this Agreement shall be either (i) registered under the
Securities Act, or (ii) exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all
applicable state securities laws.
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5.3 Authorizations. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body that are
required in connection with the lawful issuance and sale of the Stock pursuant
to this Agreement (including, if applicable, the expiration of any waiting
period under the HSR Act) shall have been duly obtained and shall be effective
on and as of the Closing.
5.4 Initial Public Offering of Common Stock. The initial
public offering of the Company's Common Stock shall have occurred.
5.5 Payment of Purchase Price. The Investor shall have
delivered to the Company the purchase price for the Stock as set forth in
Section 1.2 hereof.
6. Covenants of the Company and the Investor.
6.1 Agreement Not to Transfer.
(a) Prior to the date which is 180 days after the
Closing (the "Lockup Date"), the Investor shall not, directly or indirectly,
Transfer or offer to Transfer any shares of the Stock.
(b) Following the Lockup Date and prior to the first
anniversary of the Closing, the Investor shall not, directly or indirectly,
Transfer or offer to Transfer, in the aggregate, more than fifty percent (50%)
of the shares of the Stock during any one calendar quarter.
(c) Notwithstanding the foregoing restrictions on
Transfer (the "Transfer Restrictions"), the Transfer Restrictions shall be
ineffective in the event an unrelated third party has publicly announced and is
actively pursuing the purchase of all or substantially all of the assets or
capital stock of the Company or a merger in which the Company would not be the
surviving corporation; provided, that if such acquisition or merger is not
consummated within sixty days of such public announcement, the Transfer
Restrictions shall be reinstated.
(d) In order to enforce the Transfer Restrictions, the
Company may impose stop-transfer instructions with respect to the Stock until
the end of the restricted period.
(e) As used in this Agreement, the term "Transfer"
shall mean any sale, transfer, assignment, hypothecation, encumbrance or other
disposition, whether voluntary or involuntary, of shares of the Stock. In the
case of a hypothecation, the Transfer shall be deemed to occur both at the time
of the initial pledge and at any pledgee's sale or a sale by any secured
creditor or a retention by the secured creditor of the pledged shares of the
Stock in complete or partial satisfaction of the indebtedness for which the
shares of the Stock are security.
6.2 Market Stand-Off. In addition to the Transfer
Restrictions (which shall in no way be limited by the following), in connection
with any underwritten public offering by the Company of its equity securities
pursuant to an effective registration statement filed under the Securities Act,
the Investor shall not Transfer or offer to Transfer any shares of the Stock
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without the prior written consent of the Company and its underwriters. Such
restriction (the "Market Stand-Off") shall be in effect for such period of time
from and after the effective date of the final prospectus for the offering as
may be requested by the Company or such underwriters; provided, however, that
(i) such Market Stand-Off shall not exceed one hundred eighty (180) days, and
(ii) the Investor shall be subject to the Market Stand-Off only if the officers
and directors of the Company are also subject to similar restrictions. In order
to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the Stock until the end of the applicable stand-off
period.
6.3 Notice of Intention to Transfer. On or prior to the
third anniversary of the Closing, in the event the Investor plans to Transfer in
the aggregate more than twenty percent (20%) of the shares of the Stock in one
or more transactions during any three (3) month period, the Investor shall use
its best efforts to inform the Company of such intention to Transfer such shares
ten (10) days prior to such Transfer.
6.4 Standstill. The Investor agrees that, prior to the
third anniversary of the Closing, unless specifically invited by the Company,
the Investor will not, in any manner, directly or indirectly, effect any
acquisition of Voting Securities (as hereinafter defined), or beneficial
ownership thereof if, immediately after any such acquisition, the Investor would
beneficially own, in the aggregate, Voting Securities representing more than ten
percent (10%) of the outstanding Common Stock of the Company. The Investor also
agrees during such period not to make any public request (or publicize any
request) of the Company (or its directors, officers, employees or agents),
directly or indirectly, to amend or waive any provision of this Section 6.4
(including this sentence). The Investor also agrees not to form, join or in any
way participate in a "group" (as defined under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), or take any other action, in order to
circumvent the provisions of this Section 6.4.
For purposes of this Agreement, (i) the term "Voting
Securities" shall refer to all securities of the Company entitled to vote
generally for the election of directors, and (ii) the term "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
The restrictions set forth in this Section 6.4 shall be
ineffective upon the occurrence of either of the following events: (i) an
unrelated third party has publicly announced and is actively pursuing the
purchase of all or substantially all of the assets or capital stock of the
Company or a merger in which the Company would not be the surviving corporation;
or (ii) an officer of the Company, duly authorized by the Company's Board of
Directors, has informed the Investor in writing of the Company's potential
interest in entering into a sale of all or substantially all of its assets or
stock or a merger in which the Company would not be the surviving corporation;
provided, however, that if such acquisition, merger or sale is not consummated
within sixty days of such public announcement (in the case of clause (i)) or of
such notice in writing (in the case of clause (ii)), the restrictions set forth
in this Section 6.4 shall be reinstated.
6.5 Voting Agreements. For a period ending on the seventh
anniversary of the Closing, the Investor agrees to vote all shares of Voting
Securities owned by it (i) in each election of directors for the entire slate of
nominees recommended by the Company's
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Board of Directors to the Company's shareholders and (ii) on all other matters
to be voted on by holders of Voting Securities, unless the Company otherwise
consents in writing, in the same proportion as the votes cast by all other
shareholders of the Company entitled to vote on such matter (other than the
Investor). The Investor, as a holder of Voting Securities, shall be present, in
person or by proxy, at all meetings of shareholders of the Company so that all
shares of Voting Securities beneficially owned by it may be counted for the
purpose of determining the presence of a quorum at such meetings.
The voting agreements set forth in this Section 6.5 shall
terminate immediately if an unrelated third party has publicly announced and is
actively pursuing the purchase of all or substantially all of the assets or
capital stock of the Company or a merger in which the Company would not be the
surviving corporation; provided, however, that if such acquisition, merger or
sale is not consummated within sixty days of such public announcement, the
voting agreements set forth in this Section 6.5 shall be reinstated.
6.6 Xxxx-Xxxxx-Xxxxxx. The Company and the Investor will
assist and cooperate with each other regarding any filings required under the
HSR Act and any other applicable laws and regulations. The Company and the
Investor each agree to make any HSR Act and other filings promptly upon the
other's request.
6.7 Registration of Stock. The Company agrees that, to the
extent allowed by the SEC, it will register the Stock in the IPO. If the Company
is not able to register the Stock in the IPO, the Company agrees that, upon
request by the Investor, it will effect registration of the Stock in accordance
with the provisions contained in Exhibit A attached hereto. If the Company is
not able to register the Stock in the IPO, the Investor understands and agrees
that (i) the Stock will be characterized as "restricted securities" under the
federal securities laws inasmuch as it is being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances, and (ii) each
certificate representing the Stock and any other securities issued in respect of
the Stock upon any stock split, stock dividend, recapitalization, merger or
similar event (unless no longer required in the opinion of counsel for the
Company) shall be stamped or otherwise imprinted with appropriate legends
mandated by federal and state securities laws.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California, without regard to the conflict of law provisions thereof.
7.2 Survival; Additional Securities. The representations
and warranties set forth in Sections 2 and 3 shall survive until the Closing.
The covenants and agreements set forth in Section 6 shall survive in accordance
with their terms. Any new, substituted or additional securities which are by
reason of any stock split, stock dividend, recapitalization or reorganization
distributed with respect to the Stock ("Stock Distributions")
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shall be immediately subject to the covenants and agreements set forth in
Section 6 to the same extent the Stock is at such time covered by such
provisions.
7.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Notwithstanding
anything to the contrary contained herein, the covenants set forth in Section 6
shall not be binding upon any entity (other than an affiliate of the Investor)
which acquires any shares of the Stock or a Stock Distribution in a transaction
permitted hereunder.
7.4 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties with regard to the subject
matter hereof.
7.5 Notices. Except as otherwise provided, all notices and
other communications required or permitted hereunder shall be in writing, shall
be effective when given, and shall in any event be deemed to be given upon
receipt or, if earlier, (i) five (5) days after deposit with the U.S. postal
service or other applicable postal service, if delivered by first class mail,
postage prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1)
business day after the day of deposit with Federal Express or similar overnight
courier, freight prepaid, if delivered by overnight courier or (iv) one (1)
business day after the day of facsimile transmission, if delivered by facsimile
transmission with copy by first class mail, postage prepaid, and shall be
addressed, (a) if to the Investor, at the Investor's address set forth below its
signature, or at such other address as the Investor shall have furnished to the
Company in writing, or (b) if to the Company, at its address as set forth below
its signature, or at such other address as the Company shall have furnished to
the Investor in writing.
7.6 Amendments and Waivers. Any term of this Agreement may
be amended and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Investor.
7.7 Legal Fees. In the event of any action at law, suit in
equity or arbitration proceeding in relation to this Agreement or the Stock or
any Stock Distribution, the prevailing party shall be paid by the other party a
reasonable sum for the attorneys' fees and expenses incurred by such prevailing
party.
7.8 Expenses. Irrespective of whether the Closing is
effected, the Company and the Investor shall each pay their own costs and
expenses incurred with respect to the negotiation, execution, delivery and
performance of this Agreement.
7.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
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7.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.11 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.12 Confidentiality. The parties hereto agree that, except
with the prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish, or make accessible to anyone any
confidential information, knowledge, or data concerning or relating to the
business or financial affairs of such other party to which said party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, or the performance of its obligations hereunder.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year hereinabove first written.
HIGH SPEED ACCESS CORP.
0000 Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxxxxx, Xx., President
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
By: Xxxxxx Xxxxxxxx, Vice Chairman
COM21, INC.
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxxx
--------------------------------------
By: Xxxxx Xxxxxxxxx, CFO
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EXHIBIT A
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Exhibit A,
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Stock Purchase Agreement between the Company and the
Investor to which this Exhibit A is attached. In addition, the following terms
used herein shall have the following meanings:
(a) The term "Form S-1" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(b) The term "Form S-3" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(c) The term "1934 Act" means the Securities Exchange
Act of 1934, as amended.
(d) The term "register", "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
1.2 Request for Registration. If the Company shall receive,
at any time after one year following the Closing, a written request from the
Investor that the Company effect a registration on a Form S-3 and any related
qualification or compliance with respect to the Stock, then the Company shall,
as expeditiously as reasonably possible, effect the registration of all, but not
less than all, such Stock on Form S-3 and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale
and distribution of all of the Stock. The Company shall have no obligation to
effect any registration of less than all of the Stock.
(a) Notwithstanding anything to the contrary in this
Section 1.2, the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.2: (i) if the Company
shall furnish to the Investor a certificate signed by the President of the
Company stating that, in the good faith judgment of the Board of Directors of
the Company, such registration should be deferred due to material events
directly relating to the Company, in which event the Company shall have the
right to defer the filing of the Form S-3 for a period of not more than 90 days
after receipt of the request of the Investor under this Section 1.2 (provided,
however, that the Company may defer such registration only once); or (ii) in any
particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such
registration, qualification or compliance.
A-1
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(b) If Form S-3 is not available to the Company to
effect the registration of the Stock as contemplated by this Section 1.2, then
(i) the Company shall effect such registration on Form S-1 and (ii) in such
event, all references in this Section 1 to Form S-3 shall be read as references
to Form S-1.
(c) The Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2 after
the earlier to occur of the following events: (i) the Company has effected one
registration pursuant to this Section 1.2, and such registration has been
declared or ordered effective and otherwise satisfies and continues to satisfy
the terms and conditions of this Section 1.2; or (ii) the Company has
voluntarily effected the registration of all of the Stock without having first
received a request for such registration pursuant to this Section 1.2 (a
"Voluntary Registration"), and such Voluntary Registration has been declared or
ordered effective and otherwise satisfies and continues to satisfy the terms and
conditions of this Section 1.2.
1.3 Obligations of the Company. Whenever required under
Section 1.2 to effect the registration on Form S-3 of the Stock, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a Form S-3 with
respect to such Stock and use its best efforts to cause such registration
statement to become effective as soon as reasonably practicable after the
mailing of the request for such registration but in no event later than ninety
(90) days after such mailing. The Company shall keep such registration statement
effective until the earlier of (i) two (2) years after the Closing, (ii) the
distribution of all of the Stock as contemplated in the registration statement
has been completed, and (iii) the date which all shares of the Stock held by the
Investor may immediately be sold under Rule 144 during any 90-day period.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Stock.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investor; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) Notify the Investor covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Act of the happening of any event as a result of which the
prospectus included in such registration
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statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(f) Cause all such Stock registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.
(g) Provide a transfer agent and registrar for all of
the Stock registered pursuant hereunder and a CUSIP number for all such Stock,
in each case not later than the effective date of such registration.
1.4 Investor Obligation to Furnish Information. It shall be
a condition precedent to the obligations of the Company to take any action
pursuant hereto with respect to the Stock that the Investor shall furnish to the
Company such information regarding itself, the Stock, and the intended method of
disposition of such securities as shall be required to effect the registration
of such Stock.
1.5 Expenses of Registration. All expenses incurred in
connection with registrations, filings or qualifications pursuant hereto,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the Investor hereunder but excluding the fees and disbursements of
any other counsel for the Investor) shall be borne by the Company; provided,
however, that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant hereto if the registration request is
subsequently withdrawn at the request of the Investor, unless the Investor
agrees to forfeit its right to any demand registration pursuant hereto; provided
further, however, that if at the time of such withdrawal, the Investor has
learned of a material adverse change in the condition, business, or prospects of
the Company from that known to the Investor at the time of its request and has
withdrawn the request with reasonable promptness following disclosure by the
Company of such material adverse change, then the Investor shall not be required
to pay any of such expenses and shall retain its right of registration pursuant
to Section 1.2.
1.6 Indemnification. In the event any Stock is included in
a registration statement under Section 1.2:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless the Investor, any underwriter (as defined in the
Act) for the Investor and each person, if any, who controls the Investor or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein
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a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will pay to the Investor, or such underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection (a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Investor, underwriter or controlling person.
(b) To the extent permitted by law, the Investor will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, and any
controlling person of any such underwriter, against any losses, claims, damages,
or liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Investor expressly for
use in connection with such registration; and each such Investor will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection (b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection (b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Investor, which consent shall not be unreasonably withheld; provided, that, in
no event shall any indemnity under this subsection (b) exceed the gross proceeds
from the offering received by the Investor.
(c) Promptly after receipt by an indemnified party
under this Section 1.6 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any
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liability to the indemnified party under this Section 1.6, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 1.6.
(d) If the indemnification provided for in this Section
1.6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and the Investor
under this Section 1.6 shall survive the completion of any offering of the Stock
in a registration statement pursuant hereto, and otherwise.
1.7 Termination. The Company's obligation to register the
Stock pursuant to this agreement shall terminate on the earlier of (i) the
second anniversary of the Closing and (ii) the date on which all shares of the
Stock held by the Investor may immediately be sold under Rule 144 during any
90-day period.
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