Exhibit 4.5
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
BETWEEN
KEY3MEDIA GROUP, INC.
AND
INVEMED CATALYST FUND, L.P.
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DATED: NOVEMBER 27, 2001
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TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS................................................................................... 1
1.1 Definitions........................................................................... 1
1.2 Other Definitions..................................................................... 4
ARTICLE II REGISTRATION UNDER THE SECURITIES ACT........................................................ 5
2.1 Shelf Registration Statement.......................................................... 5
2.2 Demand Registration................................................................... 6
2.3 Incidental Registration............................................................... 9
2.4 Expenses.............................................................................. 11
2.5 Underwritten Offerings................................................................ 11
2.6 Blackout Periods...................................................................... 12
ARTICLE III RESTRICTIONS ON SALE........................................................................ 13
3.1 Restrictions on Sale by the Company and Others........................................ 13
ARTICLE IV REGISTRATION PROCEDURES...................................................................... 14
4.1 Obligations of the Company............................................................ 14
4.2 Seller Information.................................................................... 18
4.3 Notice to Discontinue................................................................. 19
ARTICLE V INDEMNIFICATION; CONTRIBUTION................................................................. 19
5.1 Indemnification by the Company........................................................ 19
5.2 Indemnification by Holders ........................................................... 20
5.3 Conduct of Indemnification Proceedings................................................ 21
5.4 Contribution.......................................................................... 22
5.5 Indemnification Payments.............................................................. 22
ARTICLE VI GENERAL ..................................................................................... 22
6.1 Registration Rights to Others......................................................... 22
6.2 Availability of Information........................................................... 23
6.3 Amendments and Waivers................................................................ 23
6.4 Notices............................................................................... 23
6.5 Successors and Assigns................................................................ 24
6.6 Counterparts.......................................................................... 25
6.7 Descriptive Headings, Etc............................................................. 25
6.8 Severability.......................................................................... 25
6.9 Governing Law......................................................................... 25
6.10 Remedies; Specific Performance........................................................ 25
6.11 Entire Agreement...................................................................... 26
6.12 Nominees for Beneficial Owners........................................................ 26
6.13 Consent to Jurisdiction; Waiver of Jury............................................... 26
6.14 Further Assurances.................................................................... 27
6.15 No Inconsistent Agreements............................................................ 27
6.16 Construction.......................................................................... 27
REGISTRATION RIGHTS AGREEMENT dated November 27, 2001 by and
between Key3Media Group, Inc. (the "Company") and Invemed Catalyst Fund, L.P., a
Delaware limited partnership ("ICF").
W I T N E S S E T H :
WHEREAS, the Company and ICF have entered into an Amended and
Restated Stock Purchase Agreement, dated November __, 2001 (such Stock Purchase
Agreement, as amended or otherwise modified from time to time, the "Stock
Purchase Agreement"), pursuant to which the Company will issue and sell, and ICF
will purchase 1,000,000 shares of 5.5% Convertible Series A Preferred Stock, par
value $0.01 per share, of the Company (the "Preferred Shares"), convertible into
shares of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock").
WHEREAS, in order to induce ICF to enter into the Stock
Purchase Agreement, the board of directors of the Company has authorized and
approved the grant by the Company of certain registration rights in respect of
the Registrable Securities (as defined below) on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person, which shall be deemed to include (i) with
respect to ICF, any general or limited partner or member of ICF, and (ii) with
respect to any individual, shall also mean the spouse, sibling, child,
stepchild, grandchild, niece, nephew or parent of such Person, or the spouse
thereof.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Demand Registration" means a registration required to be
effected by the Company pursuant to Section 2.2.
"Demand Registration Statement" means a registration statement
of the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.2 and all amendments and
supplements to such
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registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference (or deemed to be incorporated by reference)
therein.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Holders" means the Initial Holder for so long as it owns
Registrable Securities and their respective successors and permitted assigns who
acquire or are otherwise transferees of Registrable Securities, directly or
indirectly, from the Initial Holder (or any subsequent Holders), for so long as
such successors and permitted assigns own Registrable Securities.
"Holders' Counsel" means one firm of legal counsel (per
registration) representing the Holders of Registrable Securities participating
in such registration, which counsel shall be selected (i) in the case of a
Demand Registration, by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request, and
(ii) in all other cases, by the Majority Holders of the Registration.
"Incidental Registration Statement" means a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.3 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Initial Holder" means the ICF.
"Initiating Holders" means, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Majority Holders" means one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" means, with respect to
a particular registration, one or more Holders of Registrable Securities who
would hold a majority of the Registrable Securities to be included in such
registration.
"NASD" means the National Association of Securities Dealers,
Inc.
"Person" means any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
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"Prospectus" means the prospectus included in a Registration
statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in each
case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" means (i) the shares of Common Stock
issuable upon conversion of the Preferred Shares, (ii) any other securities of
the Company (or any successor or assign of the Company, whether by merger,
consolidation, sale of assets or otherwise) which may be issued or issuable with
respect to, in exchange for, or in substitution of, the Registrable Securities
referenced in clause (i) above by reason of any dividend or stock split,
combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction and
(iii) any other shares of Common Stock now owned or hereinafter acquired within
30 days of the date of this Agreement by a Holder that is an Affiliate of the
Company. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (A) a Registration Statement with
respect to the sale of such securities shall have been declared effective under
the Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (B) such securities have been otherwise
transferred, a new certificate or other evidence of ownership for them not
bearing the legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act, (C) such securities shall have ceased to
be outstanding, or (D) such securities become eligible for sale under Rule
144(k) without any volume, manner of sale or other restrictions.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with this Agreement by the Company and its
subsidiaries, including, without limitation, (i) registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of a qualified independent underwriter, if
any, counsel in connection therewith and the reasonable fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), (v) fees and disbursements of
counsel for the Company and of Holders' Counsel, (vi) customary fees and
expenses for 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), (vii) fees and expenses of any special experts retained by the
Company in connection with such registration, (viii) fees and expenses of
listing the Registrable Securities on a securities exchange or on the NASDAQ
National Market System, (ix) rating agency fees, and (x) out-of-pocket expenses
of the Company.
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"Registration Statement" means any registration statement of
the Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"SEC" means the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor statute.
"Shelf Registration" means a shelf registration pursuant to
Rule 415 under the Securities Act.
"Underwriters" means the underwriters, if any, of the offering
being registered under the Securities Act.
"Underwritten Offering" means a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
1.2 Other Definitions. The meanings of the following terms can
be found in the Sections of this Agreement indicated below:
Term Section
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Affiliate Blackout Notice............................... Section 2.6(a)
Affiliate Blackout Period............................... Section 2.6(a)
Agents.................................................. Section 5.1
Claims.................................................. Section 5.1
Common Stock............................................ Recitals
Company................................................. Preamble
Compliance Program...................................... Section 2.6
General Blackout Notice................................. Section 2.6(b)
General Blackout Period................................. Section 2.6(b)
ICF..................................................... Preamble
Incidental Registration................................. Section 2.3(a)
Inspectors.............................................. Section 4.1(g)
Permitted Trading Period................................ Section 2.6
Preferred Shares........................................ Recitals
Records................................................. Section 4.1(g)
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Term Section
---- -------
Request................................................. Section 2.2(a)
Shelf Registration Period............................... Section 2.1(b)
Shelf Registration Statement............................ Section 2.1(a)
Stock Purchase Agreement................................ Recitals
Withdrawn Demand Registration........................... Section 2.2(a)
Withdrawn Request....................................... Section 2.2(a)
ARTICLE II
REGISTRATION UNDER THE SECURITIES ACT
2.1 Shelf Registration Statement.
(a) The Company: (A) shall cause to be filed with the
SEC, on or before December 31, 2001, a shelf registration statement (the "Shelf
Registration Statement") on an appropriate form under the Securities Act,
relating solely to the offer and sale of all the Registrable Securities by the
Holders thereof from time to time in accordance with the methods of distribution
specified by the Initial Holder as set forth in the Registration Statement and
Rule 415 under the Securities Act; and (B) shall use its best efforts to have
such Shelf Registration declared effective by the SEC as soon as practicable
thereafter, but in no event later than June 30, 2002; provided, however, that no
Holder (other than the Initial Holder) shall be entitled to have the Registrable
Securities held by it covered by such Registration Statement unless such Holder
agrees in writing to be bound by all the provisions of this Agreement applicable
to such Holder.
(b) The Company shall use its best efforts to keep
the Shelf Registration Statement continuously effective, supplemented and
amended in order to permit the Prospectus included therein to be lawfully
delivered by the Holders of the Registrable Securities during each Permitted
Trading Period (as defined below) for the Holders subject to Section 2.6(a), or
at all times (except during a General Blackout Period) for all other Holders,
beginning on the effective date of the Shelf Registration Statement and ending
on the earlier of (i) the date on which all of the Registrable Securities
covered by such Shelf Registration may be sold pursuant to Rule 144(k) under the
Securities Act (or any successor provision having similar effect) without any
volume, manner of sale or other restrictions, or (ii) the date on which no
Holder owns any Registrable Securities (in any such case, such period being
called the "Shelf Registration Period"); provided, however, that prior to the
termination of such Shelf Registration pursuant to clause (i), the Company shall
first furnish to each Holder of Registrable Securities participating in such
Shelf Registration (A) an opinion, in form and substance satisfactory to the
Majority Holders of the Registration, of counsel for the Company satisfactory to
the Majority Holders stating that such Registrable Securities are freely
saleable pursuant to Rule 144(k) under the Securities Act (or any successor
provision
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having similar effect) without any volume, manner of sale or other restrictions
or (B) a "No-Action Letter" from the staff of the SEC stating that the SEC would
not recommend enforcement action if the Registrable Securities included in such
Shelf Registration were sold in a public sale other than pursuant to an
effective registration statement. The Company shall be deemed not to have used
its best efforts to keep the Registration Statement effective during the Shelf
Registration Period if it voluntarily takes any action that would result in
Holders of the Registrable Securities covered thereby not being able to offer
and sell such Registrable Securities during the Shelf Registration Period,
unless such action is required by applicable law or the SEC.
(c) If at any time the Majority Holders request in
writing that all or any part of the Registrable Securities covered by the Shelf
Registration Statement be offered by means of a firm commitment Underwritten
Offering, the Company shall cause to be filed with the SEC as soon as
practicable any necessary or appropriate supplement to the Shelf Registration
Statement in order to effect such Underwritten Offering. In such case, the sole
or managing Underwriters and any additional investment bankers and managers to
be used in connection with such registration shall be selected by the Company,
subject to the approval of such Majority Holders (such approval not to be
unreasonably withheld).
2.2 Demand Registration.
(a) Right to Demand Registration. Commencing June 30,
2002, at any time or from time to time when the Shelf Registration Statement
provided for in Section 2.1 has not become or is not effective under the
Securities Act (including, but not limited to, if the Company is not eligible to
effect a continuous offering using a Form S-3 registration statement in reliance
upon Rule 415 under the Securities Act or any comparable successor form, Rule or
statute), the Majority Holders shall have the right to request in writing that
the Company register all or part of such Holders' Registrable Securities (a
"Request") (which Request shall specify the amount of Registrable Securities
intended to be disposed of by such Holders and the intended method or methods of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the Company shall give written notice of such requested registration to all
Holders of Registrable Securities. Subject to Section 2.2(b), the Company shall
include in a Demand Registration (i) the Registrable Securities intended to be
disposed of by the Initiating Holders and (ii) the Registrable Securities
intended to be disposed of by any other Holder and shares of Common Stock of any
Person that has analogous incidental or "piggyback" registration rights which in
either case shall have made a written request (which request shall specify the
amount of Registrable Securities or shares of Common Stock to be registered) to
the Company for inclusion thereof in such registration within 20 days after the
receipt of such written notice from the Company. The Company shall, as
expeditiously as possible following a Request, use its reasonable best efforts
to cause to be filed with the SEC a Demand Registration Statement providing for
the registration under the Securities Act of the Registrable Securities which
the Company has been so requested to register by all such Holders, to the extent
necessary to permit the disposition of such Registrable Securities so to be
registered in accordance with the intended method
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of disposition thereof specified in such Request. The Company shall use its best
efforts to have such Demand Registration Statement declared effective by the SEC
as soon as practicable thereafter and to keep such Demand Registration Statement
continuously effective for the period specified in Section 4.1(b). A Request may
be withdrawn prior to the filing of the Demand Registration Statement by the
Majority Holders of the Registration (a "Withdrawn Request") and a Demand
Registration Statement may be withdrawn prior to the effectiveness thereof by
the Majority Holders of the Registration (a "Withdrawn Demand Registration"),
and such withdrawals shall be treated as a Demand Registration which shall have
been effected pursuant to this Section 2.2, unless the Holders of Registrable
Securities to be included in such Registration Statement reimburse the Company
for its reasonable out-of-pocket Registration Expenses relating to the
preparation and filing of such Demand Registration Statement (to the extent
actually incurred); provided, however, that if a Withdrawn Request or Withdrawn
Demand Registration is made (A) because of a material adverse change in the
business, financial condition or prospects of the Company determined, in the
case of an Underwritten Offering, by the sole or lead managing Underwriter in
its reasonable discretion, or (B) because the sole or lead managing Underwriter
advises that the amount of Registrable Securities to be sold in such offering be
reduced pursuant to Section 2.2(b) by more than 33% of the Registrable
Securities to be included in such Registration Statement, or (C) because of a
postponement of such registration pursuant to Section 2.6, then such withdrawal
shall not be treated as a Demand Registration effected pursuant to this Section
2.2 (and shall not be counted toward the number of Demand Registrations), and
the Company shall pay all Registration Expenses in connection therewith. Any
Holder requesting inclusion in a Demand Registration may, at any time prior to
the effective date of the Demand Registration Statement (and for any reason)
revoke such request by delivering written notice to the Company revoking such
requested inclusion.
No more than three Requests may be made by all Holders in the
aggregate pursuant to this Section 2.2; provided that the Company shall not be
obligated to effect any Demand Registration within six months of the
effectiveness of any other Demand Registration Statement. The registration
rights granted pursuant to the provisions of this Section 2.2 shall be in
addition to the registration rights granted pursuant to the other provisions of
Article II hereof.
(b) Priority in Demand Registrations. If a Demand
Registration involves an Underwritten Offering, and the sole or lead managing
Underwriter, as the case may be, of such Underwritten Offering shall advise the
Company in writing (with a copy to each Holder requesting registration) on or
before the date five days prior to the date then scheduled for such offering
that, in its opinion, the amount of Registrable Securities requested to be
included in such Demand Registration exceeds the number which can be sold in
such offering within a price range acceptable to the Majority Holders of the
Registration (such writing to state the basis of such opinion and the
approximate number of Registrable Securities which may be included in such
offering), the Company shall include in such Demand Registration, to the extent
of the number which the Company is so advised may be included in such offering,
the Registrable Securities requested to be included in the Demand Registration
by the Holders allocated pro rata in proportion to the number of Registrable
Securities requested to be included in
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such Demand Registration by each of them. In the event the Company shall not, by
virtue of this Section 2.2(b), include in any Demand Registration all of the
Registrable Securities of any Holder requesting to be included in such Demand
Registration, such Holder may, upon written notice to the Company given within
five days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such Demand
Registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such Demand Registration.
(c) Underwriting; Selection of Underwriters.
Notwithstanding anything to the contrary contained in Section 2.2(a), if the
Initiating Holders holding a majority of the Registrable Securities for which
registration was requested in the Request so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a firm commitment Underwritten Offering and such Initiating Holders may
require that all Persons (including other Holders) participating in such
registration sell their Registrable Securities to the Underwriters at the same
price and on the same terms of underwriting applicable to the Initiating
Holders. If any Demand Registration involves an Underwritten Offering, the sole
or managing Underwriters and any additional investment bankers and managers to
be used in connection with such registration shall be selected by the Company,
subject to the approval of the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request (such
approval not to be unreasonably withheld).
(d) Registration of Other Securities. Whenever the
Company shall effect a Demand Registration, no securities other than the
Registrable Securities shall be covered by such registration unless the Majority
Holders shall have consented in writing to the inclusion of such other
securities.
(e) Effective Registration Statement; Suspension. A
Demand Registration Statement shall not be deemed to have become effective (and
the related registration will not be deemed to have been effected) (i) unless it
has been declared effective by the SEC and remains effective in compliance with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, or (iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied other than by the sole reason of
any breach or failure by the Holders of Registrable Securities or are not
otherwise waived.
(f) Other Registrations. During the period (i)
beginning on the date of a Request, and (ii) ending on the date that is 90 days
after the date that a Demand Registration Statement filed pursuant to such
Request has been declared effective by the SEC or, if the Holders shall withdraw
such Request or such Demand Registration Statement, on the date of such
Withdrawn Request or such Withdrawn Demand
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Registration, the Company shall not, without the consent of the Majority
Holders, file a registration statement (other than a registration statement on
Form S-4 or S-8 or any successor form to such forms) pertaining to any
securities of the Company that are substantially similar to the Registrable
Securities.
(g) Registration Statement Form. Registrations under
this Section 2.2 shall be on such appropriate registration form of the SEC (i)
as shall be selected by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request and
as shall be reasonably acceptable to the Company, and (ii) which shall be
available for the sale of Registrable Securities in accordance with the intended
method of disposition specified in the requests for registration; provided,
however, that if the Company is then a registrant entitled to use Form S-3 or
any successor form thereto to register such securities, such registration shall
be effected on such form. The Company agrees to include in any such Registration
Statement all information which any selling Holder, upon advice of counsel,
shall reasonably request.
2.3 Incidental Registration.
(a) Right to Include Registrable Securities.
Commencing on the date of this Agreement, if the Company, at any time or from
time to time, proposes to register any of its equity securities under the
Securities Act (other than in a registration on Form S-4 or S-8 or any successor
form to such forms and other than pursuant to Sections 2.1 or 2.2) whether or
not pursuant to registration rights granted to other holders of its securities
and whether or not for sale for its own account, the Company shall deliver
prompt written notice (which notice shall be given at least 30 days prior to
such proposed registration) to all Holders of Registrable Securities of its
intention to undertake such registration, describing in reasonable detail the
proposed registration and distribution (including the anticipated range of the
proposed offering price, the class and number of securities proposed to be
registered and the distribution arrangements) and of such Holders' right to
participate in such registration under this Section 2.3 as hereinafter provided.
Subject to the other provisions of this paragraph (a) and Section 2.3(b), upon
the written request of any Holder made within 20 days after the receipt of such
written notice (which request shall specify the amount of Registrable Securities
to be registered), the Company shall effect the registration under the
Securities Act of all Registrable Securities requested by Holders to be so
registered (an "Incidental Registration"), to the extent required to permit the
disposition of the Registrable Securities so to be registered, by inclusion of
such Registrable Securities in the Registration Statement which covers the
securities which the Company proposes to register and shall cause such
Registration Statement to become and remain effective with respect to such
Registrable Securities in accordance with the registration procedures set forth
in Article IV. If an Incidental Registration involves an Underwritten Offering,
immediately upon notification to the Company from the Underwriter of the price
at which such securities are to be sold, the Company shall so advise each
participating Holder. The Holders requesting inclusion in an Incidental
Registration may, at any time prior to the effective date of the Incidental
Registration Statement (and for any reason), revoke such request by delivering
written notice to the Company revoking such requested inclusion.
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If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
Holders to cause such registration to be effected as a registration under
Sections 2.1 or 2.2, and (B) in the case of a determination to delay such
registration, the Company shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other securities; provided, however, that if such delay shall extend beyond 120
days from the date the Company received a request to include Registrable
Securities in such Incidental Registration, then the Company shall again give
all Holders the opportunity to participate therein and shall follow the
notification procedures set forth in the preceding paragraph. There is no
limitation on the number of such Incidental Registrations pursuant to this
Section 2.3 which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of
this Section 2.3 shall be in addition to the registration rights granted
pursuant to the other provisions of Article II hereof.
(b) Priority in Incidental Registration. If an
Incidental Registration involves an Underwritten Offering (on a firm commitment
basis), and the sole or the lead managing Underwriter, as the case may be, of
such Underwritten Offering shall advise the Company in writing (with a copy to
each Holder requesting registration) on or before the date five days prior to
the date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially adversely affecting the price at which the securities being offered
can be sold and/or their ability to successfully market and sell the securities
being offered (such writing to state the basis of such opinion and the
approximate number of such securities which may be included in such offering
without such effect), the Company shall include in such registration, to the
extent of the number which the Company is so advised may be included in such
offering without such effect, (i) in the case of a registration initiated by the
Company, (A) first, the securities that the Company proposes to register for its
own account, (B) second, the Registrable Securities requested to be included in
such registration by the Holders and any other stockholders having contractual
rights to participate in such registration, allocated pro rata in proportion to
the number of Registrable Securities requested to be included in such
registration by each of them, and (C) third, other securities of the Company to
be registered on behalf of any other Person, and (ii) in the case of a
registration initiated by a Person other than the Company, (A) first, the
securities requested to be included in such registration by any Persons
initiating such registration, allocated pro rata in proportion to the number of
securities requested to be included in such registration by each of them, (B)
second, the
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Registrable Securities requested to be included in such registration by the
Holders and any other stockholders having contractual rights to participate in
such registration, allocated pro rata in proportion to the number of Registrable
Securities requested to be included in such registration by each of them, (C)
third, the securities that the Company proposes to register for its own account,
and (D) fourth, other securities of the Company to be registered on behalf of
any other Person; provided, however, that in the event the Company will not, by
virtue of this Section 2.3(b), include in any such registration all of the
Registrable Securities of any Holder requested to be included in such
registration, such Holder may, upon written notice to the Company given within
three days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such registration.
2.4 Expenses. Registration Expenses incurred in connection
with any registration made or requested to be made pursuant to this Article II
will be borne by the Company, whether or not any such Registration Statement
becomes effective, to the extent permitted by applicable law.
2.5 Underwritten Offerings.
(a) Underwritten Offerings. If requested by the sole
or lead managing Underwriter for any Underwritten Offering effected pursuant to
a Demand Registration or the Shelf Registration Statement, the Company shall
enter into a customary underwriting agreement with the Underwriters for such
offering, such agreement to be reasonably satisfactory in substance and form to
the Company and to each Holder of Registrable Securities participating in such
offering, and to contain such representations and warranties by the Company and
such other terms as are customary in agreements of that type, including, without
limitation, indemnification and contribution to the effect and to the extent
provided in Article V.
(b) Holders of Registrable Securities to be Parties
to Underwriting Agreement. The Holders of Registrable Securities to be
distributed by Underwriters in an Underwritten Offering contemplated by Article
II shall be parties to the underwriting agreement between the Company and such
Underwriters and may, at such Holders' option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such Underwriters shall also be made to and
for the benefit of such Holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such Underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities; provided, however, that the Company shall not
be required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or the Underwriters other than
12
representations, warranties or agreements regarding such Holder and such
Holder's Registrable Securities.
(c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any underwritten registration hereunder unless such Person (i) agrees to sell
its securities on the same terms and conditions provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangement and (ii) accurately completes and executes in a timely manner all
questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
(d) Limitations on Underwritten Offerings. In no
event shall the Company be required to effect more than two (2) Underwritten
Offerings pursuant to this Agreement (whether as a Shelf Registration Statement
pursuant to Section 2.1 or a Demand Registration pursuant to Section 2.2).
2.6 Blackout Periods.
(a) ICF and its Affiliates (other than an Affiliate
which is an Affiliate solely because it is a limited partner in ICF and to whom
Registrable Securities have been distributed), for so long as Xxxxxxx Xxxxxxx
(or another individual who is an employee, partner or Affiliate of ICF) serves
on the board of directors of the Company, agree that offers and sales of their
Registrable Securities pursuant to the Shelf Registration or any Demand
Registration (or while this Section 2.6(a) is applicable to any such Holder, any
other transaction) may only be made during the periods (each, a "Permitted
Trading Period") in which the directors and executive officers of the Company
are permitted to purchase or sell securities of the Company pursuant to the
Company's existing Trading Compliance Program (including any period in which any
such director or executive officer is exempt from the Trading Compliance Program
pursuant to its terms), a copy of which is attached hereto as Schedule A, or any
successor program adopted by the Company's Board of Directors and delivered to
the holders (the "Compliance Program"). The Company shall promptly notify the
Persons referred to in this Section 2.6(a) in writing (an "Affiliate Blackout
Notice") of any decision to restrict trading under the Compliance Program during
any Window Period (as defined therein) and when such trading may be resumed
(each period during which there is such a restriction, an "Affiliate Blackout
Period").
(b) Holders other than the Holders referred to in
Section 2.6(a) hereof agree that the Company shall be entitled to postpone the
filing or effectiveness of, or sales under (unless they have already
contractually agreed to make such sales), a Demand Registration and to require
them to discontinue the disposition of their securities covered by a Shelf
Registration during any General Blackout Period (as defined below) (i) if the
board of directors of the Company determines in good faith that effecting such a
registration or continuing such disposition at such time would have an adverse
effect upon (A) a proposed sale of all (or substantially all) of the assets of
the Company or a merger, reorganization, recapitalization or similar current
transaction materially affecting
13
the capital, structure or equity ownership of the Company or (B) any other
material financing, acquisition or extraordinary corporate transaction, or (ii)
if the Company is in possession of material information which the board of
directors of the Company determines in good faith is not in the best interests
of the Company to disclose in a registration statement at such time, provided,
however, that the Company may delay the filing or effectiveness of, or sales
under (unless they have already contractually agreed to make such sales), a
Demand Registration and require the Holders of Registrable Securities referred
to in this Section 2.6(b) to discontinue the disposition of their securities
covered by a Shelf Registration only for a reasonable period of time not to
exceed 30 days (or such earlier time as such transaction is consummated or no
longer proposed or the material information has been made public) (each, a
"General Blackout Period"); provided, further, that the effectiveness period of
any Demand Registration shall be extended by the number of days in any General
Blackout Period to the extent that the Registration Statement already was
effective at the commencement of the General Blackout Period. There shall not be
more than three General Blackout Periods in any 12 month period. The Company
shall promptly notify the Holders referred to in this Section 2.6(b) in writing
(a "General Blackout Notice") of any decision to postpone the filing or
effectiveness of, or sales under (unless they have already contractually agreed
to make such sales), a Demand Registration or to discontinue sales of
Registrable Securities covered by a Shelf Registration pursuant to this Section
2.6 and shall include an undertaking by the Company to promptly notify the
Holders referred to in this Section 2.6(b) as soon as a Demand Registration may
be effected or sales of Registrable Securities covered by a Demand Registration
or Shelf Registration may resume.
(c) In making any such determination to initiate or
terminate an Affiliate Blackout Period or a General Blackout Period, the Company
shall not be required to consult with or obtain the consent of any Holder, and
any such determination shall be the Company's sole responsibility. Each Holder
shall treat all notices received from the Company pursuant to this Section 2.6
in the strictest confidence and shall not disseminate such information. If the
Company shall impose an Affiliate Blackout Period or a General Blackout Period
prior to the filing of a Demand Registration Statement pursuant to this Section
2.6, the Majority Holders shall have the right to withdraw the request for
registration. Any such withdrawal shall be made by giving written notice to the
Company within 30 days after receipt of the Affiliate Blackout Notice or the
General Blackout Notice. Such withdrawn registration request shall not be
treated as a Demand Registration effected pursuant to Section 2.2 (and shall not
be counted towards the number of Demand Registrations effected), and the Company
shall pay all Registration Expenses in connection therewith.
ARTICLE III
RESTRICTIONS ON SALE
3.1 Restrictions on Sale by the Company and Others. The
Company agrees that (i) if timely requested in writing by the sole or lead
managing Underwriter in an Underwritten Offering of any Registrable Securities,
it will not make any short sale of, loan, grant any option for the purchase of
or effect any public sale or distribution of any of the Company's equity
securities that are substantially similar to the Registrable
14
Securities being offered (or any security convertible into or exchangeable or
exercisable for any of such equity securities) during the nine business days (as
defined in Rule 100 of Regulation M promulgated under the Exchange Act) prior
to, and during the time period reasonably requested by the sole or lead managing
Underwriter not to exceed 90 days, beginning on the effective date of the
applicable Registration Statement (except as part of such underwritten
registration or pursuant to registrations on Forms S-4 or S-8 or any successor
form to such forms), and (ii) it will use its commercially reasonable efforts to
cause each officer and director of the Company and each Affiliate that holds 10%
or more of equity securities (or any security convertible into or exchangeable
or exercisable for any of its equity securities) of the Company purchased from
the Company at any time after the date of this Agreement (other than in a
registered public offering) to so agree.
ARTICLE IV
REGISTRATION PROCEDURES
4.1 Obligations of the Company. Subject to Section 2.6,
whenever the Company is required to effect the registration of Registrable
Securities under the Securities Act pursuant to Article II of this Agreement,
the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC (promptly, and,
except as set forth in Section 2.1, in any event within 60 days after receipt of
a request to register Registrable Securities) the requisite Registration
Statement to effect such registration, which Registration Statement shall comply
as to form in all material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be filed therewith,
and the Company shall use its best efforts to cause such Registration Statement
to become effective (provided, that the Company may discontinue any registration
of its securities that are not Registrable Securities, and, under the
circumstances specified in Section 2.3, its securities that are Registrable
Securities); provided, however, that before filing with the SEC a Registration
Statement or Prospectus or comparable statements under securities or blue sky
laws of any jurisdiction, the Company shall (i) provide Holders' Counsel and any
other Inspector (as defined in Section 4.1(g)) with an adequate and appropriate
opportunity to review, comment and participate in the preparation of such
Registration Statement, Prospectus or other comparable statement and (ii)
refrain from filing with the SEC such Registration Statement, Prospectus or
other comparable statement if Holder's Counsel, any selling Holder or any other
Inspector reasonably objects to such filing on the grounds that it does not
comply in all material respects with the requirements of the Securities Act or
of the rules or regulations thereunder;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to keep such Registration Statement effective,
and (ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such Registration
15
Statement (but not before the expiration of the 90 day period referred to in
Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable), and
(B) (x) six months after the effective date of any Registration Statement other
than a Shelf Registration Statement; and (y) with respect to any Shelf
Registration, the time period provided in Section 2.1;
(c) furnish, without charge, to each selling Holder
of such Registrable Securities and each Underwriter, if any, of the securities
covered by such Registration Statement, such number of copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits), and the Prospectus included in such Registration
Statement (including each preliminary Prospectus) in conformity with the
requirements of the Securities Act, and other documents, as such selling Holder
and Underwriter may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such selling Holder
(the Company hereby consenting to the use in accordance with applicable law of
each such Registration Statement (or amendment or post-effective amendment
thereto) and each such Prospectus (or preliminary prospectus or supplement
thereto) by each such selling Holder of Registrable Securities and the
Underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable
Securities, use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such Registration
Statement under such other securities or blue sky laws of such jurisdictions as
any selling Holder of Registrable Securities covered by such Registration
Statement or the sole or lead managing Underwriter, if any, may reasonably
request, and take any other action as may be reasonably necessary or advisable
to enable such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such selling Holder;
provided that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 4.1(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction;
(e) use its reasonable best efforts to obtain all
other approvals, consents, exemptions or authorizations from such governmental
agencies or authorities as may be necessary to enable the selling Holders of
such Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) promptly notify Holders' Counsel, each Holder of
Registrable Securities covered by such Registration Statement and the sole or
lead managing Underwriter, if any: (i) when the Registration Statement, any
pre-effective amendment, the Prospectus or any prospectus supplement related
thereto or post- effective amendment to the Registration Statement has been
filed and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any state securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related
16
thereto or for additional information, (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or the
initiation or threat of any proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation of any proceeding for such
purpose, (v) of the existence of any fact of which the Company becomes aware or
the happening of any event which results in (A) the Registration Statement
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statements
therein not misleading, or (B) the Prospectus included in such Registration
Statement containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make any
statements therein, in the light of the circumstances under which they were
made, not misleading, (vi) if at any time the representations and warranties
contemplated by Section 2.5(b) cease to be true and correct in all material
respects, and (vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate or
that there exists circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment; and, if the notification relates to an
event described in any of the clauses (ii) through (vii) of this Section 4.1,
the Company shall promptly prepare a supplement or post-effective amendment to
such Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that (1) such
Registration Statement shall not 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 not misleading, and (2) as thereafter delivered to
the purchasers of the Registrable Securities being sold thereunder, 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 (and shall furnish to each such Holder and each Underwriter, if
any, a reasonable number of copies of such Prospectus so supplemented or
amended); and if the notification relates to an event described in clause (iii)
of this Section 4.1(f), the Company shall take all reasonable action required to
prevent the entry of such stop order or to remove it if entered;
(g) make available for inspection by any selling
Holder of Registrable Securities, any sole or lead managing Underwriter
participating in any disposition pursuant to such Registration Statement,
Holders' Counsel and any attorney, accountant or other agent retained by any
such seller or any Underwriter (each, an "Inspector" and, collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company and any subsidiaries thereof as may be in
existence at such time (collectively, the "Records") as shall be necessary, in
the opinion of such Holders' and such Underwriters' respective counsel, to
enable them to exercise their due diligence responsibility and to conduct a
reasonable investigation within the meaning of the Securities Act, and cause the
Company's and any subsidiaries' officers, directors and employees, and the
independent public accountants of the Company, to supply all information
reasonably requested by any such Inspectors in connection with such Registration
Statement;
17
(h) obtain an opinion from the Company's counsel and
a "cold comfort" letter from the Company's independent public accountants who
have certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective date
of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
Majority Holders, and furnish to each Holder participating in the offering and
to each Underwriter, if any, a copy of such opinion and letter addressed to such
Holder (in the case of the opinion) and Underwriter (in the case of the opinion
and the "cold comfort" letter);
(i) provide and cause to be maintained a transfer
agent and registrar for all such Registrable Securities covered by such
Registration Statement not later than the effectiveness of such Registration
Statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency or
authority having jurisdiction over the offering, and make available to its
security holders, as soon as reasonably practicable but no later than 90 days
after the end of any 12-month period, an earnings statement (i) commencing at
the end of any month in which Registrable Securities are sold to Underwriters in
an Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such 12-
month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the
Registration, use its best efforts to cause all such Registrable Securities to
be listed (i) on each national securities exchange on which the Company's
securities are then listed or, (ii) if securities of the Company are not at the
time listed on any national securities exchange (or, if the listing of
Registrable Securities is not permitted under the rules of each national
securities exchange on which the Company's securities are then listed), on a
national securities exchange or The NASDAQ Stock Market's National Market, as
designated by the Majority Holders;
(l) keep each selling Holder of Registrable
Securities advised in writing as to the initiation and progress of any
registration under Article II hereunder;
(m) enter into and perform customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities;
18
(n) cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(o) furnish to each Holder participating in the
offering and the sole or lead managing Underwriter, if any, without charge, at
least one manually- signed copy of the Registration Statement and any
post-effective amendments thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those deemed to be incorporated by reference);
(p) cooperate with the selling Holders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the Underwriters or, if not an Underwritten Offering,
in accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(q) if requested by the sole or lead managing
Underwriter or any selling Holder of Registrable Securities, immediately
incorporate in a prospectus supplement or post-effective amendment such
information concerning such Holder of Registrable Securities, or the
Underwriters or the intended method of distribution as the sole or lead managing
Underwriter or the selling Holder of Registrable Securities reasonably requests
to be included therein and as is appropriate in the reasonable judgment of the
Company, including, without limitation, information with respect to the number
of shares of the Registrable Securities being sold to the Underwriters, the
purchase price being paid therefor by such Underwriters and with respect to any
other terms of the Underwritten Offering of the Registrable Securities to be
sold in such offering; make all required filings of such Prospectus supplement
or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment; and
supplement or make amendments to any Registration Statement if requested by the
sole or lead managing Underwriter of such Registrable Securities; and
(r) use its commercially reasonable efforts to take
all other steps necessary to expedite or facilitate the registration and
disposition of the Registrable Securities contemplated hereby.
4.2 Seller Information. The Company may require each selling
Holder of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding such Holder, such Holder's
Registrable Securities
19
and such Holder's intended method of disposition as the Company may from time to
time reasonably request in writing; provided that such information shall be used
only in connection with such registration.
If any Registration Statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, and (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
4.3 Notice to Discontinue. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4.1(f)(ii) through
(vii), such Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4.1(f) and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
the Prospectus covering such Registrable Securities which is current at the time
of receipt of such notice. If the Company shall give any such notice, the
Company shall extend the period during which such Registration Statement shall
be maintained effective pursuant to this Agreement (including, without
limitation, the period referred to in Section 4.1(b)) by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 4.1(f).
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each Holder
of Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees,
20
disbursements and other charges of legal counsel) in respect thereof
(collectively, "Claims"), insofar as such Claims arise out of or are based upon
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder or any Underwriter
specifically stating that it was expressly for use therein. The Company shall
also indemnify any Underwriters of the Registrable Securities, their Agents and
each Person who controls any such Underwriter (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Person who may be entitled to indemnification pursuant to this
Article V and shall survive the transfer of securities by such Holder or
Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such securities and its Agents and each Person who controls the
Company or any such Underwriter (within the meaning of the Securities Act) and
its Agents against any and all Claims, insofar as such Claims arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (including any
preliminary, final or summary prospectus and any amendment or supplement
thereto) related to such registration, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company in an instrument duly executed by such Holder
specifically stating that it was expressly for use therein; provided, however,
that the aggregate amount which any such Holder shall be required to pay
pursuant to this Section 5.2 shall be limited to the proportion that the net
proceeds from the sale of the Registrable Securities sold by such Holder under
the Registration Statement bears to the total net proceeds from the sale of all
securities sold thereunder, but in no event be greater than the amount of the
net proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such Claims less all
amounts previously paid by such Holder with respect to any such Claims. Such
indemnity shall remain in full
21
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after
receipt by an indemnified party of notice of any Claim or the commencement of
any action or proceeding involving a Claim under this Article V, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Article V, (i) notify the indemnifying party in
writing of the Claim or the commencement of such action or proceeding; provided,
that the failure of any indemnified party to provide such notice shall not
relieve the indemnifying party of its obligations under this Article V, except
to the extent the indemnifying party is materially and actually prejudiced
thereby and shall not relieve the indemnifying party from any liability which it
may have to any indemnified party otherwise than under this Article V, and (ii)
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party (Xxxxxxxx & Xxxxxxxx and Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx being deemed reasonably satisfactory counsel
to the parties for purposes of this Section 5.3); provided, however, that any
indemnified party shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed in writing to pay such fees and expenses, (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such indemnified party within 20 days
after receiving notice from such indemnified party that the indemnified party
believes it has failed to do so, (C) in the reasonable judgment of any such
indemnified party, based upon advice of counsel, a conflict of interest may
exist between such indemnified party and the indemnifying party with respect to
such claims (in which case, if the indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such indemnified party) or (D) such
indemnified party is a defendant in an action or proceeding which is also
brought against the indemnifying party and reasonably shall have concluded that
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party. No indemnifying party shall
be liable for the fees and expenses of more than one counsel employed by the
indemnified parties in connection with a proceeding involving a Claim under this
Article V. No indemnifying party shall be liable for any settlement of any such
claim or action effected without its written consent. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (iii) does not provide for
any action on the part of any Indemnified Party other than the payment of money
damages which is to be paid in full by the indemnifying party.
22
5.4 Contribution. If the indemnification provided for in
Section 5.1 or 5.2 from the indemnifying party for any reason is unavailable to
(other than by reason of exceptions provided therein), or is insufficient to
hold harmless, an indemnified party hereunder in respect of any Claim, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claim in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other hand, in connection with the actions which resulted in such Claim, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a party as a result of any Claim
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in Section 5.3, any legal or other fees,
costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to such
Claims. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(a) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
5.5 Indemnification Payments. The indemnification and
contribution required by this Article V shall be made by periodic payments of
the amount thereof during the course of any investigation or defense, as and
when bills are received or any expense, loss, damage or liability is incurred.
ARTICLE VI
GENERAL
6.1 Registration Rights to Others. Other than as set forth on
Schedule B, the Company is not party to any agreement with respect to its
securities
23
granting any registration rights to any Person. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, (i)
such rights shall not be in conflict with or adversely affect any of the rights
provided in this Agreement to the Holders and (ii) if such rights are provided
on terms or conditions more favorable in the aggregate to such holder than the
terms and conditions provided in this Agreement, the Company shall provide (by
way of amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.2 Availability of Information. The Company
covenants that it shall timely file any reports required to be filed by it under
the Securities Act or the Exchange Act (including, but not limited to, the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 under the Securities Act), and that it shall take
such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such rule may be amended from time to time, or (ii) any other rule or
regulation now existing or hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
6.3 Amendments and Waivers. The provisions of this
Agreement may not be amended, modified, supplemented or terminated, and waivers
or consents to departures from the provisions hereof may not be given, without
the written consent of the Company and the Holders holding more than 50% of the
Registrable Securities then outstanding; provided, however, that no such
amendment, modification, supplement, waiver or consent to departure shall reduce
the aforesaid percentage of Registrable Securities without the written consent
of all of the Holders of Registrable Securities; and provided, further, that
nothing herein shall prohibit any amendment, modification, supplement,
termination, waiver or consent to departure the effect of which is limited only
to those Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.4 Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to the applicable party at the address set forth below or such other
address as may hereafter be designated in writing by such party to the other
parties in accordance with the provisions of this Section:
If to the Company, to:
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
24
Telecopy: 000-000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
With a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
If to the ICF, to:
Invemed Catalyst Fund, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attn: Xxxxxxx Present
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: 000-000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; on the next business day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid.
6.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Any Holder may assign to any Affiliate or to
any other transferee of at least 50% of the Registrable Securities then owned by
such Holder (other than a transferee that acquires such Registrable Securities
in a registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any such transferee shall take and hold
Registrable Securities, such transferee shall promptly notify the Company and by
taking and holding such Registrable Securities such transferee shall
automatically be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement as if it were a party hereto (and shall, for all purposes, be
deemed a Holder under this Agreement). If the Company shall so request, any
successor or permitted assign (including any permitted transferee) shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
terms
25
hereof. For purposes of this Agreement, "successor" for any entity other than a
natural person shall mean a successor to such entity as a result of such
entity's merger, consolidation, sale of substantially all of its assets, or
similar transaction. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder or by
the Company without the consent of the Company and the Majority Holders.
6.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which, when so executed and delivered, shall be
deemed to be an original, but all of which counterparts, taken together, shall
constitute one and the same instrument.
6.7 Descriptive Headings, Etc. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof', "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
6.8 Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof).
6.10 Remedies; Specific Performance. The parties hereto
acknowledge that money damages would not be an adequate remedy at law if any
party fails to perform in any material respect any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions
26
of this Agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law. Except as otherwise provided by law, a delay or
omission by a party hereto in exercising any right or remedy accruing upon any
such breach shall not impair the right or remedy or constitute a waiver of or
acquiescence in any such breach. No remedy shall be exclusive of any other
remedy. All available remedies shall be cumulative.
6.11 Entire Agreement. This Agreement and the Stock Purchase
Agreement are intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings relating to such subject matter, other than those set
forth or referred to herein or in the Stock Purchase Agreement. This Agreement
and the Stock Purchase Agreement supersede all prior agreements and
understandings between the Company and the other parties to this Agreement with
respect to such subject matter.
6.12 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
6.13 Consent to Jurisdiction; Waiver of Jury. Each party to
this Agreement hereby irrevocably and unconditionally agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the address set forth or provided for in
Section 6.5 of this Agreement, such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. Each of the parties hereby irrevocably waives
trial by jury in
27
any action, suit or proceeding, whether at law or equity, brought by any of them
in connection with this Agreement or the transactions contemplated hereby.
6.14 Further Assurances. Each party hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
6.15 No Inconsistent Agreements. The Company will not
hereafter enter into any agreement which is inconsistent with the rights granted
to the Holders in this Agreement.
6.16 Construction. The Company and the Holders acknowledge
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company and
the Holders.
[Remainder of page intentionally left blank]
28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
KEY3MEDIA GROUP, INC.
By: __________________________________
Name:
Title:
INVEMED CATALYST FUND, L.P.
By: Invemed Catalyst GenPar, LLC,
its general partner
By: Gladwyne Catalyst GenPar, LLC,
its managing member
__________________________________
Name: Xxxxxxx Present
Title: Member
29
Schedule A
Trading Compliance Program of the Company
Schedule B
Other Registration Rights Granted by the Company
Registration Rights Agreement, dated as of November 27, 2001, between Key3Media
Group, Inc. and ValueAct Capital Partners, L.P., ValueAct Capital Partners II,
L.P. and ValueAct Capital International, Ltd.
Registration Rights Agreement, dated as of July, 2000, between Key3Media Group,
Inc. and SOFTBANK Corp. and its Subsidiaries (as defined therein)
Registration Rights Agreement, dated as of August 18, 2000, between Key3Media
Group, Inc., Princess Gate Investors III, L.P., certain affiliates of Xxxxxx
Xxxxxxx Xxxx Xxxxxx & Co. and certain Persons whose investment manager is PG
Investors III, Inc. listed therein
