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EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
BETWEEN
CORUS ENTERTAINMENT INC.
AND
LIBERTY CJR, INC.
DATED AS OF FEBRUARY 18, 2000
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REGISTRATION RIGHTS AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of February, 2000.
B E T W E E N:
CORUS ENTERTAINMENT INC.,
a corporation incorporated under the
laws of Canada,
(hereinafter referred to as the "Company"),
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LIBERTY CJR, INC.,
a corporation incorporated
under the laws of the State of Delaware,
(hereinafter referred to as the "Purchaser").
WHEREAS the Purchaser has entered into an agreement dated February 18,
2000 with the Company, Xxxx Communications Inc., CanWest Global Communications
Corp. and WIC Western International Communications Ltd. (the "Purchase
Agreement") relating to the purchase by the Purchaser of Class B non-voting
participating shares of the Company;
NOW THEREFORE, in connection with the Purchaser entering into the
Purchase Agreement, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the meanings
ascribed to them below. Unless the context requires, any reference herein to a
"Section", "subsection", "paragraph" or "subparagraph" refers to a Section
"subsection", "paragraph" or "subparagraph", as the case may be, of this
Agreement, and the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision:
"ADDITIONAL PIGGYBACK RIGHTS" means piggyback registration rights
granted by the Company to other holders of Class B Shares after the
date hereof which are not inconsistent with the rights granted in, or
otherwise conflict with the terms of, this Agreement.
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"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 specified Person.
"CLAIMS" is defined in Section 12.1.
"CLASS B SHARES" means the Class B non-voting participating shares in
the capital of the Company.
"COMPANY" means Corus Entertainment Inc.
"CONTROLLING PERSON" is defined in Section 12.1.
"DEMAND EXERCISE NOTICE" is defined in Section 2.1.
"DEMAND REGISTRATION" is defined in Section 2.1.
"DEMAND REGISTRATION REQUEST" is defined in Section 2.1.
"DEMAND REGISTRATION STATEMENT" is defined in Section 2.1.
"DEMANDING HOLDER" means the Purchaser and any Transferee to whom the
Purchaser has assigned its rights under Section 2.1, provided that the
Purchaser has given written notice to the Company of such assignment.
"EFFECTIVE TIME" means the time and date as of which the SEC declares
the related Demand Registration Statement effective or as of which the
related Demand Registration Statement otherwise becomes effective.
"ELECTING HOLDER" means a Holder electing to be included under the
applicable Secondary Offering Registration Statement.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.
"EXPENSES" is defined in Section 7.1.
"HOLDER" or "HOLDERS" means (i) the Purchaser and (ii) any Transferee.
"LIBERTY ENTITY" means the Purchaser and any Affiliate of the
Purchaser.
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"MAJOR HOLDER" means, with respect to any secondary offering involving
a Secondary Offering Registration Statement, the Person that, together
with its Affiliates, includes the largest number of Class B Shares in
such secondary offering.
"MANAGER" is defined in Section 5.1.
"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange, Inc.
"NON-LIBERTY DEMAND REGISTRATION REQUEST" means a Demand Registration
Request made by a Holder that is not a Liberty Entity.
"OTHER DEMAND RIGHTS" means any contractual demand registration rights
granted by the Company to other holders of Class B Shares after the
date hereof which are not inconsistent with the rights granted in, or
otherwise conflict with the terms of, this Agreement.
"PERSON" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency
or political subdivisions thereof.
"PIGGYBACK REGISTRATION" is defined in Section 3.1.
"PIGGYBACK REQUEST" is defined in Section 3.1.
"POSTPONEMENT PERIOD" is defined in Section 2.2.
"PURCHASE AGREEMENT" is defined in the recitals hereto.
"PURCHASER" means Liberty CJR, Inc.
"REGISTRABLE SHARES" means any Class B Shares purchased by the
Purchaser pursuant to the Purchase Agreement and held by a Holder, or
any shares into which such Class B Shares are reclassified as a result
of any subdivision, redivision, reduction, combination or
consolidation, of for which such Class B Shares may be exchanged or
converted. As to any particular Registrable Shares, such shares shall
cease to be Registrable Shares when (i) a registration statement with
respect to the sale of such shares shall have been declared effective
under the Securities Act and such shares shall have been disposed of in
accordance with such registration statement, or (ii) all such shares
may be sold by the Holder thereof (other than in a privately negotiated
sale) pursuant to Rule 144 (or any successor provision)
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under the Securities Act without being limited by the volume
limitations of paragraph (e) of Rule 144.
"RULE 144", "RULE 144A", "RULE 405" and "RULE 415" means, in each case,
such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SECONDARY OFFERING REGISTRATION STATEMENT" means (i) any Demand
Registration Statement required to be filed by the Company pursuant to
Section 2 hereof, and/or (ii) any piggyback registration statement
filed or required to be filed by the Company pursuant to Section 3
hereof, in each case, as applicable. As used herein, references to a
Secondary Offering Registration Statement in the singular shall, if
applicable, be deemed to be in the plural.
"SECTION 5.1 SALE NUMBER" is defined in Section 5.1.
"SECTION 5.2 SALE NUMBER" is defined in Section 5.2.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"TRANSFEREE" is defined in Section 16.4.
"US$", "$" or "U.S. DOLLARS" means lawful currency of the United States
of America.
"U.S. INITIAL PUBLIC OFFERING" means a distribution to the public of
Class B Shares in any state of the United States pursuant to a
registration statement and the concurrent listing of such shares for
trading on The Nasdaq Stock Market, the American Stock Exchange or the
NYSE.
"VALID BUSINESS REASON" is defined in subsection 2.2(d).
SECTION 2
DEMAND REGISTRATION OF THE REGISTRABLE SHARES
2.1 (a) Subject to Sections 2.2 and 5, at any time and from time to time after
the Registrable Shares are listed for trading on the NYSE, the Purchaser shall
have the right to require the Company to file a registration statement under the
Securities Act covering the Purchaser's Registrable Shares, by delivering a
written request therefor to the Company specifying the number of Registrable
Shares
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to be included in such registration by the Purchaser and the intended method of
distribution thereof. All such requests by the Purchaser pursuant to this
Section 2.1 are referred to herein as "DEMAND REGISTRATION REQUESTS" and the
registrations so requested are referred to herein as "DEMAND REGISTRATIONS". As
promptly as practicable, but no later than 15 days after receipt of a Demand
Registration Request, the Company shall give written notice (the "DEMAND
EXERCISE NOTICE") of such Demand Registration Request to all Holders of record
of Registrable Shares.
(b) The Company, subject to Sections 5 and 8, shall include in a Demand
Registration (x) the Registrable Shares of the Demanding Holder and (y) the
Registrable Shares of any other Holder which shall have made a written request
to the Company for inclusion of Registrable Shares in such registration (which
request shall specify the maximum number of Registrable Shares intended to be
disposed of by such Holder) within 30 days after the giving of the Demand
Exercise Notice (or 15 days if, at the request of the Demanding Holder, the
Company states in such written notice or gives telephonic notice to all Holders,
with written confirmation to follow promptly thereafter, that such registration
will be on a Form S-3 or F-3).
(c) The Company shall use its reasonable best efforts to, as soon as
practicable but in no event more than 45 days after receipt of a Demand
Registration Request, file a registration statement under the Securities Act (a
"DEMAND REGISTRATION STATEMENT") for distribution in accordance with such
intended method of distribution, and will use its reasonable best efforts to
cause such Demand Registration Statement to be declared effective as soon
thereafter as practicable.
2.2 The Demand Registration rights granted to the Holders in Section 2.1 are
subject to the following limitations:
(a) no Demand Registration Request under this Agreement may be
made during any period described in Section 9.1;
(b) each registration in respect of a Demand Registration Request
must include, in the aggregate, Class B Shares representing:
(i) (including Registrable Shares included in such
registration by all holders of Additional Piggyback
Rights) an amount of Class B Shares having an
aggregate market value on the NYSE calculated as of
any date within ten trading days before the date of
the Demand Registration Request of U.S.$25,000,000 or
more (unless such Demand Registration Request is in
respect of all remaining Registrable Shares owned by
the Holders, in which case such dollar threshold
shall not apply); or
(ii) all of the Registrable Shares of the Electing
Holders;
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(c) the Company shall not be required to effect more than three
Demand Registrations under this Agreement;
(d) if the Board of Directors of the Company, in its good faith
judgment, determines that the Demand Registration should not
be made or continued because it would materially adversely
effect any financing, acquisition, corporate reorganization or
merger or other transaction that is material to the Company
and consolidated subsidiaries taken as a whole (a "VALID
BUSINESS Reason"), (x) the Company may postpone filing a
registration statement relating to the Demand Registration
Request until such Valid Business Reason no longer exists, but
in no event for more than 30 days, and (y) in case a Demand
Registration Statement has been filed relating to the Demand
Registration Request, if the Valid Business Reason has not
resulted from actions taken by the Company, the Company may
postpone amending or supplementing such Demand Registration
Statement or require the Holders to suspend the disposition of
Registrable Securities pursuant to the Demand Registration
Statement until such Valid Business Reason no longer exists,
but in no event for more than 30 days (such period of
postponement or suspension under subclause (x) or (y) of this
clause (d), the "POSTPONEMENT PERIOD"); and the Company shall
give written notice of its determination to postpone a Demand
Registration Statement or suspend the disposition of
Registrable Securities and of the fact that the Valid Business
Reason for such postponement or suspension no longer exists,
in each case, promptly after the occurrence thereof; provided,
however, the Company shall not be permitted to postpone a
Demand Registration Statement or suspend the disposition of
Registrable Securities after the expiration of any
Postponement Period until 12 months after the expiration of
such Postponement Period;
(e) if the Company shall give any notice of postponement of any
Demand Registration Statement or the suspension of the
disposition of Registrable Shares pursuant to subsection
2.2(d), the Company shall not, during the period of
postponement or the suspension of the disposition of
Registrable Shares, register any Class B Shares, other than
(i) in connection with the Valid Business Reason, or (ii)
pursuant to a registration statement on Form S-4 or S-8 or F-4
or F-8, respectively, or F-10 (provided, in the case of a
registration statement on Form F-10, the registration relates
to an exchange offer or a business combination) (or an
equivalent registration form then in effect). Each Holder
agrees that, upon receipt of any notice from the Company that
the Company has determined to suspend the disposition of
Registrable Shares pursuant to subsection 2.2(d) above, such
Holder will discontinue its disposition of Registrable Shares
pursuant to the Demand Registration Statement. If the Company
shall give any notice of postponement of a Demand Registration
Statement or the suspension of the disposition of Registrable
Shares, the Company
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shall, at such time as the Valid Business Reason that caused
such postponement or suspension no longer exists, (x) use its
reasonable best efforts to effect the registration under the
Securities Act of the Registrable Shares covered by the
withdrawn or postponed registration statement in accordance
with this Section 2 as soon as reasonably practicable but in
no event later than 60 days after the date of the postponement
(unless the Demanding Holder shall have withdrawn such
request) and such registration shall not be withdrawn or
postponed pursuant to subsection 2.2(d) above and shall have
remained effective for a period of 180 days or (y) in the case
of a suspension, notify the Holders that the suspension has
been terminated and that the Holders may continue the
disposition of Registrable Shares pursuant to the Demand
Registration Statement. In the event of a suspension of the
distribution of the Registrable Shares pursuant to this
subsection 2.2(e) after a Demand Registration Statement has
become effective, the 180 day effectiveness referred to in
subsection 6.1(a)(i) will be extended by a period equal to the
total number of days for which the distribution of Registrable
Shares included in the Demand Registration Statement was
suspended;
(f) if a Demand Registration Statement is postponed by the Company
pursuant to subsection 2.2(d), upon notice to the Demanding
Holder of the termination of the Postponement Period, the
Demanding Holder shall be entitled to withdraw the relevant
Demand Registration Request and, provided the Demanding Holder
reimburses the Company for all Expenses incurred by the
Company in connection with such registration, the Company
shall not be considered to have effected an effective
registration for the purposes of this Agreement;
(g) the Holders holding an aggregate of 50% or more of the
Registrable Shares to be included in a Demand Registration
shall have the right to withdraw a Demand Registration Request
made pursuant to subsection 2.1(a) at any time prior to (i)
the execution of an underwriting agreement with respect to an
underwritten offer, or (ii) the effective date of the relevant
Demand Registration Statement and such Demand Registration
Statement shall be withdrawn and, provided that each of the
Holders whose Registrable Shares were to be included in such
Demand Registration reimburse the Company for their pro rata
portion of all Expenses incurred by the Company in connection
with such registration, the Company shall not be considered to
have effected an effective registration for the purposes of
this Agreement;
(h) the Company, subject to Sections 5 and 8, may elect to include
in any Secondary Offer Registration Statement (i) authorized
but unissued Class B Shares and (ii) any other Class B Shares
which are requested to be included in such registration
pursuant to the exercise of Additional Piggyback Rights;
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(i) subject to subsection 2.2(g), a Demand Registration shall not
be deemed to have been effected until the applicable Demand
Registration Statement shall have become effective and
remained effective (and not subject to any stop order,
injunction, or other order or requirement of the SEC or any
other government agency or court for any reason) for a period
of 180 days; and
(j) in connection with any Demand Registration, the Demanding
Holder shall have the right to designate the managing
underwriter for such registration, provided that such managing
underwriter is reasonably satisfactory to the Company. To the
extent required by applicable law, a qualified independent
underwriter (as defined in Conduct Rule 2720 of the NASD
Manual) shall be retained.
SECTION 3
PIGGYBACK REGISTRATIONS
3.1 After the Registrable Shares have been listed for trading on the NYSE, if,
at any time (other than in connection with a U.S. Initial Public Offering), the
Company proposes or is required to register any Class B Shares or other
securities under the Securities Act (other than pursuant to (i) registrations on
such form or similar form(s) solely for registration of securities in connection
with an employee benefit plan or dividend reinvestment plan or an exchange
offer, merger or consolidation, other business combination or recapitalization
or (ii) a Demand Registration under Section 2) on a registration statement on
Form X-0, Xxxx X-0 or Form S-3 or Form F-1, Form F-2 or Form F-3 (or an
equivalent general registration form then in effect), whether or not for its own
account, the Company shall give prompt written notice of its intention to do so
to the Purchaser and all other Holders. Upon the written request of any Holder,
made within 20 days following the delivery of any such written notice to the
Purchaser and all other Holders (which request shall specify the maximum number
of Registrable Shares intended to be disposed of by such Holder) (a "PIGGYBACK
REQUEST"), the Company shall, subject to Sections 3.2, 5 and 8 hereof, use its
reasonable best efforts to cause all such Registrable Shares to be registered (a
"PIGGYBACK REGISTRATION") under the Securities Act (with the securities which
the Company at the time proposes or is required to register) to permit the sale
or other disposition by such Holder (in accordance with the intended method of
distribution thereof) of such Registrable Shares. There is no limitation on the
number of Piggyback Registrations which the Company is obligated to effect. No
registration effected under this Section 3.1 shall relieve the Company of its
obligations to effect a Demand Registration.
3.2 If, at any time after giving written notice of its intention to register any
Class B Shares or other securities pursuant to Section 3.1 and prior to the
effective date of the 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
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notice of such determination to the Holders and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Shares in connection with such abandoned registration, without
prejudice, however, to the rights of the Holders under Section 2, (ii) in the
case of a determination to delay such registration of its securities, shall be
permitted to delay the registration of such Registrable Shares for the same
period as the delay in registering such other securities, and (iii) the
applicable Holders shall be entitled to continue such registration as a Demand
Registration pursuant to Section 2 following a decision by the Company not to
register.
3.3 Any Holder shall have the right to withdraw its request for inclusion of its
Registrable Shares in any registration statement pursuant to this Section 3 by
giving written notice to the Company of its request to withdraw; provided,
however, that (i) such request must be made in writing prior to the execution of
the underwriting agreement and (ii) such withdrawal shall be irrevocable.
SECTION 4
PARTICIPATION IN U.S. INITIAL PUBLIC OFFERING
4.1 If the Company determines to engage in a U.S. Initial Public Offering, then
the Company shall so notify the Purchaser and all other Holders at least 45 days
prior to the date on which it proposes to file a registration statement in
respect thereof with the SEC. The Holders and Company shall have the same rights
and obligations in connection with any such offering as each would have under
this Agreement in connection with a Piggyback Registration pursuant to Section
3, except that if a reduction in the size of the U.S. Initial Public Offering is
deemed necessary for the reasons set forth in Section 5.2, then the Company
shall include in such offering (in the following priority):
(a) all Class B Shares that the Company proposes to offer;
(b) to the extent that the number of Class B Shares to be offered
by the Company in the U.S. Initial Public Offering is less
than the Section 5.2 Sale Number, the Class B Shares of the
Liberty Entities (if applicable) (it being understood that if
the aggregate number of Class B Shares to be included pursuant
to subsection 4.1(a) and this subsection 4.1(b) exceeds the
Section 5.2 Sale Number, then the number of Class B Shares to
be included pursuant to this subsection 4.1(b) shall be
reduced accordingly, and the Class B Shares to be included
pursuant to this subsection 4.1(b) shall be allocated as such
Liberty Entities may agree or, absent such an agreement, on a
pro rata basis among all such Liberty Entities, based on the
ratio of (i) the number of Registrable Shares then properly
requested to be included in such secondary offering by each
such Liberty Entity to (ii) the aggregate number of
Registrable Shares then properly requested to be included in
such secondary offering by all such Liberty
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Entities). Notwithstanding the foregoing, upon notice thereof
to the Company, a Liberty Entity may elect to have its Class B
Shares allocated on a pro rata basis with each of the Holders
participating in the U.S. Initial Public Offering in
accordance with subsection 4.1(c); and
(c) to the extent that the number of Class B Shares to be included
pursuant to subsections 4.1(a) and (b) is less than the
Section 5.2 Sale Number, any other Class B Shares of the
Holders (it being understood that if the number of Class B
Shares to be included pursuant to subsections 4.1(a) and (b)
and this subsection 4.1(c) exceeds the Section 5.2 Sale
Number, then the number of Class B Shares to be registered or
qualified on behalf of each Holder participating in the U.S.
Initial Public Offering in accordance with this subsection
4.1(c) shall be reduced accordingly and the Class B Shares to
be included shall be allocated as such Holders may agree or,
absent such an agreement, on a pro rata basis among all such
Holders, based on the ratio of (i) the number of Class B
Shares then properly requested to be included in such
secondary offering by each such Holder to (ii) the aggregate
number of Class B Shares then properly requested to be
included in such secondary offering by all such Holders.
4.2 The parties hereto agree that the rights accorded to the Holders under this
Section 4 are in addition to, and not in derogation of, any other rights
accorded to the Holders under this Agreement.
SECTION 5
ALLOCATION OF SECURITIES
INCLUDED IN REGISTRATION STATEMENTS
5.1 ALLOCATION FOR DEMAND REQUESTS. If a Demand Registration Request involves an
underwritten offering and the manager of such offering (the "MANAGER") advises
the Company in writing that, in its view, the number of securities requested to
be included in such registration by the Holders, or any other persons (including
those Class B Shares requested by the Company or by holders exercising
Additional Piggyback Rights to be included in such registration), exceeds the
largest number (the "SECTION 5.1 SALE NUMBER") that can be sold in an orderly
manner in such offering within a price range acceptable to the Demanding Holder,
the Company shall include in such registration (in the following priority):
(a) to the extent of the Section 5.1 Sale Number, all Registrable
Shares requested by Liberty Entities to be included in the
Demand Registration (it being understood that if the aggregate
number of Class B Shares to be included pursuant to this
subsection 5.1(a) exceeds the Section 5.1 Sale Number, then
the number of such Class B Shares shall be reduced
accordingly, and the Class B Shares to be included shall be
allocated
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as such Liberty Entities may agree, or absent such an
agreement, on a pro rata basis among all such Liberty
Entities, based on the ratio of (i) the number of Registrable
Shares then properly requested to be included in the Demand
Registration by each such Liberty Entity to (ii) the aggregate
number of Registrable Shares then properly requested to be
included in such Demand Registration by all such Liberty
Entities). Notwithstanding the foregoing, upon notice thereof
to the Company, a Liberty Entity may elect to have its Class B
Shares allocated on a pro rata basis with each of the Holders
to be included in the Demand Registration in accordance with
subsection 5.1(b);
(b) to the extent that the number of Registrable Shares to be
included pursuant to subsection 5.1(a) is less than the
Section 5.1 Sale Number, all Registrable Shares requested by
all Holders to be included in the Demand Registration (it
being understood that if the aggregate number of Class B
Shares to be included pursuant to subsection 5.1(a) and this
subsection 5.1(b) exceeds the Section 5.1 Sale Number, then
the number of such Class B Shares to be included pursuant to
this subsection 5.1(b) shall be reduced accordingly, and such
Class B Shares to be included shall be allocated as such
Holders may agree or, absent such an agreement, on a pro rata
basis among all such Holders, based on the ratio of (i) the
number of Registrable Shares then properly requested to be
included in such Demand Registration by each such Holder to
(ii) the aggregate number of Registrable Shares then properly
requested to be included in such Demand Registration by all
such Holders);
(c) to the extent that the aggregate number of Registrable Shares
to be included pursuant to subsections 5.1(a) and (b) is less
than the Section 5.1 Sale Number, all Class B Shares that the
Company proposes to register; and
(d) to the extent that the aggregate number of Class B Shares to
be included pursuant to subsections 5.1(a), (b) and (c) is
less than the Section 5.1 Sale Number, any other Class B
Shares that the holders thereof propose to register pursuant
to the exercise of Additional Piggyback Rights.
If the number of Registrable Shares as to which the Holders have invoked their
Demand Registration right is greater than the Section 5.1 Sale Number, then the
Demanding Holder may elect to withdraw its Demand Registration Request;
provided, however, that (x) such request must be made in writing prior to the
execution of the underwriting agreement, (y) such withdrawal shall be
irrevocable and (z) the Demanding Holder shall not be deemed to have made a
Demand Registration Request for purposes of subsection 2.2(c) or Section 7.2.
5.2 ALLOCATION FOR PIGGYBACK REQUESTS. If any Piggyback Request involves an
underwritten offering and the Manager advises the Company in writing that, in
its view, the
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aggregate number of securities requested to be included in such offering exceeds
the number (the "SECTION 5.2 SALE NUMBER") that can be sold in an orderly manner
in such registration within a price range acceptable to the Company, the Company
shall include in such registration (in the following priority):
(a) all Class B Shares that the Company proposes to register for
its own account;
(b) if the number of Class B Shares being registered pursuant to
subsection 5.2(a) is zero, then all Class B Shares requested
to be included in such Piggyback Registration pursuant to the
exercise of Other Demand Rights;
(c) to the extent that the aggregate number of securities being
included pursuant to subsections 5.2(a) and (b) is less than
the Section 5.2 Sale Number:
(i) all Registrable Shares that are the subject of a
Piggyback Request; and
(ii) if the number of securities to be included pursuant
to clause (i) is not zero, all Class B Shares, if
any, requested to be included in such Piggybank
Registration pursuant to the exercise of Other Demand
Rights;
(it being understood that if adding the number of Class B
Shares proposed to be included pursuant to this subsection
5.2(c) would cause the aggregate number of securities being
included in the Piggybank Registration to exceed the Section
5.2 Sale Number, then the number of Class B Shares to be
included pursuant to this subsection 5.2(c) shall be reduced
accordingly, and allocated on a pro rata basis among all
Persons exercising rights under this clause (c), based on the
ratio of (A) the number of Class B Shares then properly
requested to be included in such Piggyback Registration by
each such Person to (B) the aggregate number of Class B Shares
then properly requested to be included in such Piggyback
Registration by all such Persons); and
(d) to the extent that the aggregate number of securities being
registered pursuant to subsections 5.2(a) through (c) is less
than the Section 5.2 Sale Number, all Class B Shares requested
to be included by any Person pursuant to the exercise of
Additional Piggyback Rights.
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SECTION 6
REGISTRATION PROCEDURES
6.1 If the Company files a Secondary Offering Registration Statement, the
following provisions shall apply:
(a) If and whenever the Company is required by the provisions of
this Agreement to use its reasonable best efforts to effect
any Demand Registration or Piggyback Registration, the
Company, shall, within the time periods specified in Section 2
or 3, as applicable:
(i) prepare and file with the SEC a Secondary Offer
Registration Statement on an appropriate registration
form of the SEC for the disposition of applicable
Registrable Shares in accordance with the intended
method of disposition thereof, which form (i) shall
be selected by the Company and (ii) shall, in the
case of a shelf registration with respect to
Registrable Shares, be available for the sale of the
Registrable Shares by the Electing Holders; such
Secondary Offering 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 reasonable
best efforts to cause such Secondary Offering
Registration Statement to become effective and remain
effective for 180 days thereafter in the case of a
Demand Registration (provided, however, that before
filing a Secondary Offering Registration Statement or
any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any
jurisdiction, the Company will, in the case of a
Demand Registration, furnish to counsel for the
Electing Holders and the underwriters, if any, copies
of all such documents proposed to be filed (including
all exhibits thereto), which documents will be
subject to the reasonable review and reasonable
comment of such counsel, and the Company shall not
file any Secondary Offering Registration Statement or
amendment or supplement thereto to which the
Demanding Holder or the underwriters, if any, shall
reasonably object in writing);
(ii) promptly prepare and file with the SEC such
amendments and supplements to such Secondary Offering
Registration Statement used in connection therewith
as may be necessary to keep such Secondary Offering
Registration Statement effective for such period
(which shall not be required to exceed 180 days in
the case of a Demand Registration or a Piggyback
Registration)
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as each Electing Holder shall request and to comply
with the provisions of the Securities Act with
respect to the sale or other disposition of all
Registrable Shares covered by such Secondary Offering
Registration Statement in accordance with the
intended methods of disposition by the seller or
sellers thereof set forth in such registration
statement;
(iii) furnish, without charge (except with respect to
Non-Liberty Demand Registration Requests, in which
circumstances the Demanding Holder shall be
responsible for 50% of the relevant costs), to each
Electing Holder and each underwriter, if any, of the
securities covered by such Secondary Offering
Registration Statement such number of copies of such
registration statement and each amendment and
supplement thereto (in each case including all
exhibits) in conformity with the requirements of the
Securities Act, and other documents, as such seller
and underwriter may reasonably request in order to
facilitate the public sale or other disposition of
the Registrable Shares owned by such Electing Holder
(the Company hereby consenting to the use in
accordance with all applicable laws of each such
Secondary Offering Registration Statement (or
amendment or post-effective amendment thereto) by
each such Electing Holder and the underwriters, if
any, in connection with the offering and sale of the
Registrable Shares covered by such Secondary Offering
Registration Statement or prospectus);
(iv) use its reasonable best efforts to register or
qualify the Registrable Shares covered by such
Secondary Offering Registration Statement under such
other securities or "blue sky" laws of such
jurisdictions as any Electing Holder or any managing
underwriter, if any, shall reasonably request, and do
any and all other acts and things which may be
reasonably necessary or advisable to enable such
sellers or underwriter, if any, to consummate the
disposition of the Registrable Shares in such
jurisdictions, except that in no event shall the
Company be required to qualify to do business as a
foreign corporation in any jurisdiction where it
would not, but for the requirements of this paragraph
6.1(a)(iv), be required to be so qualified, to
subject itself to taxation in any such jurisdiction
or to consent to general service of process in any
such jurisdiction;
(v) promptly notify each Electing Holder and each
managing underwriter, if any: (A) when the
appropriate Secondary Offering Registration Statement
or any pre-effective amendment or post-effective
amendment to such Secondary Offering Registration
Statement has been filed and, with respect to the
registration statement or any post-effective
amendment, when the same has become effective; (B) of
any request by the SEC or state securities authority
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for amendments or supplements to such Secondary
Offering Registration Statement or for additional
information; (C) of the issuance by the SEC of any
stop order suspending the effectiveness of such
Secondary Offer Registration Statement or the
initiation of any proceedings for that purpose; (D)
of the receipt by the Company of any notification
with respect to the suspension of the qualification
of any Registrable Shares for sale under the
securities or blue sky laws of any jurisdiction or
the initiation of any proceeding for such purpose;
(E) of the existence of any fact of which the Company
becomes aware which results in the Secondary Offering
Registration Statement or any document incorporated
therein by reference 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 statement therein not misleading; and (F) if
at any time the representations and warranties
contemplated by any underwriting agreement,
securities sale agreement, or other similar
agreement, relating to the offering shall cease to be
true and correct in all material respects; and, if
the notification relates to an event described in
clause (E), the Company shall, if required by
applicable law, promptly prepare and furnish to each
Electing Holder and each underwriter, if any, a
reasonable number of copies of a Secondary Offering
Registration Statement supplemented or amended so
that, as thereafter delivered to the purchasers of
such Registrable Shares, such registration statement
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;
(vi) comply with all applicable rules and regulations of
the SEC, and make generally available to its security
holders (within the meaning of Rule 158 under the
Securities Act), as soon as reasonably practicable
after the effective date of the Secondary Offering
Registration Statement (and in any event within 16
months thereafter), an earnings statement (which need
not be audited) covering the period of at least
twelve consecutive months beginning with the first
day of the Company's first calendar quarter after the
effective date of the Secondary Offering Registration
Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder;
(vii) (A) cause all such Registrable Shares covered by such
Secondary Offering Registration Statement to be
listed on the principal United States securities
exchange on which similar securities issued by the
Company are then listed (if any), if the listing of
such Registrable Shares is then permitted under the
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rules of such exchange, or (B) if no similar
securities are then so listed, to either cause all
such Registrable Shares to be listed on a United
States national securities exchange or to secure
designation of all such Registrable Shares as a
NASDAQ "national market system security" within the
meaning of Rule 11 Aa2-1 of the Exchange Act, or,
failing that, secure NASDAQ authorization for such
shares and, without limiting the generality of the
foregoing, take all actions that may be required by
the Company as the issuer of such Registrable Shares
in order to facilitate the managing underwriter's
arranging for the registration of at least two market
makers as such with respect to such Registrable
Shares with the NASD;
(viii) provide and cause to be maintained a transfer agent
and registrar for all such Registrable Shares covered
by such Secondary Offering Registration Statement not
later than the effective date of such Secondary
Offering Registration Statement;
(ix) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such
other actions as the Holders of a majority of the
Registrable Shares participating in such offering
shall reasonably request in order to expedite or
facilitate the disposition of such Registrable
Shares; the Electing Holders shall be a party to such
underwriting agreement and may, at their option,
require that the Company make to and for the Electing
Holders' benefit the representations, warranties and
covenants of the Company which are being made to and
for the benefit of such underwriters and which are of
the type customarily provided to institutional
investors in secondary offerings;
(x) use its reasonable best efforts to obtain an opinion
from the Company's counsel and a "cold comfort"
letter from the Company's auditors 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 underwriter, if any, and to the
Major Holder participating in such offering, and
furnish to each Electing Holder and to each
underwriter, if any, a copy of such opinion and
letter addressed to such Electing Holder or
underwriter;
(xi) deliver promptly to each Electing Holder and each
underwriter, if any, copies of all correspondence
between the SEC and the Company, its counsel or
auditors and all memoranda relating to discussions
with the SEC or its staff with respect to the
Secondary Offering Registration Statement, other than
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those portions of any such correspondence and
memoranda which contain information subject to
attorney-client privilege with respect to the
Company, and, upon receipt of such confidentiality
agreements as the Company may reasonably request,
make reasonably available for inspection by any
Electing Holder, by any underwriter, if any,
participating in any disposition to be effected
pursuant to such Secondary Offering Registration
Statement and by any attorney, accountant or other
agent retained by such Electing Holder or any such
underwriter, all pertinent financial and other
records, pertinent corporate documents and properties
of the Company, and cause all of the Company's
officers, directors and employees to supply all
information requested by any such seller,
underwriter, attorney, accountant or agent, acting
reasonably, in connection with such Secondary
Offering Registration Statement;
(xii) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness
of the Secondary Offering Registration Statement;
(xiii) provide a CUSIP number for all Registrable Shares of
each class, not later than the effective date of the
Secondary Offering Registration Statement;
(xiv) 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
Shares in any underwritten offering;
(xv) promptly prior to the filing of any document which is
to be incorporated by reference into the Secondary
Offering Registration Statement (after the initial
filing of such Secondary Offering Registration
Statement) provide copies of such document to counsel
for the Electing Holders and to each managing
underwriter, if any, and make the Company's
representatives reasonably available for discussion
of such document and make such changes in such
document concerning information that pertains
specifically to the selling holders prior to the
filing thereof as counsel for such selling holders or
underwriters may reasonably request;
(xvi) furnish to each Electing Holder and the managing
underwriter, without charge (except with respect to
Non-Liberty Demand Registration Requests, in which
circumstances the Demanding Holder shall be
responsible for 50% of the relevant costs), at least
one signed copy of the Secondary Offering
Registration Statement and any post-effective
amendments thereto, including
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financial statements and schedules, all documents
incorporated therein by reference and all exhibits
(including those incorporated by reference);
(xvii) cooperate with the Electing Holders and the managing
underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing
any restrictive legends representing the Registrable
shares to be sold, and cause such Registrable shares
to be issued in such denominations and registered in
such names in accordance with the underwriting
agreement prior to any sale of Registrable Shares to
the underwriters or, if not an underwritten offering,
in accordance with the instructions of the selling
Electing Holders at least three business days prior
to any sale of Registrable Shares and instruct any
transfer agent and registrar of Registrable Shares to
release any stop transfer orders in respect thereof;
and
(xviii) take all such other commercially reasonable actions
as are necessary or advisable in order to expedite or
facilitate the disposition of such Registrable
Shares.
(b) The Company may require as a condition precedent to the Company's
obligations under this Section 6 that the Electing Holder as to which any
registration is being effected furnish to the Company such information regarding
such Electing Holder and the distribution of such securities as the Company may
from time to time reasonably request, provided that such information shall be
used only in connection with such registration.
(c) Each Electing Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in subparagraph
6.1(a)(v)(E), it will discontinue its disposition of Registrable Shares pursuant
to the Secondary Offering Registration Statement covering such Registrable
Shares until it receives the copies of the supplemented or amended Secondary
Offer Registration Statement contemplated by subparagraph 6.1(a)(v)(F) and, if
so directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Secondary Offering Registration Statement covering such
Registrable Shares that was in effect at the time of receipt of such notice. If
the Company shall give any such notice, the applicable period mentioned in
subparagraph 6.1(a)(i) shall be extended by the number of days during such
period from and including the date of the giving of such notice to and including
the date when each seller of any Registrable Shares covered by such Secondary
Offering Registration Statement shall have received the copies of the
supplemented or amended prospectus contemplated by subparagraph 6.1(a)(v).
(d) If any Secondary Offering Registration Statement or comparable
statement under "blue sky" laws refers to any Electing Holder by name or
otherwise as the holder of any securities of the Company, then such Electing
Holder shall have the right to require (i) the insertion therein of
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language, in form and substance satisfactory to such Electing Holder and the
Company, to the effect that the holding by such Electing Holder of such
securities is not to be construed as a recommendation by such Electing Holder of
the investment quality of the Company's securities covered thereby and that such
holding does not imply that such Electing Holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such Electing 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 Electing Holder.
SECTION 7
REGISTRATION EXPENSES
7.1 "EXPENSES" shall mean any and all fees and expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation: (i) SEC, stock exchange or NASD registration and filing fees and all
listing fees, (ii) fees and expenses of compliance with state securities or
"blue sky" laws and in connection with the preparation of a "blue sky" survey,
including without limitation, reasonable fees and expenses of blue sky counsel,
(iii) printing and copying expenses, (iv) messenger and delivery expenses, (v)
expenses incurred in connection with any road show, (vi) fees and disbursements
of counsel for the Company, (vii) with respect to each registration, the
reasonable fees and disbursements of one counsel for the Electing Holder(s)
(selected by (x) the Demanding Holder, in the case of a registration pursuant to
Section 2 and (y) the Major Holder, in the case of a registration pursuant to
Section 3), (viii) fees and disbursements of all independent public accountants
(including the expenses of any audit and/or "cold comfort" letter) and fees and
expenses of other persons, including special experts, retained by the Company,
(ix) fees and expenses payable to any underwriter, and (x) any other fees and
disbursements of underwriters, if any, customarily paid by issuers or sellers of
securities.
7.2 The Company shall (i) pay all Expenses with respect to any Piggyback
Registration and with respect to three Demand Registrations requested by
Demanding Holders (other than Non-Liberty Demand Registration Requests) and (ii)
pay 50% of all Expenses with respect to any Demand Registration made by the
Company pursuant to a Non-Liberty Demand Registration Request, and the Demanding
Holder making such Non-Liberty Demand Registration Request shall pay the
remaining 50% of such Expenses.
7.3 Notwithstanding the foregoing, (x) the provisions of this Section 7 shall be
deemed amended to the extent necessary to cause these expense provisions to
comply with "blue sky" laws of each state in which the offering is made, (y) in
connection with any registration hereunder, each Electing Holder shall pay all
underwriting discounts and commissions and any transfer taxes, if any,
attributable to the sale of its Registrable Shares, pro rata with respect to
payments of discounts and commissions in accordance with the number of shares
sold in the offering by such Electing Holder,
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and (z) the Company shall, in the case of all registrations under this
Agreement, be responsible for all of its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties).
SECTION 8
CERTAIN LIMITATIONS ON REGISTRATION RIGHTS
8.1 In the case of any Demand Registration or Piggyback Registration, if the
Company has decided to enter into an underwriting agreement in connection
therewith, all securities to be included in such registration shall be subject
to such underwriting agreement and no Person may participate in such
registration unless such Person agrees to sell such Person's securities on the
basis provided therein and completes and executes all reasonable questionnaires
and other documents (including custody agreements and powers of attorney) which
must be executed in connection therewith, and provides such other information to
the Company or the underwriter as may be necessary to register such Person's
securities.
SECTION 9
LIMITATIONS ON SALE OR DISTRIBUTION OF OTHER SECURITIES
9.1 Each Holder agrees that, if requested in writing by the Company or the
managing underwriter, if any, of any registration effected pursuant to this
Agreement, such Holder, if it then holds 5% or more of the then-outstanding
Class B Shares, will not effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act, of any Class B Shares or of
any other equity security of the Company or of any security convertible into or
exchangeable or exercisable for any equity security of the Company (other than
as part of such underwritten public offering) (such restriction on such sale or
distribution being referred to herein as a "LOCK-UP") during the time period (a
"LOCK-UP PERIOD") reasonably requested by the managing underwriter, not to
exceed 90 days, or in the case of a U.S. Initial Public Offering, 120 days (and
the Company hereby also so agrees (except that the Company may effect any sale
or distribution of any such securities pursuant to a registration on Form S-4 or
F-4 (if reasonably acceptable to the managing underwriter) or Form S-8 or F-8,
or F-10 (provided that, in the case of a registration statement on Form F-10,
the registration relates to an exchange offer or a business combination), or any
successor or similar form which is then in effect) and agrees to cause each
director and executive officer of the Company and each holder of any equity
security or of any security convertible into or exchangeable or exercisable for
any equity security of the Company purchased from the Company at any time other
than in a public offering so to agree).
9.2 If the Company shall previously have received a request for registration
pursuant to this Agreement or any Other Demand Rights, and if such previous
registration shall not have been
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withdrawn or abandoned, then the Company shall not effect, and shall not be
obliged to effect, any registration of any of its securities under the
Securities Act (other than a registration on Form S-4 or Form S-8 or Form F-4 or
F-8, respectively, or F-10 (provided that, in the case of a registration
statement on Form F-10, the registration relates to an exchange offer or a
business combination), or any successor or similar form which is then in
effect), whether or not for sale for its own account, until a period of 30 days,
or in the case of a U.S. Initial Public Offering, 30 days shall have elapsed
from the effective date of such previous registration; and the Company shall so
provide in any registration rights agreements hereafter entered into with
respect to any of its securities.
SECTION 10
NO REQUIRED SALE
10.1 Nothing in this Agreement shall be deemed to create an independent
obligation on the part of any Holder to sell any Registrable Shares pursuant to
any effective registration statement.
SECTION 11
REPRESENTATIONS AND WARRANTIES
11.1 The Company represents and warrants to, and agrees with, each Holder that:
(a) each registration statement covering Registrable Shares and
any amendments or supplements to any such registration
statement, when it becomes effective or is filed with the SEC,
as the case may be, and, in the case of an underwritten
offering of Registrable Shares, at the time of closing under
the underwriting agreement relating thereto, will conform in
all material respects to the applicable requirements of the
Securities Act and the rules and regulations of the SEC
thereunder and will not contain an untrue statement of
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished
in writing to the Company by an Electing Holder, expressly for
use therein; and
(b) any documents incorporated by reference in any registration
statement referred to in subsection 11.1(a) hereof, when they
become or became effective or are or were filed with the SEC,
as the case may be, will conform or conformed in all material
respects to the requirements of the Securities Act or the
Exchange Act as applicable, and none of such documents will
contain or contained an untrue statement of a material fact
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or will omit or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading.
SECTION 12
INDEMNIFICATION
12.1 In the event of any registration of any securities of the Company under the
Securities Act pursuant to this Agreement, the Company will, and hereby does,
indemnify and hold harmless, to the fullest extent permitted by law, each
Holder, its directors, officers, fiduciaries, employees and stockholders or
general and limited partners (and the directors, officers, employees and
stockholders thereof), each Person who participates as an underwriter, if any,
in the offering or sale of such securities, each officer, director, employee,
stockholder or partner of such underwriter, and each other Person (a
"CONTROLLING PERSON"), if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, against any and all losses, claims,
damages or liabilities, joint or several, actions or proceedings (whether
commenced or threatened) and expenses (including reasonable fees of counsel and
any amounts paid in any settlement effected with the Company's consent, which
consent shall not be unreasonably withheld or delayed) to which each such
indemnified party may become subject under the Securities Act or otherwise in
respect thereof (collectively, "CLAIMS"), insofar as such Claims arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or amendment thereof or supplement
thereto under which such securities were registered under the Securities Act or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact or omission
or alleged omission of a material fact made in such registration statement or
amendment thereof or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such indemnified
party specifically for use therein. Such indemnity and reimbursement of expenses
shall remain in full 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 seller.
12.2 Each Holder and any underwriter shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
Section 12.1) to the fullest extent permitted by law, the Company, its officers,
directors, employees and shareholders with respect to any untrue statement or
alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, any Secondary Offering Registration
Statement or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or its
representatives by or on behalf of such Holder or such underwriter specifically
for
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use therein, and reimburse such indemnified party for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such Claim as such expenses are incurred; provided, however, that the aggregate
amount which any such Holder shall be required to pay pursuant to this Section
12.2 and Sections 12.3 and 12.4 shall in no case be greater than the amount of
the net proceeds received by such person upon the sale of the Registrable Shares
pursuant to the registration statement giving rise to such claim. Such indemnity
and reimbursement of expenses shall remain in full 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.
12.3 Indemnification similar to that specified in Sections 12.1 and 12.2 (with
appropriate modifications) shall be given by the Company, each seller of
Registrable Shares and any underwriter with respect to any required registration
or other qualification of securities under any state securities and "blue sky"
laws.
12.4 Any person entitled to indemnification under this Agreement shall notify
promptly the indemnifying party in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 12, but the failure of any indemnified party to provide
such notice shall not relieve the indemnifying party of its obligations under
the preceding paragraphs of this Section 12, except to the extent the
indemnifying party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Agreement. In case any action or proceeding is brought
against an indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, unless in the reasonable opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defence
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party that it so chooses, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defence thereof other
than reasonable costs of investigation; provided, however, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so; or
(ii) if such indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defences available to such
indemnified party which are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defence as
set forth above (but with no more than one firm of counsel for all indemnified
parties in each jurisdiction, except to the extent any indemnified party or
parties reasonably shall have
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concluded that there may be legal defences available to such party or parties
which are not available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, 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 (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) 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.
12.5 If for any reason the foregoing indemnity is unavailable or is insufficient
to hold harmless an indemnified party under Sections 12.1, 12.2 or 12.3, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of any 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, with respect to such offering of
securities. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. If, however, the allocation provided
in the second preceding sentence 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 contributions
pursuant to this Section 12.5 were to be determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 12.5. The
amount paid or payable in respect of any Claim shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding anything in this
Section 12.5 to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 12.5 to contribute any amount in
excess of the net proceeds received by such indemnifying party from the sale of
Registrable Shares in the offering to which the losses, claims, damages or
liabilities of the indemnified parties relate, less the amount of any
indemnification payment made by such indemnifying party pursuant to Sections
12.2 and 12.3.
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12.6 The indemnity agreements contained herein shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract and shall remain operative and in full force and
effect regardless of any investigation made or omitted by or on behalf of any
indemnified party and shall survive the transfer of the Registrable Shares by
any such party.
12.7 The indemnification and contribution required by this Section 12 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defence, as and when bills are received or expense, loss,
damage or liability is incurred.
SECTION 13
UNDERWRITTEN OFFERINGS
13.1 DEMAND REQUEST UNDERWRITTEN OFFERINGS. If requested by the underwriters for
any underwritten offering by the Holders pursuant to a registration requested
under Section 2, the Company shall enter into a customary underwriting agreement
with the underwriters. Such underwriting agreement shall be satisfactory in form
and substance to the Demanding Holder, acting reasonably, and shall contain such
representations and warranties by, and such other agreements on the part of, the
Company and such other terms as are generally prevailing in agreements of that
type, including, without limitation, indemnities and contribution agreements.
Any Holder participating in the offering shall be a party to such underwriting
agreement and may, at its 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 Holder and any other Holder participating therein 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 Holder
and any other Holder participating therein; 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. Such underwriting agreement shall also contain such
representations and warranties by the participating Holders as are customary in
agreements of that type. The form of underwriting agreement shall be subject to
the approval of the Company, acting reasonably.
13.2 PIGGYBACK UNDERWRITTEN OFFERINGS. In the case of a Secondary Offering
Registration Statement pursuant to Section 3, if the Company shall have
determined to enter into an underwriting agreement in connection therewith, all
of the Electing Holders' Registrable Shares to be included in such registration
shall be subject to such underwriting agreement. Any Electing Holder may, at its
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 Holder and any
other Holder participating therein and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
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agreement be conditions precedent to the obligations of such Holder and any
other Holder participating therein. Such underwriting agreement shall also
contain such representations and warranties by the Electing Holders as are
customary in agreements of that type. The form of underwriting agreement shall
be subject to the approval of the Company, acting reasonably.
SECTION 14
RULE 144 AND RULE 144A
14.1 The Company covenants to the Holders that the Company shall (i) timely file
the reports required to be filed by it under the Exchange Act or the Securities
Act (including the reports under Section 13 and 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144 adopted by the SEC under the
Securities Act) and the rules and regulations adopted by the SEC thereunder,
(ii) make available to each Holder of a "restricted security" (within the
meaning of Rule 144(a)(3)) the information required by Rule 144A(d)(4), and
(iii) take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Shares without registration under the Securities Act within the limitations of
the exemptions provided by Rule 144 or Rule 144A under the Securities Act, as
such Rules may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the SEC; provided that nothing in this Section
14 shall require the Company to file reports under the Exchange Act prior to the
time it shall have filed a registration statement under the Securities Act. Upon
the request of any Holder in connection with such Holder's sale pursuant to Rule
144 or Rule 144A, the Company shall deliver to such Holder a written statement
as to whether it has complied with the requirements of Rule 144 or Rule 144A, as
the case may be. The Company will comply with the foregoing provisions, mutatis
mutandis, with respect to each Canadian province in which it is a reporting
issuer.
SECTION 15
NOMINEES FOR BENEFICIAL OWNERS
15.1 If Registrable Shares are held by a Holder as a nominee for the beneficial
owner thereof, the beneficial owner thereof may, at its option, be treated as
the Holder for purposes of any request or other action pursuant to this
Agreement; provided that the Company shall have received assurances reasonably
satisfactory to it of such beneficial ownership.
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SECTION 16
MISCELLANEOUS
16.1 NO INCONSISTENT AGREEMENTS. The Company represents and warrants to the
Purchaser that the rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with any other agreements to which the
Company is a party or by which it is bound. Without the prior written consent of
the Purchaser, the Company will not, on or after the date of this Agreement,
enter into any agreement with respect to Registrable Shares or any other
securities which would be inconsistent with the rights granted in this Agreement
or would otherwise conflict with the provisions hereof, other than any Lock-up
agreement with the underwriters in connection with any registered offering
effected hereunder.
16.2 SPECIFIC PERFORMANCE. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations
hereunder and that the Holders may be irreparably harmed by any such failure,
and accordingly agree that the Holders, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of the Company under this Agreement in accordance
with the terms and conditions of this Agreement, in any court of the United
States or any State thereof having jurisdiction.
16.3 NOTICES. Except as otherwise provided in this Agreement, all notices,
requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in person
or by telecopy, nationally recognized overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such 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:
(a) if to the Company, to:
Corus Entertainment Inc.
00xx Xxxxx
XXX Xxxxx, Xxx-Xxxxxxxxxx Tower
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Telecopy: (000) 000-0000
Attention: President and Chief Executive Officer
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with a copy to:
Xxxxxx, Xxxx & Xxxx
X.X. Xxx 00, Xxxxx 0000
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX X0X 0X0
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
(b) if to the Purchaser, to:
Liberty CJR, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000 X.X.X.
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
with a copy to:
Xxxxxxx & Xxxxxx L.L.C.
0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000 X.X.X.
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxx
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
16.4 PARTIES IN INTEREST. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, the respective
successors, personal representatives and assigns of the parties hereto, whether
so expressed or not. The Company acknowledges and agrees that a Holder may
transfer any or all of its Registrable Securities to any Person (a
"TRANSFEREE"); provided, however, that if any Person shall acquire Registrable
Shares from the a Holder in any manner, whether by operation of law, pursuant to
this Agreement or otherwise, such Transferee shall promptly notify the Company
and such Registrable Shares shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Shares such Person
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shall 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. Any such successor or Transferee shall agree in writing to acquire
and hold the Registrable Shares acquired from a Holder subject to all of the
terms hereof. If a Holder shall acquire additional Registrable Shares, such
Registrable Shares shall be subject to all of the terms, and entitled to all the
benefits, of this Agreement.
16.5 SURVIVAL. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of the Purchaser, any
Holder, any director, officer or partner of the Purchaser or any Holder, any
agent or underwriter or any director, officer or partner thereof, or any
Controlling Person of any of the foregoing, and shall survive delivery of and
payment for the Class B Shares pursuant to the Purchase Agreement.
16.6 GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware without giving effect to
the conflicts of law principles thereof.
16.7 WAIVER OF JURY TRIAL. The issuer hereby waives any right it may have to a
trial by jury in respect of any action, proceeding or litigation directly or
indirectly arising out of, under or in connection with, this Agreement.
16.8 SUBMISSION TO JURISDICTION. If any action, proceeding or litigation shall
be brought by the Purchaser or any Holder in order to enforce any right or
remedy under this Agreement, the Company hereby consents and will submit to the
jurisdiction of any state or federal court of competent subject matter
jurisdiction in the State of Delaware. The Company hereby irrevocably waives any
objection, including, but not limited to, any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any such action, proceeding or litigation in such
jurisdiction.
16.9 HEADINGS. The descriptive headings of the several sections and paragraphs
of this Agreement are inserted for convenience only, do not constitute a part of
this Agreement and shall not affect in any way the meaning or interpretation of
this Agreement. All section references are to this Agreement unless otherwise
expressly provided.
16.10 ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understanding between the parties with
respect to its subject matter. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought.
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16.11 INSPECTION. For so long as this Agreement shall be in effect, this
Agreement and a complete list of the names and addresses of all Holders of
Registrable Shares and the addresses of such Holders shall be made available for
inspection and copying on any business day to the Purchaser for any proper
purpose (which shall include any purpose related to its rights under this
Agreement) at the offices of the Company at the address thereof set forth in
Section 16.3 above.
16.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
16.13 ENFORCEABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16.14 REQUIRED ACTION. 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.
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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date set forth above.
CORUS ENTERTAINMENT INC.
By /s/ XXX XXXXXX
-------------------------------------
Name: Xxx Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
LIBERTY CJR, INC.
By /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
