Exhibit 4.2
XXXXXXXXXXX.XXX INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July 30, 2001 (this
"Agreement"), among Landmark Ventures VII, LLC and any affiliates or transferee
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thereof ("Landmark"), the investors listed on Schedule I hereto (the "Current
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Investors", and, together with Landmark, the "Investors") and xxxxxxxxxxx.xxx
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inc., a Michigan corporation (the "Company").
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R E C I T A L S
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WHEREAS, the Current Investors own shares of Series C Convertible
Preferred Stock, with no par value per share, of the Company (the "Series C
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Preferred Stock"), and/or shares of Common Stock, with no par value per share,
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of the Company (the "Common Stock"); and
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WHEREAS, Landmark has, pursuant to the terms of the Securities
Purchase Agreement, dated as of July 30, 2001, between Landmark and the Company
(the "Purchase Agreement"), agreed to purchase shares of Series B Convertible
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Preferred Stock, with no par value per share, of the Company (the "Series B
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Preferred Stock" and, together with the Series C Preferred Stock, the "Preferred
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Stock"), warrants to purchase Common Stock (the "Warrants") and a Senior Secured
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Note of the Company (the "Note"); and
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WHEREAS, the shares of Preferred Stock and the Warrants purchased by
Landmark are convertible into shares of Common Stock; and
WHEREAS, the Current Investors have previously been granted certain
registration rights under that certain Shareholders Agreement, dated June 1,
1998 between the Company and the Holders as defined and listed therein (the
Current Investors that are parties to such Shareholders Agreement are
hereinafter collectively referred to as the "1998 Holders", and are listed on
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Schedule II hereto), and the Registration Rights Agreement, dated as of March 1,
2001 by and among the Company and the purchasers of its 8% senior subordinated
convertible promissory notes (the Current Investors that are parties to such
Registration Rights Agreement are hereinafter collectively referred to as the
"2001 Holders", and are listed on Schedule III hereto), and
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WHEREAS, the Company has agreed, as a condition precedent to
Landmark's obligations under the Purchase Agreement, to grant the Investors
certain registration rights; and
WHEREAS, the Company and the Investors desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meaning set forth below. Capitalized terms used but not defined herein shall
have the meaning set forth in the Purchase Agreement.
Exchange Act: shall mean the Securities Exchange Act of 1934, as
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amended;
Holder: shall mean any holder of Registrable Securities;
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Initiating Holder: shall mean Landmark and any of its successors or
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assigns who in the aggregate are Holders of more than 15% of the then
outstanding Registrable Securities and the 2001 Holders subject to the
restrictions set forth in Section 2(a)(3).
Person: shall mean an individual, partnership, joint-stock company,
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corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
Register, Registered and Registration: shall mean a registration
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effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) shares of Common Stock
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issuable upon conversion of the Preferred Stock or exercise of the Warrants, (B)
any additional shares of Common Stock acquired or held as of the date hereof by
the Investors, (C) with respect to Landmark, any additional shares of Common
Stock acquired after the date hereof, and (D) any stock of the Company issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Preferred Stock, the Warrants or Common Stock
referred to in clause (A) or (B). As to any particular Registrable Securities,
such securities will cease to be Registrable Securities on the earliest of the
following dates: (a) the date such securities have been sold to the public
pursuant to an offering registered under the Securities Act, or (b) the date
such securities have been sold to the public in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act;
Registration Expenses: shall mean all expenses incurred by the
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Company in compliance with Section 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $25,000 (provided that if such fees
and expenses of the Holders' counsel are incurred by the Company in connection
with a registration pursuant to Section 2(b) or 2(c), such fees and expenses
shall not exceed $15,000), blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company);
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SEC: shall mean the Securities and Exchange Commission, or any
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successor commission or agency having similar powers;
Security, Securities: shall have the meaning set forth in Section
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2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended, and
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the rules and regulations promulgated thereunder; and
Selling Expenses: shall mean all underwriting discounts and selling
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commissions applicable to the sale of Registrable Securities, all transfer taxes
relating to the sale or disposition of the Registrable Securities and all fees
and disbursements of counsel for each of the Holders other than fees and
expenses of one counsel for all the Holders in an amount not to exceed $25,000
(provided that if such fees and expenses of the Holders' counsel are incurred by
the Company in connection with a registration pursuant to Section 2(b) or 2(c),
such fees and expenses shall not exceed $15,000).
SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
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(i) Request for Registration. If the Company shall receive from an
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Initiating Holder, at any time, a written request that the Company effect
any registration with respect to all or a part of the Registrable
Securities, the Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations issued under
the Securities Act) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
received by the Company within 10 business days after written notice
from the Company is given under Section 2(a)(i)(1) above except as set
forth in Section 2(a)(ii) below; provided that the Company shall not
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be obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2(a):
(A) In any particular jurisdiction (x) in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in
such jurisdiction and except as
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may be required by the Securities Act or applicable rules or
regulations thereunder, or (y) where expressions of investment
interest are not sufficient in such jurisdiction to reasonably
justify the registration or qualification in such jurisdiction;
(B) After the Company has effected five (5) such
registrations pursuant to this Section 2(a) and such
registrations have been declared or ordered effective and the
sales of such Registrable Securities shall have closed;
(C) If the Registrable Securities requested by all Holders
to be registered pursuant to such request have an anticipated
aggregate public offering price (before any underwriting
discounts and commissions) of less than $5,000,000;
(D) If the Company shall furnish to the Initiating Holder a
certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors it would be
seriously detrimental to the Company or its stockholders for a
registration statement to be filed in the near future, in which
case the Company's obligation to use its best efforts to comply
with this Section 2 shall be deferred for a period not to exceed
ninety (90) days from the date of receipt of written request from
the Initiating Holder; provided, however, that the Company shall
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not exercise such right more than once in any 360 day period.
(3) Notwithstanding anything to the contrary set forth herein,
Landmark may initiate a total of three (3) requested registrations as an
Initiating Holder and the 2001 Holders may initiate a total of one (1)
requested registration under this Section 2(a). The 2001 Holders may only
initiate such requested registration as an Initiating Holder under the
following conditions:
(A) The 2001 Holders (or their permitted transferees) shall
have requested such registration prior to March 1, 2005;
(B) Such request constitutes a request by the holder or
holders of at least 75% of Registrable Securities held by the 2001 Holders
(or their permitted transferees); and
(C) Landmark shall have consented in writing to such
requested registration by the 2001 Holders (or their permitted
transferees); provided, however, that such written consent from Landmark
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shall not be required if either (a) Landmark does not own any Registrable
Securities and the Company has no outstanding indebtedness of any kind to
Landmark, or (b) each of the conditions under Section 2(l) have been
satisfied.
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If any of the other Holders request such inclusion, the registration
statement filed pursuant to the request of the Initiating Holder may,
subject to the provisions of Section 2(a)(ii) below, include Registrable
Securities held by such Holders. In the event any Initiating Holder
requests a registration pursuant to this Section 2(a) in connection with a
distribution of Registrable Securities to its affiliates, the registration
shall provide for the resale by such affiliates, if requested by such
Initiating Holder.
(ii) Underwriting.
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(1) If the Initiating Holder intends to distribute the
Registrable Securities covered by its request by means of an
underwriting, it shall so advise the Company as a part of its request
made pursuant to Section 2(a).
(2) If any of the other Holders request such inclusion, the
Initiating Holder shall offer to include the securities of such
Holders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The
Holders whose shares are to be included in such registration and the
Company shall enter into an underwriting agreement (together with such
other documents as may be required by such underwriting agreement) in
customary form with the representative of the underwriter or
underwriters selected for such underwriting by Landmark and reasonably
acceptable to the Company.
(3) Notwithstanding any other provision of this Section 2(a), if
the representative of the underwriter(s) advises the Holders in
writing that marketing factors require a limitation on the number of
shares to be underwritten, the Company shall include in such
registration (A) first, all of the Registrable Securities requested to
be included therein by the Initiating Holder, (B) second, the
Registrable Securities requested to be included therein by Landmark
(or its successors or assigns), and (C) third, the Registrable
Securities requested to be included therein by Holders (including the
2001 Holders) other than Landmark, pro rata among such Holders (based
on the number of shares held by each such Holder) by such minimum
number of shares as is necessary to comply with such request. If a
limitation on the number of shares is still required (even after all
other Holders have been reduced down to zero), then and only then
shall the securities held by Landmark be reduced on a pro rata basis
(based on the number of shares held by Landmark) by such minimum
number of shares as is necessary to comply with such request. No
Registrable Securities or any other securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall
be included in such registration.
(4) If any Holder who has requested inclusion in such
registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Initiating Holder. The
securities so withdrawn shall also be withdrawn from registration.
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(5) If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company and
officers and directors of the Company may include its or their
securities for its or their own account in such registration if the
representative of the underwriter(s) so agrees and if the number of
Registrable Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby
be limited.
(b) Company Registration.
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(i) If the Company shall determine to register any of its equity
securities for its own account, other than a registration relating solely
to employee benefit plans, or a registration relating solely to an SEC Rule
145 transaction, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, then the Company will in
connection with each such registration:
(1) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(2) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made by the Holders within fifteen (15)
days after receipt of the written notice from the Company described in
clause (1) above, except as set forth in Section 2(b)(ii) below. Such
written request may specify all or a part of the Holders' Registrable
Securities. In the event any Holder requests inclusion in a
registration pursuant to this Section 2(b) in connection with a
distribution of Registrable Securities to its affiliates, the
registration shall provide for the resale by such affiliates, if
requested by such Holder.
(ii) Underwriting.
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(1) If the registration of which the Company gives notice is for
a registered public offering involving an underwriting, the Company
shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1).
(2) If any of the Holders request such inclusion, the Company
shall offer to include the securities of such Holders in the
underwriting and may condition such offer on their acceptance of the
further applicable provisions of this Section 2. The Holders whose
shares are to be included in such registration shall (together with
the Company) enter into an underwriting agreement (together
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with such other documents as may be required by such underwriting
agreement) in customary form with the representative of the
underwriter or underwriters selected for underwriting by the Company
and reasonably acceptable to the Holders.
(3) Notwithstanding any other provision of this Section 2(b),
if the representative of the underwriter(s) determines that marketing
factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the allocation
priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting. The Company shall
so advise all Holders requesting registration, and the number of
shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following
manner: (i) first, the Company shall include in such registration the
securities that the Company proposes to sell, (ii) second, the Company
shall include in such registration the Registrable Securities
requested to be included therein by Landmark (or its successors or
assigns), (iii) third, the Company shall include in such registration
the Registrable Securities requested to be included therein by Holders
(including the 2001 Holders) other than Landmark, pro rata among such
Holders (based on the number of shares held by each such Holder), and
(iv) fourth, the Company shall include in such registration the
securities of the Company held by officers and directors of the
Company (other than Registrable Securities) requested to be included
therein by such officers and directors.
(4) If any of the Holders or any officer or director
disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such
registration.
(iii) Notwithstanding the foregoing, the rights of the 1998 Holders
and the 2001 Holders shall be limited in the following manner.
(1) All rights of the 1998 Holders under this Agreement shall
terminate on May 19, 2005.
(3) All rights of the 2001 Holders under this Agreement shall
terminate on March 1, 2005.
(c) Form S-3.
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(i) The Company shall use its best efforts to qualify for
registration on Form S-3 for secondary sales. After the Company has
qualified for the use of Form S-3, each of Landmark, the 1998 Holders and
the 2001 Holders shall have the right to request registrations on Form S-3
(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of
disposition
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of shares by such holders); provided that the Company shall not be
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obligated to effect, or take any action to effect, any such registration
pursuant to this Section 2(c):
(1) Unless Landmark, the 1998 Holders or the 2001 Holders
requesting registration proposes to dispose of shares of Registrable
Securities having an aggregate price to the public (before deduction
of underwriting discounts and expenses of sale) of more than
$2,000,000;
(2) Within 180 days of the effective date of the most recent
registration pursuant to this Section 2(c) in which securities held
by Landmark, the 1998 Holders or the 2001 Holders could have been
included for sale or distribution;
(3) In any particular jurisdiction (x) in which the Company
would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules
or regulations thereunder, or (y) where expressions of investment
interest are not sufficient in such jurisdiction to reasonably
justify the registration or qualification in such jurisdiction;
(4) If the Company shall furnish to Landmark, the 1998 Holders
or the 2001 Holders, as applicable, a certificate signed by the
President of the Company stating that in the good faith judgment of
the Board of Directors it would be seriously detrimental to the
Company or its stockholders for a registration statement to be filed
in the near future, in which case the Company's obligation to use its
best efforts to comply with this Section 2(c) shall be deferred for a
period not to exceed ninety (90) days from the date of receipt of
written request from Landmark, the 1998 Holders or the 2001 Holders;
provided, however, that the Company shall not exercise such right
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more than once in any 360 day-period.
(ii) The Company shall give written notice to all Holders of the
receipt of a request for registration pursuant to this Section 2(c) and
shall provide a reasonable opportunity for other Holders to participate in
the registration, provided that if the registration is for an underwritten
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offering, the terms of Section 2(a)(ii) shall apply to all participants in
such offering. Subject to the foregoing, the Company will use its best
efforts to effect promptly the registration of all shares of Registrable
Securities on Form S-3 to the extent requested by Landmark, the 1998
Holders or the 2001 Holders thereof for purposes of disposition. In the
event Landmark, the 1998 Holders or the 2001 Holders requests a
registration pursuant to this Section 2(c) in connection with a
distribution of Registrable Securities to its affiliates, the registration
shall provide for the resale by such affiliates, if requested by Landmark,
the 1998 Holders or the 2001 Holders, as applicable.
(iii) Notwithstanding anything to the contrary set forth herein,
Landmark shall have the right to request an unlimited number of Form S-3
registrations, the 1998 Holders shall collectively only have the right to
request two (2) Form S-3 registrations under this
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section 2(c) and the 2001 Holders shall collectively only have the right to
request three (3) Form S-3 registrations under this Section 2(c). The 1998
Holders and the 2001 Holders may only initiate such requested registration
if Landmark shall have consented in writing to such requested registration
prior to the Company granting such request for registration; provided,
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however, that such written consent from Landmark shall not be required if
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either (A) Landmark does not own any Registrable Securities and the Company
has no outstanding indebtedness of any kind to Landmark, or (B) each of the
conditions under Section 2(l) have been satisfied.
(d) Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of their shares so registered.
(e) Registration Procedures. In the case of each registration effected
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by the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the Holders (or in the case of a distribution to
the affiliates of such Holder, such affiliates), as applicable, have
completed the distribution described in the registration statement relating
thereto, whichever first occurs; provided, however, that in the case of any
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registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be
extended until all such Registrable Securities are sold, provided that Rule
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415, or any successor rule under the Securities Act, permits an offering on
a continuous or delayed basis, and provided further that applicable rules
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under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment which (y)
includes any prospectus required by Section 10(a) of the Securities Act or
(z) reflects facts or events representing a material or fundamental change
in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (y)
and (z) above to be contained in periodic reports filed pursuant to Section
12 or 15(d) of the Exchange Act in the registration statement;
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time
may reasonably request;
(iii) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to
be delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing; and
(iv) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters (1) an
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opinion, dated as of such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in such
registration, addressed to the underwriters and (2) a letter, dated as of
such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters.
Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in subsection (iii)
above, such Holder shall forthwith discontinue disposition of shares of
Common Stock pursuant to a Registration until receipt of an appropriate
supplement or amendment to the prospectus of such Registration.
(f) Indemnification.
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(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors and partners, and each person controlling
each of the Holders, with respect to each registration which has been
effected pursuant to this Section 2, and each underwriter, if any, and each
person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including
any related registration statement, notification or the like) incident to
any such registration, qualification or compliance, or based on 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, or any violation by the Company of the Securities Act or the
Exchange 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, qualification or compliance, and will reimburse
each of the Holders, each of its officers, directors and partners, and each
person controlling each of the Holders, each such underwriter and each
person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending
any such claim, loss, damage, liability or action; provided, however, that
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the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on (1)
any untrue statement or omission based upon written information furnished
to the Company by the Holders or underwriter and stated to be specifically
for use therein, or (2) a Holder's, or underwriter's, failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such Holder with a
sufficient number of copies of the same.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification
or compliance is being effected, severally and not jointly indemnify the
Company, each of its directors and officers and each underwriter, if any,
of the Company's securities covered by such a
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registration statement, each person who controls the Company or such
underwriter, each other Holder and each of their officers, directors and
partners, and each person controlling such other Holder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out
of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus,
offering circular or other document made by such Holder, or any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company and such other Holders,
directors, officers, partners, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein and then only to the extent that any loss,
damages or other liability of any kind result from such alleged untrue
statement; provided, however, that the obligations of each of the Holders
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hereunder shall be limited to an amount equal to the net proceeds to such
Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 2(f)
(the "Indemnified Party") shall give notice to the party required to
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provide indemnification (the "Indemnifying Party") promptly after such
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Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided
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that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's
expense (unless the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the reasonable fees and
expenses of one counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give
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notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party (whose consent shall not be unreasonably withheld), consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting
therefrom.
(iv) If the indemnification provided for in this Section 2(f) is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss,
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liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or
expense (solely to the extent such amount is required pursuant to Section
2(f)) in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations including without limitation the relative fault of
other Indemnifying Parties. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue (or alleged untrue) statement of a
material fact or the omission (or alleged omission) to state a material
fact relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The foregoing notwithstanding, no Indemnifying Party will be
required to contribute any amount in excess of the public offering price of
all Registrable Securities offered by it pursuant to the registration
statement, and no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be
controlling.
(vi) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage arising out of a statement made in or omitted from a
preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the Commission at the time the registration statement in
question becomes effective or the amended prospectus filed with the
Commission pursuant to Commission Rule 424(b) (the "Final Prospectus"),
----------------
such indemnity or contribution agreement shall not inure to the benefit of
any underwriter or Holder if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required
by the Securities Act.
(g) Information by the Holders.
--------------------------
(i) Each of the Holders holding securities included in any
registration shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to
in this Section 2.
-12-
(ii) In the event that, either immediately prior to or subsequent to
the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its affiliates, such Holder shall so
advise the Company and provide such information as shall be necessary to
permit an amendment to such registration statement to provide information
with respect to such affiliates, as selling securityholders. Promptly
following receipt of such information, the Company shall file an
appropriate amendment to such registration statement reflecting the
information so provided. Any incremental expense to the Company resulting
from such amendment shall be borne by such Holder.
(h) Rule 144 Reporting.
------------------
With a view to making available the benefits of certain rules and
regulations of the SEC which may permit the sale of restricted securities to the
public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144");
--------
(ii) use its best efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities, furnish
to the Holder upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any such securities
without registration.
(i) Assignment. The registration rights set forth in this Section 2 may
----------
be assigned, in whole or in part, to any transferee of Registrable Securities
(who shall be bound by all obligations of this Agreement).
(j) Additional Agreements. Without the written consent of Landmark and
---------------------
the holders of a majority of the Registrable Securities held by the Current
Investors, the Company shall not enter into any additional registration rights
agreements.
(k) Termination of Prior Agreements. The 2001 Holders and the Company
-------------------------------
hereby terminate that certain Registration Rights Agreement, dated as of March
1, 2001, which is hereby declared null and void and of no further force or
effect. The Current Investors hereby irrevocably waive all of their rights under
that certain: (1) Shareholders Agreement, dated June 1, 1998, by and among the
Company and certain of its stockholders; (2) Registration Rights Agreement,
dated May 28, 1999, by and among the Company and the purchasers of its 1999
Unsecured Convertible Subordinated Promissory Notes; and (3) Registration Rights
Agreement, dated
-13-
December 21, 1999, by and among the Company and its Series A Preferred
stockholders.
(l) Requested Registrations Not Subject to Landmark Consent. The rights
-------------------------------------------------------
of the 2001 Holders to request registrations pursuant to Sections 2(a) and 2(c)
and the rights of the 1998 Holders to request registrations pursuant Section
2(c) shall not be subject to the written consent of Landmark if such request for
registration (a "Section 2(l) Request") is made after December 31, 2003, and as
--------------------
of the date of the Section 2(l) Request the following conditions have been
satisfied:
(i) no event of default has occurred and is continuing under that
certain Amended and Restated Loan and Security Agreement, dated as of
July 30, 2001, by and between the Company and Landmark Communications,
Inc. (the "Loan Agreement");
---------------
(ii) the Company has paid all accrued dividends on the Company's
Series B Preferred Stock and issued all PIK Warrants (as defined in the
Loan Agreement) required under the Loan Agreement;
(iii) for each of the past four (4) fiscal quarters immediately
preceding such Section 2(l) Request, the Company has had positive net
earnings of at least $500,000 and positive earnings before interest, taxes,
depreciation and amortization ("EBITDA") of at least $1,000,000, and each
------
such determination of net earnings and EBITDA has been calculated according
to generally accepted accounting principles;
(iv) the Company has positive Working Capital (as that term is
defined in the Loan Agreement) of at least $3,000,000;
(v) the applicable 1998 or 2001 Holder making a Section 2(l)
Request provides the Company with a written letter addressed to the Company
by a nationally recognized investment banking firm which confirms that, as
of the date of such request for registration, the current market conditions
and financial condition of the Company are satisfactory for granting such
Section 2(l) Request taking into account solely the number of shares to be
issued thereunder;
(vi) the Company is listed on a nationally recognized stock exchange
or is quoted on the automated quotation system of a national securities
association; and
(vii) the Company has not granted a Section 2(l) Request from a 2001
Holder or 1998 Holder without the written consent of Landmark in the twelve
(12) months immediately preceding such Section 2(l) Request.
SECTION 3. MISCELLANEOUS
-14-
(a) Directly or Indirectly. Where any provision in this Agreement refers
----------------------
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
-------
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or
by registered or certified mail, postage prepaid:
(1) if to the Company, to 000 X. Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: CEO (facsimile: (000) 000-0000), or at such
other address as it may have furnished in writing to the Holders, with
a copy to Jaffe, Raitt, Heuer & Xxxxx, Xxx Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000 (facsimile: (000) 000-0000), Attention:
Xxxxx Sugar.
(2) if to Landmark, at Landmark Communications, Inc., 000 X.
Xxxxxxxxxx Xxxxxx Xxxxxxx, XX 00000, Facsimile: (000) 000-0000,
Attention: Xxx X. Xxxxxxxx III, Executive Vice President and General
Counsel, or at such other address or facsimile number as may have been
furnished the Company in writing, with copies to Xxxxxxx and Savage,
1800 Bank of America Center, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000-0000 (facsimile (757 628-5566), Attention Xxxxxx Xxxxxxx, Esq.
and Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
(facsimile: (000) 000-0000), Attention: Xxxxxxx X. Xxxxx, Xx.
(3) if to the Current Investors, at the address or facsimile
number listed on Schedule II hereto, or at such other address or
facsimile number as may have been furnished the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing; and
if mailed by registered or certified mail, on the third business day after
the date of such mailing.
(e) Reproduction of Documents. This Agreement and all documents relating
-------------------------
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the parties by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and the parties may destroy any
-15-
original document so reproduced. The parties hereto agree and stipulate
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by
the parties in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto and supersedes
all prior understanding among such parties. This Agreement may be amended,
and the observance of any term of this Agreement may be waived, with (and
only with) the written consent of the Company, Landmark and the Holders
holding a majority of the then outstanding Registrable Securities held by
the Current Investors.
(h) Severability. In the event that any part or parts of this
------------
Agreement shall be held illegal or unenforceable by any court or
administrative body of competent jurisdiction, such determination shall not
affect the remaining provisions of this Agreement which shall remain in
full force and effect.
(i) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
-16-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
XXXXXXXXXXX.XXX INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: President & CEO
LANDMARK VENTURES VII, LLC
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: VP/Sec/Treasurer
LEND LEASE INTERNATIONAL PTY.
LIMITED [ACN# 000489109]
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Power of Attorney
[Registration Rights Agreement]
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
XXXXXX X. XXXXXX REVOCABLE LIVING
TRUST DATED 3/3/98
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Trustee
XXXXXX X. XXXXXX L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: member
XXXXXXX XXXX
/s/ Xxxxxxx Xxxx
-----------------------------------------
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
XXXXXXX X. XXXXX REVOCABLE LIVING
TRUST DATED 3/21/90
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
[Registration Rights Agreement]
XXXXXXX XXXXX -- CHARITABLE
REMAINDER TRUST
By: /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: XXXXXXX X. XXXXX
Title:
XXXX X. XXXXX
/s/ XXXX X. XXXXX
-----------------------------------------
HLBL FAMILY PARTNERS LP
By: /s/ XXXX X. XXXXX
--------------------------------------
Name:
Title: Managing G.P.
XXXXXX X. XXXX, M.D.
/s/ Xxxxxx Xxxx
-----------------------------------------
[Registration Rights Agreement]
SCHEDULE I
CURRENT INVESTORS
Investor Name Investor Address
------------------------------------------------------------------------------------------------
Lend Lease International Pty. Limited Xxxxx 00 Xxxxxxxxx Xxxxxx
[ACN# 000489109] Sydney, Xxxxxxxxx 0000
Xxxxxx X. Xxxxxx 000 X. Xxxxxxxx Xxx., 00/xx/ Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxx Revocable Living Trust dated 000 X. Xxxxxxxx Xxx., 19/th/ Floor
3/3/98; Xxxxxx X. Xxxxxx as Trustee Xxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxx L.L.C. 000 X. Xxxxxxxx Xxx., 00/xx/ Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx Xxxx 000 X. Xxxxxxxx Xxx., 00/xx/ Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxx 416 Shooting Star
X.X. Xxx 0000
Xxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxx Revocable Living Trust dated 416 Shooting Star
3/31/90 X.X. Xxx 0000
Xxxx, Xxxxxxxx 00000
Xxxxxxx Xxxxx -- Charitable Remainder Trust 416 Shooting Star
X.X. Xxx 0000
Xxxx, Xxxxxxxx 00000
Xxxx X. Xxxxx M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
HLBL Family Partners LP M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxx X. Xxxx, M.D. 00000 X. Xxxxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------
SCHEDULE II
1998 Holders
-----------------------------------------------------------------------------------
Investor Name Investor Address
-----------------------------------------------------------------------------------
Lend Lease International Pty Limited Xxxxx 00 Xxxxxxxxx Xxxxxx
[ACN# 000489109] Sydney, Xxxxxxxxx 0000
-----------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx Revocable Living Trust 000 X. Xxxxxxxx Xxxxxx, 19/th/ Floor
dated 3/3/98; Xxxxxx X. Xxxxxx as Xxxxxxx, Xxxxxxxx 00000
Trustee
-----------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx L.L.C. 000 X. Xxxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxxx, Xxxxxxxx 00000
-----------------------------------------------------------------------------------
Xxxx X. Xxxxx c/o M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
-----------------------------------------------------------------------------------
HLBL Family Partners LP c/o M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
-----------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx Revocable Living Trust 416 Shooting Star
dated 3/21/90 X.X. Xxx 0000
Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxx Xxxxx - Charitable Remainder 416 Shooting Star
Trust X.X. Xxx 0000
Xxxx, XX 00000
-----------------------------------------------------------------------------------
SCHEDULE III
2001 Holders
-----------------------------------------------------------------------------------
Investor Name Investor Address
-----------------------------------------------------------------------------------
Xxxx X. Xxxxx c/o M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
-----------------------------------------------------------------------------------
HLBL Family Partners LP c/o M.D. Sass Investor Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
-----------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx Revocable Living Trust 416 Shooting Star
dated 3/21/90 X.X. Xxx 0000
Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxx Xxxxx - Charitable Remainder 416 Shooting Star
Trust X.X. Xxx 0000
Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxx X. Xxxx, M.D. 00000 X. Xxxxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
-----------------------------------------------------------------------------------
