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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered
into as of June ____, 1998, between Xxxxx Corporation (f/k/a Access Beyond,
Inc.), a Delaware corporation (the "Company") and each of the entities listed
under "Investors" on the signature page hereto, and who has signed this
Agreement (each signatory individually an "Investor" and collectively the
"Investors"), each with offices at the address listed under such Investor's name
on Schedule I hereto.
W I T N E S S E T H :
WHEREAS, the Company has heretofore entered into a Preferred
Stock Investment Agreement (the "Investment Agreement") dated November 12, 1997
with the certain investors that were signatories thereto (the "Original
Investors") and, pursuant to the Investment Agreement, the Company has
previously issued a series of Preferred Stock consisting of a total of 44,999
shares designated as "6% Cumulative Convertible Preferred Stock" (the "Original
Shares") to the Original Investors;
WHEREAS, certain of the Original Investors have not entered
into this Exchange Agreement, are not signatories hereto and are not listed on
Schedule I (the "Non-Participating Investors");
WHEREAS, the Company has previously issued to the Investors an
aggregate of 19,999 shares of the Original Shares pursuant to the Investment
Agreement (the "Exchange Shares"), and the Company and the Investors desire to
exchange the Exchange Shares now held by them on the Closing Date (as defined in
the Exchange Agreement) for a like number of new 8% Cumulative Convertible
Preferred Stock (the "Preferred Shares"), having the rights, designations and
preferences set forth in the Certificate of Designations for the Preferred
Shares (the "Certificate");
WHEREAS, all Preferred Shares held by each holder on the
Mandatory Exchange Date (as defined in the Certificate) shall be automatically
exchanged into Debentures (as defined in the Exchange Agreement);
WHEREAS, the Exchange Agreement contemplates that the
Preferred Shares and Debentures (the "Convertible Instruments") will be
convertible into shares (the "Common Shares") of common stock, par value $.01,
of the Company ("Common Stock") pursuant to the terms and conditions set forth
in the Certificate of Designations for the Preferred Shares (the "Certificate")
and in the Debentures; and
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WHEREAS, pursuant to the terms of, and in partial
consideration for, the Investors' agreement to enter into the Exchange
Agreement, the Company has agreed to provide the Investors with certain
registration rights with respect to the Common Shares and certain other rights
and remedies with respect to the Convertible Securities as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Exchange
Agreement and this Agreement, the Company and the Investors agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Exchange
Agreement, the Debenture or the Certificate. As used in this Agreement, the
following terms shall have the following respective meanings:
"Approved Markets" shall have the meaning ascribed to such
term in the Exchange Agreement.
"Closing" and "Closing Date" shall have the meanings ascribed
to such terms in the Exchange Agreement.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Common Shares" shall mean the underlying shares of Common
Stock with which the Convertible Instruments are convertible.
"Common Stock" shall mean the common stock, par value $.01 per
share, of the Company.
"Conversion Notice" shall have the meaning ascribed to said
term in the Certificate.
"Convertible Instruments" shall mean the Preferred Shares and
the Debentures.
"Debentures" shall have the meaning ascribed to such term in
the Certificate.
"Effective Registration" shall have the meaning ascribed to
such term in the Exchange Agreement.
"Effective Time" shall mean the date upon which the Exchange
Agreement becomes effective pursuant to Section 1.1(b)(iii) of the Exchange
Agreement.
"Holder" and "Holders" shall include an Investor or the
Investors, respectively, and any transferee of the Preferred Shares, Debentures,
Common Shares or Registrable Securities
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which have not been sold to the public to whom the registration rights conferred
by this Agreement have been transferred in compliance with this Agreement.
"Listing Period" shall mean the period from the earlier of (i)
the 110th day following the Effective Time, or (ii) the date on which a
Registration Statement is declared effective until such date as there are no
Preferred Shares or Debentures held by any Holder.
"Mandatory Exchange Date" shall have the meaning ascribed to
such term in the Certificate.
The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
"Registrable Securities" shall mean: (i) the Common Shares or
other securities issued or issuable to each Holder or its permitted transferee
or designee upon conversion of the Convertible Instruments;(ii) securities
issued or issuable upon any stock split, stock dividend, recapitalization or
similar event with respect to such Common Shares; and (iii) and any other
security issued as a dividend or other distribution with respect to, in exchange
for or in replacement of Registrable Securities.
"Registration Expenses" shall mean all expenses to be incurred
by the Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority in interest of the Holders) for a
review of the Registration Statement and related documents, 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).
"Registration Statement" shall have the meaning set forth in
Section 2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant
to the Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of
1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for Holders not included within "Registration
Expenses".
"Trading Day" shall have the meaning ascribed to such term in
the Certificate.
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2. REGISTRATION REQUIREMENTS. The Company shall use its best
efforts to effect the registration of the Registrable Securities (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 would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale) and
in all states reasonably requested by the Holder. Such best efforts by the
Company shall include the following:
(a) The Company shall, as expeditiously as reasonably possible
after the Effective Time:
(i) But in any event within 20 days of the
Effective Time, prepare and file a registration statement with the
Commission pursuant to Rule 415 under the Securities Act on Form S-3
under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is eligible
to use under the Securities Act) covering the Registrable Securities
("Registration Statement"), which Registration Statement, to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock
as may become issuable upon conversion of the Preferred Shares or
Debentures, inter alia, to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The number of shares
of Common Stock initially included in such Registration Statement shall
be no less than two times the sum of the number of Common Shares that
are then issuable upon conversion of the Convertible Instruments then
outstanding without regard to any limitation on the Investor's ability
to convert such Convertible Instruments. The Company shall use its best
efforts to cause such Registration Statement and other filings to be
declared effective (including by promptly responding to all Commission
comments and inquiries and filing requests for acceleration with the
Commission as promptly as possible) as soon as possible, and in any
event prior to 110 days following the Effective Time. The Company shall
provide Holders reasonable opportunity to review any such Registration
Statement or amendment or supplement thereto prior to filing.
(ii) Prepare and file with the SEC such amendments
and supplements to such Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary to
comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement and promptly
notify the Holders of the filing and effectiveness of such Registration
Statement and any amendments or supplements.
(iii) Furnish to each Holder such numbers of copies
of a current prospectus conforming with the requirements of the Act,
copies of the Registration Statement, any amendment or supplement
thereto and any documents incorporated by
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reference therein and such other documents as such Holder may
reasonably require in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(iv) Use its best efforts to register and qualify
the securities covered by such Registration Statement under such other
securities or "Blue Sky" laws of such jurisdictions as shall be
reasonably requested by each Holder; provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(v) Notify each Holder immediately of the
happening of any event as a result of which the prospectus (including
any supplements thereto or thereof) 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
light of the circumstances then existing, and use its best efforts to
promptly update and/or correct such prospectus.
(vi) Notify each Holder immediately of the issuance
by the Commission or any state securities commission or agency of any
stop order suspending the effectiveness of the Registration Statement
or the threat or initiation of any proceedings for that purpose. The
Company shall use its best efforts to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible time.
(vii) Permit counsel to each Holder to review the
Registration Statement and all amendments and supplements thereto
within a reasonable period of time prior to each filing, and shall not
file any document in a form to which such counsel reasonably objects.
(viii) Use its best efforts to list the Registrable
Securities covered by such Registration Statement by the time that the
Registration Statement is declared effective with all securities
exchange(s) and/or markets on which the Common Stock is then listed and
prepare and file any required filings with the National Association of
Securities Dealers, Inc. or any exchange or market where the Common
Shares are traded.
(ix) Take all steps necessary to enable Holders to
avail themselves of the prospectus delivery mechanism set forth in Rule
153 (or successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I) events
that may arise that the Investors consider will interfere with the full
enjoyment of their rights under this Agreement, the Exchange Agreement, the
Debenture and the Certificate (the "Interfering Events"), and (II) certain
remedies applicable in each of these events. Paragraphs (i) through (iv) of this
Section 2(b) describe the Interfering Events, provide a remedy to the Investors
if an Interfering Event occurs and provide that the Investors may require that
the Company purchase outstanding Convertible
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Instruments at a specified price if certain Interfering Events are not timely
cured. Paragraph (v) provides, inter alia, that if cash payments required as the
remedy in the case of certain of the Interfering Events are not paid when due,
the Company may be required by the Investors to purchase outstanding Convertible
Instruments at a specified price. Paragraph (vi) provides, inter alia, that the
Investors have the right to specific performance. The preceding paragraphs in
this Section 2(b) are meant to serve only as an introduction to this Section
2(b), are for convenience only, and are not to be considered in applying,
construing or interpreting this Section 2(b).
(i) Delay in Effectiveness of Registration
Statement. The Company agrees that it shall file a Registration
Statement (or an amendment to an already effective Registration
Statement) complying with the requirements of this Agreement promptly
following the Effective Time, but in any event within 20 days after the
Effective Time, and shall use its best efforts to cause such
Registration Statement to become effective within 110 days from the
Effective Time. In the event that any such Registrable Statement has
not been filed within 20 days after the Effective Time, or has not been
declared effective within 110 days from the Effective Time, then the
Company shall pay in cash to each Holder a default payment in an amount
equal to two percent (2%) of the Liquidation Preference of the
Convertible Instruments held by such Holder that should have been
registered on such Registration Statement for each 30-day period that
such failure continues. If any such Registration Statement has not been
declared effective within 210 days after the Effective Time, then each
Holder shall have the right to sell any or all of its Preferred Shares
or Debentures to the Company for consideration equal to the price at
which the Company may optionally redeem Preferred Shares pursuant to
Section 4(d) of the Certificate or purchase the Debenture pursuant to
Section 3 of the Debenture, whichever is applicable. Payment of such
cash amount shall be due and payable from the Company to such Holder
within five (5) Trading Days of demand therefor.
(ii) No Listing; Premium Price Redemption for
Delisting of Class of Shares.
(A) In the event that the Company fails, refuses
or for any other reason is unable to cause
the Registrable Securities covered by a
Registration Statement to be listed with the
Nasdaq NMS or one of the other Approved
Markets at all times during the Listing
Period, then the Company shall pay in cash
to each Holder a default payment in an
amount equal to two percent (2%) of the
Liquidation Preference of the Convertible
Instruments covered by such Registration
Statement and held by such Holder for each
30-day period during the Listing Period from
and after such failure, refusal or inability
to so list the Registrable Securities until
the Registrable Securities are so listed.
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(B) In the event that shares of Common Stock of
the Company are not listed on any of the
Approved Markets at all times during the
Listing Period and remain delisted for 60
consecutive days, then at the option of each
Holder and to the extent such Holder so
elects, each Holder shall have the right to
sell to the Company the Convertible
Instruments held by such Holder, in whole or
in part, for the consideration and on the
terms as set forth in Section 2(b)(i) above.
(iii) Blackout Periods. In the event any Holder's
ability to sell Registrable Securities under any Registration Statement
is suspended for more than (i) twenty (20) consecutive Trading Days in
the aggregate or (ii) thirty (30) Trading Days during any 365-day
period during the Listing Period ("Suspension Grace Period"), including
without limitation by reason of a suspension of trading of the Common
Stock on the Nasdaq NMS (exclusive of a general trading suspension on
the Nasdaq NMS lasting no more than two Trading Days), any suspension
or stop order with respect to the Registration Statement or the fact
that an event has occurred as a result of which the prospectus
(including any supplements thereto) included in such Registration
Statement then in effect includes an untrue statement of material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, then the Company shall pay in cash to each
Holder a default payment in an amount equal to two percent (2%) of the
Liquidation Preference for the Convertible Instruments held by such
Holder for each 30-day period from and after the expiration of the
Suspension Grace Period and continuing until the termination or cure of
the suspension, stop order or event giving rise to the Suspension Grace
Period. At any time after the tenth day following the expiration of the
Suspension Grace Period, a Holder shall have the right to sell to the
Company its Convertible Instruments in whole or in part for the
consideration and on the terms as set forth in Section 2(b)(i) above.
(iv) Conversion Deficiency; Mandatory Purchase
Price Redemption for Conversion Deficiency. In the event that the
Company, after receipt of a Conversion Notice (as defined in the
Certificate), (x) does not have a sufficient number of Common Shares
authorized and available to satisfy the Company's obligations to any
Holder upon receipt of a Conversion Notice, (y) is otherwise unable but
willing (which shall be limited to the existence of (I) a lack of a
sufficient number of authorized and available Common Shares, other than
authorization deficiencies satisfying the provisions of Section
2(b)(iv)(B)(I) below and (II) a force majeure event resulting in the
inability of the Company's transfer agent to process the required
conversion), or (z) is unwilling to issue such Common Shares (including
without limitation by reason of the limit described in Section 10
below)(each a "Conversion Deficiency") in accordance with the terms of
the Certificate for any reason, then:
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(A) The Company shall pay in cash to each Holder
a default payment in an amount equal to two
percent (2%) of the Liquidation Preference
for the outstanding Convertible Instruments
held by such Holder for each 30-day period
that the Company fails or refuses to issue
Common Shares in accordance with the
Certificate terms (such amount not being
payable in respect of Convertible
Instruments actually converted into Common
Shares); and
(B) At any time, as applicable, (I) seventy days
(in the case of Section (iv)(x) above,
provided that the deficiency of authorized
Common Shares was caused by one or a series
of market events occurring within a 7
Trading Day period, the Company previously
was in compliance with its covenant to keep
a sufficient number of Common Shares
authorized and available and promptly takes
effective action to authorize and make
available more Common Shares in response to
market changes necessitating such action,
and provided further that the Company has
not used Common Shares reserved for the
Holders for other purposes), (II) thirty
days (in the case of Section (iv)(y) above),
or (III) five days (in the case of Section
(iv)(z) above) after the commencement of the
running of the first 30-day period described
above in clause (A) of this paragraph (iv),
at the request of any Holder pursuant to a
redemption notice, (unless the Company has,
within the relevant seventy, thirty or five
day period, as applicable, issued the Common
Shares required by such Conversion Notice)
the Company promptly (1) shall purchase from
such Holder, for the consideration and on
the terms set forth in Section 2(b)(i)
above, the outstanding Convertible
Instruments equal to such Holder's pro rata
share of the "Deficiency", as such terms are
defined below, if the failure to issue
Common Shares results from the lack of a
sufficient number thereof and (2) shall
purchase all of such Holder's Convertible
Instruments (or such portion requested by
such Holder) for such consideration and on
such terms if the failure to issue Common
Shares results from any other cause. The
"Deficiency" shall be equal to the amount of
outstanding Convertible Instruments that
would not be able to be converted for Common
Shares, due to an insufficient number of
Common Shares available, if all the
outstanding Convertible Instruments were
submitted for
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conversion at the Conversion Price set forth
in the Certificate as of the date such
Deficiency is determined.
(v) Liquidated Damages.
(A) The Company acknowledges that any failure,
refusal or inability by the Company
described in the foregoing paragraphs (i)
through (iv) will cause the Holders to
suffer damages in an amount that will be
difficult to ascertain, including without
limitation damages resulting from the loss
of liquidity in the Registrable Securities
and the additional investment risk in
holding the Registrable Securities.
Accordingly, the parties agree that it is
appropriate to include in this Agreement the
foregoing provisions for default payments
and mandatory redemptions in order to
compensate the Holders for such damages. The
parties acknowledge and agree that the
default payments and mandatory redemptions
set forth above represent the parties' good
faith effort to quantify such damages and,
as such, agree (after consultation with
counsel) that the form and amount of such
default payments are reasonable and will not
constitute a penalty.
(B) Each default payment provided for in the
foregoing paragraphs (i) through (iv) shall
be in addition to each other default
payment; provided, however, that in no event
shall the Company be obligated to pay to any
Holder default payments in an aggregate
amount greater than two percent (2%) of the
Liquidation Preference of the Convertible
Instruments held by such Holder for any
30-day period. All default payments required
to be made in connection with the above
provisions shall be paid in cash by the
tenth (10th) day of each next succeeding
calendar month (which payments shall be pro
rata on a per diem basis for any period of
less than 30 days).
(C) In the event that the Company fails or
refuses to pay any default payment when due,
at any Holder's request and option, the
Company shall purchase all (or such portion
requested by the Holder) of the Convertible
Instruments held by such Holder (with
default payments accruing through the date
of such purchase), within five (5) Trading
Days of such request, for the consideration
and on the terms set forth in
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Section 2(b)(i) above, provided that such
Holder may revoke such request at any time
prior to receipt of such payment of such
purchase price. Until such time as the
Company purchases such Convertible
Instruments at the request of such Holder
pursuant to the preceding sentence, at any
Holder's request and option the Company
shall as to such Holder pay such amount by
adding and including the amount of such
default payment to the Liquidation
Preference of a Holder's Convertible
Instruments.
(vi) Cumulative Remedies. The default payments
and mandatory purchases provided for above are in addition to and not
in lieu or limitation of any other rights the Holders may have at law,
in equity or under the terms of the Certificate, the Exchange
Agreement, the Debentures or this Agreement, including without
limitation the right to specific performance. Each Holder shall be
entitled to specific performance of any and all obligations of the
Company in connection with the registration rights of the Holders
hereunder.
(viii) Remedies for Registrable Securities. In any
case in which a Holder of Convertible Instruments has the right to
cause the purchase of its Convertible Instruments under this Section
2(b), it shall also have the right to cause the purchase of the
Registrable Securities that it owns as follows: in the case of Common
Shares issued to such Holder pursuant to conversion of Convertible
Instruments, such shares shall be purchased at a price per share
("Common Purchase Price") equal to the closing bid price of a share of
Common Stock on the Approved Market on which it is traded as of the
time such Common Shares were received pursuant to conversion of
Convertible Instruments; provided, however, that such Holder may revoke
such request at any time prior to receipt of such payment of such
redemption price. In the case in which a Holder of Convertible
Instruments would have the right to receive default payments with
respect to Convertible Instruments under Section 2(b), it shall also
have the right to receive default payments with respect to Registrable
Securities owned by it in an amount equal to two percent (2%) per
30-day period of the aggregate Common Purchase Price amount of such
Registrable Securities.
(ix) Mandatory Purchase Period. In the event a
Holder has the right to cause the Company to purchase Convertible
Instruments at the Mandatory Purchase Price or Registrable Securities
at the Common Purchase Price, the period in which the Holder may
exercise its right to cause the Company to so purchase those securities
(the "Mandatory Purchase Period") shall terminate 90 days after the
Company notifies the Holder in writing of such purchase right (which
notice will specify the subsection(s) of Section 2(b) pursuant to which
the Holder may cause such purchase); provided that if the Company does
not honor the Holder's request that the Company purchase the applicable
instruments in accordance with the terms of this Agreement, the Holder
may revoke its
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request for such purchase by the Company, whereupon another Mandatory
Purchase Period will begin. Nothing in this Section 2(b)(ix) will limit
the right of a Holder to revoke any request to the Company seeking
repurchase at the Mandatory Purchase Price or at the Common Purchase
Price before such repurchase is effected and without beginning a new
Mandatory Purchase Period.
(c) If at any time and from time to time the Company shall
determine to register any of its securities either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights, other than a registration relating solely to employee
benefit plans or a registration statement on Form S-4, the Company will: (i)
promptly give to each Holder 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
(ii) 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 any
Holder within thirty (30) days after receipt of the written notice from the
Company described in clause (i) above, except as set forth in Section 2(d)
below. Such written request may specify all or a part of a Holder's Registrable
Securities.
(d) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
2(c). All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
Section 2(c) or Section 2(d), if the underwriter in good faith determines that
marketing factors require a limitation on the number of securities underwritten,
the underwriter may (subject to the proportional allocation below) exclude from
such registration and underwriting some or all of the Registrable Securities
which would otherwise be underwritten pursuant hereto. The Company shall so
advise all holders of securities 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. The number of shares
that may be included in the registration and underwriting shall be allocated
among all such Holders and other shareholders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and other
securities which they had requested to be included in such registration at the
time of filing the registration statement. If any Holder of Registrable
Securities or any other shareholder 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.
(e) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition
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pursuant to a Registration Statement, and any attorney or accountant retained by
any Holder or underwriter, all financial or other records customary for purposes
of the Holders' due diligence examination of the Company and review of any
Registration Statement, all SEC Documents (as defined in the Exchange Agreement)
filed subsequent to the Closing, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration Statement, provided
that such parties agree to keep such information confidential.
(f) Subject to Section 2(b) above, the Company may suspend the
use of any prospectus used in connection with the Registration Statement only in
the event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission. The Company will use its best efforts
to cause such suspension to terminate at the earliest possible date.
(g) The Company shall file a Registration Statement with
respect to any newly authorized and/or reserved shares for purposes of complying
herewith within forty-five (45) days of any shareholders meeting authorizing
same and shall use its best efforts to cause such Registration Statement to
become effective within one hundred and ten (110) days of such shareholders'
meeting. If the Holders become entitled, pursuant to an event described in part
(iii) of the definition of Registrable Securities, to receive any securities in
respect of Registrable Securities that were already included in a Registration
Statement, subsequent to the date such Registration Statement is declared
effective, and the Company is unable under the securities laws to add such
securities to the then effective Registration Statement, the Company shall
promptly file, in accordance with the procedures set forth herein, an additional
Registration Statement with respect to such newly Registrable Securities. The
Company shall use its best efforts to (i) cause any such additional Registration
Statement, when filed, to become effective under the Securities Act, and (ii)
keep such additional Registration Statement effective during the period
described in Section 5 below and use its best efforts to cause such Registration
Statement to become effective within 110 days of that date that the need to file
the Registration Statement arose. All of the registration rights and remedies
under this Agreement shall apply to the registration of such newly reserved
shares and such new Registrable Securities, including without limitation the
provisions providing for default payments contained herein.
3. EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with any registration, qualification or compliance with
registration pursuant to this Agreement shall be borne by the Company, and all
Selling Expenses of a Holder shall be borne by such Holder.
4. REGISTRATION ON FORM S-3. The Company shall use its best
efforts to remain qualified for registration on Form S-3 or any comparable or
successor form or forms, or in the event that the Company is ineligible to use
such form, such form as the Company is eligible
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to use under the Securities Act. The Company will use Form S-3 whenever
available, and will use another Form only if, and to the extent that, Form S-3
is not available.
5. REGISTRATION PERIOD. In the case of the registration
effected by the Company pursuant to this Agreement, the Company will use its
best efforts to keep such registration effective until all the Holders have
completed the sales or distribution described in the Registration Statement
relating thereto or, if earlier, until such Registerable Securities may be sold
under Rule 144(k)(provided that the Company's transfer agent has accepted an
instruction from the Company to such effect).
6. INDEMNIFICATION.
(a) The Company Indemnity. The Company will indemnify each
Holder, each of its officers, directors and partners, and each person
controlling each Holder, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, 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 in light of the circumstances under which they were made,
or any violation by the Company of the Securities Act or any state securities
law or in either case, 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
Holder, each of its officers, directors and partners, and each person
controlling such Holder, 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 that the Company will not be liable in any such
case to a Holder to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by such Holder or the underwriter
(if any) therefor and intended to be specifically for use therein. The indemnity
agreement contained in this Section 6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent will
not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, partners, 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
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each other Holder (if any), and each of their officers,
directors and partners, and each person controlling such other Holder(s) 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, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statement therein not misleading in light of the circumstances under which
they were made, and will reimburse the Company and such other Holder(s) and
their directors, officers and partners, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
and 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 intended to be specifically for use therein, and provided that the maximum
amount for which such Holder shall be liable under this indemnity shall not
exceed the net proceeds received by such Holder from the sale of the Registrable
Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities if such settlement
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under
this Section 6 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
besought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided 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 be unreasonably withheld), and the Indemnified Party may
participate in such defense at its own expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Article except to
the extent that the Indemnifying Party is materially and adversely affected by
such failure to provide notice. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, 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
non-privileged 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.
7. CONTRIBUTION. If the indemnification provided for in
Section 6 herein is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities
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referred to herein (other than by reason of the exceptions provided therein),
then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages or liabilities as between the
Company on the one hand and any Holder on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of such Holder in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of any
Holder on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material factor omission or
alleged omission to state a material fact relates to information supplied by the
Company or by such Holder. In no event shall the obligation of any Indemnifying
Party to contribute under this Section 7 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances. The Company and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Holders or the underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraphs. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this section, no Holder or
underwriter shall be required to contribute any amount in excess of the amount
by which (i) in the case of any Holder, the net proceeds received by such Holder
from the sale of Registrable Securities pursuant to the registration statement
in question or (ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages that
such Holder or underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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.
8. SURVIVAL. The indemnity and contribution agreements
contained in Sections 6 and 7 and the representations and warranties of the
Company referred to in Section 2(d)(i) shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement or the Exchange
Agreement or any underwriting agreement, (ii) any investigation made by or on
behalf of any Indemnified Party or by or on behalf of the Company, and (iii) the
consummation of the sale or successive resales of the Registrable Securities.
9. INFORMATION BY HOLDERS. Each Holder shall furnish to the
Company such information regarding such Holder and the distribution and/or sale
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 Agreement. The intended
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method or methods of disposition and/or sale (Plan of Distribution) of such
securities as so provided by such Investor shall be included without alteration
in the Registration Statement covering the Registrable Securities and shall not
be changed without written consent of such Holder.
10. LIMIT ON STOCK ISSUANCES. In the event that the Company is
unable to issue any Common Shares upon conversion of the Convertible Instruments
or due to the rules or regulations of any market or exchange regulator for the
market or exchange on which the Common Shares are then trading, the Company
shall, at the request of any Holder promptly following such determination,
purchase such Convertible Instruments of such Holder which cannot be converted
at a purchase price equal to the Mandatory Purchase Price.
11. REPLACEMENT CERTIFICATES. The certificate(s) representing
the Common Shares held by any Investor (or then Holder) may be exchanged by such
Investor (or such Holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate number of Common
Shares, as reasonably requested by such Investor (or such Holder) upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange.
12. TRANSFER OR ASSIGNMENT. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The rights granted to the
Investors by the Company under this Agreement to cause the Company to register
Registrable Securities may be transferred or assigned (in whole or in part) to a
transferee or assignee of Convertible Instruments, and all other rights granted
to the Investors by the Company hereunder may be transferred or assigned to any
transferee or assignee of any Convertible Instruments; provided in each case
that the Company must be given written notice by such Investor at the time of or
within a reasonable time after said transfer or assignment, stating the name and
address of said transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being transferred
or assigned; and provided further that the transferee or assignee of such rights
agrees in writing to be bound by the registration provisions of this Agreement.
13. MISCELLANEOUS.
(a) Remedies. The Company and each of the Investors
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity. (b) Jurisdiction. THE COMPANY AND
EACH OF THE INVESTORS (I) HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT, THE NEW YORK STATE COURTS AND
OTHER
00
00
XXXXXX XX XXX XXXXXX XXXXXX SITTING IN NEW YORK COUNTY, NEW YORK FOR THE
PURPOSES OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND (II) HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH SUIT
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER. THE COMPANY AND EACH OF THE INVESTORS CONSENTS TO PROCESS BEING SERVED
IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Xxxxx Corporation
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Chairman
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxx
Xxxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: G. Xxxxxx Xxxxxxx, Esq.
to the Investors: To each Investor at the address and/or
fax number set forth on Schedule I of this
Agreement, and with copies to counsel, if
any, indicated on Schedule I.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
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(d) Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees)
incurred as a result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement.
(e) Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter. The representations and warranties and
the agreements and covenants of the Company and each Investor contained herein
shall survive the Closing.
(f) Execution in Counterpart. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(g) Publicity. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Investor
without its consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company agrees to deliver a copy of any public announcement regarding the
matters covered by this Agreement or any agreement or document executed herewith
to each Investor and any public announcement including the name of an Investor
to such Investor, prior to the publication of such announcements.
(h) Entire Agreement; Amendment and Termination. This
Agreement, together with the Exchange Agreement, the Certificate and the
Debentures and the agreements and documents contemplated hereby and thereby,
contains the entire understanding and agreement of the parties, and may not be
modified, amended or terminated except by a written agreement signed by all
parties.
(i) Governing Law. This Agreement and the validity and
performance of the terms hereof shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed and to
be performed entirely within such state, except to the extent that the law of
the State of Delaware regulates the Company's issuance of securities.
(j) Severability. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
(k) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.
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(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
[EXECUTION HEREOF ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------------
XXXXXX X. XXXXX, Chairman
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
XXXXXX X. XXXXXX
Chief Executive Officer
INVESTORS:
XXXXX INTERNATIONAL
By: /s/
-----------------------------------------------------
Name:
Title:
SHEPHERD INVESTMENTS INTERNATIONAL, LTD.
By: /s/
-----------------------------------------------------
Name:
Title:
RAMIUS FUND, LTD.
By: AG. RAMIUS PARTNERS, L.L.C., Investment Manager
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Officer
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GAM ARBITRAGE INVESTMENTS, INC.
By: XXXXXX, XXXXXX & CO., L.P., Investment Manager
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
XXXXXXXX, L.P.
By: XXXXXX, XXXXXX & CO., L.P., General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
RAPHAEL, L.P.
By: XXXXXX, XXXXXX & CO., L.P., General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
AG SUPER FUND INTERNATIONAL PARTNERS, L.P.
By: XXXXXX, XXXXXX & CO., L.P., General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
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