REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of March 21,
1997, by and among XXXXXX COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), and the Shareholders listed on the signature page hereof
(collectively, the "Shareholders").
RECITALS
WHEREAS, pursuant to an offer made by the Company on March , 1997 to the
Shareholders, amongst others, to acquire (the "Acquisition") the entire issued
ordinary share capital of Xxxxx Holdings Limited ("Xxxxx"), the Shareholders
received shares of the Company's common stock, $.001 par value (the "Common
Stock") in exchange for all the outstanding shares of capital stock of Xxxxx;
WHEREAS, the Shareholders have been granted certain registration rights with
respect to the shares of Common Stock received in connection with the
Acquisition; and
WHEREAS, the Company and the Shareholders desire to set forth the rights and
obligations of the parties with respect to such registration rights.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Closing" means the closing of the Acquisition.
"Common Stock" shall have the meaning set forth in Paragraph one of the
Recitals.
"Company" shall mean Xxxxxx Communications, Inc., a Delaware
corporation.
"Demand Registration Request" shall have the meaning set forth in
Section 3.1 hereof.
"Demand Registration Rights" shall mean the rights of the Holders to
have a Registration Statement filed by the Company with respect to the
Registrable Securities held by the Holders in accordance with the
provisions of Section 3 hereof.
"Demanding Holders" shall have the meaning set forth in Section 3.1
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holders" shall mean the Shareholders or any Permitted Transferee of a
Shareholder, and, with respect to a Permitted Transferee, only if such
Shareholder has granted rights under this Agreement to such Permitted
Transferee; and "Holder" shall mean any one of them.
"Registrable Securities" means the aggregate number of shares of Common
Stock issued by the Company to the Shareholders in connection with the
Acquisition and shall include all shares of Common Stock received by
the Holders pursuant to a stock split, stock dividend or other
recapitalization of the Company or pursuant to any merger,
consolidation or reorganization involving the Company. For the purposes
of this Agreement, such shares of Common Stock shall cease to be
Registrable Securities on the Rule 144 Eligibility Date or, if earlier,
on such date on which (a) a Registration Statement covering such shares
has been declared effective and such shares have been disposed of
pursuant to such effective Registration Statement, (b) such shares are
sold pursuant to Rule 144A of the Securities Act or (c) all of the
Registrable Securities are eligible for sale (other than pursuant to
Rule 904 of the Securities Act), in the opinion of counsel to the
Company, in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act, so that all transfer
restrictions with respect to such shares and all restrictive legends
with respect to the certificates evidencing such shares are or may be
removed upon the consummation of such sale.
"Registration Period" shall mean the period commencing on the date of
publication of financial results of the Company for the first full
calendar month following the Closing provided that the Holders have
complied with all of their undertakings in the last sentence of Section
2 (the "Pooling Date"), and ending at the earlier of (i) such time as
no Holder owns any Registrable Securities or (ii) the Rule 144
Eligibility Date.
"Registration Statement" means any registration statement filed by the
Company under the Securities Act that covers any of the Registrable
Securities, including the Prospectus, any amendments and supplements to
such registration statement, including post-effective amendments, and
all exhibits thereto and all material incorporated by reference in such
registration statement.
"Rule 144 Eligibility Date" means the date on which all shares of
Common Stock issued by the Company to the Shareholders in the
Acquisition and the other shares of Common Stock defined as Registrable
Securities herein may first be sold under Rule 144 of the Securities
Act by the holders thereof within three months of such date within the
volume limitations of Rule 144(e), assuming for this purpose that the
average weekly trading volume in the four full weeks prior to such date
will be the average weekly trading volume during the following
three-month period; and provided further, however, that for
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purposes of Rule 144(d), the holding period applicable to the shares of
Common Stock issued by the Company to the Shareholders in the
Acquisition shall be computed without regard to any transfers of such
shares by any Shareholder to a Permitted Transferee.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Holder Information" shall mean information furnished in
writing by or on behalf of a Selling Holder for use in the Registration
Statement or Prospectus.
"Selling Holders" when used with respect to a Registration Statement,
shall mean those Holders whose Registrable Securities are included in a
Registration Statement pursuant to an exercise by such Holders of their
Demand Registration Rights.
"Shareholders" shall those persons listed in the Schedule I hereto.
"Underwriter(s)" shall mean any one or more investment banking or
brokerage firms to or through whom the Holders or the Company, as the
case may be, may offer and sell Registrable Securities pursuant to a
transaction requiring the filing of a Registration Statement under the
Securities Act, including one or more of such firms who shall manage
such public offering through such Underwriters and that are referred to
herein as "Managing Underwriter(s)."
2. PERMITTED TRANSFEREES
Any Shareholder may transfer any of the Registrable Securities held by
such Shareholder, (i) to the spouse, siblings or issue or spouses of
siblings or issue of such Shareholder; (ii) to a trust or custodial
account for the sole benefit of such Shareholder or the spouse,
siblings or issue of such Shareholder, (iii) to a partnership, limited
liability company or other entity, the majority and controlling equity
owners of which are a shareholder or the spouse, siblings or issue or
spouses of siblings or issue of such Shareholder or any trust referred
to in clause (ii) above; (iv) to the personal representative of a
Shareholder upon the death of such Shareholder for the purposes of
administration of such Shareholder's estate or upon the incompetency of
such Shareholder for the purposes of the protection and management of
such Shareholder's assets, but such personal representative may not
transfer such Registrable Securities other than as permitted under this
Agreement; (v) to a charitable foundation (subject to receipt by the
Shareholder of written approval from the Company, such approval not to
be unreasonably withheld), (vi) to the Company or (vii) to the extent
effected pursuant to an effective registration statement under the
Securities Act or in a transaction exempt from the registration
requirements of the Securities Act with respect to which the Company
has received an opinion of counsel reasonably acceptable to it (a
"Permitted Transferee"). No
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stockholder shall transfer, sell or otherwise dispose of or reduce its
risk (within the meaning of the SEC's Financial Reporting Release No.
1, "Codification of Financial Reporting Policies", Section 2.1.01 [47
F.R 21028] (May 17, 1982)) with respect to any shares of Common Stock
until after such time as consolidated financial statements which
reflect at least 30 days of post-merger combined operations of the
Company and Xxxxx Holdings Limited have been published by the Company,
except as permitted by Staff Accounting Bulletin 76. The Company agrees
to publish such results no later than 30 days following the completion
of the first full calendar month after closing.
The Holders acknowledge that (i) the shares of Common Stock issued in
connection with the execution of this agreement will be legended to
reflect the fact that such shares have not been registered under the
Securities Act (ii) such shares may not be sold in the absence of such
registration or the availability of an exemption from registration and
(iii) a stop transfer order will be issued to the transfer agent for
the Common Stock restricting the transfer of any such unregistered
shares in the absence of a legal opinion to the effect that the
transfer is in compliance with the Securities Act.
The Company will not, prior to the earlier of 3 business days after the
first anniversary of the commencement of the Registration Period and
the termination of the Registration Period, issue any Preferred Stock
without the consent of a majority of the holders of Registrable
Securities.
3. REGISTRATION RIGHTS.
3.1 Subject to the provisions of this Section 3, at any time (i) during
that portion of the Registration Period occurring between the Pooling
Date and the first anniversary date thereof, any Holder or Holders may
deliver to the Company a written request (a "Demand Registration
Request") that the Company register up to 50% of the Registrable
Securities owned by such Demanding Holders (as hereinafter defined)
(provided that such Demand Registration Request represents, in the
aggregate, at least 20% of the Registrable Securities held by all
Holders) and any other Holders that may elect to be included pursuant
to Section 3.2 hereof and (ii) during that portion of the Registration
Period occurring after the first anniversary of the Pooling Date, any
Holder or Holders may deliver to the Company a Demand Registration
Request that the Company register any or all of the Registrable
Securities owned by such Demanding Holders (provided that such Demand
Registration Request represents at least 20% of the Registrable
Securities held by all Holders) and any other Holders that may elect to
be included pursuant to Section 3.2 hereof; in each case under the
Securities Act and the state securities or blue sky laws of any
jurisdiction designated by such Selling Holders (subject to Section 8).
The requisite Holders making such demand are sometimes referred to
herein as the "Demanding Holders". The Company shall, as soon as
practicable following the Demand Registration Request, prepare and file
a Registration Statement (on the then appropriate form or, if more than
one form is available, on the appropriate form selected by the Company)
with the SEC under the Securities
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Act, covering such number of the Registrable Securities as the Selling
Holders request to be included in such Registration Statement and to
take all necessary steps to have such Registrable Securities qualified
for sale under state securities or blue sky laws; provided, however, in
the event that a Demand Registration Request is received by the Company
during that portion of the Registration Period between the Pooling Date
and the first anniversary date thereof, the Company shall not be
obligated to file a Registration Statement with respect to greater than
50% of the Registrable Securities held by all Holders. The Company
shall use its best efforts to file such Registration Statement no later
than 30 days following the Demand Registration Request and to have such
Registration Statement declared effective by the SEC (within the
meaning of the Securities Act) as soon as practicable thereafter and
shall take all necessary action (including, if required, the filing of
any supplements or posteffective amendments to such Registration
Statement) to keep such Registration Statement effective to permit the
lawful sale of such Registrable Securities included thereunder for the
period set forth in Section 5 hereof, subject, however, to the further
terms and conditions set forth in Sections 3.3, 3.4, 3.5, 3.6 and 3.7
hereof.
3.2 (a) No later than 10 days after the receipt of the Demand
Registration Request, the Company shall notify all Holders who
have not joined in such request of the proposed filing, and such
Holders may, if they desire to sell any Registrable Securities
owned by them, by notice in writing to the Company given within
15 days after receipt of such notice from the Company, elect to
have all or any portion of their Registrable Securities included
in the Registration Statement up to the maximum number of shares
that the Holders could require to be registered pursuant to a
Demand Registration Request pursuant to Section 3.1 at such
time. In addition, the Company shall notify the Holders no later
than 30 days prior to the effectiveness of any other
registration statement under the Securities Act with respect to
any proposed public offering by the Company or by any other
holders of Common Stock (other than a registration on Form X-0,
Xxxx X-0 or any subsequent similar Form). In the event that
within the 15 days following such notice, written requests to
include Registratable Securities in such registration statement
are given to the Company by Holders with respect to a number of
Registrable Securities in the Registration Statement that would
be sufficient to initiate a Demand Registration Request pursuant
to section 3.1 ("the Minimum Number") the inclusion of at least
such number of the Holder's Registrable Securities in the
Registration Statement shall constitute an exercise of Demand
Registration Rights for purposes of Section 3.1 so long as all
shares that are the subject of the foregoing notices from
Holders are included in such Registration Statement (up to the
maximum number of shares that the Holders could require to be
registered pursuant to a Demand Registration Request pursuant to
Section 3.1 at such time). In the event the Managing Underwriter
determined that the Minimum Number of such Holders' Registrable
Securities cannot be included in such registration statement the
Company may exclude all such Holders' Registrable Securities
from such Registration Statement.
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Except for a registration on Form S-8 and one registration on Form S-4,
the Company covenants that until three business days following the
commencement of the Registration Period, it shall not register shares
of Common Stock in any primary offering and shall use best efforts not
to register any shares of Common Stock in any secondary offering by one
or more stockholders.
3.3 The Holders, in the aggregate, may only exercise the Demand
Registration Rights granted pursuant to this Section 3 one time prior
to the first anniversary of the commencement of the Registration Period
and one time thereafter. The Company shall only be required to file two
Registration Statements (as distinguished from supplements or
pre-effective or post-effective amendments thereto) in response to the
exercise by the Demanding Holders of their Demand Registration Right
pursuant to the provisions of this Section 3.
3.4 In the event that preparation of a Registration Statement is commenced
by the Company in response to the exercise by the Demanding Holders of
the Demand Registration Right, but such Registration Statement is not
filed with the SEC, either at the request of the Company in accordance
with Section 6 or at the written request or with the written consent of
the Demanding Holders, for any reason, the Demanding Holders shall not
be deemed to have exercised the Demand Registration Right pursuant to
this Section 3, except that, if such Registration Statement is not
filed after the commencement of preparation thereof at the written
request of the Demanding Holders, then such Demanding Holders shall be
required to bear the fees, expenses and costs incurred in connection
with the preparation thereof.
3.5 In the event that any Registration Statement filed by the Company with
the SEC pursuant to the provisions of this Section 3 is withdrawn prior
to the completion of the sale or other disposition of the Registrable
Securities included thereunder, then the following provisions,
whichever applicable, shall govern:
(i) If such withdrawal is effected at the request of the Company
with the written consent of the Demanding Holders or otherwise
in accordance with Section 6 for any reason other than the
failure of all the Selling Holders to comply with their
obligations hereunder with respect to such registration, then
the filing thereof by the Company shall be excluded in
determining whether the Holders have exercised their Demand
Registration Rights hereunder with respect to the filing of such
Registration Statement
(ii) If such withdrawal is effected at the written request of the
Selling Holders, then the filing thereof by the Company shall be
deemed an exercise of their Demand Registration Rights with
respect to the filing of such Registration Statement.
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3.6 The Company shall bear and pay all fees, costs and expenses incident to
such Registration Statement and incident to keeping it effective and in
compliance with all federal and state securities laws, rules, and
regulations for the period set forth in Section 5 hereof (including,
without limitation, registration fees, blue sky qualification fees,
exchange listing fees and expenses, legal fees of Company counsel
(including blue sky counsel), printing costs, costs of any special
audits and accounting fees). Each Selling Holder shall pay fees or
disbursements of counsel, accountants or other advisors for the Selling
Holder and any underwriting discounts and commissions with respect to
its Registrable Securities and any internal, overhead and other
expenses of the Selling Holders.
3.7 Whenever a decision or election is required to be made hereunder by the
Demanding Holders or the Selling Holders, such decision or election
shall be made by a vote of holders of a majority of the Registrable
Securities owned by such Demanding Holders or Selling Holders, as the
case may be; provided, however, any decision to withdraw a Demand
Notice shall be made unanimously by the Demanding Holders.
3.8 In the event that there is a limitation on the number of securities
which may be covered by Registration Statement, the Selling Holders
shall have the right with respect to any such Registration Statement
filed as a result of their Demand Registration Request to include their
Registrable Securities prior to the inclusion of any other
securityholder exercising piggyback registration rights.
3.9 The Selling Holders shall have the right, with respect to any
Registration Statement to be filed as a result of a Demand Registration
Request, to determine whether such registration shall be underwritten
or not; provided, however, that the Company shall select the investment
banking firm or firms to manage the offering, provided such
underwriters are reasonably satisfactory to Holders holding at least
50% of the Registrable Securities to be included in the offering.
4. INFORMATION TO BE FURNISHED
In the event any of the Registrable Securities are to be included in a
Registration Statement under Section 3, the Selling Holders and the
Company shall furnish the following information and documents:
4.1 The Selling Holders will furnish to the Company all information
required by the Securities Act to be furnished by sellers of securities
for inclusion in the Registration Statement, together with all such
other information which the Selling Holders have or can reasonably
obtain and which may reasonably be required by the Company in order to
have such Registration Statement become effective and such Registrable
Securities qualified for sale under applicable state securities laws.
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4.2 The Company, before filing a Registration Statement, amendment or
supplement thereto, will furnish copies of such documents to legal
counsel selected by the Selling Holders. In addition, the Company will
make available for inspection by any Selling Holder or by any
Underwriter, attorney or other agent of any Selling Holder or
Underwriter all information reasonably requested by such persons. All
nonpublicly available information provided to any Selling Holder,
Underwriter or any attorney or agent of any Selling Holder or
Underwriter shall be kept strictly confidential by such Selling Holder,
Underwriter or attorney or agent of such Selling Holder or Underwriter
so long as such information remains nonpublic.
4.3 If requested by the underwriter with respect to any Registration
Statement the Company shall use its best efforts to cause its
independent accountants to provide such underwriter with a "comfort
letter ".
4.4 From the filing of any Registration Statement until the termination of
the effectiveness thereof the Company shall provide to the Selling
Holder without charge a reasonable number of copies of the prospectus
(including any preliminary prospectus prepared for circulation to
prospective purchasers of Registrable Securities) included in the
Registration Statement and any amendment or supplement thereto and the
Company consents to the use of any such prospectus or amendment or
supplement thereto in connection with the offering and sale of the
Registrable Securities covered thereby. In addition during such period,
the Company shall provide the Selling Holders, without charge, with (1)
one copy of the Registration Statement and any post-effective amendment
thereto (including financial statements and schedules and, to the
extent requested by the Selling Holders in writing, the exhibits
thereto) and (2) to the extent requested by the Selling Holders, all
reports and filing made by the Company pursuant to the Securities and
Exchange Act of 1934, as amended.
4.5 The Company will promptly notify each Selling Holder of the occurrence
of any event which renders any Prospectus then being circulated among
prospective purchasers misleading because such Prospectus contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements made, in light of the circumstances in
which they were made, not misleading, and the Company will, as promptly
as possible, amend the Prospectus so that it does not contain any
material misstatements or omissions and deliver the number of copies of
such amendments to each Selling Holder as each Selling Holder may
require.
5. REGISTRATION TO BE KEPT EFFECTIVE
In connection with any registration of Registrable Securities pursuant
to this Agreement, the Company shall, at its expense, keep effective
and maintain such registration and any related qualification of
Registrable Securities under state securities laws for such period not
exceeding 120 days as may be necessary for the Selling Holder,
Underwriters and selling agents to dispose of such Registrable
Securities, from time to time to amend or supplement the
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Prospectus used in connection therewith to the extent necessary to
comply with applicable laws, and to furnish to such Selling Holders
such number of copies of the Registration Statement, the Prospectus
constituting part thereof, and any amendment or supplement thereto as
such Selling Holders may reasonably request in order to facilitate the
disposition of the registered Registrable Securities.
6. CONDITIONS TO COMPANY'S OBLIGATIONS
The obligations of the Company to cause the Registrable Securities
owned by the Holders to be registered under the Act are subject to each
of the following limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone for a reasonable
period of time up to three (3) months the filing of any
Registration Statement otherwise required to be prepared and
filed by it pursuant to Section 3 hereof, if the Company
determines, in its reasonable judgment, that such registration
and offering would materially interfere with any financing,
acquisition, corporate reorganization or other material
transaction involving the Company, and the Company promptly
gives the Holders written notice including an explanation of
such determination. The Company shall not exercise its rights to
defer the filing of any specific Registration Statement pursuant
to the terms of this paragraph more than once or in any event if
the result thereof is to permit a registration of shares of
Common Stock (other than a registration on Form X-0, Xxxx X-0 or
any subsequent similar form) to the exclusion of the Holders. If
the Company shall so postpone the filing of a Registration
Statement, the Selling Holders shall have the right to withdraw
the Demand Registration Request by giving written notice to the
Company within 30 days after receipt of the notice of
postponement (and, in the event of such withdrawal, such Demand
Registration Request shall not be counted for purposes of the
Demand Registration Request to which the Holders are entitled
pursuant to Section 3 hereof). The exercise by the Company of
its rights under this paragraph shall not affect the timeliness
of a Demand Registration Request made prior to such exercise
that is not so withdrawn.
(b) The Company shall not be required to file any Registration
Statement pursuant to this Agreement in connection with a Demand
Registration Request made less than 90 days after the effective
date of any registration statement filed by the Company (other
than registrations statements filed on Form X-0, Xxxx X-0, or
any successor forms thereto), if the Managing Underwriter(s)
associated with such prior registration statement reasonably
objects to such Demand Registration Request or has otherwise
precluded the Company from filing a registration statement
within such 90 day period.
(c) The Company may require, as a condition to fulfilling its
obligations to register the Registrable Securities under
Sections 3 hereof, that the Selling Holders execute reasonable
and customary indemnification agreements for the benefit of the
Underwriters of the registration; provided, however, a Selling
Holder shall not be required to indemnify the Underwriters
except with respect to Selling Holder Information and that the
maximum liability
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of any Selling Holder under any such indemnification agreement
shall not exceed the net proceeds received by such Selling
Holder from the sale of such Registrable Securities.
(d) The Company shall not be required to fulfill any registration
obligations under this Agreement, if the Company provides the
Holders with an opinion of counsel reasonably acceptable to such
Holders stating that the Holders are free to sell in the manner
proposed by them the Registrable Securities that they desired to
register without registering such Registrable Securities or such
Registrable Securities can be sold under Rule 144 of the
Securities Act, or otherwise without registration in the open
market in compliance with the Securities Act, without regard to
volume restrictions.
(e) The Company shall not be obligated to file any Registration
Statement pursuant to this Agreement in connection with a Demand
Registration Request at any time if the Company would be
required to include financial statements audited as of any date
other than the end of its fiscal year, unless the Selling
Holder(s) agree to pay the cost of any such additional audit.
7. EXCHANGE LISTING
In the event any Registrable Securities are included in a Registration
Statement under Section 3 hereof, the Company will exercise reasonable
efforts to cause all such Registrable Securities to be listed on the
New York Stock Exchange or any other exchange(s) on which the Common
Stock is then listed.
8. REGISTRATION UNDER STATE SECURITIES LAWS
The Company shall use its best efforts to register or qualify any
Registrable Securities included in a Registration Statement pursuant to
Section 3 hereof under state "blue sky" or similar securities laws in
such jurisdictions as the Selling Holders reasonably request and to
take such other action as may be reasonably necessary to enable the
Selling Holders to sell their shares of Registrable Securities in the
jurisdictions where such registration or qualification was made,
provided that the Company will not be required to qualify to do
business in any jurisdiction in which it would not otherwise be
required to be so qualified or to execute a general consent to service
of process in any jurisdiction in which it would not otherwise be
required to execute such a consent.
9. INDEMNIFICATION.
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9.1 The Company will indemnify and hold each Selling Holder, its partners,
officers, directors and agents (including sales agents and
Underwriters) and each person, if any, who controls (within the meaning
of the Securities Act or the Exchange Act) the Selling Holder or any of
the foregoing, harmless to the maximum extent permitted by law, from
and against any loss, claim, liability, damage or expense (including
attorney's fees) resulting from any Registration Statement, Prospectus
or amendment thereof of supplement thereto, which includes Registrable
Securities to be sold by such Selling Holder, or any information
reincorporated by reference therein, containing an untrue statement of
material fact or omitting to state a material fact necessary in order
to make the statements made therein in light of the circumstances under
which they were made, not misleading unless such misstatement or
omission is with respect to Selling Holder Information or results from
the Selling Holder's failure to deliver a current Prospectus as
required under the Securities Act and provided to such Selling Holder
by the Company; and each such Selling Holder will (severally and not
jointly) indemnify and hold harmless the Company, its directors,
officers and agents and each person, if any, who controls (within the
meaning of the Securities Act or the Exchange Act) the Company against
any loss, claim, liability, damage or expense (including attorney's
fees) resulting from any such claim relating to Selling Holder
Information provided by such Selling Holder.
9.2 Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party under this Section 9 or otherwise to
the extent such omission did not materially prejudice the indemnifying
party. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there exists a
conflict of interest between the indemnifying party and any indemnified
party or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to, and
inconsistent or in conflict with, those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party from
separate fees and disbursements of counsel unless (i) the indemnified
party shall have employed separate counsel in accordance with the
proviso to the preceding sentence, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of commencement of the action, or(iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at
the expense of the
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indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). No settlement of an action
against any party under this Section 9 shall bind the other party
unless such other party agrees in writing to the terms of such
settlement (which agreement will not be unreasonably withheld).
9.3 The obligation of the indemnifying party to indemnify the indemnified
party under this Section 9 shall, in each case, be in addition to any
liability which the indemnifying party may otherwise have hereunder or
otherwise at law or in equity.
9.4 If the indemnification provided for in this Section 9 from the
indemnifying party is applicable in accordance with its terms but for
any reason is held to be unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as
appropriate to reflect the relative faults of the indemnifying party
and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative faults of such
indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made
by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such misstatement
or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
Section 9.1 and 9.2 hereof, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.4 were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. 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.
9.5 In no event shall the liability with respect to any Registration
Statement of any Selling Holder under this Section 9, whether by way of
indemnification or contribution, exceed the net proceeds to such
Selling Holder from the sale of Registrable Securities pursuant to such
Registration Statement.
10. RULE 144
The Company covenants that it shall file any reports required to be
filed by it under the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and that it shall take such further
action as any Holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to
sell the Registrable Securities without registration under
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the Securities act within the limitation of the exemptions provided by
(a) Rule 144 under the Securities Act, as such rule may be amended from
time to time, or (b) any similar rule or regulation adopted by the SEC.
The Company shall, upon the request of any Holder of Registrable
Securities, deliver to such Holder a written statement as to whether it
has complied with such requirements.
11. MISCELLANEOUS
11.1 Amendments and Waivers. Subject to Section 11.2, this Agreement may be
modified or amended only by a writing signed by the Company and each of
the Holders.
11.2 Third Party Beneficiaries. Any Permitted Transferee shall be a third
party beneficiary or intended beneficiary to the agreement made
hereunder by a Holder so long as such Holder has granted rights under
this Agreement to such Permitted Transferee, and any such third party
beneficiary shall have the right to enforce such Agreement directly to
the extent it deems such enforcement necessary or advisable.
11.3 No Waiver. No failure to exercise and no delay in exercising on the
Company's or the Holders' part, of any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right power or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
11.4 Survival of Agreements. All agreements, representations and warranties
contained herein or made in writing by or on behalf of the Company in
connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement.
11.5 Limitation of Registration Rights. Nothing contained in this Agreement
shall create any obligation on behalf of the Company to register under
the Securities Act any securities which are not Registrable Securities.
11.6 Binding Effect and Benefits. This Agreement shall be binding upon and
shall insure to the benefit of the Company and the Holders and their
respective successors and assigns. Without limiting the generality of
the foregoing, each Holder's registration rights granted hereunder
shall be transferable to and exercised by any Permitted Transferee of
Registrable Securities. In the event the Company merges into or
consolidates with another entity or transfers substantially all of its
assets to another entity, the Company shall cause the surviving entity
or transferee to assume the Company's obligations hereunder.
11.7 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the
subjects hereof.
11.8 Separability of Provisions. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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11.9 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be by telecopy, facsimile
transmission (confirmed by U.S. mail), telegraph, hand delivery or
mailed by certified or registered mail postage prepaid, returned
receipt requested, to the addresses set forth below or to such other
address as any party may advise the other party in a written notice
given in accordance with this Section.
If to the Company: Xxxxxx Communications, Inc.
Two Democracy Center
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to the Holders: To the respective addresses set
forth in the records of the Company
Any notice or other communication so addressed and so mailed shall be
deemed to have been given when duly delivered or sent.
11.10 Construction. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to the conflict of laws provisions thereof. The descriptive
headings of the several sections and subsections hereof are for
convenience only and shall not control or affect the meaning of
construction of any of the provisions hereof.
11.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute a single original instrument.
11.12 Third Party Demand Rights. The Company represents that as of the date
hereo there are no effective demand registration rights in relation to
the
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Common Stock of the Company other than those contained herein and those
contained in the Registration Rights Agreement dated as of 6 January
1997 among the Company, Xxxxxx Xxxxx Xxxxxxxx Xxxxx and Xxxxxxx
Xxxxxxxx and the Registration Rights Agreement dated as of September 4,
1996 among the Company, Xxxxxx X Xxxxxx, Xxxxxxxx X Xxxxxx, U.S. News
College Marketing, L P and the 1995 Investors referred to therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE SHAREHOLDERS:
/s/ Xxxxxxxxxxx Xxxx Xxxxx
------------------------------------
Name: Xxxxxxxxxxx Xxxx Xxxxx
/s/ Xxxx Xxxxxx Bigg
------------------------------------
Name: Xxxx Xxxxxx Bigg
/s/ XX Xxxxx
------------------------------------
Name: Xxxx Madoc Xxxxxx
Signed by his attorney Xx XX Xxxxx
/s/ XX Xxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx Xxxx Kitcatt
Signed by his attorney Xx XX Xxxxx
/s/ Xxxxxx Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx Xxxxxx Xxxxxxx
/s/ XX Xxxxx
------------------------------------
Name: Xxx X Xxxxx
Signed by her attorney Xx XX Xxxxx
/s/ Xxxxxxx X Xxxxxx
------------------------------------
Name: Xxxxxxx X Xxxxxx
/s/ XX Xxxxxx
------------------------------------
Name: Mrs BR Xxxxxx
Signed by her attorney Xx XX Xxxxxx
/s/ XX Xxxxx
-----------------------------------
Name: Xxx XX Xxxxxx
Signed by her attorney Xx XX Xxxxx
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/s/ XX Xxxxx
-----------------------------------
Name: Mrs CM Kitcatt
Signed by her attorney Xx XX Xxxxx
/s/ XX Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxx Godwell Boss
Signed by his attorney Xx XX Xxxxx
/s/ Xxxxxx XxXxxxxx
-----------------------------------
Name: Xxxxxx XxXxxxxx
/s/ N Van Der Xxxxx/XX Xxxxxxxxx-Xxxxx
--------------------------------------
Name: N Van Der Xxxxx and XX
Xxxxxxxxx-Xxxxx as Trustees of the
ATB 1995 Settlement
/s/ AT Bigg
-----------------------------------
Name: Xxx XX Xxxxxx Bigg
Signed by her attorney Mr AT Bigg
/s/ Xxxxxxxx X Xxxx
-----------------------------------
Name: Xxxxxxxx X Xxxx
/s/ XX Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxx Xxxx
Signed by his attorney Xx XX Xxxxxxx
/s/ Xxxxx Xxxxxxx /XX Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx and X Xxxxx as
Trustees of the C Xxxxx settlement
Signed by Xxxxx Xxxxxxx as
attorney for Xxxxxx Xxxxx
Signed on behalf of
X Xxxxx by her attorney Xx XX
Xxxxx
/s/ XX Xxxxxxxx
-----------------------------------
3i Group plc
/s/ A Xxxxxxx Xxxxxxx
-----------------------------------
NatWest Ventures Investment Limited
By its attorney Xxxxxxx Xxxxxxx, a duly
authorized agent of Xxxxxx
Communications Inc.
17
THE COMPANY:
XXXXXX COMMUNICATIONS, INC.
By: /s/ A Xxxxxxx Xxxxxxx
----------------------------
Name: A Xxxxxxx Xxxxxxx
Title: Chief Financial Officer
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