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EXHIBIT 10.4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 3rd day of
May, 2000, by and between HIGH SPEED ACCESS CORP., a Delaware corporation (the
"Company") and LUCENT TECHNOLOGIES INC., a Delaware corporation (the
"Investor").
WHEREAS, the Investor wishes to purchase from the Company,
and the Company wishes to sell to the Investor, 1,250,000 shares of the
Company's Common Stock of an aggregate purchase price of Ten Million Dollars
($10,000,000), on the terms set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Stock. Subject to the terms and conditions of
this Agreement, the Company agrees to sell to the Investor and the Investor
agrees to purchase from the Company 1,250,000 shares of Common Stock from the
Company (the "Stock") at a price per share of Common Stock equal to $8.00, for
an aggregate purchase price equal to Ten Million Dollars ($10,000,000), having
the rights, preferences, privileges and restrictions set forth in the Amended
and Restated Certificate of Incorporation of the Company (the "Restated
Certificate").
1.2 The Closing. The purchase and sale of the Stock shall be held at
the Company's offices within five (5) business days after the satisfaction or
waiver of each of the conditions set forth in Sections 4 and 5 (the "Closing").
At the Closing, the Company will deliver the Stock to the Investor against
payment of the purchase price therefor by check payable to the order of the
Company or by wire transfer.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that:
2.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted.
2.2 Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
the Company hereunder, and the authorization, issuance and delivery of the
Stock has been taken or will be taken prior to the Closing, subject to laws of
general application relating to bankruptcy, insolvency and the relief of
debtors and by general principles of equity.
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2.3 Valid Issuance of Stock. The Stock, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed,
will be duly and validly issued, fully paid and nonassessable and, based in
part upon the representations of the Investor in this Agreement, will be issued
in compliance with all applicable federal and state securities laws.
2.4 Litigation. There are no actions, proceedings or investigations
pending or, to the best of Company's knowledge, any basis therefor or threat
thereof, against or affecting the Company, that, either in any case or in the
aggregate, would result in any material adverse change in the business,
financial condition, or results of operations of the Company.
2.5 Properties. To the best of the Company's knowledge (but without
having conducted any special investigation), the Company has (i) good and
marketable title to its properties and assets and has good title to all its
leasehold interests, and (ii) sufficient title, license and/or ownership of all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for its business as now
conducted on the date hereof.
2.6 Compliance with Other Documents. The execution and delivery of
this Agreement, consummation of the transactions contemplated hereby, and
compliance with the terms and provisions hereof will not conflict with or
result in a breach of the terms and conditions of, or constitute a default
under the Restated Certificate or Bylaws of the Company or of any contract or
agreement to which the Company is now a party, except where such conflict,
breach or default of any such contract or agreement, either individually or in
the aggregate, would not have a material adverse effect on the Company's
business, financial condition or results of operations.
2.7 SEC Filings. Since June 4, 1999 (the "IPO Date"), the Company has
filed with the Securities and Exchange Commission (the "SEC") all reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) required to be filed under the
Securities Act and the Exchange Act (the "SEC Documents"). As of their
respective dates, the SEC Documents have complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents and, except to the extent that information contained in any
SEC Document has been revised or superseded by a later filed SEC Document, none
of the SEC Documents when filed contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form, as
of their respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all
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material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal recurring year-end audit adjustments).
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants that:
3.1 Authorization. This Agreement constitutes the valid and legally
binding obligation of the Investor, enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and by general principles of equity.
3.2 Investigation. The Investor acknowledges that it has had an
opportunity to discuss the business, affairs and current prospects of the
Company with the Company's executive officers. The Investor further
acknowledges having had access to information about the Company that it has
requested or considers necessary for purposes of purchasing the Stock.
3.3 Accredited Investor. The Investor is an "accredited investor" as
such term is defined in Regulation D adopted by the SEC.
3.4 Purchase Entirely for Own Account. This Agreement is made with the
Investor in reliance upon the Investor's representation to the Company, which
by the Investor's execution of this Agreement the Investor hereby confirms,
that the Stock will be acquired for investment for the Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that the Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same.
4. Conditions to the Investor's Obligation at Closing. The obligation of
the Investor to purchase the Stock at the Closing is subject to the fulfillment
to the Investor's satisfaction on or prior to the Closing of the following
conditions:
4.1 Representations and Warranties. The representations and warranties
made by the Company in Section 2 hereof shall be true and correct when made,
and shall be true and correct as of the Closing with the same force and effect
as if they had been made on and as of such date, subject to changes
contemplated by this Agreement.
4.2 Securities Laws. The offer and sale of the Stock to the Investor
pursuant to this Agreement shall be either (i) registered under the Securities
Act, or (ii) exempt from the registration requirements of the Securities Act
and the registration and/or qualification requirements of all applicable state
securities laws.
4.3 Authorizations. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement (including, if applicable, the
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expiration of any waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act")) shall have been duly
obtained and shall be effective on and as of the Closing.
5. Conditions to the Company's Obligations at Closing. The obligation of
the Company to sell the Stock at the Closing is subject to the fulfillment to
the Company's satisfaction on or prior to the Closing of the following
conditions:
5.1 Representations and Warranties. The representations and warranties
of the Investor contained in Section 3 hereof shall be true as of the Closing
with the same force and effect as if they had been made on and as of such date,
subject to changes contemplated by this Agreement.
5.2 Securities Laws. The offer and sale of the Stock to the Investor
pursuant to this Agreement shall be either (i) registered under the Securities
Act, or (ii) exempt from the registration requirements of the Securities Act
and the registration and/or qualification requirements of all applicable state
securities laws.
5.3 Authorizations. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement (including, if applicable, the expiration of any waiting period under
the HSR Act) shall have been duly obtained and shall be effective on and as of
the Closing.
5.4 Payment of Purchase Price. The Investor shall have delivered to
the Company the purchase price for the Stock as set forth in Section 1.2
hereof.
6. Covenants of the Company and the Investor.
6.1 Agreement Not to Transfer.
(a) Prior to the first anniversary of the Closing, the Investor
shall not, directly or indirectly, Transfer or offer to
Transfer, in the aggregate, more than fifty percent (50%) of
the shares of the Stock during any one calendar quarter.
(b) Notwithstanding the foregoing restrictions on Transfer (the
"Transfer Restrictions"), the Transfer Restrictions shall be
ineffective in the event an unrelated third party has
publicly announced and is actively pursuing the purchase of
all or substantially all of the assets or capital stock of
the Company or a merger in which the Company would not be the
surviving corporation; provided, that if such acquisition or
merger is not consummated within sixty days of such public
announcement, the Transfer Restrictions shall be reinstated.
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(c) In order to enforce the Transfer Restrictions, the Company
may impose stop-transfer instructions with respect to the
Stock until the end of the restricted period.
(d) As used in this Agreement, the term "Transfer" shall mean any
sale, transfer, assignment, hypothecation, encumbrance or
other disposition, whether voluntary or involuntary, of
shares of the Stock. In the case of a hypothecation, the
Transfer shall be deemed to occur both at the time of the
initial pledge and at any pledgee's sale or a sale by any
secured creditor or a retention by the secured creditor of
the pledged shares of the Stock in complete or partial
satisfaction of the indebtedness for which the shares of the
Stock are security.
6.2 Market Stand-Off. In addition to the Transfer Restrictions (which
shall in no way be limited by the following), in connection with any secondary
underwritten public offering by the Company of its equity securities pursuant
to an effective registration statement filed under the Securities Act, the
Investor shall not Transfer or offer to Transfer any shares of the Stock
without the prior written consent of the Company and its underwriters. Such
restriction (the "Market Stand-Off") shall be in effect for such period of time
from and after the effective date of the final prospectus for the offering as
may be requested by the Company or such underwriters; provided, however, that
(i) such Market Stand-Off shall not exceed one hundred eighty (180) days, and
(ii) the Investor shall be subject to the Market Stand-Off only if the officers
and directors of the Company are also subject to similar restrictions. In order
to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the Stock until the end of the applicable
stand-off period.
6.3 Notice of Intention to Transfer. On or prior to the third
anniversary of the Closing, in the event the Investor plans to Transfer in the
aggregate more than twenty percent (20%) of the shares of the Stock in one or
more transactions during any three (3) month period, the Investor shall use its
best efforts to inform the Company of such intention to Transfer such shares
ten (10) days prior to such Transfer.
6.4 Standstill. The Investor agrees that, prior to the third
anniversary of the IPO Date, unless specifically invited by the Company, the
Investor will not, in any manner, directly or indirectly, effect any
acquisition of Voting Securities (as hereinafter defined), or beneficial
ownership thereof if, immediately after any such acquisition, the Investor
would beneficially own, in the aggregate, Voting Securities representing more
than ten percent (10%) of the outstanding Common Stock of the Company. The
Investor also agrees during such period not to make any public request (or
publicize any request) of the Company (or its directors, officers, employees or
agents), directly or indirectly, to amend or waive any provision of this
Section 6.4 (including this sentence). The Investor also agrees not to form,
join or in any way participate in a "group" (as defined under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), or take any other
action, in order to circumvent the provisions of this Section 6.4.
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For purposes of this Agreement, (i) the term "Voting
Securities" shall refer to all securities of the Company entitled to vote
generally for the election of directors, and (ii) the term "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
The restrictions set forth in this Section 6.4 shall be
ineffective upon the occurrence of either of the following events: (i) an
unrelated third party has publicly announced and is actively pursuing the
purchase of all or substantially all of the assets or capital stock of the
Company or a merger in which the Company would not be the surviving
corporation; or (ii) an officer of the Company, duly authorized by the
Company's Board of Directors, has informed the Investor in writing of the
Company's potential interest in entering into a sale of all or substantially
all of its assets or stock or a merger in which the Company would not be the
surviving corporation; provided, however, that if such acquisition, merger or
sale is not consummated within sixty days of such public announcement (in the
case of clause (i)) or of such notice in writing (in the case of clause (ii)),
the restrictions set forth in this Section 6.4 shall be reinstated.
6.5 Voting Agreements. For a period ending on the seventh anniversary
of the Closing, the Investor agrees to vote all shares of Voting Securities
owned by it (i) in each election of directors for the entire slate of nominees
recommended by the Company's Board of Directors to the Company's shareholders
and (ii) on all other matters to be voted on by holders of Voting Securities,
unless the Company otherwise consents in writing, in the same proportion as the
votes cast by all other shareholders of the Company entitled to vote on such
matter (other than the Investor). The Investor, as a holder of Voting
Securities, shall be present, in person or by proxy, at all meetings of
shareholders of the Company so that all shares of Voting Securities
beneficially owned by it may be counted for the purpose of determining the
presence of a quorum at such meetings.
The voting agreements set forth in this Section 6.5 shall
terminate immediately if an unrelated third party has publicly announced and is
actively pursuing the purchase of all or substantially all of the assets or
capital stock of the Company or a merger in which the Company would not be the
surviving corporation; provided, however, that if such acquisition, merger or
sale is not consummated within sixty days of such public announcement, the
voting agreements set forth in this Section 6.5 shall be reinstated.
6.6 Xxxx-Xxxxx-Xxxxxx. The Company and the Investor will assist and
cooperate with each other regarding any filings required under the HSR Act and
any other applicable laws and regulations. The Company and the Investor each
agree to make any HSR Act and other filings promptly upon the other's request.
6.7 Registration of Stock. The Company agrees that, upon request by
the Investor on or after June 3, 2000, it will effect registration of the Stock
in accordance with the provisions contained in Exhibit A attached hereto. The
Investor understands and agrees that (i) the Stock will be characterized as
"restricted securities" under the federal securities laws inasmuch as it is
being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities
may be resold
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without registration under the Securities Act only in certain limited
circumstances, and (ii) each certificate representing the Stock and any other
securities issued in respect of the Stock upon any stock split, stock dividend,
recapitalization, merger or similar event (unless no longer required in the
opinion of counsel for the Company) shall be stamped or otherwise imprinted
with appropriate legends mandated by federal and state securities laws.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware without regard to the conflict of law
provisions thereof.
7.2 Survival; Additional Securities. The representations and
warranties set forth in Sections 2 and 3 shall survive until the Closing. The
covenants and agreements set forth in Section 6 shall survive in accordance
with their terms. Any new, substituted or additional securities which are by
reason of any stock split, stock dividend, recapitalization or reorganization
distributed with respect to the Stock ("Stock Distributions") shall be
immediately subject to the covenants and agreements set forth in Section 6 to
the same extent the Stock is at such time covered by such provisions.
7.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the respective successors and assigns of the parties hereto. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. Notwithstanding anything to the
contrary contained herein, the covenants set forth in Section 6 shall not be
binding upon any entity (other than an affiliate of the Investor) which
acquires any shares of the Stock or a Stock Distribution in a transaction
permitted hereunder.
7.4 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties with regard to the subject
matter hereof.
7.5 Notices. Except as otherwise provided, all notices and other
communications required or permitted hereunder shall be in writing, shall be
effective when given, and shall in any event be deemed to be given upon receipt
or, if earlier, (i) five (5) days after deposit with the U.S. postal service or
other applicable postal service, if delivered by first class mail, postage
prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1) business day
after the day of deposit with Federal Express or similar overnight courier,
freight prepaid, if delivered by overnight courier or (iv) one (1) business day
after the day of facsimile transmission, if delivered by facsimile transmission
with copy by first class mail, postage prepaid, and shall be addressed, (a) if
to the Investor, at the Investor's address set forth below its signature, or at
such other address as the Investor shall have furnished to the Company in
writing, or (b) if to the Company, at its address as set forth below its
signature, or at such other address as the Company shall have furnished to the
Investor in writing.
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7.6 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of the Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only
with the written consent of the Company and the Investor.
7.7 Legal Fees. In the event of any action at law, suit in equity or
arbitration proceeding in relation to this Agreement or the Stock or any Stock
Distribution, the prevailing party shall be paid by the other party a
reasonable sum for the attorneys' fees and expenses incurred by such prevailing
party.
7.8 Expenses. Irrespective of whether the Closing is effected, the
Company and the Investor shall each pay their own costs and expenses incurred
with respect to the negotiation, execution, delivery and performance of this
Agreement.
7.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
7.11 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
7.12 Confidentiality. The parties hereto agree that, except with the
prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish, or make accessible to anyone any
confidential information, knowledge, or data concerning or relating to the
business or financial affairs of such other party to which said party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, or the performance of its obligations hereunder.
7.13 Publicity. Except as required by law, no press release, public
statement, advertisement or similar publicity from any party hereunder with
respect to the participation of the Investor or any affiliate thereof in the
transactions contemplated hereby (or any other matter relating to the Company
and such Investor or its affiliates) shall be issued or made without the prior
consent of the Investor. In the event that such publicity or disclosure is
required by law, the Company shall provide the Investor with prior written
notice of such publicity or disclosure. Notwithstanding the foregoing, the
Company may disclose the Investor's participation as a shareholder of the
Company and the number of shares of common stock the Investor owns pursuant to
the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year herein above first written.
HIGH SPEED ACCESS CORP.
0000 Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx X'Xxxxx, President
/s/ Xxxxxx X. X'Xxxxx
--------------------------------
By: Xxxxxx X. X'Xxxxx, CEO
LUCENT TECHNOLOGIES INC.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
/s/ Xxxx Xxxxxxxx
--------------------------------------
By: Xxxx Xxxxxxxx
Vice President and Treasurer
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EXHIBIT A
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Exhibit A, capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them
in the Stock Purchase Agreement between the Company and the Investor to which
this Exhibit A is attached. In addition, the following terms used herein shall
have the following meanings:
(a) The term "Form S-1" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the
Company with the SEC.
(b) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the
Company with the SEC.
(c) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(d) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
1.2 Request for Registration. If the Company shall receive, at any
time after June 3, 2000, a written request from the Investor that the Company
effect a registration on a Form S-3 and any related qualification or compliance
with respect to the Stock, then the Company shall, as expeditiously as
reasonably possible, effect the registration of all, but not less than all,
such Stock on Form S-3 and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and distribution of all of
the Stock. The Company shall have no obligation to effect any registration of
less than all of the Stock.
(a) Notwithstanding anything to the contrary in this Section 1.2, the
Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.2: (i) if the
Company shall furnish to the Investor a certificate signed by the
President of the Company stating that, in the good faith judgment of
the Board of Directors of the Company, such registration should be
deferred due to material events directly relating to the Company, in
which event the Company shall have the right to defer the filing of
the Form S-3 for a period of not more than 90 days after receipt of
the request of the Investor under this Section 1.2 (provided, however,
that the Company may defer such registration only once); or (ii) in
any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance.
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(b) If Form S-3 is not available to the Company to effect the
registration of the Stock as contemplated by this Section 1.2, then
(i) the Company shall effect such registration on Form S-1 and (ii) in
such event, all references in this Section 1 to Form S-3 shall be read
as references to Form S-1.
(c) The Company shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 1.2 after
the earlier to occur of the following events: (i) the Company has
effected one registration pursuant to this Section 1.2, and such
registration has been declared or ordered effective and otherwise
satisfies and continues to satisfy the terms and conditions of this
Section 1.2; or (ii) the Company has voluntarily effected the
registration of all of the Stock without having first received a
request for such registration pursuant to this Section 1.2 (a
"Voluntary Registration"), and such Voluntary Registration has been
declared or ordered effective and otherwise satisfies and continues to
satisfy the terms and conditions of this Section 1.2.
1.3 Obligations of the Company. Whenever required under Section 1.2 to
effect the registration on Form S-3 of the Stock, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a Form S-3 with respect to such
Stock and use its best efforts to cause such registration statement to
become effective as soon as reasonably practicable after the mailing
of the request for such registration but in no event later than ninety
(90) days after such mailing. The Company shall keep such registration
statement effective until the earlier of (i) two (2) years after the
Closing, (ii) the distribution of all of the Stock as contemplated in
the registration statement has been completed, and (iii) the date
which all shares of the Stock held by the Investor may immediately be
sold under Rule 144 during any 90-day period.
(b) 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.
(c) Furnish to the Investor such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Investor may
reasonably request in order to facilitate the disposition of the
Stock.
(d) 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 the Investor; 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.
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(e) Notify the Investor covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered
under the Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing.
(f) Cause all such Stock registered pursuant hereunder to be listed on
each securities exchange on which similar securities issued by the
Company are then listed.
(g) Provide a transfer agent and registrar for all of the Stock
registered pursuant hereunder and a CUSIP number for all such Stock,
in each case not later than the effective date of such registration.
1.4 Investor Obligation to Furnish Information. It shall be a
condition precedent to the obligations of the Company to take any action
pursuant hereto with respect to the Stock that the Investor shall furnish to
the Company such information regarding itself, the Stock, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Stock.
1.5 Expenses of Registration. All expenses incurred in connection with
registrations, filings or qualifications pursuant hereto, including (without
limitation) all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company (including
fees and disbursements of counsel for the Company in its capacity as counsel to
the Investor hereunder but excluding the fees and disbursements of any other
counsel for the Investor) shall be borne by the Company; provided, however,
that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant hereto if the registration request is
subsequently withdrawn at the request of the Investor, unless the Investor
agrees to forfeit its right to any demand registration pursuant hereto;
provided further, however, that if at the time of such withdrawal, the Investor
has learned of a material adverse change in the condition, business, or
prospects of the Company from that known to the Investor at the time of its
request and has withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change, then the Investor
shall not be required to pay any of such expenses and shall retain its right of
registration pursuant to Section 1.2.
1.6 Indemnification. In the event any Stock is included in a
registration statement under Section 1.2:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Investor, any underwriter (as defined in the Act)
for the Investor and each person, if any, who controls the Investor or
underwriter within the meaning of the Act or the 1934 Act, against any
losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of
the following statements, omissions or violations (collectively a
"Violation"):
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(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement,
including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to
make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of
the Act, the 1934 Act, any state securities law or any rule
or regulation promulgated under the Act, the 1934 Act or any
state securities law; and the Company will pay to the
Investor, or such underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection (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
shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly
for use in connection with such registration by any such
Investor, underwriter or controlling person.
(b) To the extent permitted by law, the Investor will indemnify and
hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter,
and any controlling person of any such underwriter, against any
losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, the
1934 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Investor
expressly for use in connection with such registration; and each such
Investor will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this
subsection (b), in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection (b) 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 Investor, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subsection
(b) exceed the gross proceeds from the offering received by the
Investor.
(c) Promptly after receipt by an indemnified party under this Section
1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under
this Section 1.6, deliver to the indemnifying party a written notice
of the
4
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commencement thereof and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party (together
with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under
this Section 1.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section 1.6.
(d) If the indemnification provided for in this Section 1.6 is held by
a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on
the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in an underwriting
agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
(f) The obligations of the Company and the Investor under this Section
1.6 shall survive the completion of any offering of the Stock in a
registration statement pursuant hereto, and otherwise.
1.7 Termination. The Company's obligation to register the Stock
pursuant to this agreement shall terminate on the earlier of (i) the second
anniversary of the Closing and (ii) the date on which all shares of the Stock
held by the Investor may immediately be sold under Rule 144 during any 90-day
period.
5
