EXHIBIT 4.3
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REGISTRATION RIGHTS AGREEMENT
Dated as of September 4, 1997
relating to
$115,000,000 in Aggregate Principal Amount
of 5 1/4% Convertible Subordinated
Notes due 2002
by and between
Credence Systems Corporation
and
Xxxxx Xxxxxx Inc.
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This Registration Rights Agreement (the "Agreement") is made and
entered into as of September 4, 1997, by and between Credence Systems
Corporation, a Delaware corporation (the "Company") and Xxxxx Xxxxxx Inc. (the
"Initial Purchaser"), who has purchased $100,000,000 in aggregate principal
amount of 5 1/4% Convertible Subordinated Notes due 2002 (the "Firm Notes") of
the Company pursuant to the Purchase Agreement (as defined below). The Company
also proposes, upon the terms and conditions set forth in the Purchase
Agreement, to issue and sell to the Initial Purchaser up to an additional
$15,000,000 aggregate principal amount of its 5 1/4% Convertible Subordinated
Notes due 2002 (the "Additional Notes"). The Firm Notes and the Additional
Notes are hereinafter collectively referred to as the "Notes."
This Agreement is made pursuant to a Purchase Agreement, dated
September 4, 1997 (the "Purchase Agreement"), between the Company and the
Initial Purchaser. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to closing under the Purchase Agreement. All defined terms used but
not defined herein shall have the meanings ascribed to them in the Indenture (as
defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
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Closing Date: The date on which all the Firm Notes are sold by
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the Company to the Initial Purchaser.
Commission: The Securities and Exchange Commission.
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Common Stock: The voting Common Stock, par value $.001 per
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share, of the Company.
Damages Payment Date: With respect to the Notes or the Common
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Stock, as applicable, each Interest Payment Date as defined in the Indenture.
Effectiveness Target Date: As defined in Section 4.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
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Exempt Resales: The transactions in which the Initial Purchaser
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proposes to sell the Notes (i) inside the United States to certain "qualified
institutional buyers" (as such term is defined in Rule 144A under the Act) and
(ii) outside the United States in reliance on Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
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Indenture: The Indenture, dated as of September 10, 1997,
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between the Company and First National Bank and Trust Company of California,
N.A., as trustee (the "Trustee"), pursuant to which the Notes are to be issued,
as such Indenture is amended or supplemented from time to time in accordance
with the terms thereof.
Interest Payment Date: As defined in the Indenture.
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NASD: National Association of Securities Dealers, Inc.
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Offering Memorandum: The Offering Memorandum, dated September
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4,1997, and all amendments and supplements thereto, relating to the Notes and
prepared by the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or
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unincorporated organization, or a government or agency or political subdivision
thereof.
Preliminary Prospectus: As defined in Section 3(g).
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Prospectus: The prospectus included in the Shelf Registration
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Statement (as defined herein), as amended or supplemented by any Prospectus
Supplement with respect to the terms of the offering of any portion of the
Transfer Restricted Securities (as defined herein) covered by the Shelf
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments, and all material which may be
incorporated by reference into such prospectus.
Prospectus Supplement: As defined in Section 5(b).
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Record Holder: (i) With respect to any Damages Payment Date
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relating to the Notes, each Person who is registered on the books of the
Registrar as the holder of Notes on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur and (ii) with
respect to any Damages Payment Date relating to the Common Stock, each Person
who is a holder of record of such Common Stock fifteen days prior to the Damages
Payment Date.
Shelf Registration Statement: As defined in Section 3(a)
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hereof.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C.
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Section 77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Debenture and share of
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Common Stock of the Company issuable upon conversion of a Debenture, until each
such Debenture or share (i) has been effectively registered under the Act and
disposed of in accordance with the Shelf Registration Statement covering it,
(ii) is distributed to the public pursuant to Rule 144 or (iii) may be sold or
transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling broker,
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dealer manager, qualified independent underwriter or similar securities industry
professional.
Underwritten Registration or Underwritten Offering: An
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offering in which securities of the Company are sold to an Underwriter or with
the assistance of such Underwriter for reoffering to the public on a firm
commitment or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled
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to the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
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deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission on
or prior to 60 days after the Closing Date, a shelf registration statement
pursuant to Rule 415 under the Act (as may then be amended, the "Shelf
Registration Statement") on Form S-1, or Form S-3 if the use of such form is
then available, to cover resales of Transfer Restricted Securities by the
Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Holders of
such Transfer Restricted Securities shall have provided the representations
required pursuant to Section 3(g) hereof. The Company shall use its reasonable
best efforts to cause such Shelf Registration Statement to be declared effective
by the Commission on or prior to 120 days after the Closing Date. The Company
shall use its reasonable best efforts to keep such Shelf Registration Statement
continuously effective for a period ending two years following the Closing Date
or such shorter period that will terminate when each of the Transfer Restricted
Securities covered by the Shelf Registration
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Statement shall cease to be a Transfer Restricted Security. The Company further
agrees to use its reasonable best efforts to prevent the happening of any event
that would cause the Shelf Registration Statement to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or to
be not effective and useable for resale of the Transfer Restricted Securities
during the period that such Shelf Registration Statement is required to be
effective and useable.
Upon the occurrence of any event that would cause the Shelf
Registration Statement (i) to contain a any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) to be not effective and
useable for resale of Transfer Restricted Securities during the period that such
Shelf Registration Statement is required to be effective and useable, the
Company shall as promptly as reasonably practicable file an amendment to the
Shelf Registration Statement, in the case of clause (i), correcting any such
misstatement or omission, and in the case of either clause (i) or (ii), use its
reasonable best efforts to cause such amendment to be declared effective and
such Shelf Registration Statement to become useable as soon as reasonably
practicable thereafter.
(b) None of the Company nor any of its security holders (other
than the Holders of Transfer Restricted Securities in such capacity) shall have
the right to include any of the Company's securities in the Shelf Registration
Statement.
(c) No Holder of Transfer Restricted Securities may include any
of its Transfer Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless such Holder furnishes to the Company in
writing, within 10 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus (a
"Preliminary Prospectus") included therein.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with
the Commission on or prior to 60 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commissioner
within 120 days after the Closing Date (the "Effectiveness Target Date"), or
(iii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by any
additional Shelf Registration Statement filed and declared effective) or useable
for the offer and sale of Transfer Restricted Securities for a period of time
(including any period during which offers and sales are prohibited) which shall
exceed 60 days in the aggregate in any 12-month period during the period
beginning on the Closing Date and ending on or prior to the second anniversary
of the Closing Date (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay liquidated damages to each Holder
of Transfer Restricted Securities who has complied with such Holder's
obligations under this Agreement; provided, however, that if any Registration
Default results solely from the failure of any Holder of Transfer Restricted
Shares to provide the Company with information required by it in connection with
the Shelf Registration Statement, the Company shall not be liable for any
liquidated damages hereunder for so long as such Registration Default continues
solely due to the failure of such Holder or Holders to provide the required
information. The amount of liquidated damages payable during any period in which
a Registration Default shall have occurred and be continuing is that amount
which is equal to one-quarter of one percent (25 basis points) per annum per
$1,000 principal amount of Notes or, if applicable, $2.50 per annum per 14.4613
shares of Common Stock (subject to adjustment in the event of stock splits,
stock recombinations, stock dividends and the like) constituting Transfer
Restricted Securities for the first 90 days during which a Registration Default
has occurred and is continuing and 50 basis points per annum per $1,000
principal amount of Notes or $5.00 per annum per 14.4613 shares of Common Stock
(subject to adjustment as set forth above) constituting Transfer Restricted
Securities for any additional days during which a Registration Default has
occurred and is continuing. It being understood that all calculations pursuant
to the preceding sentences shall be carried out to four decimals. All accrued
liquidated damages shall be paid to Record Holders by wire transfer of
immediately available funds or by federal funds check by the Company on each
Damages Payment Date. Following the cure of all Registration Defaults,
liquidated damages will cease to accrue with respect to such Registration
Default.
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All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company
will use its reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution or disposition thereof, and pursuant
thereto the Company will as expeditiously as possible after the Closing Date:
(a) prepare and file with the Commission a Shelf Registration
Statement relating to the registration on Form S-1, or Form S-3 if the use of
such form is then available, for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof and
shall include all financial statements required to be included or incorporated
by reference therein; cooperate and assist in any filings required to be made
with the NASD and use its reasonable best efforts to cause such Shelf
Registration Statement to become effective and approved by such governmental
agencies or authorities as may be necessary to enable the selling Holders to
consummate the disposition of such Transfer Restricted Securities; provided,
however, that before filing a Shelf Registration Statement or any Prospectus, or
any amendments or supplements thereto, the Company will furnish to the Holders
copies of all such documents filed (except that the Company shall not be
required to furnish any exhibits to such documents, including those incorporated
by reference, unless so requested by a Holder in writing), and the Company will
not file any Shelf Registration Statement or amendment thereto or any Prospectus
or any supplement thereto to which and if (A) only Notes are to be registered in
the Shelf Registration Statement and the Holders of a majority in aggregate
principal amount of the Notes registered in the Shelf Registration Statement
shall reasonably object, or (B) any shares of Common Stock issued upon
conversion of the Notes are included in the Shelf Registration Statement and the
Holders of a majority of the shares of Common Stock so registered in the Shelf
Registration Statement shall reasonably object, in each such case within five
business days after the receipt thereof. A Holder or Underwriter, if any, shall
be deemed to have reasonably objected to such filing if the Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed contains any 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 which misstatement or omission is specifically identified
to the Company in writing within such five business days;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period set forth in Section 3(a) hereof, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold; cause the Prospectus to be supplemented
by any required supplement thereto (a "Prospectus Supplement"), and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Shelf Registration
Statement, Prospectus or Prospectus Supplement;
(c) if requested by the Holders of Transfer Restricted
Securities, or if the Transfer Restricted Securities are being sold in an
Underwritten Offering, the Underwriter(s) of such Underwritten Offering,
promptly incorporate in the Prospectus, any Prospectus Supplement or post-
effective amendment to the Shelf Registration Statement such information as the
Underwriters and/or the Holders of Transfer Restricted Securities being sold
agree should be included therein relating to the plan of distribution of the
Transfer Restricted Securities, including, without limitation, information with
respect to the principal amount of Transfer Restricted Securities being sold to
such Underwriter(s), the purchase price being paid therefor and any other terms
with respect to the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus, Prospectus
Supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be incorporated in such Prospectus, Prospectus
Supplement or post-effective amendment;
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(d) advise the Underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing,
(i) when the Prospectus or any Prospectus Supplement or post-effective amendment
to the Shelf Registration Statement has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment thereto, when the
same has become effective, (ii) of any request by the Commission for amendments
to the Shelf Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any proceeding
for any of the preceding purposes, (iv) if at any time the representations and
warranties of the Company contemplated by paragraph (m)(i) below cease to be
true and correct, and (v) of the existence of any fact and the happening of any
event that makes any statement of a material fact made in the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Shelf Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use their reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(e) promptly following the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration Statement,
provide copies of such document (excluding exhibits, unless requested by a
Holder in writing) to the Holders if requested by the Holder;
(f) furnish to each Holder and each of the Underwriter(s), if
any, without charge, at least one copy of the Shelf Registration Statement, as
first filed with the Commission, and of each amendment thereto, excluding all
documents incorporated by reference therein and all exhibits (excluding exhibits
to documents incorporated by reference therein unless requested by such Holder);
(g) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto;
(h) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the Underwriter(s), if any, and
one counsel for all Holders in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or Blue
Sky laws of such jurisdictions as the selling Holders or Underwriter(s) may
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdiction of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that the
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Company shall not be required (i) to register or qualify as a foreign
corporation where it is not now so qualified, (ii) to take any action that would
subject it to the service of process in suits, other than as to matters and
transactions relating to the Shelf Registration Statement, in any jurisdiction
where it is not now so subject, or (iii) to take any action that would subject
it to taxation in any jurisdiction in an amount greater than it would be so
subject without having taken such action;
(i) cooperate with the selling Holders and the Underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request as soon as possible;
(j) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof or the
Underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (h) above;
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(k) if any fact or event contemplated by clause (d)(v) above
shall exist or have occurred, prepare a post-effective amendment or supplement
to the Shelf Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(l) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration Statement
and provide the Trustee under the Indenture and/or the transfer agent for the
Common Stock with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the Depository Trust Company;
(m) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith as may
reasonably be required in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to the Shelf Registration Agreement, in
connection with an Underwritten Registration, set forth in full or incorporate
by reference in the underwriting agreement the indemnification provisions and
procedures of Section 7 hereof with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at or prior to each closing
under such underwriting agreement, as and to the extent required thereunder;
(n) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act, for the twelve-month period (i)
commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to Underwriters in a firm commitment or best efforts
Underwritten Offering or (ii) if not sold to Underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Shelf Registration Statement;
(o) cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner;
(p) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration Statement at
the earliest possible moment;
(q) cause all Transfer Restricted Securities covered by the
Shelf Registration Statement to be listed on the securities exchange or
quotation system on which similar securities issued by the Company are then
listed if requested by the Holders of a majority in aggregate principal amount
and/or number of shares of such Transfer Restricted Securities or the
Underwriters, if any; cause the Notes covered by the Shelf Registration
Statement to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of such Notes or the
Underwriters; and
(r) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
Each Holder as to which any Shelf Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading or necessary to cause
such Shelf Registration Statement not to omit a material fact with respect to
such Holder necessary in order to make the statements therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder
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will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities current at the time of receipt of
such notice. In the event Company shall give any such notice, the time period
regarding the effectiveness of Shelf Registration Statement set forth in Section
3(a) hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(d)(v)
hereof to and including the date when each selling Holder covered by such Shelf
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof or shall have received
the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement (the "Registration Expenses") will be borne by
the Company, regardless whether a Shelf Registration Statement becomes
effective, including without limitation:
(i) all registration and filing fees and expenses
(including filings made with the NASD);
(ii) fees and expenses of compliance with federal
securities or state blue sky laws;
(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer Restricted
Securities in a form eligible for deposit with Depository Trust Company and of
printing the Prospectus and any Preliminary Prospectus), messenger and delivery
services and telephone;
(iv) reasonable fees and disbursements of counsel for the
Company and for one counsel to Holders of the Transfer Restricted
Securities which, it is agreed shall be Xxxxxxxx & Xxxxxxxx LLP (subject to
the provisions of Section 6(b) hereof);
(v) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any special
audit and "cold comfort" letters required by or incidental to the
preparation and filing of a Shelf Registration Statement and Prospectus and
the disposition of Transfer Restricted Securities);
(vi) fees and expenses associated with any NASD filing
required to be made in connection with the Shelf Registration Statement,
including, if applicable, the fees and expenses of any "qualified
independent Underwriter" (and its counsel) that is required to be retained
in accordance with the rules and regulations of the NASD; and
(vii) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in accordance with
Section 5(q) hereof.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company. The Holders of Transfer Restricted
Securities shall bear the expense of any broker's commission or Underwriters'
discount or commission.
(b) In connection with the Shelf Registration Statement, the
Company will reimburse the Holders of Transfer Restricted Securities being
registered pursuant to such Shelf Registration Statement for the fees and
disbursements of not more than one counsel which, it is agreed shall be Xxxxxxxx
& Xxxxxxxx LLP.
Notwithstanding the provisions of this Section 6(b), each Holder
of Transfer Restricted Securities shall pay all Registration Expenses to the
extent required by applicable law.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnity and hold harmless each
Holder (each such Holder an "Indemnified Holder"), each agent, employee, officer
and director of any Indemnified Holder and each person that controls each
Indemnified Holder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and agents, employees, officers and directors or any such
controlling person of any Indemnified Holder from and against
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any and all reasonable losses, claims, damages, judgments, liabilities and
expenses (including the reasonable fees and expenses of counsel and other
expenses in connection with investigating, defending or settling any such action
or claim) which arise out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement or the Prospectus or any amendment or supplement thereto or any
Preliminary Prospectus or arising out of or based upon 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, except (i) the Company
shall not be liable to any Indemnified Holder in any such case insofar as such
losses, claims, damages, judgments, liabilities or expenses arise out of, or are
based upon, any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to such Indemnified Holder or
Indemnified Underwriter furnished in writing by such Indemnified Holder to the
Company expressly for use therein and (ii) the Company shall not be liable to
any Indemnified Holder under the indemnity agreement in this Section 7(a) with
respect to any Preliminary Prospectus to the extent that any such loss, claim,
damage, judgment, liability or expense results solely from the fact that any
Indemnified Holder sold Transfer Restricted Securities to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented, if the Company has
previously furnished sufficient copies thereof to the Indemnified Holder.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Indemnified Holder with respect to which indemnity may be sought against the
Company pursuant to this Section 7, such Indemnified Holder shall promptly
notify the Company in writing, and the Company shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Holder and payment of all fees and expenses; provided,
however, that the omission so to notify the Company shall not relieve the
Company from any liability that they may have to any Indemnified Holder (except
to the extent that the Company is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). An Indemnified Holder
shall have the right to employ separate counsel in any such action or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Holder unless (i) the
Company agrees in writing to pay such fees and expenses, (ii) the Company has
failed promptly to assume the defense and employ counsel satisfactory to the
Indemnified Holder or (iii) the named parties to any such action or proceeding
(including any unpleaded parties) include both the Indemnified Holder and the
Company and such Indemnified Holder shall have been advised in writing by its
counsel that representation of them and the Company by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation has been proposed) due to actual or potential differing
interests between them (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Indemnified Holder). It is
understood that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for such Indemnified Holders, which firm shall be
designated in writing by the Holders of the majority of the aggregate principal
amount of Notes and/or the number of shares of Common Stock on behalf of such
Indemnified Holders, and that all such fees and expenses shall be reimbursed as
they are incurred. The Company shall not be liable for any settlement of any
such action effected without the written consent of the Company, but if settled
with the written consent of the Company, or if there is a final judgment with
respect thereto, the Company agrees to indemnify and hold harmless each
Indemnified Holder from and against any loss or liability by reason of such
settlement or judgment. The Company shall not, without the prior written consent
of each Indemnified Holder affected thereby, effect any settlement of any
pending or threatened proceeding in which such Indemnified Holder has sought
indemnity hereunder, unless such settlement includes an unconditional release of
such Indemnified Holder from all liability arising out of such action, claim,
litigation or proceeding.
(c) Each Indemnified Holder agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act (collectively, the "Company
Indemnified Parties") to the same extent as the foregoing indemnity from the
Company to any Indemnified Holder, but only with respect to information relating
to each Indemnified Holder furnished to the Company in writing by each
Indemnified Holder, expressly for use in the Registration Statement, Prospectus
(or any amendment or supplement thereto), or any Preliminary Prospectus. In case
any action shall be brought against any Company Indemnified Party based on the
Registration Statement, Prospectus (or any amendment or supplement thereto), or
any Preliminary Prospectus and in respect of which indemnification may be sought
against each Indemnified Holder pursuant to this Section 7(c),
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each Indemnified Holder shall have the rights and duties given to the Company by
Section 7(a) (except that if the Company shall have assumed the defense thereof,
each Indemnified Holder may, but shall not be required to, employ separate
counsel therein and participate in the defense thereof and the fees and expenses
of such counsel shall be at the expense of the Indemnified Holder) and the
Company Indemnified Parties shall have the rights and duties given to the
Indemnified Holders by Section 7(b).
(d) If the indemnification provided for in this Section 7 is
unavailable to any party entitled to indemnification pursuant to Section 7(a) or
7(c), then each 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, judgments, liabilities and expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and each Indemnified Holder on the other
from the offering of the Transfer Restricted Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and each Indemnified Holder on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
judgments, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Indemnified Holder on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total net proceeds from the
offering (before deducting expenses) received by each Indemnified Holder, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company on the one hand and each Indemnified Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the Indemnified Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and each Indemnified Holder agree that it would
not be just and equitable if contribution pursuant to Section 7(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 7(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph 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. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation.
(f) The Company shall also indemnify each Underwriter
participating in the distribution (as described in such registration statement),
their officers and directors and each person who controls such persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders.
(g) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability that any indemnifying party may
otherwise have to any indemnified party.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any
of the Notes or shares of Common Stock that are Transfer Restricted Securities
remain outstanding or, if earlier, two years from the Closing Date, and during
any such period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, to make available to the Initial Purchaser or any beneficial
owner of the Notes or shares of such Common Stock in connection with any sale
thereof and any prospective purchaser of such Notes or Common Stock from the
Initial Purchaser or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, (b) completes and
executes all
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questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(c) furnishes the Company in writing information in accordance with Section 3(g)
and agrees to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the extent contemplated by Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the Underwriter(s) that will administer the offering will be selected
by the Holders of the Transfer Restricted Securities included in such offering
in the manner specified in Section 3(c); provided, however, that such
Underwriters must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted Securities,
--------
in addition to being entitled to exercise all rights provided herein, and as
provided in the Purchase Agreement and granted by law, including recovery of
damages, will be entitled to specific performance of such Holder's rights under
this Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or
--------------------------
after the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders of Transfer Restricted
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
other agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the Notes constituting Transfer
Restricted Securities affected by such amendment, modification, supplement,
waiver or departure (provided that, if any such Transfer Restricted Securities
are shares of Common Stock issued upon conversion of Notes, consents by Holders
of such shares shall be calculated as if such conversions had not taken place).
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders of Transfer
Restricted Securities whose securities are being sold pursuant to such Shelf
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Transfer Restricted Securities shall be valid only
with the written consent of Holders of at least 66-2/3% of the Transfer
Restricted Securities being sold, in each case calculated in accordance with the
provisions of Section 3(c).
(d) Notices. All notices and other communications provided
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for or permitted hereunder shall be made in writing by hand-delivery, first-
class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities, at
the address set forth on the records of the Registrar under the Indenture,
with a copy to the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially
at its address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions
of this Section.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
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Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee
under the Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities unless
and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided further that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement. If
any transferee of any Holder shall acquire Transfer Restricted Securities, in
any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement and by
taking and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement together with the other
----------------
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the securities sold pursuant to the Purchase Agreement.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
Credence Systems Corporation
By:
-----------------------------
Name:
Title:
Xxxxx Xxxxxx Inc.
By:
-----------------------------
Name:
Title:
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