EXHIBIT IV
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated
as of May 29, 1998, among STORMEDIA INCORPORATED, a Delaware corporation (the
"Company"), PRUDENTIAL PRIVATE EQUITY INVESTORS III, L.P., a Delaware limited
partnership ("PPEI"), Xxxxxxx X. Xxxxx and Xxxxx Xxxxx, Trustees of the Xxxxx
Family Trust ("Xxxxx"), Capital Ventures International, a Cayman Islands
corporation ("CVI"), Seagate Technology Inc., a Delaware corporation ("Seagate")
and the bank syndicate consisting of Canadian Imperial Bank of Commerce [Asia]
Ltd., Banque Nationale de Paris, Singapore Branch, Union Bank of California
N.A., Sanwa Bank California and Fleet National Bank (the "Syndicate" and,
together with PPEI, Xxxxx, Seagate and CVI, the "Shareholders").
RECITALS:
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(a) PPEI, the Company and the Xxxxx Family Partnership, a California
limited partnership (the "Xxxxx Partnership") entered into a Registration Rights
Agreement, dated as of May 20, 1994 (the "Rights Agreement"), pursuant to which
the Company granted to PPEI and the Xxxxx Partnership certain registration
rights with respect to certain of the Company's securities held by them. On
dissolution of the Xxxxx Partnership, the registration rights were assigned to
Xxxxx and have now terminated with respect to the other members of the Xxxxx
partnership.
(b) The Company, PPEI and CVI have entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement") of even date herewith, pursuant
to which the Company has sold to PPEI and CVI certain of its securities.
(c) The Company and Seagate have entered into a Termination of Supply
Agreement and Loan Agreement (the "Seagate Agreement") dated May 15, 1998
pursuant to which the Company issued to Seagate a Convertible Promissory Note
(the "Convertible Note").
(d) The Company and the Syndicate have entered into an Amended and Restated
Credit Agreement (the "Amended and Restated Credit Agreement") and a Warrant
Purchase Agreement (the "Warrant Purchase Agreement") of even date herewith,
pursuant to which the Company has issued to the Syndicate warrants for certain
of its securities in consideration for agreements and covenants made by the
Syndicate in the Amended and Restated Credit Agreement and the Warrant Purchase
Agreement.
(e) In connection with the Securities Purchase Agreement, the Seagate
Agreement, the Amended and Restated Credit Agreement and the Warrant Purchase
Agreement, the Company desires to amend the Rights Agreement to grant the
Shareholders certain registration rights with respect to the Registrable
Securities held by them as set forth on Schedule I.
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NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto hereby amend and restate the Rights Agreement in its entirety
to provide as herein set forth, to add Seagate, CVI and the Syndicate as parties
and hereby agree as follows:
1. Demand Registrations.
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(a) Requests for Registration. Subject to paragraphs 1(b) and 1(c)
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below, the Holders (as defined in Section 8) shall have the following rights to
request registration under the Securities Act of 1933, as amended (the
"Securities Act") of all or part of their Registrable Securities on Form S-1 or
any similar long-form registration ("Long-Form Registrations"), and on Form S-2
or S-3 or any similar short-form registration ("Short-Form Registrations") if
available (all registrations requested pursuant to this paragraph 1(a) are
referred to herein as "Demand Registrations"):
(i) PPEI and Xxxxx may, collectively, request up to three (3)
Demand Registrations, provided any request for a Demand Registration must be
made by the holders of at least 50.1% of the Registrable Securities held by PPEI
and Xxxxx .
(ii) Seagate may request one (1) Demand Registration.
(iii) CVI may request two (2) Demand Registration.
(iv) The Syndicate may request one (1) Demand Registration,
provided any request for a Demand Registration must be made by the Holders of at
least 50.1% of the then outstanding Registrable Securities originally held by
the Syndicate .
The party making the foregoing demand pursuant to subparagraphs (i) through (iv)
shall be referred to as the "Initiating Holder."
Each request for a Demand Registration pursuant to this paragraph 1(a) shall
specify the approximate number of Registrable Securities requested to be
registered and the anticipated method of distribution. Within ten days after
receipt of any such request, the Company will give written notice of such
requested registration to all other Holders and will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 20 days after the receipt
of the Company's notice.
(b) Long-Form Registrations. Subject to paragraph 1(a), the Holders
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will be entitled at any time after June 30, 1998 to request Long-Form
Registrations in which the Company will pay all Registration Expenses ("Company-
paid Long-Form Registrations"). A registration will not count as one of the
permitted Long-Form Registrations (i) until the applicable Registration
Statement has become effective or (ii) as to any particular Holder, if after the
applicable registration statement has become effective, such registration or the
related offer, sale or distribution of Registrable Securities thereunder is
interfered with by any stop order, injunction for other order or requirement of
the Commission or other governmental agency or court for any reason not
attributable to such Holder and such interference is not thereafter eliminated,
or if the conditions to
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closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of such Holder; and no Company-paid Long-Form
Registration will count as one of the permitted Long-Form Registrations unless
the Initiating Holder registers and sells at least 85% of the Registrable
Securities requested by such Initiating Holder to be included in such
registration; provided that in any event the Company will pay all Registration
Expenses in connection with any registration initiated as a Company-paid Long-
Form Registration whether or not it has become effective.
(c) Short-Form Registrations. Subject to paragraph 1(a), the Holders
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will be entitled to request Short-Form Registrations in which the Company will
pay all Registration Expenses. Demand Registrations will be Short-Form
Registrations whenever the Company is permitted to use any applicable short
form. The Company will use its best efforts to make Short-Form Registrations on
Form S-3 available for the sale of Registrable Securities, provided the
Shareholders acknowledge that the Company is not currently so eligible. The
Holders agree that they will not request a Long-Form Registration when the
Company is eligible to use a Short-Form Registration, provided that the Company
agrees to include in the prospectus included in any Short-Form Registration
Statement, such material describing the Company and, intended to facilitate the
sale of securities being so registered as is reasonably requested for inclusion
therein by any of the Holders selling securities pursuant to such registration
statement, whether or not the form used for such registration statement requires
the inclusion of such information.
(d) Priority on Demand Registrations. The Company will not include in
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any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the Initiating Holder, which consent will
not be unreasonably withheld. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the number of Registrable Securities and, if permitted hereunder,
other securities requested to be included in such offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold therein
without adversely affecting the marketability of the offering, the Company will
include in such registration prior to the inclusion of any other securities,
Registrable Securities held by the Initiating Holder and thereafter shall
include in such registration, only such other securities as in the opinion of
such underwriters can be sold without adversely affecting the marketability of
the offering, in the following order of priority: prior to the inclusion of any
securities which are not Registrable Securities, the number of Registrable
Securities held by other Holders which are requested to be included which in the
opinion of such underwriters can be sold without adversely affecting the
marketability of the offering, pro rata among the respective holders thereof on
the basis of the number of Registrable Securities owned by each Holder
participating in such offering.
(e) Restrictions on Long-Form Registrations and Demand Registrations.
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The Company will not be obligated to file a registration statement to effect any
Demand Long-Form Registration during the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred and eighty (180) days after the effective date
of, a Company-initiated registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become
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effective. The Company will not be obligated to effect any Demand Long-Form
Registration within 180 days after the effective date of a previous Long-Form
Registration pursuant to paragraph 1(b). Not more than once in any twelve (12)
month period, the Company may postpone for up to 180 days the filing of a
registration statement for a Demand Registration if the Company's Board of
Directors agrees (with the concurrence of the Company's investment banker or
managing underwriter, if any) that such Demand Registration would have a
material adverse effect on any proposal or plan by the Company or any of its
subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or similar
transaction or would otherwise materially adversely affect the Company or its
business or its ability to raise capital; provided that in such event, the
Initiating Holders will be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration will not count as one of the
permitted Demand Registrations hereunder and the Company will pay all
Registration Expenses in connection with such withdrawn registration.
(f) Selection of Underwriters. If any registration pursuant to this
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Section 1 involves an underwritten offering (whether on a "firm", "best efforts"
or "reasonable efforts" basis or otherwise), the Initiating Holder will have the
right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval which will not be unreasonably
withheld.
(g) Other Registration Rights. Except as provided in this Agreement,
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the Company will not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of at least 50.1% of the then outstanding Registrable
Securities and initially issued to (i) PPEI and Xxxxx, (ii) Seagate, (iii) CVI
and (iv) the Syndicate; provided that the Company may grant rights to other
Persons to (i) participate in Piggyback Registrations so long as such rights are
subordinate in all respects in a manner reasonably acceptable to the Holders of
at least 50.1% of the then outstanding Registrable Securities, to the rights of
the holders of Registrable Securities with respect to such Piggyback
Registrations and (ii) request registrations so long as the holders of
Registrable Securities are entitled to participate in any such registrations
with such Persons pro rata on the basis of the number of shares owned by each
such holder.
2. Piggyback Registrations.
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(a) Right to Piggyback. Whenever the Company proposes to register any
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of its securities under the Securities Act (including for this purpose a
registration effected by the Company for shareholders of the Company other than
the Holders, but other than registrations pursuant to a Demand Registration and
other than registrations relating solely to employee benefit plans,
registrations relating solely to SEC Rule 145 transactions (or transactions
under any successor rule) or registrations on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering Registrable Securities) and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company will give prompt written notice to all
Holders of its intention to effect
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such a registration and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 20 days after the receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the Holders will
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be paid by the Company in all Piggyback Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
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an underwritten primary registration on behalf of the Company, and the managing
underwriter(s) advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration, pro rata among the Holders of
Registrable Securities on the basis of the number of Registrable Securities
owned by each Holder of Registrable Securities participating in such offering
and (iii) third, other securities requested to be included in such registration;
provided that in any event the Holders shall be entitled to register at least
10% of the securities to be included in any such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
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is an underwritten secondary registration on behalf of holders of the Company's
securities other than any of the Holders pursuant to paragraph 1 hereof, and the
managing underwriter(s) advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration (i)
first, the Registrable Securities requested to be included in such registration,
pro rata among the Holders of Registrable Securities on the basis of the number
of Registrable Securities owned by each Holder of Registrable Securities
participating in such offering and (ii) second, other securities requested to be
included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
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underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be approved by the Holders of a majority of the Registrable
Securities included in such Piggyback Registration. Such approval will not be
unreasonably withheld.
(f) Other Registrations. If the Company has previously filed a
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registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has been declared effective, the Company will not file or cause to be effected
any other registration of any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-8 or any successor form), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least six months has elapsed from the effective date of such
previous registration.
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3. Holdback Agreements.
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(a) Each Holder agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144) of Common Stock, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the one hundred and eighty (180)-day period beginning on
the effective date of any underwritten public offering (except as part of such
underwritten registration), unless the underwriter(s) managing the registered
public offering otherwise agree, provided that with respect to CVI, such period
shall be the seven days prior to and the thirty (30)-day period beginning on the
effective date of said underwritten public offering.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, whether on the Company's own
behalf or at the request of any Holder or Holders of such securities, during the
seven days prior to and during the one hundred and eighty (180)-day period
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor form),
unless the underwriter(s) managing the registered public offering otherwise
agree and (ii) to cause each director and executive officer of the Company and
each holder of at least 5% (on a fully-diluted basis) of its Common Stock, or
any securities convertible into or exchangeable or exercisable for Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
4. Registration Procedures. Whenever one or more Holders have requested
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that any Registrable Securities be registered pursuant to this Agreement, the
Company will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file (in the case of a Demand Registration not more
than sixty (60) days after request therefor) with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
on such appropriate registration form of the Commission as shall permit the
disposition of the Registrable Securities in accordance with the intended method
or methods of disposition specified in the request for registration, and use the
Company's best efforts to cause such registration statement to become effective
as soon as reasonably practicable (provided that as far in advance as
practicable (but not less than three business days) before filing a registration
statement or prospectus and as far in advance as practicable before filing any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the holders of a majority of the Registrable Securities covered by
such registration statement copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel);
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(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to (i) keep such registration
statement effective for the shorter of (A) the completion of the distribution of
the securities registered pursuant to such registration statement and (B) a
period of not less than one hundred and twenty (120) days or, if such
registration is for an offering on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act (a "Shelf Registration"), for a period equal
to the lesser of two years after its effective date or the date as of which the
securities so registered cease to be Registrable Securities; and (ii) comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement. In addition, if the registration is for
an underwritten offering, the Company shall amend the registration statement or
supplement the prospectus whenever required by the terms of the applicable
underwriting agreement. Subject to Rule 415 under the Securities Act, if the
registration statement is a Shelf Registration, the Company shall use reasonable
efforts to amend the registration statement or supplement the prospectus so that
it will remain current and in compliance with the requirements of the Securities
Act for a period equal to the lesser of two years after its effective date or
the date as of which the securities so registered cease to be Registrable
Securities. Notwithstanding the foregoing, with respect to Shelf Registrations,
if the Board of Directors of the Company determines in good faith (A) that an
amendment or supplement to the Registration Statement or prospectus contained
therein is necessary, in light of subsequent events, in order to correct a
material misstatement made therein or to include information the absence of
which would render the Registration Statement or such prospectus materially
misleading and (B) that the filing of such amendment or supplement would result
in the disclosure of information which the Company has a bona fide business
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purpose for preserving as confidential, the Company may impose a Blackout Period
during which no sale may be made under such Registration Statement; provided
that the Company shall be entitled to impose no more than two (2) Blackout
Periods during any period of twelve (12) consecutive months for an aggregate of
not more than thirty (30) days. To impose such a Blackout Period, the Company
shall send written notice to each Shareholder who has registered shares for sale
under such Shelf Registration and such Shareholder shall not sell under such
Shelf Registration until the end of such Blackout Period;
(c) furnish without charge to each seller of Registrable Securities
such number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus), in each case in conformity with the
requirements of the Securities Act and the rules thereunder, and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (including, without limitation, obtaining the withdrawal of any order
suspending the effectiveness of
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the registration statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of the offer and transfer of any
of the Registrable Securities in any jurisdiction at the earliest possible
moment) provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will prepare
and furnish to each selling Holder a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the National Association of
Securities Dealers automated quotation system;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, the Company's premises and all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) use the Company's best efforts to obtain a so-called "comfort
letter" from the Company's independent public accountants, and opinion letters
from the Company's counsel addressed to the selling Holders, in customary form
and covering such matters of the type customarily covered by such letters. The
Company shall furnish to each selling Holder a signed counterpart of any such
comfort letter or opinion letter of counsel. Delivery of any such opinion
letter or comfort letter shall be subject to the recipient furnishing such
written representations or
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acknowledgments as are customarily provided by selling shareholders who receive
such comfort letters or opinions;
(k) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders generally, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with the first
day of the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(l) permit any Holder of Registrable Securities which Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included; and
(m) in the event of the threatened or actual issuance of any stop
order suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, the Company will promptly notify the holders of
Registrable Securities and will use its reasonable best efforts to prevent the
entry of such stop order or if entered, promptly to obtain the withdrawal of
such order.
5. Registration Expenses.
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(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and of all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Company will, in any event, pay 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 or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the
National Association of Securities Dealers automated quotation system. The
Company shall not be required to pay an underwriting discount with respect to
any shares being sold by any party other than the Company in connection with an
underwritten public offering of any of the Company's securities pursuant to this
Agreement.
(b) In connection with each Company-paid Demand Registration, the
Company will reimburse the holders of Registrable Securities covered by such
registration for the reasonable
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fees and disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities initially requesting such registration.
6. Indemnification.
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(a) The Company agrees to indemnify and hold harmless, to the full
extent permitted by law, each Holder, its employees, officers and directors,
each Person who controls such Holder (within the meaning of the Securities Act)
and such Person's employees, officers and directors against all losses, claims,
damages, liabilities and expenses (including reasonable attorneys' fees and
disbursements and expenses of investigation) incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state law, to the extent the same
arise out of or result from untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any applicable state securities
law or any rule or regulation promulgated under the Securities Act, the Exchange
Act or any applicable state securities law, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by
such holder expressly for use therein or by such holder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their employees,
officers and directors and each Person who controls such Persons (within the
meaning of the Securities Act) to the same extent as provided above with respect
to the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in which a Holder is
participating, each such Holder will furnish to the Company and any underwriter
in writing such information and affidavits as the Company reasonably requests
for use in connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify and hold harmless the Company and
any underwriter, and their respective employees, directors and officers, each
Person who controls the Company and any underwriter (within the meaning of the
Securities Act) and such Person's employees, directors and officers against any
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees and disbursements and expenses of investigation) incurred by
such party pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may otherwise become
subject under the Securities Act, the Exchange Act or other federal or state
law, to the extent the same arise out of or result from any untrue or alleged
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by such Holder of the Securities Act, the
Exchange Act, any applicable state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any applicable state
securities law, but
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only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such holder expressly for
use in such registration statement or prospectus; provided that the obligation
to indemnify will be individual to each holder and will be limited to the net
amount of proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of the commencement of any
action, suit, proceeding, investigation or threat thereof for which such
indemnified party may seek indemnification and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest (actual or potential) between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume (jointly with any other indemnifying
party similarly noticed) the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest (determined as described below)
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim (in which event the reasonable fees and
disbursements and expenses of counsel for such indemnified party shall be paid
by the indemnifying party). The failure to deliver written notice to the
indemnifying party within a reasonable time following the commencement of any
such action, suit or proceeding, if prejudicial to the indemnifying party's
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6. All fees and expenses
incurred by the indemnified party (including any fees and expenses incurred in
investigating or preparing to defend such action, suit or proceeding) shall be
paid to the indemnified party, as incurred, within thirty (30) days of written
notice thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder, provided if such a determination is thereafter made, the indemnified
party shall reimburse the indemnifying party for all such amounts so paid). Any
such indemnified party shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to promptly assume the
defense of such action, suit or proceeding or (iii) the named parties to any
such action, suit or proceeding (including any impleaded party) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal defenses
available to such indemnified party that are different from or in addition to
those available to the indemnifying party and that the assertion of such
defenses would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnifying party (in
which case, if such indemnified party notifies the indemnifying party in writing
that the indemnified party elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action,
-11-
suit or proceeding on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings 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 (together with appropriate local
counsel) at any time for all such indemnified parties, unless in the reasonable
judgment of such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
action, suit or proceeding, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or counsels).
No indemnifying party shall be liable to an indemnified party for any settlement
of any action, suit or proceeding, or claim, without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld.
(d) If the indemnification required by this Section 6 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any loss, claim, damage, liability or expense referred to in this Section 6:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses, in such
proportion as is appropriate as reflect the relative fault of the indemnifying
party and the indemnified parties in connection with the actions that resulted
in such losses, claims, damages, liabilities or expenses, as well as all other
relevant equitable considerations, if any. The relative fault of such
indemnifying party and the indemnified party shall be determined by reference
to, among other things, whether any violation of any applicable law, rule or
regulation has been committed by, or relates to information supplied by, such
indemnifying party or indemnifying parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in the preceding portions of this
Section 6, all legal or other fees and expenses reasonably incurred by such
party in connection with such investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this paragraph 6(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in paragraph 6(d)(i). No
Person guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(iii) If indemnification is available under this Section 6, the
indemnifying party shall indemnify each indemnified party to the full extent
provided in this Section 6 without regard to the relevant fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in paragraph 6(d).
(e) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any
-12-
officer, director or controlling Person of such indemnified party and will
survive the transfer of securities.
7. Participation in Underwritten Registrations. No Person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
8. Definitions.
-----------
"Common Stock" (i) means the Class A Common Stock and Class B Common
Stock of the Company, $0.013 par value per share and (ii) shares of capital
stock of the Company issued by the Company in respect of or in exchange for
shares of such Class A Common Stock or Class B Common Stock in connection with
any stock dividend or distribution, stock split-up, recapitalization,
recombination or exchange by the Company generally of shares of such Common
Stock.
"Holders" means the Shareholders and all Persons, if any, to whom
Registrable Securities are sold, assigned or otherwise transferred in accordance
with Section 9(e) hereof (other than a transfer for security), in each case at
such times as, and only for so long as, such Shareholders and Persons shall own
Registrable Securities as defined herein.
"Preferred Stock" means the Series A Preferred Stock of the Company,
$0.01 par value per share.
"Registrable Securities" means (i) any Class A Common Stock currently
held by each Shareholder, (ii) any Class A Common Stock issued or issuable upon
conversion of any Preferred Stock or upon conversion of the currently
outstanding Class B Common Stock held by PPEI, (iii) any Class A Common Stock
issued or issuable upon exercise of any Warrants issued pursuant to the Warrant
Purchase Agreement or the Securities Purchase Agreement, (iv) any Class A Common
Stock issued or issuable upon conversion of the Convertible Note, and (v) any
Class A Common Stock issued or issuable with respect to the securities referred
to in clauses (i) through (iv) above (including securities issuable upon the
conversion or exercise of any warrant, right or other security that is issued)
by way of a stock dividend, stock distribution or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization (including any exchange by the Company generally of such shares
of stock). As of the date hereof, the Registrable Securities held by the
Shareholders are as set forth on Schedule I. As to any particular Registrable
----------
Securities, such securities will cease to be Registrable Securities when they
have been distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force) or have been sold to the public pursuant to any exemption from
registration under the Securities Act . In addition, the Company shall have no
-13-
obligation under Sections 1 and 2 to any particular Person (and the securities
held by such Person shall cease to be Registrable Securities) at such time as
all Registrable Securities held by such Person can be sold by such Person in
open market sales within a given three month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 or other
applicable exemption and the Company delivers to such Person a written opinion
of legal counsel for the Company to such effect, and the Company offers to
remove any and all legends restricting transfer from the certificates evidencing
such Registrable Securities. For purposes of this Agreement, a Person will be
deemed to be a holder of Registrable Securities whenever such Person has the
right to acquire directly or indirectly such Registrable Securities (upon
conversion or exercise in connection with a transfer of securities or otherwise,
but disregarding any restrictions or limitations upon the exercise of such
right), whether or not such acquisition has actually been effected. In
addition, references to Registrable Securities owned or held by a Holder shall
include Registrable Securities owned by such Person but held of record in the
name of a nominee, trustee, custodian or other agent, and Registrable Securities
shall be deemed outstanding at such times as such securities are owned by a
Holder.
"Warrants" means warrants to purchase Class A Common Stock of the Company
issued in connection with the Warrant Purchase Agreement or the Securities
Purchase Agreement.
9. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not granted any
--------------------------
registration rights to any other Person. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement. PPEI and Xxxxx agree that their rights under the Rights Agreement
have been superseded and amended in their entirety hereby.
(b) Adjustments Affecting Registrable Securities. The Company will
--------------------------------------------
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration.
(c) Remedies. Any Person having rights under any provision of this
--------
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement. By seeking or obtaining any such relief, the aggrieved party shall
not be precluded from seeking or obtaining any other relief to which such party
may be entitled.
-14-
In any action or proceeding brought in enforce any provision of this
Agreement or in which any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees
(including any fees incurred in any appeal) in addition to such party's costs
and expenses or other available remedy.
(d) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of at least a majority of the
Registrable Securities originally issued to each of (i) PPEI and Xxxxx, (ii)
Seagate, (III) CVI and (iv) the Syndicate.
(e) Successors and Assigns. All covenants and agreements in this
----------------------
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto who
acquire other than through a sale to the public at least 100,000 shares of
Registrable Securities (or securities convertible into Registrable Securities),
provided that the Company is given written notice by such Holder at the time of
or within a reasonable time after such transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
the rights and obligations set forth are being assigned. In addition, whether
or not any express assignment has been made, the provisions of this Agreement
which are for the benefit of purchasers or holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
Except as specifically provided herein with respect to certain
matters, neither this Agreement nor any of the Company's rights, interests or
obligations hereunder shall be assigned or delegated by the Company (other than
by operation of law) without the prior written consent of Holders owning on the
date as of which such delegation or assignment is to become effective not less
than 50.1% of the Registrable Securities originally issued to (i) PPEI and
Xxxxx, (ii) Seagate, (iii) CVI and (iv) Syndicate.
(f) Notices. Except as otherwise expressly provided herein, any and
-------
all notices, designations, consents, offers, acceptances or other communications
provided for herein shall be given in writing and shall be mailed by first class
registered or certified mail, postage prepaid, sent by a nationally recognized
overnight courier service for next business day delivery or transmitted via
telecopier as follows:
If to the Company: StorMedia Incorporated
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
(Attention: President)
With a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-00000
Facsimile: (000) 000-0000
-15-
(Attention: Xxxxxx X. X'Xxxxx, Esq.)
and with a copy to PPEI.
If to PPEI: Prudential Private Equity Investors III, L.P.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
(Attention: Xxxx Xxxxx)
With a copy to: Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
(Attention: Xxxxxxxxx Xxxxx, Esq.)
If to Xxxxx: Balmon Group
0000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
(Attention: Xxxxxxx X. Xxxxx)
If to Seagate: Seagate Technology, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
(Attention: Xxxxxx X. Xxxxxxxx, Esq.)
With a copy to: Xxxxxx Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
(Attention: Xxxxxxx Xxxxxx, Esq.)
If to CVI: Heights Capital Management, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(Attention: Xxxxxxx X. Xxxxxx)
With a copy to: Wolf Block Xxxxxx & Xxxxx-Xxxxx LLP
00xx Xxxxx, Xxxxxxx Xxxxxxxx
-00-
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(Attention: Xxxxxxx X. Xxxxxx)
If to the Syndicate, to each of: Canadian Imperial Bank
00 Xxxxxxx Xxxx Xx. 00-00
Xxxxxxxxx, 0000
Telephone: 00-000-0000
Telecopier: 00-000-0000
(Attention: Xx. Xxxx Foo Xxxx)
Telephone: 00-000-0000
Telecopier: 00-000-0000
(Attention: Xx. Xxxxx Xxxx)
Banque Nationale de Paris,
Singapore Branch
Tung Centre
00 Xxxxxxx Xxxx
Xxxxxxxxx 000000
Telephone: 00-000-0000
Telecopier: 00-000-0000
(Attention: Xx. Xxxxx Xxx)
Union Bank of California N.A.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(Attention: Xx. Xxxxxxxxxx Xxxxxxxxx)
Sanwa Bank California
000 X. Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(Attention: Ms. E. Xxxxx Xxxxx)
Fleet National Bank
00 Xxxxxxxxxxxx Xxxxxx
-17-
Mail Stop RI OP XX0X
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(Attention: Xx. Xxxxxxx X. X'Xxxxx)
With a copy in each case to: Sidley & Austin
000 X. Xxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
(Attention: Xxxxxxxx Xxxxx, Esq.)
Notice shall be deemed given, for all purposes, when deposited in the United
States mail as registered or certified mail, in which event the third day
following the date of postmark on the receipt of such registered or certified
mail shall conclusively be deemed the date of giving of such notice, on the
first Business Day following collection by the courier service or when
acknowledged by the receiving telecopier.
(g) Interpretation of Agreement; Severability. The provisions of this
-----------------------------------------
Agreement shall be applied and interpreted in a manner consistent with each
other so as to carry out the purposes and intent of the parties hereto, but if
for any reason any provision hereof is determined to be unenforceable or
invalid, such provision or such part thereof as may be unenforceable or invalid
shall be deemed severed from the Agreement and the remaining provisions carried
out with the same force and effect as if the severed provision or part thereof
had not been a part of this Agreement.
(h) Governing Law. This agreement shall be governed by and construed
-------------
in accordance with the internal substantive laws of the State of California
without giving effect to principles of conflicts of law or choice of law of the
State of California or of any other jurisdiction which would result in the
application of the laws of any jurisdiction other than those of the State of
California.
(i) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same Agreement.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
of the parties with respect to the subject matter hereof, and supersedes all
previous agreements.
* * * * *
-18-
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
STORMEDIA INCORPORATED
By:
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
PRUDENTIAL PRIVATE EQUITY INVESTORS III,
L.P.
By: Prudential Equity Investors, Inc.,
General Partner
By: Cornerstone Equity Investors, L.L.C.,
its Investment Advisor
By:
-------------------------------------
Name:
Title: Managing Director
XXXXX FAMILY TRUST
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Trustee
SEAGATE TECHNOLOGY, INC.
By:
-------------------------------------
Name:
Title:
[AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
CAPITAL VENTURES INTERNATIONAL
by Heights Capital Management, Inc.,
its authorized agent
By:
-----------------------------------
Name:
Title:
[AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
CIBC [ASIA] LTD.
By:
-----------------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS,
SINGAPORE BRANCH
By:
----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA N.A.
By:
----------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
-----------------------------------
Name:
Title:
SANWA BANK CALIFORNIA
By:
-----------------------------------
Name:
Title:
[AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
SCHEDULE I
----------
REGISTRABLE SECURITIES
SHARES OF
SHARES OF SHARES OF COMMON
COMMON COMMON ISSUABLE ON
SHARES OF ISSUABLE UPON SHARES OF ISSUABLE ON CONVERSION
SERIES A CONVERSION OF CLASS A EXERCISE OF OF SEAGATE
SHAREHOLDER PREFERRED* PREFERRED COMMON WARRANTS NOTE
Prudential Private
Equity Investors III, L.P. 162,602 5,737,500 1,626,020
Xxxxx Family Trust 973,872
Seagate Technology,
Inc. 1,000,000
Capital Ventures
International 97,561 975,610
Canadian Imperial Bank
of Commerce [Asia]
Ltd. 533,260
Banque Nationale de
Paris, Singapore Branch 400,000
Union Bank of
California N.A. 266,740
Sanwa Bank California 400,000
Fleet National Bank 400,000
---------------
* Convertible into 10 shares of Class A Common Stock
