REGISTRATION RIGHTS AGREEMENT by and between Sidhu Special Purpose Capital Corp. WNH Holdings, LLC and THE OTHER PERSONS NAMED HEREIN Dated as of , 2008
Exhibit 10.4
by and between
WNH Holdings, LLC
and
THE OTHER PERSONS NAMED HEREIN
and
THE OTHER PERSONS NAMED HEREIN
Dated as of , 2008
TABLE OF CONTENTS
| ARTICLE I DEFINITIONS | 1 | |||||||
| ARTICLE II REGISTRATION RIGHTS | 3 | |||||||
| 2.1 | Demand Registration |
3 | ||||||
| 2.2 | Piggy-Back Registration |
5 | ||||||
| 2.3 | Form S-3 Registrations |
7 | ||||||
| 2.4 | Automatic Shelf Registration Statement |
8 | ||||||
| 2.5 | Permitted Delays |
8 | ||||||
| ARTICLE III REGISTRATION; PROCEDURES | 9 | |||||||
| 3.1 | Filings; Information |
9 | ||||||
| 3.2 | Obligation to Suspend Distribution |
12 | ||||||
| 3.3 | Registration Expenses |
12 | ||||||
| 3.4 | Information |
13 | ||||||
| ARTICLE IV INDEMNIFICATION AND CONTRIBUTION | 13 | |||||||
| 4.1 | Indemnification by the Company |
13 | ||||||
| 4.2 | Indemnification by Holders |
14 | ||||||
| 4.3 | Conduct of Indemnification Proceedings |
14 | ||||||
| 4.4 | Contribution |
15 | ||||||
| ARTICLE V UNDERWRITING AND DISTRIBUTION | 15 | |||||||
| 5.1 | Rule 144 |
15 | ||||||
| ARTICLE VI MISCELLANEOUS | 16 | |||||||
| 6.1 | Other Registration Rights |
16 | ||||||
| 6.2 | Assignment; No Third Party Beneficiaries |
16 | ||||||
| 6.3 | Stock Splits, etc |
16 | ||||||
| 6.4 | Notices |
16 | ||||||
| 6.5 | Severability |
17 | ||||||
| 6.6 | Counterparts |
17 | ||||||
| 6.7 | Entire Agreement |
17 | ||||||
| 6.8 | Modifications and Amendments |
17 | ||||||
| 6.9 | Titles and Headings |
17 | ||||||
| 6.10 | Waivers and Extensions |
17 | ||||||
| 6.11 | Remedies Cumulative |
17 | ||||||
| 6.12 | Governing Law; Submission to Jurisdiction |
18 | ||||||
| 6.13 | Waiver of Trial by Jury |
18 | ||||||
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of , 2008, by
and between Sidhu Special Purpose Capital Corp. (the
“Company”), WNH Holdings, LLC (the
“Sponsor”), the persons listed in Schedule I hereto (the “Initial Holders”) and any
Permitted Transferee (as defined below) who hereafter becomes a party to this Agreement as
contemplated by Section 6.2 of this Agreement (each such party who holds Registrable
Securities (as defined below), a “Holder” and, collectively, the “Holders”).
WHEREAS, the Sponsor and the Initial Holders currently hold all of the issued and outstanding
common stock, par value $0.0001 per share, of the Company (the “Common Stock”), consisting
of 2,587,500 shares of Common Stock (the “Initial Shares”);
WHEREAS, the Sponsor has
agreed to purchase from the Company an aggregate of 425,200
units (the “Sponsor Units”), with each such Sponsor Unit consisting of (i) one share of Common Stock
(the “Sponsor Shares”) and (ii) one warrant to purchase one share of Common Stock at an exercise price of $6.50 per share (the “Sponsor Warrants”), immediately
prior to the closing of the Company’s initial public offering; and
WHEREAS, the Sponsor, the
Initial Holders and the Company desire to enter into this Agreement
to provide the Sponsor and the Initial Holders with certain rights relating to the registration of
(i) the Initial Shares, the Common Stock and Warrants comprising (or that formerly were part of)
the Initial Shares and the Common Stock issuable upon exercise of such Warrants and (ii) the
Sponsor Units, the Sponsor Shares, the Sponsor Warrants and the Common Stock issuable upon exercise of the Sponsor Warrants.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
The following capitalized terms used herein have the following meanings:
“Affiliate” has the meaning set forth in Rule 405 promulgated under the Securities Act
(in effect on the date hereof).
“Agreement” means this Agreement, as amended, restated, supplemented or otherwise
modified from time to time.
“Automatic Shelf Registration Statement” means an “automatic shelf registration
statement” as defined in Rule 405 promulgated under the Securities Act (in effect on the date
hereof).
“Business Combination” means the Company’s initial business combination, through a
merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more currently unidentified domestic or international operating
businesses, meeting the conditions described in the Registration Statement.
“Commission” means the U.S. Securities and Exchange Commission or any successor
entity.
“Demand Registration” is defined in Section 2.1 (a).
“Demanding Holder” is defined in Section 2.1 (a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405
promulgated under the Securities Act (in effect on the date hereof).
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Individual Holders” means (i) the Initial Holders, (ii) any other current or future
officers or directors of the Company who receive or acquire Registrable Securities from the Sponsor
after the date hereof, and (iii) any Permitted Transferees (other than the Sponsor) of such persons
described in (i) and (ii) (but only to the extent that after the date hereof any such Permitted
Transferees acquire Registrable Securities from such persons).
“Maximum Threshold” is defined in Section 2.1(d).
“Permitted Transferees” means (i) the Company, any of the Company’s officers,
directors and employees, any Affiliates or Family Members of such individuals, the Sponsor, any
Affiliates of the Company or the Sponsor, and any officers, directors, members and employees of the
Sponsor or such Affiliates, (ii) any charitable organization, (iii) any individual pursuant to a
qualified domestic relations order, (iv) if the transferor is a corporation, partnership or limited
liability company, any stockholder, partner or member of the transferor and (v) any individual or
entity by virtue of laws or agreements governing descent or distribution upon the death or
dissolution of the transferor; provided, that, any such transferees agree in writing to
become a party to this Agreement. For purposes of this definition, “Family Member” of a
person means such person’s present spouse and/or domestic partner, parents, lineal ascendants or
descendants or any siblings of any of the foregoing, any descendants of any sibling of such person,
any estate planning vehicle formed primarily for the benefit of such person or any of the foregoing
persons or any corporation, partnership, limited liability company, trust, incorporated or
unincorporated association, joint venture or other entity of any kind (including any successor of
such entity) owned by any of the foregoing.
“Piggy-Back Registration” is defined in Section 2.2(a).
“Pro rata” is defined in Section 2.1(d).
“Registrable Securities”
means (i) the Initial Shares, (ii) the Sponsor Units, (iii) the Sponsor Shares, and (iv) the Sponsor Warrants
and the Common Stock issuable upon exercise of the Sponsor Warrants. Registrable Securities
include any shares of capital stock, warrants or other securities of the Company issued as a
dividend or other distribution with respect to or in exchange for or in replacement of Registrable
Securities. As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such securities shall have been
sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b)
such securities shall have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration under the Securities Act; (c) such securities
shall have ceased to be outstanding; or (d) the entire amount of the Registrable Securities held by
any Holder may be sold in a single sale, in the opinion of counsel reasonably satisfactory
2
to the Company, without any limitation as to volume or manner of sale pursuant to Rule 144 (or
any successor rule or regulation) under the Securities Act.
“Registration Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act for a public offering and sale of Registrable
Securities (other than a registration statement on Form S-4 or S-8 (or any successor or
substantially similar form), or in connection with (i) an employee stock option, stock purchase or
compensation plan or securities issued or issuable pursuant to any such plan or (ii) a dividend
reinvestment plan).
“
Release Date” means, (i) the 365th day following the consummation of a Business
Combination with respect to the Initial Shares, and (ii) the date of the consummation of a Business
Combination with respect to the Sponsor Units, the Sponsor Shares, the Sponsor
Warrants and the shares of Common Stock issuable upon the exercise of the Sponsor Warrants.
“S-3 Initiating Holders” means either (i) the Holders of a majority-in-interest, on an
as-converted to Common Stock basis, of the Registrable Securities or (ii) the Holders of a
majority-in-interest, on an as-converted to Common Stock basis, of the Registrable Securities held
by the Individual Holders.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Underwriter” means a securities dealer who purchases any Registrable Securities as
principal in an underwritten offering and not as part of such dealer’s market-making activities.
“Warrant Agreement” means the warrant agreement, dated [ ], 2008, between the
Company and Mellon Investor Services LLC, as warrant agent.
ARTICLE II
REGISTRATION RIGHTS
REGISTRATION RIGHTS
2.1 Demand Registration.
(a) Request for Registration.
At any time on or after the
applicable Release Date (i) the Holders of a majority-in-interest, on an as-converted
to Common Stock basis, of such Registrable Securities may make a written demand for registration
under the Securities Act of all or part of their Registrable Securities (each such demand, a
“Demand Registration”); provided that any Registration Statement filed with the
Commission with respect to a Demand Registration shall not be declared effective before the
applicable Release Date. Any demand for a Demand Registration shall specify the class and number
of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution
thereof. The Company will promptly notify all Holders of the demand, and each who wishes to
include all or a portion of such Holder’s Registrable Securities in the Demand Registration (each
such Holder including shares of Registrable Securities in such registration, a “Demanding
Holder”) shall so notify the Company in writing within 10 days after the receipt by the Holder
of the notice from the Company. Upon receipt by the Company of any such notice, the Demanding
Holders shall be entitled to have their Registrable Securities included in the Demand Registration,
subject to Sections 2.1 (d) and 2.1 (f). The Company shall not be obligated to
effect more than three Demand Registrations in respect of all Registrable Securities.
(b) Effective Registration. A registration will not count as a Demand Registration
until the Registration Statement filed with the Commission with respect to such Demand Registration
has been declared effective and the Company has complied with all of its material obligations under
this Agreement with respect thereto; provided, however, that if, after such
Registration Statement has been declared effective, the offering of Registrable Securities pursuant
to a Demand Registration is interfered with by any stop order or injunction of the Commission or
any other governmental agency or court, the
3
Registration Statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until (i) such stop order or injunction is removed, rescinded
or otherwise terminated and (ii) a majority-in-interest, on an as-converted to Common Stock basis,
of the Demanding Holders thereafter elect to continue the offering; provided,
further, that the Company shall not be obligated to file a second Registration Statement
until a Registration Statement that has been filed is counted as a Demand Registration or is
terminated.
(c) Underwritten Offering. If a majority-in-interest, on an as-converted to Common
Stock basis, of the Demanding Holders so elects and such Holders so advise the Company as part of
their written demand for a Demand Registration, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an underwritten offering with one or
more investment banking firms of national reputation to act as the managing Underwriter or
Underwriters of the offering. In such event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form with the Underwriter
or Underwriters selected for such underwriting by a majority-in-interest, on an as-converted to
Common Stock basis, of the Demanding Holders, which Underwriter or Underwriters shall be reasonably
acceptable to the Company.
(d) Reduction of Offering. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the Demanding Holders
in writing that the dollar amount or number or amount of Registrable Securities that the Demanding
Holders desire to sell, taken together with all other shares of Common Stock or other securities
that the Company desires to sell and the shares of Common Stock, if any, as to which registration
has been requested pursuant to written contractual piggy-back registration rights held by other
stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number
of securities that the Company believes can be sold in such offering without adversely affecting
the proposed offering price, the timing, the distribution method or the probability of success of
such offering (such maximum dollar amount or maximum number of securities, as applicable, the
“Maximum Threshold”), then the Company shall include in such registration: (i) first, the
Registrable Securities as to which Demand Registration has been requested by the Demanding Holders
(pro rata in accordance with the number of shares (including Sponsor Warrants, on
an as-converted to Common Stock basis) that each such person has requested be included in such
registration, regardless of the number of shares held by each such person (such proportion is
referred to herein as “Pro rata”)) that can be sold without exceeding the Maximum
Threshold; (ii) second, to the extent that the Maximum Threshold has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Threshold; and (iii) third, to the extent that
the Maximum Threshold has not been reached under the foregoing clauses (i) and (ii) collectively,
the shares of Common Stock or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such persons and that can
be sold without exceeding the Maximum Threshold.
(e) Withdrawal. If a majority-in-interest, on an as-converted to Common Stock basis,
of the Demanding Holders disapproves of the terms of any underwriting or is not entitled to include
all of its Registrable Securities in any offering, such majority-in-interest of the Demanding
Holders may elect to withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of its request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand Registration. If the
majority-in-interest, on an as-converted to Common Stock basis, of the Demanding Holders withdraws
from a proposed offering relating to a Demand Registration, then the Company shall withdraw the
Registration Statement related to such
4
offering with regards to all such Demanding Holders and such registration shall not count as a
Demand Registration provided for in Section 2.1(a). Notwithstanding any such withdrawal,
the Company shall pay all expenses incurred by the Holders in connection with such Demand
Registration as provided in Section 3.3.
(f) Permitted Delays. The Company shall be entitled to postpone the filing of any
Registration Statement under this Section 2.1 if (i) at any time prior to the filing of
such Registration Statement the Board of Directors of the Company determines, in its good faith
business judgment, that such registration and offering would materially and adversely affect any
financing, acquisition, corporate reorganization or other material transaction involving the
Company and (ii) the Company delivers the Demanding Holders written notice thereof within 10
business days of the date of receipt of such request for a Demand Registration; provided
that all such periods of postponement may not exceed 45 days during any 365-day period.
(g) Cancellation of Registration. A majority-in-interest, on an as-converted to
Common Stock basis, of the Demanding Holders shall have the right to cancel a proposed registration
of Registrable Securities pursuant to Section 2.1 when (i) in their discretion, market
conditions are so unfavorable as to be seriously detrimental to an offering pursuant to such
registration or (ii) the request for cancellation is based upon material adverse information
relating to the Company that was unknown to the Demanding Holders at the time of their written
request for a Demand Registration. Such cancellation of a registration shall not be counted as one
of the three Demand Registrations provided for in Section 2.1(a) and, notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the expenses of
the Demanding Holders incurred in connection with the registration prior to the time of such
cancellation.
(h) Suspension of Registration. If the filing, initial effectiveness or continued use
of a Registration Statement in respect of a Demand Registration at any time would require the
Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement
of financial statements that are unavailable to the Company for reasons beyond the Company’s
control, the Company may, upon giving prompt written notice of such action to the Holders, delay
the filing or initial effectiveness of, or suspend use of, such Registration Statement for the
shortest possible period of time determined in good faith by the Company to be necessary for such
purpose. In the event the Company exercises its rights under the preceding sentence, the Holders
agree to suspend, immediately upon their receipt of notice referred to above, their use of the
prospectus relating to the Demand Registration in connection with any sale or offer to sell
Registrable Securities. The Company shall immediately notify the Holders of the expiration of any
period during which it exercised rights under this Section 2.1(h). For the purpose of this
Section 2.1(h), “Adverse Disclosure” means public disclosure of material nonpublic
information, which, in the good faith judgment of the Chairman of the Board of Directors, the
principal executive officer or the principal financial officer of the Company, after consultation
with counsel to the Company, (i) would be required to be made in any Registration Statement or
prospectus in order for the applicable Registration Statement or prospectus not to contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein in light of the circumstances under which they were made not misleading, (ii)
would not be required to be made at such time if the Registration Statement were not being filed
and (iii) the Company has a bona fide business purpose for not publicly making.
2.2 Piggy-Back Registration.
(a) Piggy-Back Rights. If at any time on or after the applicable Release Date, the
Company proposes to file a Registration Statement under the Securities Act with respect to an
offering of equity securities, or securities or other obligations exercisable or exchangeable for,
or convertible into,
5
equity securities, by the Company for its own account or for stockholders of the Company for
their account other than pursuant to Section 2.1, then the Company shall (i) give written
notice of such proposed filing to the Holders as soon as practicable but in no event less than 10
business days before the intended filing date, which notice shall disclose the amount and type of
securities to be included in such Registration Statement, the intended method(s) of distribution
and the name of the proposed managing Underwriter or Underwriters, if any and (ii) offer to the
Holders in such notice the opportunity to register the sale of such number or amount of Registrable
Securities as such Holders may request in writing within 10 days following receipt of such notice
(a “Piggy-Back Registration”). The Company shall cause such Registrable Securities to be
included in such registration and shall use its commercially reasonable efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration on the same terms and conditions
as any similar securities of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method(s) of distribution thereof. All
Holders proposing to distribute their securities through a Piggy-Back Registration that involves an
Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Piggy-Back Registration.
(b) Reduction of Offering. If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the Company and the Holders
in writing that the dollar amount or number or amount of securities which the Company desires to
sell, taken together with the shares of Common Stock or other securities, if any, as to which
registration has been demanded pursuant to written contractual arrangements with persons other than
the Holders hereunder, the Registrable Securities as to which registration has been requested under
this Section 2.2, and the securities, if any, as to which registration has been requested
pursuant to the written contractual piggy-back registration rights of other stockholders of the
Company, exceeds the Maximum Threshold, then the Company shall include in any such registration:
(i) If the registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Threshold; (B) second, to the extent that the Maximum
Threshold has not been reached under the foregoing clause (A), the shares of Common Stock or
other securities, if any, comprised of Registrable Securities as to which Piggy-Back
Registration has been requested pursuant to Section 2.2(a), Pro rata, that can be
sold without exceeding the Maximum Threshold; and (C) third, to the extent that the Maximum
Threshold has not been reached under the foregoing clauses (A) and (B) collectively, the
shares of Common Stock or other securities for the account of other persons that the Company
is obligated to register pursuant to written contractual piggy-back registration rights with
such persons and that can be sold without exceeding the Maximum Threshold; and
(ii) If the registration is a “demand” registration undertaken at the demand of persons
other than the Holders, (A) first, the shares of Common Stock or other securities for the
account of the demanding persons that can be sold without exceeding the Maximum Threshold;
(B) second, to the extent that the Maximum Threshold has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Threshold; (C) third, to the
extent that the Maximum Threshold has not been reached under the foregoing clauses (A) and
(B) collectively, the shares of Common Stock or other securities comprised of Registrable
Securities, Pro rata, as to which Piggy-Back Registration has been requested pursuant to
Section 2.2(a), that can be sold without exceeding the Maximum Threshold; and (D)
fourth, to the extent that the Maximum Threshold has not been reached under the foregoing
clauses (A), (B) and (C) collectively, the shares of Common Stock or other securities for
the account of other persons that the Company is obligated
6
to register pursuant to written contractual arrangements with such persons, that can be
sold without exceeding the Maximum Threshold.
(c) Withdrawal. Any Holder may elect to withdraw such Holder’s request for inclusion
of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of
such request to withdraw prior to the effectiveness of the Registration Statement. The Company
(whether on its own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a Registration Statement filed pursuant
to this Section 2.2 at any time prior to the effectiveness of the Registration Statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the Holders in
connection with such Piggy-Back Registration as provided in Section 3.3.
2.3 Form S-3 Registrations.
(a) Requests for a Form S-3 Registration. Upon the later of (i) the Company becoming
eligible for use of Form S-3 or any successor form thereto under the Securities Act in connection
with a secondary public offering of its securities and (ii) the time at which the Holders may
request a Demand Registration under Section 2.1(a), in the event that the Company shall receive
from the S-3 Initiating Holders a written request that the Company register under the Securities
Act on Form S-3 or any successor form then in effect (an “S-3 Registration”) the sale of
all or a portion of the Registrable Securities owned by such S-3 Initiating Holders (which S-3
Registration may be a shelf registration pursuant to Rule 415 promulgated under the Securities Act
(or any successor rule or regulation)), the Company shall give written notice of such request to
all of the other Holders as promptly as practicable but in no event later than 10 days before the
anticipated filing date of such Form S-3, which notice shall describe the proposed registration,
the intended method of distribution of such Registrable Securities and any other information that
at the time would be appropriate to include in such notice, and offer such other Holders the
opportunity to register the number of Registrable Securities as each such Holder may request in
writing to the Company, given within 10 days of the date on which the Company sent the written
notice of such registration. Each request for an S-3 Registration by the S-3 Initiating Holders
shall state the amount of the Registrable Securities proposed to be sold and the intended method of
disposition thereof. With respect to each S-3 Registration, the Company shall, subject to
Section 2.3(c), (i) include in such offering the Registrable Securities of the S-3
Initiating Holders and the other Holders who have requested in writing to participate in such
registration on the same terms and conditions as the Registrable Securities of the S-3 Initiating
Holders included therein (collectively, the “S-3 Participating Holders”) and
(ii) use its commercially reasonable efforts to cause such registration pursuant to this
Section 2.3(a) to become and remain effective as soon as practicable but in no event
earlier than 90 days after the effective date of any other Registration Statement of the Company
that had been filed with the Commission but not yet declared effective at the time such
registration was requested. Notwithstanding the foregoing, immediately upon determination of the
price at which such Registrable Securities are to be sold in a S-3 Registration that is a firm
commitment underwritten offering, if such price is below the price which any S-3 Participating
Holder finds acceptable, such S-3 Participating Holder shall then have the right, by written notice
to the Company, to withdraw its Registrable Securities from being included in such offering;
provided, that such a withdrawal by any one of the S-3 Initiating Holders shall constitute
and effect an automatic withdrawal by all other S-3 Participating Holders. If the S-3 Initiating
Holders request, the Company shall cause such S-3 Registration to be made pursuant to an Automatic
Shelf Registration Statement (provided such Automatic Shelf Registration Statement is available for
use by the Company) and may omit the names of the S-3 Participating Holders and the amount of the
Registrable Securities to be offered thereunder. The Company shall not be obligated to effect more
than one S-3 Registration requested by the S-3 Initiating Holders described in clause (ii) of the
definition thereof.
7
(b) Form S-3 Underwriting Procedures. If a majority-in-interest, on an as-converted
to Common Stock basis, of the S-3 Initiating Holders so elect, the Company shall use its
commercially reasonable efforts to cause such S-3 Registration pursuant to this Section 2.3
to be in the form of a firm commitment underwritten offering with one or more investment banking
firms of national reputation to act as the managing Underwriter or Underwriters. In connection
with any S-3 Registration under Section 2.3(a) involving an underwritten offering, the
Company shall not be required to include any Registrable Securities in such underwritten offering
unless the Holders thereof accept the terms of the underwritten offering as agreed upon between the
Company, the managing Underwriter or Underwriters and a majority-in-interest, on an as-converted to
Common Stock basis, of the S-3 Initiating Holders, and then only in such quantity as set forth
below.
(c) Reduction of Offering. If the managing Underwriter or Underwriters advise the
Company that the registration of all or part of the Registrable Securities which the S-3 Initiating
Holders and the other Holders have requested to be included would materially adversely affect the
distribution or sales price of the Registrable Securities in such public offering, then the Company
shall include in such underwritten offering, to the extent of the amount that the managing
Underwriter or Underwriters believes may be sold without causing such material adverse effect, (i)
first, such number of Registrable Securities of the Holders participating in the offering under
Section 2.1 (a), which Registrable Securities shall be allocated Pro rata, (ii) second, any
other securities of the Company requested by holders thereof to be included in such registration,
pro rata among such other holders on the basis of the number of securities that
each such holder requested to be included in such registration and (iii) third, securities offered
by the Company for its own account.
(d) Expenses. Except as provided in Section 3.3, the Company shall bear all
Registration Expenses in connection with any S-3 Registration pursuant to this Section 2.3,
whether or not such S-3 Registration becomes effective.
2.4 Automatic Shelf Registration Statement. If a Form S-3 is an Automatic Shelf
Registration Statement and such Automatic Shelf Registration Statement becomes effective without
naming the selling security holders or disclosing the amount of securities offered, upon written
request by the Holders participating in the offering, the Company shall, as promptly as practicable
after receiving such request, (i) file with the Commission a prospectus supplement naming the
selling security holders and the amount of Registrable Securities to be offered and include, to the
extent not included or incorporated by reference in the Registration Statement, any other
information omitted from the prospectus used in connection with such Registration Statement as
permitted by Rule 430B promulgated under the Securities Act (including the plan of distribution)
and (ii) pay any necessary filing fees to the Commission within the time period required.
2.5 Permitted Delays. The Company shall be entitled to postpone the filing of any
Registration Statement under Section 2.3 if (i) at any time prior to the filing of such
Registration Statement the Board of Directors of the Company determines, in its good faith business
judgment, that such registration and offering would materially and adversely affect any financing,
acquisition, corporate reorganization or other material transaction involving the Company, and (ii)
the Company delivers the Holders requesting such registration written notice thereof within 10
business days of the date of receipt of such request; provided, that all such periods of
postponement may not exceed 45 days during any 365-day period.
8
ARTICLE III
REGISTRATION; PROCEDURES.
REGISTRATION; PROCEDURES.
3.1 Filings; Information. Whenever the Company is required to effect the registration
of any Registrable Securities pursuant to Article II, the Company shall use its reasonable
best efforts to effect the registration and sale of such Registrable Securities in accordance with
the intended method(s) of distribution thereof as promptly as reasonably practicable, and in
connection with any such request:
(a) Filing Registration Statement. Subject to Sections 2.1 (f) and
2.5, the Company shall, as promptly as reasonably practicable, and in any event within 75
days after receipt of a request for a Demand Registration pursuant to Section 2.1 or a
request for an S-3 Registration pursuant to Section 2.3, prepare and file with the
Commission a Registration Statement on any applicable form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall be available for the sale
of all Registrable Securities to be registered thereunder in accordance with the intended method(s)
of distribution thereof, and shall use its commercially reasonable efforts to cause such
Registration Statement to become and remain effective for the period required by
Section 3.1(b). Before filing with the Commission a Registration Statement or prospectus
or any amendment or supplement thereto, including documents incorporated by reference, or before
using any Free Writing Prospectus, the Company shall furnish to the Holders included in such
Registration Statement and to one firm of legal counsel selected by a majority-in-interest, on an
as-converted to Common Stock basis, of the Demanding Holders, copies of all such documents proposed
to be filed sufficiently in advance of filing to provide such Holders and legal counsel with a
reasonable opportunity to review such documents and comment thereon, and the Company shall not file
any Registration Statement or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such Holders or their legal counsel shall reasonably object.
(b) Amendments and Supplements. The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements to such
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
such Registration Statement effective and in compliance with the provisions of the Securities Act
until all Registrable Securities and other securities covered by such Registration Statement have
been disposed of in accordance with the intended method(s) of distribution set forth in such
Registration Statement (which period shall not exceed the sum of 180 days (or, in the case of an
S-3 Registration Statement, three years from the effective date of the Registration Statement if
such Registration Statement is filed pursuant to Rule 415 promulgated under the Securities Act (or
any successor rule or regulation) plus any period during which any such disposition is interfered
with by any stop order or injunction of the Commission or any governmental agency or court).
(c) Copies. The Company shall, upon request, furnish without charge to the Holders
included in such Registration Statement, and the Holders’ legal counsel, copies of such
Registration Statement, each amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), any prospectus filed under Rule 424
under the Securities Act and any Free Writing Prospectus as each such Holder or their legal counsel
may reasonably request in order to facilitate the disposition of the Registrable Securities owned
by such Holders.
(d) State Securities Laws Compliance.
Unless an exemption is available, the Company shall, as promptly as practicable,
(i) register or qualify the Registrable Securities covered by the Registration Statement under such
securities or “blue sky” laws of such jurisdictions in the United States as the Holders included in
such Registration Statement (in light of their intended plan of distribution) may request and (ii)
take such action necessary to cause such Registrable Securities covered by the Registration
Statement to be registered
9
with or approved by such other governmental authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the Holders included in such Registration Statement to consummate
the disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this paragraph, subject
itself to taxation in any such jurisdiction or consent to general service of process in any such
jurisdiction.
(e) Notification. After the filing of a Registration Statement, the Company shall
promptly, and in no event more than two business days after such filing, notify the Holders
included in such Registration Statement of such filing, and shall further notify such Holders in
writing within two business days of the occurrence of any of the following: (i) when a prospectus,
any prospectus supplement, any Free Writing Prospectus, or a post-effective amendment to the
Registration Statement has been filed with the Commission, and with respect to the Registration
Statement or any post-effective amendment, when the same becomes effective; (ii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall take all reasonable
actions required to prevent the entry of such stop order or to remove it if entered); (iii) any
request by the Commission for any amendment or supplement to such Registration Statement, any
prospectus relating thereto or Free Writing Prospectus or for additional information; or (iv) the
existence of any fact or happening of any event of which the Company has knowledge which makes any
statement of a material fact in such Registration Statement, related prospectus or Free Writing
Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or
which would require the making of any changes in such Registration Statement, prospectus or Free
Writing Prospectus in order that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in the case of such
prospectus or Free Writing Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The Company shall, as promptly as practicable upon the occurrence of any event contemplated by the
foregoing clause (iv), prepare a supplement or amendment to such Registration Statement, related
prospectus or Free Writing Prospectus and furnish to each Holder participating in the offering to
which such Registration Statement relates a reasonable number of copies of such supplement to, or
amendment of, such Registration Statement, prospectus or Free Writing Prospectus as may be
necessary so that, after delivery to the purchasers of such Registrable Securities, in the case of
the Registration Statement, it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of such prospectus or Free Writing Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(f) Agreements for Disposition. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities. The representations, warranties and covenants of the Company in any underwriting
agreement that are made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the Holders included in such Registration Statement. No
Holder included in such Registration Statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to such Holder’s
organization, good standing, authority, title to Registrable Securities, lack of conflict of such
sale with such Holder’s material agreements and organizational documents, and with respect to
written information relating to such Holder that such
Holder has furnished in writing expressly for inclusion in such Registration Statement.
Holders shall
10
agree to such covenants and indemnification and contribution obligations from selling
stockholders as are customarily contained in underwriting agreements. Further, such Holders shall
cooperate fully in the preparation of the Registration Statement and other documents relating to
any offering in which they include securities pursuant to Article II hereof;
provided, however, that such cooperation shall be limited to furnishing to the
Company such information regarding itself, the Registrable Securities held by such Holder and the
intended method of distribution of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.
(g) Cooperation. The principal executive officer of the Company, the principal
financial officer of the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully in any offering of
Registrable Securities hereunder, which cooperation shall include, without limitation, the
preparation of the Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with Underwriters, attorneys,
accountants and potential investors.
(h) Records. The Company shall make available for
inspection by the Holders whose Registrable Securities are included
in such Registration Statement, any Underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other professional retained by the Holders
included in such Registration Statement or any Underwriter (each an “Inspector” and,
collectively, the “Inspectors”), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall be
necessary to enable them to exercise their due diligence responsibility, and cause the Company’s
officers, directors and employees to supply all information reasonably requested by any of them in
connection with such Registration Statement. Records that the Company determines, in good faith,
to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors (and the Inspectors shall confirm their agreement in writing in advance to the
Company if the Company shall so request) unless (x) the disclosure of such Records is necessary, in
the Company’s judgment, to avoid or correct a misstatement or omission in the Registration
Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction after exhaustion of all appeals therefrom or (z) the information in
such Records was known to the Inspectors on a nonconfidential basis prior to its disclosure by the
Company or has been made generally available to the public. Each Holder participating in an
offering agrees that it shall, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, promptly give notice to the Company and allow the Company, at the
Company’s expense, to undertake appropriate action to prevent disclosure of the Records deemed
confidential. In the event that the Company is unsuccessful in preventing the disclosure of such
Records, such Holder agrees that it shall furnish only such portion of those Records which it is
advised by counsel is legally required and shall, at the Company’s expense, exercise all reasonable
efforts to obtain reliable assurance that confidential treatment will be accorded to those Records.
(i) Opinions and Comfort Letters. If a Registration Statement in respect of
Registrable Securities includes an underwritten public offering, the Company shall furnish or cause
to be furnished to the participating Holders and the managing Underwriter or Underwriters such
documents and certificates from the Company’s independent public accountants and legal counsel,
including an opinion of counsel and customary comfort letters, as may be reasonably required
pursuant to the underwriting agreement related thereto. In the event no legal opinion is to be
delivered pursuant to the Underwriting Agreement, the Company shall furnish to each Holder included
in such Registration Statement, at any time that such Holder elects to use a prospectus, an opinion
of counsel to the Company (based solely on the oral advice of the Commission) to the effect that
the Registration Statement containing such prospectus has been declared effective and that no stop
order is in effect.
11
(j) Earnings Statement. The Company shall comply with all applicable rules and
regulations of the Commission and the Securities Act, and make available to its stockholders, as
soon as practicable, an earnings statement covering a period of 12 months, beginning within three
months 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.
(k) Listing. The Company shall cause all Registrable Securities included in any
registration to be listed on such exchanges or otherwise designated for trading in the same manner
as similar securities issued by the Company are then listed or designated or, if no such similar
securities are then listed or designated, in a manner reasonably satisfactory to the holders of the
majority-in-interest, on an as-converted to Common Stock basis, of the Registrable Securities
included in such Registration, provided, in each case, that the applicable listing
requirements are satisfied.
(l) FINRA. The Company shall cooperate with each Holder participating in the offering
and each Underwriter, if any, and their respective legal counsel in connection with any filings
required to be made with the Financial Industry Regulatory Authority.
(m) Other Actions. The Company shall (i) take all other steps reasonably necessary to
effect the registration of the Registrable Securities contemplated hereby and reasonably cooperate
with the Holders of such Registrable Securities to facilitate the disposition of such Registrable
Securities pursuant thereto; (ii) make all required filings of all prospectuses and Free Writing
Prospectuses with the Commission within the deadlines specified by the Securities Act; and (iii)
make all required filing fee payments in respect of any Registration Statement or prospectus used
under this Agreement (and any offering covered thereby) within the deadlines specified by the
Securities Act.
3.2 Obligation to Suspend Distribution. Each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in Sections
3.1(e)(ii), (iii) or (iv) such Holder shall forthwith discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder’s receipt of the copies of the supplemented or amended Prospectus or
Free Writing Prospectus contemplated by Section 3.1(e)(i) (or if no supplemental or amended
prospectus or Free Writing Prospectus is required, upon confirmation from the Company that use of
the prospectus or Free Writing Prospectus is once again permitted) and, if so directed by the
Company, such Holder shall 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 or Free Writing
Prospectus covering such Registrable Securities which is current at the time of receipt of such
notice. If the Company shall give any such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this Agreement
(including, without limitation, the period referred to in Section 3.1(b) by the number of
days during the period from and including the date of the giving of such notice pursuant to
Sections 3.1(e)(ii), (iii) or (iv) to and including the date when the
Holders of such Registrable Securities participating in the offering under such Registration
Statement shall have received the copies of the supplemented or amended prospectus or Free Writing
Prospectus contemplated by and meeting the requirements of Section 3.1(e) (or if no
supplemental or amended prospectus or Free Writing Prospectus is required, upon confirmation from
the Company that use of the prospectus or Free Writing Prospectus is once again permitted).
3.3 Registration Expenses. The Company shall bear all costs and expenses incurred in
connection with any registration of Registrable Securities under this Agreement, and all expenses
incurred in performing or complying with its other obligations under this Agreement, whether or not
the Registration Statement becomes effective, including, without limitation: (i) all registration
and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including
fees and disbursements of counsel in connection with blue sky qualifications or exemptions of the Registrable
Securities); (iii) printing
12
expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries
and expenses of its officers and employees); (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities as required by Section 3.1(k); (vi) Financial
Industry Regulatory Authority, Inc. fees; (vii) the fees and disbursements of counsel for the
Company and counsel for the Underwriter or Underwriters and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to Section 3.1(i));
(viii) the fees and expenses of any special experts retained by the Company in connection with such
registration; and (ix) the fees and expenses of one legal counsel selected by the Holders of a
majority-in-interest, on an as-converted to Common Stock basis, of the Registrable Securities
included in such registration. The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities being sold by the
Holders thereof, which underwriting discounts or selling commissions shall be borne by such
Holders. Additionally, in an underwritten offering, all selling stockholders and the Company shall
bear the expenses of the underwriter, if any, pro rata in proportion to the
respective amount of shares each is selling in such offering.
3.4 Information. The Holders shall provide such information as may reasonably be
requested by the Company or the managing Underwriter, if any, in connection with the preparation of
any Registration Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to Article II
and in connection with the Company’s obligation to comply with federal and applicable state
securities laws.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless
the Sponsor and each other Holder participating in an offering pursuant to Sections 2.1,
2.2 or 2.3 hereunder, and each of their respective officers, employees, Affiliates,
directors, partners, members, attorneys and agents, and each person, if any, who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Sponsor and
each other Holder participating in such offering from and against any expenses, losses, judgments,
claims, damages or liabilities, or any action or proceeding in respect thereof (including
reasonable costs of investigation and reasonable attorneys’ fees and expenses), whether joint or
several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a
material fact contained in any Registration Statement under which the sale of such Holder’s
Registrable Securities was registered under the Securities Act (including each preliminary
prospectus), any prospectus filed under Rule 424 under the Securities Act, any Free Writing
Prospectus or any other information that is deemed under Rule 159 promulgated under the Securities
Act to have been conveyed to purchasers of securities at the time of sale of such securities
(including, without limitation, a contract of sale), or any amendment or supplement thereto, or
arising out of or based upon any omission (or alleged omission) to state a material fact required
to be stated therein or necessary to make the statements therein not misleading under the
circumstances such statements were made; and the Company shall promptly reimburse any such
indemnified party for any legal and any other expenses reasonably incurred by such indemnified
party in connection with investigating and defending any such expense, loss, judgment, claim,
damage, liability or action; provided, however, that the Company will not be liable
in any such case to the extent that any such expense, loss, claim, damage or liability arises out
of or is based upon any untrue statement or allegedly untrue statement or omission or alleged
omission made in such Registration Statement (including each preliminary prospectus), any
prospectus filed under Rule 424 under the Securities Act, any Free Writing Prospectus or any other
information that is deemed under Rule 159 promulgated under the Securities Act to have been
conveyed to purchasers of securities at the time of sale of such securities (including, without
limitation, a contract of sale), or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing,
13
by a Holder participating in the offering expressly for use therein. The Company also shall
indemnify any Underwriter of the Registrable Securities, their officers, Affiliates, directors,
partners, members and agents and each person who controls such Underwriter on substantially the
same basis as that of the indemnification provided above in this Section 4.1.
4.2 Indemnification by Holders. Each Holder will, in the event that any registration
is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities
held by such Holder, indemnify and hold harmless the Company, each of its directors and officers
and each Underwriter (if any), and each other Holder participating in the offering and each other
person, if any, who controls another participating Holder or such Underwriter within the meaning of
the Securities Act, against any expenses, losses, judgments, claims, damages or liabilities, or any
action or proceeding in respect thereof (including reasonable costs of investigation and reasonable
attorneys’ fees and expenses), whether joint or several, insofar as such expenses, losses,
judgments, claims, damages or liabilities, or any action or proceeding in respect thereof, arise
out of or are based upon any untrue statement (or allegedly untrue statement) of a material fact
contained in the Registration Statement under which the sale of such Registrable Securities was
registered under the Securities Act, any preliminary prospectus, any prospectus filed under Rule
424 under the Securities Act, any Free Writing Prospectus or any other information that is deemed
under Rule 159 promulgated under the Securities Act to have been conveyed to purchasers of
securities at the time of sale of such securities (including, without limitation, a contract of
sale), or any amendment or supplement thereto, or arise out of or are based upon any omission (or
alleged omission) to state a material fact required to be stated therein or necessary to make the
statements therein not misleading under the circumstances such statements were made, if the
statement or omission was made in reliance upon and in conformity with information furnished in
writing to the Company by such Holder participating in the offering expressly for use therein, and
shall reimburse the Company, its directors and officers, and each other Holder participating in the
offering or controlling person for any legal or other expenses reasonably incurred by any of them
in connection with investigating or defending any such expense, loss, judgment, claim, damage,
liability or action. Each Holder’s indemnification obligations hereunder shall be several and not
joint and shall be limited to the amount of any net proceeds actually received by such Holder in
the offering.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person of
any notice of any loss, claim, damage or liability or any action in respect of which indemnity may
be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified
Party”) shall, if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying Party”) in writing
of the loss, claim, judgment, damage, liability or action; provided, however, that
the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified
Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by
such failure. If the Indemnified Party is seeking indemnification with respect to any claim or
action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly with all other
Indemnifying Parties, to assume control of the defense thereof with counsel reasonably satisfactory
to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the Indemnified
Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the
right to employ separate counsel (but no more than one such separate counsel in addition to local
counsel) to represent the Indemnified Party and its controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought by the Indemnified
Party against the Indemnifying
Party, with the reasonable fees and expenses of such counsel to be paid by such Indemnifying
Party if,
14
based upon the written opinion of counsel of such Indemnified Party, representation of
both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or
threatened proceeding in respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all liability arising
out of such claim or proceeding.
4.4 Contribution.
(a) Equitable Considerations. If the indemnification provided for in the foregoing
Sections 4.1 and 4.2 is unavailable to any Indemnified Party in respect of any
loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion
as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss, claim, damage,
liability or action, as well as any other relevant equitable considerations. The relative fault of
any Indemnified Party and any Indemnifying Party 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 such Indemnified Party
or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(b) Other Payments. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 4.4 were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding Section 4.4(a). The amount paid or
payable by an Indemnified Party as a result of any loss, claim, damage, liability or action
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. Notwithstanding the
provisions of this Section 4.4, no Holder shall be required to contribute any amount in
excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such Holder from the sale of Registrable Securities
which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
ARTICLE V
UNDERWRITING AND DISTRIBUTION
UNDERWRITING AND DISTRIBUTION
5.1 Rule 144. The Company covenants that it shall use its reasonable best efforts to
file any reports required to be filed by it under the Securities Act and the Exchange Act and shall
use its reasonable efforts to take such further action as the Holders may reasonably request, all
to the extent required from time to time to enable such Holders to sell Registrable Securities
without registration under the Securities Act within the limitation of the exemptions provided by
Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
15
ARTICLE VI
MISCELLANEOUS
MISCELLANEOUS
6.1 Other Registration Rights. Except as set forth in the Warrant Agreement, the
Company represents and warrants that no person, other than the Sponsor and any Permitted Transferee
who holds Registrable Securities has any right to require the Company to register any shares of the
Company’s capital stock for sale or to include shares of the Company’s capital stock in any
registration filed by the Company for the sale of shares of capital stock for its own account or
for the account of any other person.
6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties
and obligations of the Company hereunder may not be assigned or delegated by the Company in whole
or in part. This Agreement and the rights, duties and obligations of the Holders hereunder may be
freely assigned or delegated by such Holder in conjunction with and to the extent of any transfer
of Registrable Securities by any such Holder to a Permitted Transferee. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each of the parties
hereto and their respective successors and the permitted assigns of the Sponsor or other Holder or
of any assignee of the Sponsor or other Holder. This Agreement is not intended to confer any
rights or benefits on any persons that are not party hereto other than as expressly set forth in
Article IV and this Section 6.2.
6.3 Stock Splits, etc. The provisions of this Agreement shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the
like occurring after the date hereof.
6.4 Notices. All notices, demands, requests, consents, approvals or other
communications required or permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be delivered by nationally recognized commercial courier
service promising next business day delivery and requiring receipt for delivery (such as Federal
Express), or transmitted by hand delivery, addressed as set forth below, or to such other address
as such party shall have specified most recently by written notice. Notice shall be deemed given
on the date of delivery if hand delivered or one business day after timely delivery of
such notice to such commercial courier service with an order for next-day delivery.
To the Company:
Attention: Xxx X. Xxxxx
with a copy to:
Xxxxxxx & Xxx
000 Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
16
To the Sponsor:
WNH Holdings, LLC
Center City Executive Centre
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Center City Executive Centre
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
To each of the other Holders:
at such addresses as shall have been provided by such Holders to the Company.
6.5 Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible that is valid and enforceable.
6.6 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, and all of which taken together shall constitute one and the
same instrument.
6.7 Entire Agreement. This Agreement (including all agreements entered into pursuant
hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
6.8 Modifications and Amendments. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless consented to in writing by the Company and the holders of a
majority-in-interest, on an as-converted to Common Stock basis, of the Registrable Securities.
6.9 Titles and Headings. Titles and headings of sections of this Agreement are for
convenience only and shall not affect the construction of any provision of this Agreement.
6.10 Waivers and Extensions. Any party to this Agreement may waive any right, breach
or default which such party has the right to waive, provided, however, that such
waiver will not be effective against the waiving party unless it is in writing, is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance or after the
right waived has arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or
provision herein contained. No waiver or extension of time for performance of any obligations or
acts shall be deemed a waiver or extension of the time for performance of any other obligations or
acts.
6.11 Remedies Cumulative. In the event that the Company fails to observe or perform
any covenant or agreement to be observed or performed under this Agreement, the Sponsor or any
other Holder may proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for an injunction
against the breach of any such
17
term or in aid of the exercise of any power granted in this Agreement or to enforce any other
legal or equitable right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this Agreement shall be
mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any
other right, power or remedy, whether conferred by this Agreement or now or hereafter available at
law, in equity, by statute or otherwise.
6.12 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by
the laws of the State of Delaware, without giving effect to any choice-of-law provisions thereof
that would compel the application of the substantive laws of any other jurisdiction. The parties
hereto agree that any action, proceeding or claim against it arising out of or relating in any way
to this Agreement shall be brought and enforced in the courts of the State of Delaware or the
United States District Court for Delaware, and the parties hereto irrevocably submit to such
jurisdiction, which jurisdiction shall be exclusive. The parties hereto hereby waive any objection
to such exclusive jurisdiction and that such courts represent and inconvenient forum.
6.13 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally
waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether
based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement,
the transactions contemplated hereby, or the actions of the parties hereto in the negotiation,
administration, performance or enforcement hereof.
[Remainder of page intentionally left blank.]
18
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by
their duly authorized representatives as of the date first written above.
| SIDHU SPECIAL PURPOSE CAPITAL CORP. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| WNH HOLDINGS, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| INITIAL HOLDERS: Name: |
||||
