Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated September
21, 1998, is by and between ANICOM, INC., a Delaware corporation ("Anicom"),
TEXCAN CABLES INC., a Nevada corporation ("Texcan U.S."), and TEXCAN CABLES
LIMITED, a Canadian corporation ("Texcan CN" and, together with Texcan U.S., the
"Texcan Entities").
WHEREAS, concurrent with the execution hereof, Anicom and ANICOM
MULTIMEDIA WIRING SYSTEMS INCORPORATED, a Nova Scotia company and a wholly-owned
subsidiary of Anicom ("Anicom CN" and, together with Anicom, the "Anicom
Entities"), shall purchase substantially all of the assets of the Texcan
Entities and TEXCAN CABLES INTERNATIONAL, INC., a Nevada corporation ("Texcan
International") pursuant to that certain Asset Purchase Agreement, dated as of
September 21, 1998 (the "Asset Purchase Agreement"), by and between the Anicom
Entities and the Texcan Entities and Texcan International;
WHEREAS, pursuant to the Asset Purchase Agreement, the Texcan Entities
will be receiving, as a portion of the purchase price, (a) 1,403,509 shares of
Anicom's common stock (the "Anicom Common Shares"); and (b) 20,000 shares of
Anicom's Series B convertible preferred stock (the "Anicom Preferred Shares"
and, together with the Anicom Common Shares, the "Anicom Shares"); and
WHEREAS, as a condition to the closing of the Contemplated Transactions
(as defined in the Asset Purchase Agreement), Anicom has agreed to grant to the
Texcan Entities certain registration rights for the Anicom Shares on the terms
and conditions set forth herein.
NOW, THEREFORE, upon the premises and the mutual promises herein
contained, and for good and valuable consideration, the receipt and adequacy of
which is acknowledged, the parties agree as follows:
1. Certain Definitions. As used in this Agreement the following
initially capitalized terms shall have the following meanings:
Closing: The closing of the transactions contemplated by the Asset
Purchase Agreement.
Permitted Transferees: (i) ▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the event of ▇▇▇▇▇▇
▇▇▇▇▇'▇ death or permanent incompetency, his personal representative for
purposes of the administration of his estate or the protection and management of
his assets) or (ii) any other Person, directly or indirectly, controlled by, or
under the common control of, ▇▇▇▇▇▇ ▇▇▇▇▇ as of the date of any assignment
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thereto pursuant to Section 4(a), provided that in either case such Person
agrees to be bound by the terms of this Agreement for all purposes thereafter as
a "Texcan Entity" by executing and delivering to Anicom a notice of assignment
in the form of Attachment I hereto.
Person: A corporation, an association, a partnership, a limited
liability company, an unlimited liability company, an organization, a business,
an individual, a governmental or political subdivision thereof or a governmental
agency.
Registrable Securities: (i) The Anicom Common Shares and (ii) the
shares of Anicom common stock issued or issuable pursuant to the conversion of
the Anicom Preferred Shares and any stock or other securities into which such
Anicom Preferred Shares shall have hereafter been changed, converted or
exchanged which are held by the Texcan Entities or any of their Permitted
Transferees.
Registration Expenses: All expenses incident to Texcan Entities' and
Anicom's performance of or compliance with this Agreement, including, without
limitation, all registration and filing fees, including fees with respect to
filings required to be made with the National Association of Securities Dealers,
Inc., fees and expenses of compliance with securities or blue sky laws,
including, without limitation, all word processing, duplicating and printing
expenses, messenger, telephone and delivery expenses, and fees and disbursements
of counsel and of all independent certified public accountants (including the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance and the fees of the Texcan Entities' independent certified
public accountants with regard to services rendered in connection with the
financial statements and opinions included in a registration statement) and the
cost to furnish each Texcan Entity or Permitted Transferee thereof with copies
of any registration statement, each preliminary prospectus, final prospectus and
each amendment and supplement thereto.
Rule 144: Rule 144 promulgated under the Securities Act, or any
successor rule to similar effect.
SEC: The United States Securities and Exchange Commission.
Securities Act: The United States Securities Act of 1933, as amended,
or any successor statute.
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Termination Date: The date which is the earlier of the fifth
anniversary of the date hereof and the date the Texcan Entities and any
Permitted Transferees thereof no longer hold any Registrable Securities.
2. Registration of the Registrable Securities under Securities Act.
2.1 Mandatory Registration.
a. Anicom shall file with the SEC, on or before the sixtieth
day after the Closing, a registration statement on Form S-3, which shall
register the Registrable Securities for resale. Anicom, with the assistance of
the Texcan Entities, shall promptly respond to any SEC comments on such
registration statement and shall otherwise use commercially reasonable efforts
to cause such registration statement to be declared effective as soon as
practicable.
b. Anicom shall comply with all applicable provisions of and
rules under the Securities Act and state securities laws in the preparation and
filing of such registration statement. Without limiting the foregoing, Anicom
shall ensure that such registration statement does not, as of its effective
date, contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (provided that Anicom shall not be responsible for the accuracy
or completeness of any information relating to, and furnished by the Texcan
Entities in writing for inclusion in such registration statement).
c. Anicom will pay all Registration Expenses in connection
with the registration of Registrable Securities pursuant to this Section 2.1.
2.2 Incidental Registration.
a. Right to Include the Registrable Securities. If Anicom, at
any time before the Termination Date, proposes to register securities under the
Securities Act by registration on Forms ▇-▇, ▇-▇ or S-3 or any successor or
similar form(s) (but excluding registrations on Forms S-4 or S-8 or, any
successor or similar forms), whether for sale for its own account or pursuant to
a demand for registration granted to any other party, Anicom will give written
notice each such time to the Texcan Entities and any Permitted Transferees of
its intention to do so. Upon the written request of a Texcan Entity or a
Permitted Transferee thereof holding Registrable Securities (specifying the
intended method of disposition, and the number of, Registrable Securities
requested by such Texcan Entity or Permitted Transferee to be included in such
registration), made within 10 business days after the receipt of any such
notice, Anicom will include in its proposed registration all such Registrable
Securities, subject to the priorities and limitations set forth in Sections
2.2(b) and 2.2(d) below. If Anicom thereafter determines for any reason not to
register or to delay registration of Anicom's offering of its securities, Anicom
may, at its election, give written notice of such determination to the Texcan
Entities and/or their Permitted Transferees who chose to participate in such
registration and, thereupon, (i) in the case of a determination not to register,
shall be relieved of the obligation to register such Registrable Securities in
connection with such registration (but not from any obligation of Anicom to pay
the Registration Expenses in connection therewith), and (ii) in the case of a
determination to delay registration, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registration of such
other securities. Anicom will pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this Section 2.2.
The right to request the registration of Registrable Securities pursuant to this
Section 2.2(a) is in addition, and not in lieu of, the mandatory registration
rights provided for in Section 2.1.
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b. Priority in Incidental Registration Rights. If the
registration referred to in Section 2.2(a) is to be an underwritten registration
and the managing underwriter(s) in connection with such registration advise
Anicom (or the other shareholders participating therein) in writing that in
their good faith opinion such offering would be adversely affected by the
inclusion therein of the total number of Registrable Securities requested by the
Texcan Entities and their Permitted Transferees to be included therein, Anicom
shall include in such registration: (1) first, all securities Anicom proposes to
sell for its own account (the "Company Securities"), (2) second, up to the full
number of securities proposed to be registered for the account of the
shareholders on behalf of whom registration may have initially been requested
and who are entitled to a priority in such case, and (3) the securities
requested to be registered by shareholders of Anicom (including, without
limitation, the Texcan Entities and their Permitted Transferees) entitled to
participate in the registration, drawn from them pro rata based on the number
each has requested to be included in such registration; provided, however that
notwithstanding anything herein to the contrary, neither the Texcan Entities nor
any Permitted Transferees thereof shall have the right, and Anicom shall not be
obligated, under this Agreement to include in any such registration Registrable
Securities of the Texcan Entities and the Permitted Transferees thereof, in the
aggregate, in excess of twenty percent (20%) of the aggregate number of
securities registered in any such registration.
c. Order of Priority. The Texcan Entities' rights to register
the Registerable Securities hereunder shall be pari passu with all such rights
currently held by other shareholders of Anicom. Anicom represents and warrants
to the Texcan Entities that, except for with respect to the limitations set
forth in clause (2) of Section 2.2(b) and in the last clause of the last
sentence in Section 2.2(b) above, no shareholder of Anicom has "piggyback"
registration rights more favorable than the rights granted to the Texcan
Entities under this Agreement. Anicom hereby agrees that it will not grant any
more favorable "piggyback" registration rights to another shareholder on or
before the earlier of (i) September 21, 2001 or (ii) the date on which the
aggregate number of Anicom Preferred Shares owned or held by one or more of the
Texcan Entities and the Permitted Transferees thereof collectively represent
less than 1.8% of the outstanding shares of Anicom common stock, on an
as-converted basis (the "Superior Rights Date"). In the event that Anicom
hereafter grants more favorable "piggyback" registration rights to another
shareholder prior to the Superior Rights Date, Anicom shall automatically be
deemed to have granted comparable registration rights to the Texcan Entities and
their Permitted Transferees hereunder. Anicom shall provide the Texcan Entities
and their Permitted Transferees with notice of any such grant of more favorable
"piggyback" registration rights and shall execute such documentation as the
Texcan Entities and their Permitted Transferees may reasonably request to
evidence such rights.
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d. Limitations; Exceptions. Anicom shall not be required to
effect any registration of Registrable Securities under this Section 2.2
incidental to the registration of any of its securities in connection with
mergers, acquisitions, exchange offers, subscription offers, dividend
reinvestment plans or stock option or other employee benefit plans.
Notwithstanding anything herein to the contrary, the Texcan Entities and their
Permitted Transferees agree that they will exercise their right to incidental
registration in a registration statement under this Section 2.2 first with
respect to the shares of Anicom common stock issued or issuable pursuant to the
conversion of the Anicom Preferred Shares and any stock or other securities into
which such Anicom Preferred Shares shall have hereafter been changed, converted
or exchanged which are then held by all of the Texcan Entities and their
Permitted Transferees, collectively, and then against the Anicom Common Shares
then held by all of the Texcan Entities and their Permitted Transferees,
collectively.
e. Number of Incidental Registrations. Each Texcan Entity and
any Permitted Transferee thereof may exercise its right to incidental
registration under this Section 2.2 an unlimited number of times before the
Termination Date; provided, that the Texcan Entities and their Permitted
Transferees, in the aggregate, may not exercise their right to incidental
registration in a registration statement under this Section 2.2 with respect to
less than the lesser of: (i) 10,000 shares of common stock, and (ii) the total
number of shares of Registrable Securities then held by such Texcan Entities and
their Permitted Transferees, collectively.
2.3 Registration Procedures. In connection with the mandatory
registration pursuant to Section 2.1 above or, subject to Section 2.2(a) or
2.2(c) above, whenever the Texcan Entities or any of their Permitted Transferees
have requested an incidental registration pursuant to Section 2.2 above, Anicom
will:
a. prepare and file with the SEC such amendments and
supplements to such registration statements and the prospectus(es) used in
connection therewith, which prospectus(es) are to be filed pursuant to Rule 424
under the Securities Act, as may be necessary to keep the (i) registration
statement pursuant to Section 2.1 effective until the date upon which, in the
opinion of counsel to Anicom (a copy of which shall be provided to the Texcan
Entities or their Permitted Transferees), the Registrable Securities are
permitted to be distributed by the Texcan Entities or their Permitted
Transferees pursuant to Rule 144, and may then be sold without regard to any
volume limitation (or if the volume limitation would permit distribution and
sale of all such securities in a single three-month period), or the Termination
Date, if earlier, and (ii) the registration statements pursuant to Section 2.2
effective for a period of 90 days (unless the Registrable Securities registered
thereunder have been sold or disposed of prior to the expiration of such 90-day
period), and in each case comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statements during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statements or
supplements to such prospectuses;
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b. furnish to the Texcan Entities and their Permitted
Transferees without charge, such number of copies of such registration
statements, each amendment and supplement thereto, the prospectus(es) included
in such registration statements, and such other documents as the Texcan Entities
and their Permitted Transferees may reasonably request in order to facilitate
the disposition of the Registrable Securities (Anicom consents to the use of
such prospectuses or any amendment or supplement thereto by the Texcan Entities
and their Permitted Transferees in connection with the offering and sale of the
Registrable Securities covered by such prospectuses or any amendment or
supplement thereto); and furnish to the Texcan Entities and their Permitted
Transferees, without charge, at least one conformed copy of the registration
statement or statements and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
c. use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the Texcan Entities and their Permitted Transferees reasonably
request and do any and all other acts and things which may be reasonably
necessary or advisable to (i) keep such registration or qualification effective
during the period such registration statement is required to be kept effective
and (ii) enable the Texcan Entities and their Permitted Transferees to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by the Texcan Entities and their Permitted Transferees (provided that
Anicom will not be required to (1) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph, (2) subject itself to taxation in any such jurisdiction or (3)
consent to general service of process in any such jurisdiction);
d. notify the Texcan Entities and their Permitted Transferees,
promptly, and if requested, confirm such advice in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and,
with respect to a registration statement or any post-effective amendment, when
the same has become effective, (ii) of any request by the SEC for amendments or
supplements to a registration statement or related prospectus or for additional
information, (iii) of the happening of any event as a result of which a
registration statement or 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 Anicom will prepare a supplement
or amendment to such registration statement or prospectus so that such
registration statement or prospectus will not contain any untrue statement of a
material fact or omit to state any fact necessary to make the statements therein
not misleading, (iv) of the receipt by Anicom of any notification with respect
to the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, and (v) of Anicom's reasonable determination that a post-effective
amendment to a registration statement would be appropriate;
e. cause all such Registrable Securities to be listed on each
securities exchange and inter-dealer quotation system on which similar
securities issued by Anicom are then listed and pay all fees and expenses in
connection therewith; and
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f. advise the Texcan Entities and their Permitted Transferees
promptly after Anicom shall have received notice or obtained knowledge of (i)
the issuance of any stop order by the SEC suspending the effectiveness of such
registration statements or the initiation or threatening of any proceeding for
such purposes and will use its reasonable efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued, or
(ii) the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purposes and will promptly use its best efforts to prevent such
suspension or have such suspension lifted if it should be effected.
2.4 The Texcan Entities' Covenants.
a. Each of the Texcan Entities and their Permitted Transferees
shall furnish to Anicom in writing such information relating to it as Anicom may
reasonably request in writing in connection with the preparation of such
registration statements, and each of the Texcan Entities and their Permitted
Transferees agrees to notify Anicom as promptly as practicable of any inaccuracy
or change in information it has previously furnished to Anicom or of the
happening of any event, in either case as a result of which any prospectus
relating to such registrations contains an untrue statement of a material fact
regarding such Texcan Entity or Permitted Transferee or the distribution of such
Registrable Securities or omits to state any material fact regarding any of the
Texcan Entities and their Permitted Transferees or the distribution of such
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and to promptly furnish to Anicom any additional information required to correct
and update any previously furnished information or required such that such
prospectus shall not contain, with respect to any of the Texcan Entities and
their Permitted Transferees or the distribution of such Registrable Securities,
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing.
b. The Texcan Entities and their Permitted Transferees agree
that, upon receipt of any notice from Anicom of the happening of any event of
the kind described in Section 2.3(d) (ii), (iii), (iv) or (v) or Section 2.3(f)
hereof, the Texcan Entities will forthwith discontinue disposition of such
Registrable Securities covered by such registration statement or prospectus
until the Texcan Entities' receipt of the copies of the supplemented or amended
prospectus relating to such registration statement or prospectus, or until it is
advised in writing by Anicom that the use of the applicable prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in such prospectus, and, if so directed by Anicom,
the Texcan Entities and their Permitted Transferees will deliver to Anicom all
copies, other than permanent file copies then in the Texcan Entities' or their
Permitted Transferees' possession, of the prospectus covering the Registrable
Securities current at the time of receipt of such notice.
2.5 Reasonable Investigation. In connection with the preparation and
filing of each registration statement under the Securities Act pursuant to this
Agreement, Anicom will give the Texcan Entities and their Permitted Transferees
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and their counsel and accountants such access to its books and records and such
opportunities to discuss the business of Anicom with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary in their respective reasonable opinions or in the reasonable
opinion of their respective counsel to conduct a reasonable investigation for
the purpose of establishing a due diligence defense within the meaning of the
Securities Act and in order to enable the Texcan Entities or their Permitted
Transferees to execute any certificates required by the underwriters in any
underwritten offering in which they participate.
2.6 Indemnification.
a. Indemnification by Anicom. In the event of any registration
of any Registrable Securities under the Securities Act, Anicom will, and hereby
does, indemnify and hold harmless, to the fullest extent permitted by law, the
Texcan Entities, their Permitted Transferees, and each of their respective
officers and directors and each Person who controls any Texcan Entity within the
meaning of the Securities Act (collectively, the "Texcan Parties") against any
and all judgments, fines, penalties, charges, costs, amounts paid in settlement,
losses, claims, damages, liabilities, expenses, or attorney fees, joint or
several, incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or SEC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto ("Indemnified Damages"), to which they or any of
them may become subject under the Securities Act or any other statute or common
law, insofar as any such Indemnified Damages arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement relating to the sale of such securities or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under blue sky or other securities laws of
jurisdictions in which the Registrable Securities are offered ("Blue Sky
Filing"), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the final prospectus (as amended or supplemented if
Anicom shall have filed with the SEC any amendment thereof or supplement
thereto) if used within the period during which Anicom is required to keep the
registration statement to which such prospectus relates current, or the omission
or alleged omission to state therein (if so used) a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the indemnification
agreement contained herein shall not apply to such Indemnified Damages to the
Texcan Parties arising out of, or based upon, any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission: (i) was made in reliance upon and in conformity with
written information furnished to Anicom by the Texcan Entities or their
Permitted Transferees for use in connection with preparation of the registration
statement, any prospectus contained in the registration statement, any such
amendment or supplement thereto or any Blue Sky Filing; or (ii) was included in
a registration statement, prospectus contained therein or any amendment or
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supplement thereto, and prior to the use thereof, Anicom had given written
notice to the Texcan Parties of the existence of an untrue statement or an
omission and Anicom's intent to promptly file an amendment to its registration
statement to correct such untrue statement or omission. Furthermore, the
indemnification agreement contained herein shall not apply to any Indemnified
Damages to the Texcan Parties arising out of, or based upon, the Texcan
Entities' or their Permitted Transferees', or any of their representatives',
failure to deliver a prospectus, including any amendments or supplements
thereto, in connection with any sale thereunder in accordance with the rules and
regulations of the SEC. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Texcan Party and
shall survive the transfer of such securities by the Texcan Entities and their
Permitted Transferees.
b. Indemnification by the Texcan Entities. Anicom may require,
as a condition to including the Registrable Securities of the Texcan Entities
and their Permitted Transferees in any registration statement filed pursuant to
this Agreement, that Anicom shall have received an undertaking satisfactory to
it from the Texcan Entities and their Permitted Transferees to indemnify and
hold harmless (in the same manner and to the same extent as set forth in
subdivision (a) of this Section 2.6) Anicom, its officers and directors and each
officer of Anicom and each other Person, if any, who controls Anicom within the
meaning of the Securities Act with respect to any untrue statement or alleged
untrue statement in, or omission or alleged omission from, such registration
statement, any prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission (i) arises from information relating to,
or provided by, the Texcan Entities or their Permitted Transferees and was made
in reliance upon written information the Texcan Entities or their Permitted
Transferees furnished to Anicom for use in the preparation of such registration
statement, prospectus, amendment or supplement, or (ii) was included in a
registration statement, prospectus contained therein or any amendment or
supplement thereto, and prior to the use thereof, Anicom had given notice to the
Texcan Parties of the existence of an untrue statement or an omission and
Anicom's intent to promptly file an amendment to its registration statement to
correct such untrue statement or omission. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of Anicom
or any such director, officer or controlling Person and shall survive the
transfer of such securities by the Texcan Entities and their Permitted
Transferees. The Texcan Entities' and their Permitted Transferees' indemnity as
described in this Section 2.6(b) shall be limited to the dollar amount of the
proceeds of the Registrable Securities actually sold by the Texcan Entities and
their Permitted Transferees pursuant to such registration statement.
c. Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.6,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
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party shall be entitled to participate in and, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. The indemnified
party shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. If the indemnifying party does not
assume such defense, the indemnified party shall keep the indemnifying party
apprised at all times as to the status of the defense; provided, however, that
the failure to keep the indemnifying party so informed shall not affect the
obligations of the indemnifying party hereunder. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the indemnified party
with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made.
d. Indemnification Payments. The indemnification required by
this Section 2.6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.
e. Contribution. If the indemnification provided for in this
Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subparagraph (a) or (b) hereof in respect of any
Indemnified Damages, then, in lieu of the amount paid or payable under
subparagraph (a) or (b) hereof, the indemnified party and the indemnifying party
under subparagraph (a) or (b) hereof shall contribute to the aggregate
Indemnified Damages, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party with respect
to the statements or omissions which resulted in such Indemnified Damages, as
well as any other relevant equitable considerations. 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. The obligations of the Texcan
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Entities (and their Permitted Transferees) and Anicom to contribute as provided
in this subparagraph (e) are several in proportion to the relative value of
their respective Registrable Securities covered by such registration statement
and not joint. In addition, no Person shall be obligated to contribute hereunder
any amounts in payment for any settlement of any action or claim effected
without such Person's consent, which consent shall not be unreasonably withheld.
In no event shall any of the Texcan Entities nor any Permitted Transferee
thereof be obligated to contribute under this Section 2.6(e) an amount in excess
of the dollar amount of the proceeds of the Registrable Securities sold by any
such Texcan Entity or any such Permitted Transferee pursuant to the registration
statement giving rise to such damages.
f. Other Rights; Liabilities. The indemnity agreements
contained herein shall be in addition to (i) any cause of action or similar
right of the indemnified party against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to pursuant to the
law.
3. Holdback Agreements. Each of the Texcan Entities agrees that, in the
event that it elects to participate in any registration pursuant to a
registration statement filed by Anicom with respect to an underwritten public
offering by Anicom that becomes effective on or before the Termination Date (a
"Follow-On Offering") and fifty percent (50%) or more of the Registrable
Securities that it has requested to be registered in such Follow-On Offering are
included in such registration in accordance with the terms of this Agreement, it
shall not effect any public sale or distribution (including sales pursuant to
Rule 144) of Registrable Securities during the seven days prior to and the
ninety day period beginning on the effective date of the Follow-On Offering
(other than Registrable Securities which are registered in such Follow-On
Offering), unless the underwriters managing such Follow-On Offering otherwise
consent thereto. Furthermore, if the underwriters managing any such Follow-On
Offering request written confirmation of the foregoing covenant, each of the
Texcan Entities shall provide such confirmation upon a written request therefor.
Each of the Texcan Entities further agrees that in the event that it elects not
to participate in any Follow-On Offering, it shall not unreasonably refuse to
(i) agree to refrain from effecting any public sale or distribution (including
sales pursuant to Rule 144) of Registrable Securities in excess of fifteen
percent (15%) of the number of Registrable Securities received by the Texcan
Entities pursuant to the Asset Purchase Agreement during the five days prior to
and the forty-five day period beginning on the effective date of the Follow-On
Offering (other than Registrable Securities which are registered in such
Follow-On Offering), unless the underwriters managing such Follow-On Offering
otherwise consent thereto and (ii) execute written confirmation thereof if the
underwriters managing any such Follow-On Offering request such written
confirmation.
4. Miscellaneous.
a. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns. Anicom may not assign its
obligations hereunder. Without the prior written consent of Anicom, which
consent may be granted or withheld at Anicom's sole discretion, the Texcan
Entities may not assign their rights hereunder or otherwise provide to any third
party the benefits granted to the Texcan Entities hereunder; provided, however,
that any Texcan Entity may assign its rights under this Agreement to a Permitted
Transferee.
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b. Severability. If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term or provision.
c. Further Assurances. Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
d. Waivers, Etc. No failure or delay on the part of either
party hereto (or the intended third party beneficiaries referred to herein) in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement nor
consent to any departure therefrom shall in any event be effective unless the
same shall be in writing, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
e. Entire Agreement. This Agreement, together with Asset
Purchase Agreement and the documents and agreements referenced therein, contain
the entire understanding of the parties with respect to the subject matter
hereof. The section headings contained in this Agreement are solely for the
purpose of reference, and shall not in any way affect the meaning or
interpretation of this Agreement.
f. Counterparts. For the convenience of the parties, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original but all of which together shall be one and the same
instrument.
g. Notices. All notices, demands and requests required or
permitted to be given hereunder shall in every case be in writing and shall be
deemed duly given (a) when delivered personally, (b) three (3) Business Days
after being deposited in the United States mail, registered or certified mail,
return receipt requested, (c) one Business Day after being dispatched by a
United States or Canadian nationally recognized overnight courier service, or
(d) when sent by telecopier, provided that a copy is mailed by U.S. or Canadian
certified mail, return receipt requested, to the parties at the addresses and
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telecopier numbers as set forth below or at such other addresses or telecopier
numbers as may be furnished in writing:
If to Anicom: Anicom, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the TEXCAN ENTITIES:
Tricontinental Industries, Ltd.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: 604/681-8861
With copy to: Hunton & ▇▇▇▇▇▇▇▇
Riverfront Plaza
East Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: T. ▇▇▇▇▇▇ ▇▇▇▇▇, III, Esq.
Telecopy No.: 804/788-8218
h. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.
i. Amendments. This Agreement may be amended only by a written
agreement signed by the parties hereto.
j. Specific Performance. Anicom acknowledges and agrees that
monetary damages would be inadequate to compensate the Texcan Entities for the
breach of any of Anicom's obligations contained in this Agreement and that the
Texcan Entities would be seriously and irreparably injured if any provision of
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this Agreement is not performed by Anicom in accordance with the specific terms
and conditions of this Agreement. Accordingly, Anicom agrees, without prejudice
to any additional or alternative remedies the Texcan Entities have hereunder,
that the Texcan Entities shall be entitled to:
(a) seek injunctive relief to prevent any breach
of this Agreement by Anicom:
(b) enforce specifically the terms and provisions
hereof and any obligation in favor thereof,
or any of them, contained in this Agreement;
and
(c) seek declaratory relief or injunctive relief
in respect of anything done in breach of an
obligation in favor thereof, or any of them,
contained in this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
ANICOM, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Title: Vice President
-----------------------
TEXCAN CABLES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------
Title: Vice President - Finance
------------------------
TEXCAN CABLES LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------
Title: Vice President - Finance
------------------------
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Attachment I
to
Registration Rights Agreement
Notice of Assignment
[Texcan Cables Inc., a Nevada corporation] [Texcan Cables Limited, a
Canadian corporation] (the "Assignor") and ______________________, a
__________________ (the "Assignee") hereby notify Anicom, Inc., a Delaware
corporation ("Anicom"), that Assignor has transferred to Assignee _____ shares
of Anicom's [common stock] [Series B Convertible preferred stock].
By its execution of this Notice of Assignment, Assignee agrees to be
bound by the terms of the Registration Rights Agreement dated September 21, 1998
by and among Anicom, Texcan Cables Inc. and Texcan Cables Limited for all
purposes hereafter as a "Texcan Entity."
[TEXCAN CABLES INC.]
[TEXCAN CABLES LIMITED]
_____________________________________
[Name]
[Title]
[ASSIGNEE]
_____________________________________
[Name]
[Title]
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