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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is made as of May 27, 1999
by and among American Xtal Technology, Inc., a Delaware corporation ("AXT"),
Lyte Optronics, Inc., a Nevada corporation ("LYTE OPTRONICS") and Keith Halsey
and Robert Shih as representatives of the shareholders of Lyte Optronics
(collectively, "SHAREHOLDERS' REPRESENTATIVE").
1. DEFINITIONS. As used in this Agreement:
(a) "AFFILIATE" means each person or party who may be deemed to be an
"affiliate" for purposes of paragraphs (c) and (d) of Rule 145 of the SEC,
although nothing contained herein shall be construed as an admission by such
person or party that such person or party is in fact an affiliate of AXT for
such purposes.
(b) "CLOSING DATE" shall mean the Closing Date as defined in the
Merger Agreement.
(c) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(d) "FORM S-3" means such form under the Securities Act as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by AXT with the SEC.
(e) "HOLDER" means: (i) a shareholder of Lyte Optronics to whom
shares of Registrable Securities are issued pursuant to the Merger Agreement,
for so long as such holder continues to hold such shares, or (ii) a transferee
of Registrable Securities by a Holder, to whom registration rights under this
Agreement are assigned pursuant to Section 6 of this Agreement and who becomes a
Holder (within the meaning of this Agreement) of Registrable Securities.
(f) "MERGER AGREEMENT" means that certain Agreement and Plan of
Reorganization dated as of May 27, 1999 by and among AXT, Lyte Optronics
Acquisition Corporation, and Lyte Optronics.
(g) "NASD" means the National Association of Securities Dealers.
(h) "REGISTRABLE SECURITIES" means (i) for each Holder, the shares of
AXT Common Stock issued to such Holder pursuant to the Merger Agreement,
together with all other shares of AXT Common Stock issued in respect thereof (by
way of stock split, dividend, recapitalization, share exchange or otherwise),
and (ii) for all Holders, the sum of the Registrable Securities held by them.
Registrable Securities shall not include any shares of AXT Common Stock
transferred by a Holder pursuant to SECTION 8 hereof to any person who does not
agree to be bound by the terms of this Agreement.
(i) "SEC" means the Securities and Exchange Commission.
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(j) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(k) "AXT COMMON STOCK" means common stock, per value $0.01 per share
of AXT.
The term "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
Capitalized terms used and not otherwise defined in this Agreement have the
respective meanings assigned in the Merger Agreement.
2. REGISTRATION.
(a) Requests for Registration. A majority in interest of the Holders
shall be entitled to make up to two (2) requests that AXT register the
Registrable Securities pursuant to the Securities Act, subject in each case to
the following limitations: (i) no request for registration of any Registrable
Securities shall be made unless and until not less than six (6) months have
elapsed after the Closing Date; (ii) no request for registration of any
Registrable Securities shall be made if a request for registration of the same
Registrable Securities has theretofore been made pursuant to this Agreement and
AXT has caused the securities covered by such request to be registered; and
(iii) AXT shall not be obligated to effect such registration if the Holders,
together with the holders of any other securities of AXT entitled to inclusion
in such registration, propose to sell Registrable Securities at an aggregate
price to the public (before deduction of any underwriters' discounts or
commissions) of less than $1,000,000. All requests for registration shall be in
writing, signed by the requesting Holders, and delivered to AXT at the address
specified in the Merger Agreement for notices. If a request for registration is
made, AXT shall give notice of such request to all other Holders at their
respective address as reflected in the books and records of AXT, and each such
other Holder shall have the right to request that such other Holder's
Registrable Securities be included in the registration, and (subject to the
limitations set forth elsewhere in this Agreement) such other Holder's
Registrable Securities shall be included in such registration to the extent that
notice of such other Holder's request is received by AXT within ten (10) days
after notice of the original registration request is given by AXT to such other
Holders. Upon receipt of a registration request in accordance with this SECTION
2(a), AXT shall use reasonable efforts to cause the applicable Registrable
Securities to be registered under the Securities Act so as to permit the resale
thereof, and in connection therewith AXT shall use reasonable efforts to prepare
and file with the SEC and shall use reasonable efforts to cause to become
effective promptly thereafter a registration statement on Form S-3 (or any
successor form to Form S-3) (a "DEMAND REGISTRATION STATEMENT"). Subject to the
provisions of SECTION 2(d), AXT shall use commercially reasonable efforts to
keep such Demand Registration Statement continuously effective for up to one
hundred eighty (180) days or until such earlier date as of which all of the
Registrable Securities included in the registration statement shall have been
disposed of in the manner described in the registration statement.
Notwithstanding the foregoing, if for any reason the effectiveness of such
Demand Registration Statement is postponed or suspended then the foregoing
period shall be extended, if required to complete the disposition of such
Registrable Securities, by up to the aggregate number of days of
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such postponement or suspension. For purpose of the preceding sentence, the
registration shall not be deemed to have been effective (i) unless the
registration statement with respect thereto has become effective, or (ii) if
after such registration has become effective such registration or the related
offer, sale, or distribution of Registrable Securities thereunder is prohibited
by any stop order, injunction or any other order or requirement of the
Commission or other governmental agency for any reason not attributable to the
Holders, or (iii) if the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such registration are not
satisfied or waived, in each case other than as a result of action or inaction
of the Holders. AXT shall have complied with its obligations under this
Agreement, and Holders' right to demand registration pursuant to this SECTION 2
(a) shall be deemed to have been satisfied upon the earlier of (x) the date as
of which all of the Registrable Securities included in the Demand Registration
Statement shall have been disposed of pursuant to the Demand Registration
Statement, or (y) the date as of which such Demand Registration shall have been
effective for an aggregate period of one hundred eighty (180) days, provided
that no stop order or similar order is thereafter entered. Notwithstanding
anything to the contrary herein, AXT shall not be required to effect more than
two (2) registrations of Registrable Securities pursuant to this SECTION 2(a).
(b) Piggyback Registration. If at any time AXT proposes to prepare
and file a registration statement (other than a Demand Registration Statement)
under the Securities Act with the SEC covering equity securities of AXT, it will
give written notice of its intention to do so (the "PIGGYBACK NOTICE"), at least
thirty (30) days prior to the filing of any such registration statement, to the
Holders; provided, however, that AXT shall not be required to give such 30 day
advance notice of its intention to file a registration statement if the Board of
Directors determines in good faith that it is not in the Company's best interest
to provide advance notice of a proposed registration statement, and provided,
further, that in such circumstance AXT shall give written notice not later than
the date of filing the registration statement and the date of such written
notice shall be deemed the date of the Piggyback Notice. Upon the written
request of a Holder (a "REQUESTING HOLDER"), made within ten (10) days after the
date of the Piggyback Notice, that AXT include any of the Requesting Holder's
Registrable Securities in such proposed registration statement, AXT shall use
reasonable efforts to cause such registration statement (a "PIGGYBACK
REGISTRATION STATEMENT") to be declared effective under the Securities Act by
the SEC so as to permit the public sale of the Requesting Holder's Registrable
Securities pursuant thereto. Notwithstanding the provisions of this SECTION
2(b), AXT shall have the right, at any time after it shall have given a
Piggyback Notice pursuant to this SECTION 2(b) (irrespective of whether any
written request for inclusion of Registrable Securities shall have already been
made), to elect not to file any Piggyback Registration Statement or to withdraw
the same after the filing but prior to the effective date thereof. If the
registration pursuant to this SECTION 2(b) shall be underwritten in whole or in
part, the right of any Holder to have its Registrable Shares included 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 upon the same terms and conditions as the other holders of AXT
Common Stock otherwise being sold through the underwriters. As a condition
precedent to the inclusion of such Registrable Securities in such underwriting,
each Holder acknowledges and understands that it may be required to (i) provide
information and make representations and warranties to the underwriters
concerning such Holder's ownership and intended means of distribution of such
Holder's Registrable Securities
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and such other matters as may be required by law, (ii) indemnify the
underwriters to the extent as any other similarly situated holders including
shares in such underwriting, and (iii) enter into holdback and other agreements
at the request of the underwriters. If the managing underwriter for such
underwriting advises AXT that marketing factors require limitation of the number
of shares to be underwritten, the underwriters and AXT may limit the number of
Registrable Shares to be included in the registration and underwriting, or may
exclude Registrable Securities entirely from such registration and underwriting,
in accordance with the following priorities:
(i) First there shall be included in the registration and
underwriting any securities sought to be newly issued by AXT;
(ii) Second, if after according priority to the securities
described in clause (i) above, additional shares are to be included in the
registration and underwriting in accordance with the advice of the underwriter,
then the additional shares to be registered and sold shall be allocated pro rata
among the selling Holders of Registrable Securities and all other selling
shareholders that AXT has agreed may include shares in such registration.
If application of the priorities set forth above should result in some
but not all of the Registrable Securities sought to be included by Holders in
the registration and underwriting being so included, AXT shall advise all
Holders of any such limitation, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders exercising their registration rights and all other
selling shareholders in proportion, as nearly as practicable, to the respective
amounts of outstanding shares of common stock of AXT held by each such selling
shareholder to the total number of outstanding shares of AXT common stock. If
any Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to AXT and the underwriter. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
(c) Information. Each Holder shall provide all information and
materials to AXT, and take all action, as may be required in order to permit AXT
to comply with all applicable requirements of law and of the SEC and to obtain
any desired acceleration of the effective date of any Demand Registration
Statement or Piggyback Registration Statement. The provision of such information
and materials by Holders is a condition precedent to the obligations of AXT
pursuant to this Agreement.
(d) Certain Limitations.
(i) For each Holder who is an "insider" of AXT or who may be
deemed to be an Affiliate of AXT, AXT shall keep effective each Demand
Registration Statement filed pursuant to SECTION 2(a) and each Piggyback
Registration Statement which includes Registrable Securities of a Requesting
Holder pursuant to SECTION 2(b) during such periods as directors, officers and
Affiliates of AXT are permitted to purchase and sell AXT Common Stock pursuant
to the insider trading policies of AXT (subject to the right of AXT to suspend
use of a prospectus pursuant to SECTION 3(b)) and, notwithstanding the
provisions of
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SECTION 3(a)(i) and any other provision of this Agreement to the contrary, shall
not be required to keep any such registration statement effective at any other
time. By making a registration request or selling any Registrable Securities
pursuant to any such registration statement, each such Holder who is an insider
or Affiliate of AXT agrees that the right of such Holder to resell Registrable
Securities pursuant to any such registration statement hereunder shall be
suspended, unless otherwise agreed by AXT, whenever AXT "insiders" (as defined
in the AXT insider trading policy furnished to such Holders and any amendments
thereto hereafter furnished to such Holders) are restricted from trading capital
stock of AXT (a "RESTRICTED PERIOD"). Unless otherwise specified by AXT by
written notice to such Holders who are insiders or Affiliates of AXT, the term
"RESTRICTED PERIOD" shall include the period commencing at the opening of
trading on the first day of the third month of each fiscal quarter of AXT and
expiring at the close of trading on the second full trading day following
release of AXT financial results for such fiscal quarter (or, in the case of the
fourth quarter of each year, for the fiscal year). If a Restricted Period shall
commence or shall expire or terminate on any other date, AXT shall provide
advance written notice of such commencement and prompt written notice of such
expiration or termination.
(ii) Notwithstanding any other provision of this Agreement, AXT
shall be entitled to postpone the declaration of effectiveness of any Demand
Registration Statement filed pursuant to SECTION 2(a) and any Piggyback
Registration Statement filed pursuant to SECTION 2(b) for a reasonable period of
time, but not in excess of ninety (90) calendar days after the date the SEC has
informed AXT that the registration statement will not be reviewed or that the
SEC has no further comments with regard to the registration statement, if the
chief executive officer of AXT, acting in good faith, determines that there
exists material nonpublic information about AXT which the Board of Directors of
AXT does not wish to disclose in a registration statement which information
would otherwise be required by the Securities Act to be disclosed in any Demand
Registration Statement filed pursuant to SECTION 2(a) or any Piggyback
Registration Statement which includes Registrable Securities of a Holder
pursuant to SECTION 2(b).
(iii) With respect to any Demand Registration Statement filed
pursuant to SECTION 2(a) and any Piggyback Registration Statement which includes
securities of a Requesting Holding pursuant to SECTION 2(b) or any
post-effective amendment, when the same has become effective; AXT shall notify
each Holder (i) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of the registration
statement for amendments or supplements to the registration statement or related
prospectus or for additional information relating to the registration statement,
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose, (iii) of the
receipt by AXT of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (iv) of the happening of any event which makes
any statement made in the registration statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or which requires the making of any changes in the
registration statement or prospectus so that, in the case of the registration
statement, it will not contain 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, and that in the case of the prospectus, it
will not contain an untrue statement of a
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material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In such event, AXT may suspend use of the prospectus on
written notice to each Holder, in which case each Holder shall not dispose of
Registrable Securities covered by the registration statement or prospectus until
copies of a supplemented or amended prospectus are distributed to the Holders or
until the Holders are advised in writing by AXT that the use of the applicable
prospectus may be resumed. AXT shall use its commercially reasonable efforts to
ensure that the use of the prospectus may be resumed as soon as practicable. AXT
shall use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the securities for sale in any jurisdiction, at the earliest practicable
moment. AXT shall, upon the occurrence of any event contemplated by clause (iv),
prepare a supplement or post-effective amendment to the registration statement
or a supplement to the related prospectus or any document incorporated therein
by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such prospectus will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3. SELLING PROCEDURES. Any sale of Registrable Securities pursuant to the
registration statement filed and declared effective in accordance with SECTION
2(a) hereof shall be subject to the following conditions and procedures:
(a) Stockholder Notice. The selling Holder shall provide written
notice ("STOCKHOLDER NOTICE") to AXT no less than five (5) business days prior
to such Holder's intended sale. Within three (3) business days of receipt of the
Stockholder Notice, AXT will inform such Holder in writing if the registration
statement and final prospectus then on file with the SEC is current and
otherwise complies with the Securities Act such that sales may be made
thereunder. After receipt of notice from AXT that the registration statement is
current and complies with the Securities Act, such Holder shall then have ten
(10) business days to sell the Registrable Securities proposed to be sold,
unless the notice from AXT specifies that no sale may be made until the date of
intended sale as specified in the Stockholder Notice, in which case such Holder
must wait until the date of the intended sale to make such sale and such Holder
shall have ten (10) business days thereafter to made such sale. After such ten
(10) day period, the Holder shall once again comply with the procedures set
forth in this SECTION 3(a) prior to any further sales.
(b) Updating the Prospectus. If AXT informs the selling Holder that
the registration statement or final prospectus then on file with the SEC is not
current or otherwise does not comply with the Securities Act, AXT shall use
commercially reasonable efforts to promptly provide to the selling Holder a
current prospectus that complies with the Securities Act on or before the date
of the intended sale of the Registrable Securities as disclosed in the
Stockholder Notice; provided, however, that AXT shall have the right to delay
the preparation of
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a current prospectus that complies with the Securities Act for up to sixty (60)
days without explanation to the Holder, in which case the time of such
suspension shall be added to the minimum of 180 days of effectiveness of the
registration statement set forth in SECTIONS 2(a) and 4(a).
(c) Blackout Periods. In addition to the restrictions set forth in
SECTION 2(d) above, Holders who become employees of AXT agree to be bound by
AXT's Insider Trading Policy as such may be in effect from time to time for so
long as such Holders remain employees of AXT and are subject to such policy.
4. OBLIGATIONS OF AXT.
(a) Subject in each case to the limitations of SECTION 2 (including
SECTION 2(d)) above, AXT shall (i) use all reasonable efforts to cause such
registration statement to become effective promptly after filing and to keep
each such registration statement effective until the Termination Date (as
hereinafter defined); (ii) prepare and file with the SEC such amendments and
supplements to such registration statements and the prospectuses used in
connection therewith as may be necessary, and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
securities proposed to be registered in each such registration statement until
the Termination Date (as hereinafter defined); (iii) furnish to each Holder such
number of copies of any prospectus (including any preliminary prospectus and any
amended or supplemented prospectus) in conformity with the requirements of the
Securities Act, and such other documents, as each Holder may reasonably request
in order to effect the offering and sale of the shares of the Registrable
Securities to be offered and sold, but only while AXT shall be required under
the provisions hereof to cause such registration statement to remain current;
and (iv) use reasonable efforts to register or qualify the shares of the
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request (provided that AXT shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction where it has not
been qualified). For purposes of this SECTION 4(a), "TERMINATION DATE" with
respect to a given registration statement filed pursuant to SECTION 2(a) or
SECTION 2(b) means the earlier of (i) the first anniversary of the Closing Date,
(ii) such time as all of the Registrable Securities then held by such Holder can
be sold by such Holder in a three-month period in accordance with Rule 144 under
the Securities Act, (iii) the date on which all of the Registrable Securities
have been resold pursuant to Rule 144 or an effective registration statement,
and (iv) the date on which the registration statement has been effective for an
aggregate of one hundred eighty (180) days.
(b) In connection with any offering of shares of Registrable
Securities registered pursuant to this Agreement, AXT shall (i) furnish each
Holder, at AXT's expense, with unlegended certificates representing ownership of
the shares of Registrable Securities being sold in such denominations as each
Holder shall request and (ii) instruct the transfer agent and registrar of the
Registrable Securities to release any stop transfer orders with respect to the
shares of Registrable Securities being sold.
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5. EXPENSES. AXT shall pay all of the out-of-pocket costs expenses
incurred in connection with a registration of Registrable Securities pursuant
SECTION 2(a) or SECTION 2(b) to this Agreement , including all SEC, NASD and
blue sky registration and filing fees, printing expenses, transfer agents' and
registrars' fees, and the reasonable fees and disbursements of AXT's outside
counsel and independent accountants, but not including underwriting discounts
and commissions on the Registrable Securities and fees and costs of separate
counsel for the Holders. Underwriting fees and commissions on the Registrable
Securities and any fees and costs of separate counsel retained by the Holders
shall be borne pro rata among the participating Holders on the basis of the
number of shares registered.
6. INDEMNIFICATION. In the event of any offering registered pursuant to
this Agreement:
(a) Indemnification by AXT. AXT will indemnify each Holder and its
directors, officers, legal counsel and independent accountants, and each person
controlling a Holder, against all claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, or any amendment or
supplement thereto, incident to any offering registered pursuant to this
Agreement, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading,
or any violation by AXT of any rule or regulation promulgated under the
Securities Act, or state securities laws applicable to AXT in connection with
any such registration, and subject to SECTION 6(c) of this Agreement, will
reimburse each such Holder, and each person controlling such Holder, for any
legal and any other out-of-pocket expenses reasonably incurred in connection
with investigating, preparing or defending any such claim, loss, damage,
liability or action, provided that AXT will not be liable to the extent that any
such claim, loss, damage, or liability arises out of or is based in any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to AXT by such Holder
or controlling person for use therein.
(b) Indemnification by Holders. Each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify AXT, each
of its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of AXT's securities covered by such a registration
statement, each person who controls AXT or such underwriter within the meaning
of Section 15 of the Securities Act, and each other such Holder, and such
Holder's legal counsel and independent accountants, against all claims, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse AXT, such Holders,
such directors, officers, legal counsel, independent accountants,
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underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to AXT by such Holder for use therein; provided, however, that the
obligations of such Holders hereunder shall be several and not joint and shall
be limited to an amount equal to the respective net proceeds before expenses and
commissions to each such Holder of Registrable Securities sold as contemplated
herein.
(c) Defending Claims. Each party entitled to indemnification under
this SECTION 6 (the "INDEMNIFIED PARTY") shall give notice to the party required
to provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party receives written notice of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, except to the
extent, but only to the extent, that the Indemnifying Party's ability to defend
against such claim or litigation is impaired as a result of such failure to give
notice. Notwithstanding the foregoing sentence, the Indemnified Party may retain
its own counsel to conduct the defense of any such claim or litigation, and
shall be entitled to be reimbursed by the Indemnifying Party for expenses
incurred by the Indemnified Party in defense of such claim or litigation, in the
event that the Indemnifying Party does not assume the defense of such claim or
litigation within sixty days after the Indemnifying Party receives notice
thereof from the Indemnified Party. Further, an Indemnifying Party shall be
liable for amounts paid in settlement of any such claim or litigation only if
the Indemnifying Party consents in writing to such settlement (which consent
shall not be reasonably withheld). No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party a release from all liability in respect to such claim
or litigation.
(d) Contribution. If the indemnification provided for in this Section
3 from the Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any claim, loss, damage or liability referred to herein, then the
Indemnifying Party, to the extent such indemnification is unavailable, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such claims, losses, damages or
liabilities in such proportion as is appropriate to reflect the relative benefit
to or fault of the Indemnifying Party and Indemnified Parties in connection with
the actions that resulted in such claims, losses, damages and liabilities. The
relative benefit of such Indemnifying Party and Indemnified Parties shall be
determined by reference to, among other things, the gross proceeds received by
each such party from the sale of Registrable Securities in the manner
contemplated
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hereby. The relative fault of such Indemnifying Party and Indemnified Parties
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the claims, losses, damages or liabilities referred to
above shall be deemed to include any legal fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this paragraph were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this paragraph. No party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any party.
(e) Survival. The obligations of AXT and each Holder under this
SECTION 6 shall survive the completion of any offering of Registrable Securities
registered pursuant to this Agreement and otherwise.
7. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause AXT to register
Registrable Securities pursuant to this Agreement may be assigned by a Holder to
a transferee of Registrable Securities only if: (a) AXT is furnished with
written notice of the name and address of such transferee and the Registrable
Securities with respect to which such registration rights are being assigned and
a copy of a duly executed written instrument in form reasonably satisfactory to
AXT pursuant to which such transferee assumes all of the obligations and
liabilities of its transferor hereunder and agrees itself to be bound hereby;
and (b) immediately following such transfer, the disposition of such Registrable
Securities by the transferee is restricted under the Securities Act. AXT shall
not be liable for failure to include such assignee's securities in any offering
hereunder unless AXT receives such written notice and agreement sufficiently in
advance of the effectiveness of the registration statement so as to permit such
inclusion without significant prejudice to the rights of AXT or of the other
Holders of Registrable Securities.
8. AMENDMENT OF REGISTRATION RIGHTS. This Agreement, and the registration
rights granted hereunder, may be amended or modified only by an instrument in
writing executed by or on behalf of AXT and Holders holding a majority of the
Registrable Securities then outstanding.
9. TERMINATION. The registration rights set forth in this Agreement shall
terminate with respect to a Holder (and the shares held by such Holder shall
cease to constitute Registrable Securities) upon the earlier of (i) the second
anniversary of the Closing Date, (ii) such time as all of the Registrable
Securities then held by such Holder can be sold by such Holder in a three-month
period in accordance with Rule 144 under the Securities Act, and (iii) the date
on which all of the Registrable Securities have been resold pursuant to Rule 144
or an effective registration statement.
10. MARKET STAND-OFF. The Holders hereby agree that, except as to any
Registrable Securities included in the registration pursuant hereto, they shall
not, to the extent requested by
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AXT and an underwriter of AXT Common Stock, sell or otherwise transfer or
dispose of any Registrable Securities for one hundred eighty (180) days
following the effective date of a registration statement of AXT filed under the
Securities Act, provided that all officers and directors and holders of 5% or
more of the outstanding shares of Common Stock of AXT enter into similar
agreements. In order to enforce the foregoing, AXT may impose stop-transfer
instructions with respect to the Registrable Securities of the Holders (and the
shares or securities of every other person subject to the foregoing
restrictions) until the end of such period.
11. OBLIGATIONS OF HOLDERS. By exercising any rights hereunder, each
Holder shall be deemed to assume all obligations of a Holder hereunder as though
such Holder were a signatory hereto. AXT may require Holders to execute an
instrument whereby such Holders expressly assume all obligations under this
Agreement of Holders as a condition precedent to any obligations of AXT
hereunder.
12. REPORTS UNDER THE 1934 ACT. For two years following the Closing Date,
with a view to making available to the Holders the benefits of SEC Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of AXT to the public
without registration, AXT agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of AXT under the Securities Act and the Exchange Act;
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by AXT as to its
compliance with the reporting requirements of SEC Rule 144 , the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of AXT and such other reports and documents so filed by AXT, and (iii) such
other information as may be reasonably requested in availing any Holder of any
rule or regulation of the SEC which permits the selling of any such securities
without registration.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties or
their representatives thereunto duly authorized as of the date first written
above.
AMERICAN XTAL TECHNOLOGY, INC.
By: /s/ Morris S. Young
--------------------------
Name: Morris S. Young
Title: Chief Executive Officer and President
LYTE OPTRONICS, INC.
/s/ Keith Halsey
------------------------------
Name: Keith Halsey
Title: Chief Executive Officer
SHAREHOLDERS' REPRESENTATIVE
By: /s/ Keith Halsey
--------------------------
Keith Halsey
/s/ Robert Shih
--------------------------
Robert Shih
[Signature Page to Registration Rights Agreement]
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