Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made
and entered into as of October 14, 1998 among CAI WIRELESS SYSTEMS, INC.
(the "Company"), a Connecticut corporation, MERRILL LYNCH GLOBAL
ALLOCATION FUND, INC. ("GAX"), and MERRILL LYNCH EQUITY/CONVERTIBLE
SERIES: GLOBAL ALLOCATION PORTFOLIO ("Portfolio") together with GAX and
including their respective successors, assigns and direct and indirect
transferees, "SHAREHOLDERS" and "NOTEHOLDERS").
This Agreement is made pursuant to the plan of reorganization
under Chapter 11 of the United States Bankruptcy Code for the Company and
Philadelphia Choice Television, Inc., a Delaware corporation, dated June
30, 1998, as amended, modified or supplemented from time to time (the
"PLAN"), and the Note Purchase Agreement dated October 14, 1998 among the
Company and the other parties thereto (the "PURCHASE AGREEMENT"). In
order to induce (i) the Noteholders to accept the 13% Senior Notes due
2004 of the Company pursuant to the Plan and (ii) the Shareholders to
accept the shares of the Company's common stock, par value $0.01 per
share, (the "Common Stock") pursuant to the Plan and the Purchase
Agreement, the Company has agreed to provide the Noteholders and the
Shareholders the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the consummation of the
Plan and the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following defined terms shall have the following meanings:
"ADVICE" has the meaning ascribed to such term in Section 3
hereof.
"AFFILIATE" shall have the meaning ascribed to such term in
Rule 144A under the Securities Act.
"AGREEMENT" shall have the meaning ascribed to such term in the
preamble hereof.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
"CAPITAL STOCK" shall mean, with respect to any Person, any and
all shares, interests, partnership interests, participation's,
rights in or other equivalents (however designated and whether
voting or non-voting) of such person's capital stock, and any rights
(other than debt securities convertible into capital stock),
warrants or options exchangeable for or convertible into such
capital stock whether outstanding on the date hereof or issued
hereafter.
"COMPANY" shall have the meaning ascribed to such term in the
preamble hereof and shall also include the Company's permitted
successors and assigns.
"COMMON STOCK" shall have the meaning ascribed to such term in
the preamble hereof.
"DEMAND REGISTRATION" shall have the meaning ascribed to such
term in Section 2.2(a) hereof.
"DTC" shall mean The Depository Trust Company.
"EFFECTIVENESS PERIOD" shall mean the respective periods for
which the Company is obligated to keep a Registration Statement
effective pursuant to Sections 2.1(a), 2.2(a) and 2.3(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"GAX" shall have the meaning ascribed to such term in the
preamble hereof.
"HOLDER" shall mean each holder of any Registrable Securities,
and each of their successors, assigns and direct and indirect
transferees who become registered owners of such Registrable
Securities.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the
respective meanings ascribed to such terms in Section 4(c).
"INDENTURE" shall mean the Indenture dated the date hereof
between the Company and State Street Bank and Trust Company, as
Trustee, pursuant to which the Notes are issued.
"INSPECTORS" shall have the meaning ascribed to such term in
Section 3(m) hereof.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on
which (i) banking institutions in The City of New York are required
or authorized by law or other government action to be closed and
(ii) the principal U.S. securities exchange or market, if any, on
which the Notes or any Common Stock is listed or admitted to trading
are closed for business.
"NOTEHOLDERS" shall have the meaning ascribed to such term in
the preamble hereof.
"NOTES" shall have the meaning ascribed to such term in the
preamble hereof.
"PERSON" shall mean any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, unincorporated organization or government or
any agency or political subdivision thereof or any other entity,
including any predecessor of any such entity.
"PIGGY-BACK REGISTRATION" shall have the meaning ascribed to
such term in Section 2.3(a) hereof.
"PIGGY-BACK REGISTRATION STATEMENT" shall have the meaning
ascribed to such term in Section 2.3(c) hereof.
"PLAN" shall have the meaning ascribed to such term in the
preamble hereof.
"PORTFOLIO" shall have the meaning ascribed to such term in the
preamble hereof.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, any
prospectus subject to completion and a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"PURCHASE AGREEMENT" shall have the meaning ascribed to such
term in the preamble hereof.
"REGISTRABLE SECURITIES" shall mean securities acquired
pursuant to or in connection with the Plan, including the Common
Stock, the Notes and any other securities issued or issuable with
respect to the Common Stock or the Notes, including by way of stock
dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization or otherwise, PROVIDED that if the Common Stock is
listed on any national securities exchange or quoted on any
interdealer quotation system only the shares of Common Stock and
Notes held by Persons deemed to be Affiliates or "underwriters" for
purposes of the Securities Act will be deemed to be 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 offering of such
securities by the holder thereof shall have been declared effective
under the Securities Act and such securities shall have been
disposed of by such holder pursuant to such registration statement,
(b) such securities have been sold to the public pursuant to, or are
eligible for sale to the public without volume or manner of sale
restrictions under, Rule 144(k) (or any similar provision then in
force, but not Rule 144A) promulgated under the Securities Act,
(c) such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company or its
transfer agent and subsequent disposition of such securities shall
not require registration or qualification under the Securities Act
or any similar state law then in force, or (d) such securities shall
have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement,
including, without limitation, all SEC and stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees and expenses, fees and expenses of compliance with
securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters,
if any, and the Holders in connection with blue sky qualifications
of the Registrable Securities), printing expenses, messenger,
telephone and delivery expenses, fees and disbursements of counsel
for the Company, counsel for the Holders, counsel for the
underwriters, if any, the Trustee, the Transfer Agent and Registrar
and all independent certified public accountants, and other
reasonable out-of-pocket expenses of Holders (it being understood
that Registration Expenses shall not include, as to the fees and
expenses of counsel, the fees and expenses of more than one counsel
for each of the Shareholders, as a whole, and the Noteholders, as a
whole, and one counsel for the underwriters, if any, as to
securities and blue sky matters).
"REGISTRATION STATEMENT" shall mean any appropriate
registration statement of the Company filed with the SEC pursuant to
the Securities Act which covers any of the shares of Common Stock,
the Notes and any other Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to
any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all materials incorporated by reference
therein.
"RULE 144" shall mean Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the
SEC providing for offers and sales of securities made in compliance
therewith resulting in offers and sales by subsequent holders that
are not Affiliates of an issuer of such securities being free of the
registration and prospectus delivery requirements of the Securities
Act.
"RULE 144A" shall mean Rule 144A promulgated under the
Securities Act, as such Rule may be amended from time to time, or
any similar rule (other than Rule 144) or regulation hereafter
adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
"SELLING HOLDER" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of Section 2.3.
"SHAREHOLDERS" shall have the meaning ascribed to such term in
the preamble hereof.
"SHELF REGISTRATION STATEMENT" shall have the meaning ascribed
to such term in Section 2.1(a).
"SUSPENSION PERIOD" shall have the meaning ascribed to such
term in Section 2.4(a).
"TERMINATION DATE" shall mean October 14, 2004.
"TRANSFER AGENT AND REGISTRAR" shall mean American Stock
Transfer & Trust Company and any successor thereto for the Common
Stock.
"TRUSTEE" shall mean State Street Bank and Trust Company and
any successor trustee for the Notes pursuant to the Indenture.
Capitalized terms used herein but not defined shall have the
meaning ascribed thereto in the Plan or the Purchase Agreement.
SECTION 2. REGISTRATION RIGHTS.
2.1 (a) SHELF REGISTRATION STATEMENT. Upon request of
Shareholders of not less than 10% of the outstanding shares of Common
Stock which are deemed to be Affiliates or "underwriters" for purposes of
the Securities Act, the Company shall, as soon as practicable, cause to
be filed pursuant to Rule 415 (or any successor provision) of the
Securities Act a shelf registration statement (the "SHELF REGISTRATION
STATEMENT") covering the resale of the Registrable Securities by the
Holders thereof, and shall use its commercially reasonable efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act on or before 180 days after the date of such request.
Subject to Section 2.4(a) hereof, the Company shall use its best efforts
to maintain the effectiveness of the Shelf Registration Statement until
the earlier of (i) such time as all of the Registrable Securities have
been resold thereunder, or (ii) such time as the Registrable Securities
may be sold without restriction under the Securities Act. The Company
shall pay all Registration Expenses in connection with the resale of the
Registrable Securities. Each Holder of Registrable Securities shall pay
all brokerage and sales commissions, underwriting discounts and
commissions, if any, and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to a
Registration Statement requested pursuant to this Section 2.1.
(b) BLUE SKY. The Company shall use its best efforts to
register or qualify the shares of Common Stock and the Notes under all
applicable securities laws, blue sky laws or similar laws of all
jurisdictions in the United States and Canada in which any Holder may or
may be deemed to purchase such securities and shall use its best efforts
to maintain such registration or qualification for as long as the Shelf
Registration Statement shall be required to be kept effective under
Section 2.1(a); 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 Section 2.1(b) or to
take any action which would subject it to general service of process or
to taxation in any such jurisdiction where it is not then so subject.
(c) ACCURACY OF DISCLOSURE. The Company represents and
warrants to each Holder and agrees for the benefit of each Holder that
(i) the Shelf Registration Statement and any amendment thereto will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading; and (ii) each of the
prospectuses furnished to such Holder for delivery in connection with the
resale of Registrable Securities and the documents incorporated by
reference therein will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company shall have no liability under clause (i) or
(ii) of this Section 2.1(c) with respect to any such untrue statement or
omission made in the Shelf Registration Statement in reliance upon and in
conformity with information furnished to the Company by or on behalf of
the Holders specifically for inclusion therein.
(d) ADDITIONAL ACTS. If the issuance or sale of any
Registrable Securities requires registration or approval of any
governmental authority (other than the registration requirements under
the Securities Act), or the taking of any other action under the laws of
the United States of America or any political subdivision thereof before
such securities may be validly offered or sold in compliance with such
laws, then the Company covenants that it will, in good faith and as
expeditiously as possible, use its best efforts to secure and maintain
such registration or approval or to take such other action, as the case
may be.
2.2 (a) DEMAND REGISTRATION. The Holders of a number of
Registrable Securities equivalent to at least a majority of the
outstanding shares of Common Stock comprising Registrable Securities at
such time or a majority of the outstanding Notes comprising Registrable
Securities at such time, as the case may be, may make a written request
to the Company, from time to time, to effect up to two registrations
under the Securities Act per year of each such class of Registrable
Securities until the Termination Date (each, a "DEMAND REGISTRATION");
PROVIDED, HOWEVER, that such Holders may not make a second demand for
registration with respect to such class of Registrable Securities until
12 months after the date on which the Registration Statement filed
pursuant to the first demand was declared effective. Within 15 days
after the receipt of such written request for a Demand Registration, the
Company shall notify the Holders of all such class Registrable Securities
that a Demand Registration relating to that class of Registrable
Securities has been requested. As promptly as practicable after
receiving a written request for a Demand Registration, the Company shall
(i) prepare, file with the SEC and use its commercially reasonable
efforts to cause to become effective under the Securities Act within 90
days of such demand a Registration Statement with respect to such class
of Registrable Securities, subject to Section 2.2(b), and (ii) keep such
Registration Statement continuously effective until the earlier to occur
of (A) the date that is 90 days after such effectiveness and (B) such
period of time as all of the Registrable Securities included in such
registration statement shall have been sold thereunder. Any such request
will specify the number of shares of Registrable Securities proposed to
be sold and will also specify the intended method of disposition thereof.
Within 30 days after receipt by any Holder of Registrable Securities of
such notice from the Company, such Holder may request in writing that the
applicable class of such Holder's Registrable Securities be included in
such Registration Statement and, subject to 2.2(b), the Company shall
include in such Registration Statement the applicable class of
Registrable Securities of any such Holder requested to be so included
(the "INCLUDED SECURITIES"). Each such request by such other Holders
shall specify the number of Included Securities proposed to be sold and
the intended method of disposition thereof.
If such demand occurs during the "lock up" or "black out"
period (not to exceed 180 days) imposed on the Company pursuant to or in
connection with any underwriting or purchase agreement relating to an
underwritten Rule 144A or registered public offering of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock, the Company shall not be required to so notify holders of
Registrable Securities and file such Demand Registration Statement prior
to the end of such "lock up" or "black out" period, in which event the
Company will use its commercially reasonable efforts to cause such Demand
Registration statement to become effective no later than the later of
(i) 150 days after such demand or (ii) 30 days after the end of such
"lock up" or "black out" period. In the event of any "lock up" or "black
out" period or any underwriting or other purchase agreement, the Company
shall so notify the holders of the Registrable Securities.
(b) PRIORITY IN DEMAND REGISTRATION. In a registration
pursuant to this Section 2.2 involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Holders requesting inclusion in
such offering that in such underwriter's or underwriters' reasonable
opinion the total number of securities which the Company and the Holders
intend to include in such offering is such as to materially and adversely
affect the success of such offering, including the price at which such
securities can be sold, then the Company will be required to include in
such registration only the amount of securities which it is so advised
should be included in such registration. In such event, securities shall
be registered in such offering in the following order of priority:
(i) FIRST, the securities which have been requested to be included in
such registration by any Holder deemed to be an Affiliate or
"underwriter" for purposes of the Securities Act (in an amount equal to
the lesser of (x) an amount sufficient to include all Registrable
Securities offered by such Holder and (y) an amount sufficient to reduce
the number of such Holder's Registrable Securities held after the
offering to a level that would cause such Holder to no longer be so
deemed an Affiliate or "underwriter") (ii) SECOND, PROVIDED that no
securities sought to be included by an Affiliate or "underwriter" have
been excluded from such registration pursuant to (i) above, the
securities which have been duly requested to be included in such
registration by all other Holders of Registrable Securities pursuant to
this Agreement (such securities for the account of the Holders to be
allocated among the Holders pro rata based on the amount of securities
sought to be registered by the Holder), (iii) THIRD, PROVIDED that no
securities sought to be included by an Affiliate or "underwriter" or any
other Holder have been excluded from such registration, the securities of
other Persons entitled to exercise "piggy-back" registration rights
pursuant to contractual commitments of the Company (pro rata based on the
amount of securities sought to be registered by such Persons) and (iv)
FOURTH, PROVIDED that no securities of any of the foregoing eligible
Persons sought to be included therein have been excluded from such
registration, securities to be offered and sold for the account of the
Company.
If, as a result of the provisions of this Section 2.2(b), any
Holder shall not be entitled to include all Registrable Securities in a
Demand Registration that such Selling Holder has requested to be
included, such Holder may elect to withdraw his request to include
Registrable Securities in such registration.
(c) EFFECTIVE REGISTRATION. A Registration Statement shall
not be deemed to have been effected as a Demand Registration unless it
shall have been declared effective by the SEC, no later than the later of
(i) 90 days after the request for a Demand Registration or (ii) 30 days
after the end of any "lock up" or "black out" period described in Section
2.2(a) hereof and the Company has complied in all material respects with
all of its obligations under this Agreement with respect thereto;
PROVIDED, HOWEVER, that if, after such Registration Statement has become
effective, the offering of Registrable Securities pursuant to such
Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the SEC or any other
governmental, judicial or administrative order or requirement that
prevents, restrains or otherwise limits the sale of Registrable
Securities pursuant to such Registration Statement for any reason not
attributable to any Holder participating in such registration, and such
Registration Statement has not become effective within a reasonable time
period thereafter, such Registration Statement shall be deemed not to
have been effected. If (i) a registration requested pursuant to this
Section 2.2 is deemed not to have been effected or (ii) a Demand
Registration does not remain effective under the Securities Act until at
least the earlier of (A) an aggregate of 90 days (subject to Section 2.4
herein) after the effective date thereof or (B) the consummation of the
distribution by the Holders of all of the Registrable Securities covered
thereby, then such Demand Registration shall not count towards
determining if the Company has satisfied its obligation to effect Demand
Registrations pursuant to this Section 2.2. For purposes of calculating
the 90-day period referred to in the preceding sentence, any period of
time during which such Registration Statement was not in effect shall be
excluded. The Holders of Registrable Securities shall be permitted to
withdraw all or any part of the Registrable Securities from a Demand
Registration. Notwithstanding any such withdrawal by a Holder of
Registrable Securities, if the Company has complied with all of its
obligations hereunder and has effected a Demand Registration within 90
days after the request for a Demand Registration, such withdrawal shall
not require the Company to effect any additional Demand Registrations.
(d) RESTRICTIONS ON SALE BY HOLDERS. Each Holder of
Registrable Securities whose Registrable Securities are covered by a
Registration Statement filed pursuant to this Section 2.2 and are to be
sold thereunder agrees, if and to the extent reasonably requested by the
managing underwriter or underwriters in an underwritten public offering,
not to effect any public sale or distribution of Registrable Securities
or of securities of the Company of the same class as any securities
included in such Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten offering), during the
30-day period prior to, and during the 180-day period beginning on, the
closing date of each underwritten offering made pursuant to such
Registration Statement, to the extent timely notified in writing by the
Company or such managing underwriter or underwriters.
The foregoing provisions of Section 2.2(d) shall not apply to
any Holders of Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
PROVIDED, HOWEVER, that any such Holder shall undertake, in its request
to participate in any such underwritten offering, not to effect any
public sale or distribution of any Registrable Securities commencing on
the date of sale of such Registrable Securities unless it has provided 45
days' prior written notice of such sale or distribution to the managing
underwriter or underwriters.
(e) SELECTION OF UNDERWRITER. If the Holders so elect, the
offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of an underwritten offering. The
Holders making such Demand Registration shall select one or more
nationally recognized firms of investment bankers, who shall be
reasonably acceptable to the Company, to act as the managing underwriter
or underwriters in connection with such offering and shall select any
additional investment bankers and managers to be used in connection with
the offering.
(f) EXPENSES. The Company will pay all Registration Expenses
in connection with the registrations requested pursuant to Section 2.2(a)
hereof. Each Holder of Registrable Securities shall pay all brokerage
and sales commissions, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Holder's Registrable Securities pursuant to a Registration Statement
requested pursuant to this Section 2.2.
2.3 (a) PIGGY-BACK REGISTRATION. If at any time prior to
the Termination Date the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the
Company for its own account or for the account of any of its
securityholders of Capital Stock (other than (i) a registration statement
on Form S-4 or S-8 (or F-4 or F-8) (or any substitute form that may be
adopted by the SEC) or any other publicly registered offering pursuant to
the Securities Act pertaining to the issuance of shares of Capital Stock
or securities exercisable therefor under any benefit plan, employee
compensation plan, or employee or director stock purchase plan or (ii) a
registration statement filed in connection with an offer of securities
solely to the Company's existing securityholders), then the Company shall
give written notice of such proposed filing to the Holders of Registrable
Securities of the same class intended to be offered by the Company as
soon as practicable (but in no event fewer than 15 days before the
anticipated filing date or 10 days if the Company is subject to filing
reports under the Exchange Act and able to use Form S-3 (or F-3) under
the Securities Act. Such notice shall offer such Holders the opportunity
to register such number of shares of the applicable class of Registrable
Securities as each such Holder may request, and such request must be
received by the Company within 20 days after such written notice was
received by such Holder, (which request shall specify the number of such
Registrable Securities intended to be disposed of by such Selling Holder
and the intended method of distribution thereof) (a "PIGGY-BACK
REGISTRATION"). The Company shall use its commercially reasonable
efforts to effect the registration of such Registrable Securities and
shall use its best efforts to keep such Piggy-Back Registration
continuously effective under the Securities Act in the qualifying
jurisdictions until at least the earlier of (A) 60 days after the
effective date thereof or (B) the consummation of the distribution by the
Holders of all of the Registrable Securities covered thereby. The
Company shall use its commercially reasonable efforts to cause the
managing underwriter or underwriters, if any, of such proposed offering
to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions
as any similar securities of the Company or any other securityholder
included therein and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method of
distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.3 by giving written
notice to the Company of its request to withdraw. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective or the Company may elect to delay the registration;
PROVIDED, HOWEVER, that the Company shall give prompt written notice
thereof to participating Selling Holders. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.3, and each Holder of
Registrable Securities shall pay all brokerage and sales commissions,
underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable
Securities pursuant to a Registration Statement effected pursuant to this
Section 2.3.
No registration effected under this Section 2.3, and no failure
to effect a registration under this Section 2.3, shall relieve the
Company of its obligation to effect a registration upon the request of
Holders of Registrable Securities pursuant to Sections 2.1 and 2.2
hereof, and no failure to effect a registration under this Section 2.3
and to complete the sale of securities registered thereunder in
connection therewith shall relieve the Company of any other obligation
under this Agreement.
(b) PRIORITY IN PIGGY-BACK REGISTRATION. In a registration
pursuant to this Section 2.3 involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Selling Holders requesting
inclusion in such offering that in such underwriter's or underwriters'
reasonable opinion the total number of securities which the Company, the
Selling Holders and any other persons desiring to participate in such
registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, including the price at
which such securities can be sold, then the Company will be required to
include in such registration only the amount of securities which it is so
advised should be included in such registration. In such event: (x) in
cases only involving the registration for sale of securities for the
Company's own account (which may include securities included pursuant to
the exercise of piggy-back rights herein and in other contractual
commitments of the Company), securities shall be registered in such
offering in the following order of priority: (i) FIRST, the securities
which the Company proposes to register, (ii) SECOND, PROVIDED that no
securities sought to be included by the Company have been excluded from
such registration, the securities which have been properly requested to
be included in such registration by any Holder deemed to be an Affiliate
or "underwriter" for purposes of the Securities Act (in an amount equal
to the lesser of (x) an amount sufficient to include all Registrable
Securities offered by such Holder and (y) an amount sufficient to reduce
the number of such Holder's Registrable Securities held after the
offering to a level that would cause such Holder to no longer be so
deemed an Affiliate or "underwriter"), (iv) THIRD, PROVIDED that no
securities sought to be included by the Company or an Affiliate or
"underwriter" have been excluded from such registration pursuant to (i)
or (ii) above, the securities which have been duly requested to be
included in such registration by all other Holders of Registrable
Securities pursuant to this Agreement (such securities for the account of
the Holders to be allocated among the Holders pro rata based on the
amount of securities sought to be registered by the Holder) and
(iv) FOURTH, PROVIDED that no securities sought to be included by the
Company or any Holders have been excluded from such registration, the
securities of other Persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments of the Company
(pro rata based on the amount of securities sought to be registered by
such Persons); and (y) in cases not involving the registration for sale
of securities for the Company's own account only, securities shall be
registered in such offering in the following order of priority:
(i) FIRST, securities to be sold for the account of the Company and the
securities of any Person whose exercise of a "demand" registration right
pursuant to a contractual commitment of the Company is the basis for the
registration (PROVIDED that if such Person is a Holder of Registrable
Securities, as among Holders of Registrable Securities there shall be no
priority), (ii) SECOND, PROVIDED that no securities of the Company or
such Persons referred to in the immediately preceding clause (i) have
been excluded from such registration, the securities properly requested
to be included in such registration by any Holder deemed to be an
Affiliate or "underwriter" for purposes of the Securities Act (in an
amount equal to the lesser of (x) an amount sufficient to include all
Registrable Securities offered by such Holder and (y) an amount
sufficient to reduce the number of such Holder's Registrable Securities
held after the offering to a level that would cause such Holder to no
longer be so deemed an Affiliate or "underwriter"), (iii) THIRD, PROVIDED
that no securities sought to be included by the Company or an Affiliate
or "underwriter" have been excluded from such registration pursuant to
(i) or (ii) above, the securities which have been duly requested to be
included in such registration by all other Holders of Registrable
Securities pursuant to this Agreement (such securities for the account of
the Holders to be allocated among the Holders pro rata based on the total
amount of securities sought to be registered by the Holders) and
(iv) FOURTH, PROVIDED that no securities of such Person referred to in
the immediately preceding clause (i) or of the Holders have been excluded
from such registration, securities of other Persons entitled to exercise
"piggy-back" registration rights pursuant to contractual commitments (pro
rata based on the amount of securities sought to be registered by such
Persons).
If, as a result of the provisions of this Section 2.3(b), any
Selling Holder shall not be entitled to include all Registrable
Securities in a Piggy-Back Registration that such Selling Holder has
requested to be included, such Selling Holder may elect to withdraw his
request to include Registrable Securities in such registration.
(c) RESTRICTIONS ON SALE BY HOLDERS. Each Holder of
Registrable Securities whose Registrable Securities are covered by a
Registration Statement filed pursuant to this Section 2.3 (a "PIGGY-BACK
REGISTRATION STATEMENT") and are to be sold thereunder agrees, if and to
the extent reasonably requested by the managing underwriter or
underwriters in an underwritten public offering, not to effect any public
sale or distribution of Registrable Securities or of securities of the
Company of the same class as any securities included in such Piggy-Back
Registration Statement, including a sale pursuant to Rule 144 (except as
part of such underwritten offering), during the 30-day period prior to,
and during the 180-day period beginning on, the closing date of each
underwritten offering made pursuant to such Piggy-Back Registration
Statement, to the extent timely notified in writing by the Company or
such managing underwriter or underwriters.
The foregoing provisions of Section 2.3(c) shall not apply to
any Holders of Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
PROVIDED, HOWEVER, that any such Holder shall undertake, in its request
to participate in any such underwritten offering, not to effect any
public sale or distribution of any Registrable Securities commencing on
the date of sale of such Registrable Securities unless it has provided 45
days' prior written notice of such sale or distribution to the managing
underwriter or underwriters.
2.4 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS. The obligations of the Company set forth
in Sections 2.1, 2.2, 2.3 and 2.6 hereof are subject to each of the
following limitations, conditions and qualifications:
(a) Subject to the next sentence of this paragraph, the
Company shall be entitled to postpone, for a reasonable period of
time, the filing of, or suspend the effectiveness of, any
registration statement or amendment thereto, or suspend the use of
any prospectus and shall not be required to amend or supplement the
registration statement, any related prospectus or any document
incorporated therein by reference (other than an effective
registration statement being used for an underwritten offering);
PROVIDED that the duration of all such postponements or suspensions
during any consecutive 365-day period (a "SUSPENSION PERIOD") may
not exceed an aggregate of 60 days and shall not include the 60 days
immediately prior to the Termination Date and PROVIDED, FURTHER,
that the duration of such Suspension Period shall be excluded from
the calculation of the 90-day period described in Section 2.2(c)
hereof. Such Suspension Period may be effected only if (i) an event
or circumstance occurs and is continuing as a result of which the
registration statement, any related prospectus or any document
incorporated therein by reference as then amended or supplemented or
proposed to be filed would, in the Company's good faith judgment,
contain an untrue statement of a 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, and (ii) (A) the Company determines in its good faith
judgment that the disclosure of such an event at such time would
have a material adverse effect on the business, operations or
prospects of the Company or (B) the disclosure otherwise relates to
a material business transaction which has not yet been publicly
disclosed; PROVIDED, that the Effectiveness Period shall be extended
by the number of days in any Suspension Period; PROVIDED, FURTHER,
that the Company may from time to time suspend the effectiveness
for a period not in excess of five Business Days to allow for the
updating of the financial statements included in a Registration
Statement to the extent required by law, such suspension for
updating financial statements not to exceed 45 calendar days in
aggregate in any 12-month period. If the Company shall so postpone
the filing of a Registration Statement it shall, as promptly as
possible, deliver a certificate signed by the chief executive
officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (1) have the right, in
the case of a postponement of the filing or effectiveness of a
Registration Statement, upon the affirmative vote of the Holders of
not less than a majority of the Registrable Securities to be
included in such Registration Statement, to withdraw the request for
registration by giving written notice to the Company within 10 days
after receipt of such notice or (2) in the case of a suspension of
the right to make sales, receive an extension of the registration
period equal to the number of days of the suspension. Any Demand
Registration as to which the withdrawal election referred to in the
preceding sentence has been effected shall not be counted for
purposes of the Demand Registration the Company is required to
effect pursuant to Section 2.2 hereof.
(b) The Company's obligations shall be subject to the
obligations of the Selling Holders, which the Selling Holders
acknowledge, to furnish all information and materials and to take
any and all actions as may be required under applicable federal and
state securities laws and regulations to permit the Company to
comply with all applicable requirements of the SEC, if applicable,
and to obtain any acceleration of the effective date of the
applicable Registration Statement.
2.5 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The
Company covenants and agrees that (i) it shall not, and that it shall not
cause or permit any of its subsidiaries to, effect any public sale or
distribution of any securities of the same class as any of the
Registrable Securities or any securities convertible into or exchangeable
or exercisable for such securities (or any option or other right for such
securities) during the 30-day period prior to, and during the 90-day
period beginning on, the commencement of any underwritten offering of
Registrable Securities pursuant to a Demand Registration which has been
requested pursuant to this Agreement, or a Piggy-Back Registration which
has been scheduled, prior to the Company or any of its subsidiaries
publicly announcing its intention to effect any such public sale or
distribution; (ii) the Company will not, and the Company will not cause
or permit any subsidiary of the Company to, after the date hereof, enter
into any agreement or contract that conflicts with or limits or prohibits
the full and timely exercise by the Holders of Registrable Securities of
the rights herein to request a Demand Registration or to join in any
Piggy-Back Registration subject to the other terms and provisions hereof;
and (iii) upon request of the Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement or
any underwriter, it shall use its best efforts to secure the written
agreement of each of its officers and directors to not effect any public
sale or distribution of any securities of the same class as the
Registrable Securities (or any securities convertible into or
exchangeable or exercisable for an such securities), or any option or
right for such securities during the period described in clause (i) of
this Section 2.5.
2.6 RULE 144 AND RULE 144A. The Company covenants that it
will file the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the SEC
thereunder in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder or
beneficial owner of Registrable Securities, make available such
information necessary to permit sales pursuant to Rule 144A under the
Securities Act. The Company further covenants that it will take such
further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a)
Rule 144(k) and Rule 144A under the Securities Act, as such Rules may be
amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. The Company shall also be required to file
with the Trustee and the Transfer Agent and Registrar, and to provide to
each other Holder upon written request, without cost to such Holder,
copies of such reports and documents within 15 days after the date on
which the Company files such reports and documents with the SEC. Upon
the request of any Holder of Registrable Securities, the Company will in
a timely manner deliver to such Holder a written statement as to whether
it has complied with such information requirements.
2.7 UNDERWRITTEN REGISTRATIONS. No Holder of Registrable
Securities may participate in any underwritten registration pursuant to a
Registration Statement filed under this Agreement unless such Holder (a)
agrees to (i) sell such Holder's Registrable Securities on the basis
provided in and in compliance with any underwriting arrangements approved
by the Holders of not less than a majority of the Registrable Securities
to be sold thereunder and (ii) comply with Rules 101, 102 and 104 of
Regulation M under the Exchange Act and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements.
If the Company has complied with all its obligations under this
Agreement with respect to a Demand Registration or a Piggy-Back
Registration relating to an underwritten public offering, all holders of
the applicable class of Registrable Securities upon request of the lead
managing underwriter with respect to such underwritten public offering,
will be required to not sell or otherwise dispose of any such Registrable
Securities owned by them for a period not to exceed 30 days prior to and
180 days after the consummation of such underwritten public offering.
SECTION 3. REGISTRATION PROCEDURES. In connection with the
obligations of the Company with respect to any Registration Statement
pursuant to Sections 2.1, 2.2, 2.3 and 2.6 hereof, the Company shall,
except as otherwise provided:
(a) At least five days prior to the initial filing of a
Registration Statement or Prospectus and at least two days prior to
the filing of any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated
therein by reference), furnish to the Trustee, the Transfer Agent
and Registrar, the Holders and the managing underwriters, if any,
copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by
reference) shall be subject to the review of such Holders, and such
underwriters, if any, and cause the officers and directors of the
Company, counsel to the Company and independent certified public
accountants to the Company to respond to such reasonable inquiries
as shall be necessary, in the opinion of counsel to such
underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act; PROVIDED that the foregoing
inspection and information gathering shall be coordinated on behalf
of the Holders by GAX. The Company shall not file any such
Registration Statement or related Prospectus or any amendments or
supplements thereto which the Holders of a majority of the
Registrable Securities included in such Registration Statement shall
reasonably object on a timely basis.
(b) Prepare and file with the SEC such amendments, including
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective
for the applicable time period required hereunder; cause the related
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities
Act; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all securities
covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold
and the managing underwriters, if any, promptly, and (if requested
by any such person) confirm such notice in writing, (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment
is proposed to be filed, and (B) with respect to a Registration
Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other Federal or
state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC, any state securities
commission, any other governmental agency or any court of any stop
order suspending the effectiveness of such Registration Statement or
of any order or injunction suspending or enjoining the use of a
Prospectus or the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the receipt
by the Company 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, and
(v) of the happening of any event, the existence of any information
becoming known that makes any statement made in a Registration
Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any
material respect 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 the 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.
(d) Use its reasonable best efforts to avoid the issuance of
or, if issued, obtain the withdrawal of any order enjoining or
suspending the effectiveness of the Registration Statement or the
use of a Prospectus or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities covered thereby for sale in any jurisdiction
described in Section 3(h) at the earliest practicable moment.
(e) If requested by the managing underwriters, if any, or if
none, by the Holders of a majority of the Registrable Securities
being sold pursuant to such Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment
such information as the managing underwriters, if any, or if none,
such Holders reasonably believe should be included therein, and (ii)
make all required filings of such Prospectus supplement or such
post-effective amendment under the Securities Act as soon as
practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or
post-effective amendment; PROVIDED, HOWEVER, that the Company shall
not be required to take any action pursuant to this Section 3(e)
that would, in the opinion of counsel for the Company, violate
applicable law.
(f) Upon written request to the Company, furnish to each
Holder of Registrable Securities to be sold pursuant to a
Registration Statement and each managing underwriter, if any,
without charge, at least one conformed copy of the Registration
Statement and each amendment thereto, including financial statements
and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent
requested (including those previously furnished or incorporated by
reference) as soon as practicable after the filing of such documents
with the SEC.
(g) Deliver to each Holder of Registrable Securities to be
sold pursuant to a Registration Statement and each managing
underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the
Company hereby consents to use of such Prospectus and each amendment
or supplement thereto and each document supplemental thereto by each
of the Selling Holders of Registrable Securities and the
underwriters or agents, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the Holders of
Registrable Securities to be sold, the managing underwriter or
underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as any such Holder or underwriter reasonably requests
in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective hereunder and do any and
all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; PROVIDED, HOWEVER,
that the Company shall not be required to (i) qualify generally to
do business in any jurisdiction where it is not then so qualified or
(ii) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or
to taxation in any jurisdiction where it is not so subject.
(i) In connection with any sale or transfer of Registrable
Securities that will result in such securities no longer being
Registrable Securities, cooperate with the Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear
any restrictive legends whatsoever and shall be in a form eligible
for deposit with DTC; and to enable such Registrable Securities to
be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such Holders may
reasonably request at least two business days prior to any sale of
Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section
3(c)(v) above, as promptly as practicable prepare a supplement or
amendment, including if appropriate a post-effective amendment to
each Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that,
as thereafter delivered, such Prospectus 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, in light of the circumstances under which they were made,
not misleading.
(k) Prior to the effective date of a Registration Statement,
(i) provide the Trustee and the Transfer Agent and Registrar, as
applicable, with certificates for such securities in a form eligible
for deposit with DTC and (ii) provide CUSIP numbers for such
securities.
(l) Enter into such agreement (including an underwriting
agreement in such form, scope and substance as is customary in
underwritten offerings) and take all such other actions in
connection therewith (including those reasonably requested by the
managing underwriters, if any, or the Holders of a majority of the
Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities, and,
whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, (i) make
such representations and warranties to the Holders of such
Registrable Securities and the underwriter or underwriters, if any,
with respect to the business of the Company and the subsidiaries of
the Company (including with respect to businesses or assets acquired
or to be acquired by any of them), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance
and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if any when requested;
(ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any,
addressed to each selling Holder of Registrable Securities and each
of the underwriters, if any), covering the matters customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such underwriters;
(iii) use their best efforts to obtain customary "cold comfort"
letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the
Registration Statement), addressed (where reasonably possible) to
each Selling Holder of Registrable Securities and each of the
underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings; (iv) if an
underwriting agreement is entered into, the same shall contain
customary indemnification provisions and procedures no less
favorable to the Selling Holder and the underwriters, if any, than
those set forth in Section 4 hereof (or such other provisions and
procedures acceptable to Holders of a majority of Registrable
Securities covered by such Registration Statement and the managing
underwriter, if any); and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold and the managing
underwriters or underwriters to evidence the continued validity of
the representations and warranties made pursuant to clause (i) above
and evidence compliance with any customary conditions contained in
the underwriting agreement or other agreements entered into by the
Company.
(m) Make available for inspection by a representative of the
Selling Holders of Registrable Securities, any underwriter
participating in any such disposition of Registrable Securities, if
any, and any attorney, consultant or accountant retained by such
representative of the Selling Holders of Registrable Securities or
underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during the reasonable business hours, all financial
and other records, pertinent corporate documents and properties of
the Company and the subsidiaries of the Company (including with
respect to businesses and assets acquired or to be acquired to the
extent that such information is available to the Company), and cause
the officers, directors, agents and employees of the Company and its
subsidiaries of the Company (including with respect to businesses
and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information
in each case reasonably requested by any such Inspector in
connection with such Registration Statement; PROVIDED, HOWEVER, that
the foregoing investigation shall be coordinated on behalf of the
Selling Holders of Registrable Securities by GAX.
(n) Comply with all applicable rules, regulations and policies
of the SEC and make generally available to its securityholders
earnings statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder no later than 60 days
after the end of any 12-month period (or 135 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are
sold to an underwriter or to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to an
underwriter or to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company after the
effective date of the relevant Registration Statement, which
statements shall cover said such period, consistent with the
requirements of Rule 158 under the Securities Act.
(o) Use its best efforts to cause all Common Stock or Notes
held by the Holders and relating to such Registration Statement to
be listed or declared eligible for quotation on each securities
exchange, if any, on which similar securities issued by the Company
are then listed or quoted.
(p) Cooperate with each seller of Registrable Securities to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends and registered in such names as the Selling
Holders may reasonably request at least two business days prior to
the closing of any sale of Registrable Securities.
(q) Cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
its respective counsel in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.
The Company may require a Holder of Registrable Securities to
be included in a Registration Statement to furnish to the Company such
information regarding (i) the intended method of distribution of such
Registrable Securities, (ii) such Holder and (iii) the Registrable
Securities held by such Holder as is required by law to be disclosed in
such Registration Statement and the Company may exclude from such
Registration Statement the Registrable Securities of any Holder who fails
to furnish such information within a reasonable time after receiving such
request.
If any such Registration Statement refers to any Holder by name
or otherwise as the Holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of
language, in form and substance reasonably satisfactory to such Holder,
to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment
quality of the Company's securities covered thereby and that such holding
does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is not required by the
Securities Act, the deletion of the reference to such Holder in such
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(c)(ii), 3(c)(iii), 3(c)(iv) or 3(c)(v) hereof, such Holder will
forthwith discontinue disposition of such Registrable Securities covered
by the Registration Statement or Prospectus until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by
Section 3(j) hereof, or until it is advised in writing (the "ADVICE") by
the Company that the use of the applicable Prospectus may be resumed, and
in either case has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference
in such Prospectus. If the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such
periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by
such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 3(j) hereof or
(y) the Advice, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
Holders of the Registrable Securities shall be obligated to
keep confidential the existence of a Suspension Period or any
confidential information communicated by the Company to the Holder with
respect thereto.
SECTION 4. INDEMNIFICATION AND CONTRIBUTION. (a) The Company
agrees to indemnify and hold harmless each Holder, each underwriter, if
any, who participates in an offering of Registrable Securities, and
their respective directors, officers, employees, agents and each Person,
if any, who controls any of such parties within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a 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 or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever, in each case, based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; PROVIDED that (subject to Section 4(d) below)
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen
by GAX), incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of this
Section 4(a);
PROVIDED, HOWEVER, that this indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission (A)
made in or omitted from a preliminary Prospectus or Registration
Statement and corrected or included in a subsequent Prospectus or
Registration Statement or any amendment or supplement thereto, (B) made
in reliance upon and in conformity with written information furnished to
the Company by the Selling Holders of Registrable Securities, any Holder,
or any underwriter expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) or (C) resulting from the use of the Prospectus during a period
when the use of the Prospectus has been suspended for sales thereunder in
accordance with Section 2.2(d), 2.3(c), 2.4, 2.5 or 2.7 hereof, PROVIDED,
in each case, that Holders received prior notice of such suspension or
other unavailability.
(b) In the case of any registration of Registrable Securities,
each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, each underwriter, if any, who participates in an
offering of Registrable Securities and the other Selling Holders and each
of their respective directors and officers (including each director and
officer of the Company who signed the Registration Statement) and each
Person, if any, who controls the Company, any underwriter or any Selling
Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment
thereto), or the Prospectus (or any amendment or supplement thereto);
PROVIDED, HOWEVER, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder
from the sale of Registrable Securities pursuant to such Registration
Statement.
(c) In case any action shall be commenced involving any Person
in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) above, such Person (the "INDEMNIFIED PARTY") shall give notice
as promptly as reasonably practicable to each Person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY"), but failure to so
notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from
any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action; PROVIDED, HOWEVER, that counsel to
the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4
(whether or not the indemnified parties are actual or potential parties
thereof), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 4(a)(ii)
hereof effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) If the indemnification provided for in any of the
indemnity provisions set forth in this Section 4 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred
to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, in such
proportion as is appropriate to reflect the relative fault of such
indemnifying party or parties on the one hand, and such indemnified party
or parties on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party or parties on the one hand, and
such indemnified party or parties on the other hand shall be determined
by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such
indemnifying party or parties or such indemnified party or parties and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Holders of the Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Selling Holders of
Registrable Securities were treated as one entity for such purpose) or by
another method of allocation which does not take account of the equitable
considerations referred to above in Section 4. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 4 shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by an governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
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.
For purposes of this Section 4, each Person, if any, who controls a
Holder within the meaning of this Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as such Holder, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each Person, if any,
who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.
SECTION 5. MISCELLANEOUS. (a) RESALES BY AFFILIATES. In the
event that, and for so long as, any Affiliate of a Holder, or any
successor thereto, in its opinion, is or becomes an Affiliate of the
Company, or any successor thereto, and is making a market in the shares
of Common Stock or the Notes, the Company (or its successor) shall use
its best efforts to keep effective a Shelf Registration Statement
providing for the resale of any shares of Common Stock or Notes, as the
case may be, acquired by such Person from time to time until such time as
each such Person shall, in its opinion, cease to be an Affiliate of the
Company, as evidenced by written notice sent promptly upon such event.
(b) REMEDIES. In the event of a breach by the Company of any
of its obligations under this Agreement, each Holder, in addition to
being entitled to exercise all rights provided herein, in the Plan, the
Purchase Agreement or granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of
the provisions of this Agreement.
(c) NO INCONSISTENT AGREEMENTS. The Company will not enter
into any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and
outstanding securities, if any, under any such agreements.
(d) NO PIGGY-BACK ON DEMAND REGISTRATIONS. The Company shall
not grant to any of its securityholders (other than the Holders in such
capacity) the right to include any of their securities in any
Registration Statement filed pursuant to a Demand Registration.
(e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, otherwise than with the prior written
consent of the Holders of not less than a majority of each class and
series of Registrable Securities; PROVIDED, HOWEVER, that, for the
purposes of this Agreement, Registrable Securities that are owned,
directly or indirectly, by the Company or any of its Affiliates (other
than the Holders existing on the date hereof and any of their respective
affiliates) shall be deemed not to be outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of one or more
Holders and that does not directly or indirectly affect the rights of
other Holders may be given by a majority of the Holders so affected;
PROVIDED, HOWEVER, that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. Notwithstanding the
foregoing, no amendment, modification, supplement, waiver or consent with
respect to Section 4 shall be made or given otherwise than the prior
written consent of each Person affected thereby.
(f) NOTICES. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, facsimile, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address of
such Holder as set forth in the register for the Registrable Securities;
and (ii) if to the Company, initially to CAI WIRELESS SYSTEMS, INC., 18
Corporate Woods Blvd., Albany, NY 12211, Facsimile: (518) 462-3045,
Attention: James P. Ashman, and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 5(f).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder. If
any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement,
and by taking and holding such Registrable Securities such Person shall
be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be
entitled to receive the benefits hereof. The Company may not assign any
of its rights or obligations hereunder without the prior written consent
of each Holder of Registrable Securities. Notwithstanding the foregoing,
no successor or assignee of the Company shall have any rights granted
under the Agreement until such person shall acknowledge its rights and
obligations hereunder by a signed written statement of such person's
acceptance of such rights and obligations.
(h) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same Agreement.
(I) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions 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,
provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(k) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(l) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement, the Plan and any other documents entered into
pursuant thereto, is intended by the parties as a final expression of
their agreement, and is intended to be a complete and exclusive statement
of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, the
Purchase Agreement, the Plan and any other documents entered into
pursuant thereto supersede all prior agreements and understandings
between the parties with respect to such subject matter.
(m) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held
by the Company or by any of its Affiliates (other than the Holders
existing on the date hereof and any of their respective affiliates) shall
not be counted (in either the numerator or the denominator) in
determining whether such consent or approval was given by the Holders of
such required percentage.
(n) TERMINATION OF AGREEMENT. This Agreement shall terminate
on the Termination Date; PROVIDED, HOWEVER, that the obligations,
representations and warranties in Sections 2.1(c), 4, 5(a), 5(b), 5(m)
and all obligations of the Company relating to the payment of
Registration Expenses shall survive termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
CAI WIRELESS SYSTEMS, INC.
By: /S/ JAMES P. ASHMAN
Name: James P. Ashman
Title: Executive Vice President
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
By: /S/_________________________________
Name:
Title:
MERRILL LYNCH EQUITY/CONVERTIBLE
SERIES: GLOBAL ALLOCATION PORTFOLIO
By: /S/__________________________________
Name:
Title: