-25-
REGISTRATION RIGHTS AGREEMENT
BETWEEN
AFGL INTERNATIONAL, INC.
AND
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
Dated as of May 31, 1996
TABLE OF CONTENTS
Page
Section 1. Definitions 1
Section 2. Registration of Securities by the Company 4
Section 3. Shelf Registration 10
Section 4. Registration Expenses 16
Section 5. Conditions to Registration 18
Section 6. Indemnification 19
Section 7. Exchange Act Registration;
Rule 144 Reporting 22
Section 8. Limitation on Registration Rights of
Others 23
Section 9. Mergers, etc. 23
Section 10. Notices, etc. 23
Section 11. Entire Agreement 24
Section 12. Waivers and Further Agreements 24
Section 13. Amendments 24
Section 14. Assignment; Successors and Assigns 24
Section 15. Severability 25
Section 16. Counterparts 25
Section 17. Section Headings 25
Section 18. Gender; Usage 25
Section 19. Governing Law 25
Section 20. Termination 26
Section 21. Expenses 26
Section 22. Specific Performance 26
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made and entered into as of May 31, 1996, by and between AFGL
INTERNATIONAL, INC., a Nevada corporation (the "Company"), and
INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware
corporation (the "Purchaser").
W I T N E S S E T H:
RECITALS.
A. Simultaneously herewith, the Purchaser is entering into
a Credit Agreement dated of even date herewith, by and among the
Company, the Purchaser and various other lenders that may become
parties thereto (the "Lenders") and the Purchaser in its capacity
as Agent for the Lenders (the Agent"); and
B. It is a condition precedent to extensions of credit by
the Purchaser to the Company contemplated by the Credit Agreement
that the Company agree to issue to the Purchaser Warrants
initially exercisable for 575,000 shares of Series E Convertible
Preferred Stock, par value $0.001 per share, of the Company (the
"Series E Convertible Preferred Stock") for an exercise price of
$0.02 per share; and
C. The Purchaser is unwilling to extend credit to the
Company pursuant to the Credit Agreement or to purchase the
Warrants pursuant to the Warrant Agreement (as defined in Section
1) unless it receives the assurances set forth in this Agreement;
and
D. The Company and the Purchaser desire to set forth
certain understandings with respect to the Warrants;
NOW, THEREFORE, in consideration of the premises and the
agreements herein set forth and to induce the Purchaser to
proceed with the transactions contemplated by the Warrant
Agreement and the Credit Agreement, the parties hereto, intending
to be legally bound, hereby agree as follows:
SECTION 1. Definitions.
(a) Defined Terms. The following terms (whether or
not underscored) when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise
requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"Agreement" means this Registration Rights Agreement as in
effect on the date hereof and as hereafter amended, supplemented,
restated or otherwise modified.
"Available Securities" is defined in Section 2.
"Business Day" is defined in the Warrant Agreement.
"Certificate of Designation" is the Certificate of
Designation, Preferences and Rights of the Series E Convertible
Preferred Stock.
"Common Stock" is defined in the Warrant Agreement.
"Company" means AFGL International, Inc.
"Credit Agreement" is defined in the Warrant Agreement.
"Exchange Act" is defined in the Warrant Agreement.
"Holder" is defined in the Warrant Agreement.
"Indemnified Person" is defined in Section 6(a).
"Indemnifying Person" is defined in Section 6(c).
"NASD" means the National Association of Securities Dealers,
Inc.
"Person" is defined in the Warrant Agreement.
"Prospectus" means each prospectus included as part of any
Registration Statement, as amended or supplemented, including
each preliminary prospectus and all material incorporated by
reference in such prospectus.
"Purchaser" is defined in the Preamble.
"Quoted Price" is defined in the Warrant Agreement.
"Registrable Securities" shall mean the shares of Common
Stock or any other securities issued or issuable upon the
conversion of shares of Series E Convertible Preferred Stock
(including any conversion in accordance with Part 2B or Part 2C
of the Certificate of Designation), but excluding (i) shares that
have been disposed of under a Registration Statement, the Shelf
Registration Statement or any other effective registration
statement, and (ii) shares distributed to the public pursuant to
Rule 144 under the Securities Act.
"Registration Expenses" is defined in Section 4(c).
"Registration Statement" means any registration statement of
the Company which covers Registrable Securities pursuant to
Section 2 of this Agreement, including the Prospectus,
amendments, including post-effective amendments, and supplements
to such registration statement and Prospectus and all exhibits
and all material incorporated by reference in such registration
statement.
"Required Holders" shall mean the holders of Series E
Convertible Preferred Stock and/or Warrant Securities which when
fully converted would represent at least two-thirds of the voting
power of such securities held by all of the Holders.
"Securities Act" is defined in the Warrant Agreement.
"SEC" is defined in the Warrant Agreement.
"Shelf Prospectus" shall mean the prospectus included in the
Shelf Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, including
any supplement relating to the terms of the offering of any
portion of the Registrable Securities covered by the Shelf
Registration Statement, and in each case including all material
incorporated by reference therein.
"Shelf Registration" shall mean a registration required to
be effected pursuant to Section 3 hereof.
"Shelf Registration Statement" shall mean a registration
statement of the Company (and any other entity required to be a
registrant with respect to such registration statement pursuant
to the requirements of the Securities Act) that covers all of the
Registrable Securities to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments
(including post-effective amendments) to such registration
statement, and all exhibits thereto and materials incorporated by
reference therein.
"Specified Registrable Securities" is defined in Section
2(a).
"Stock" is defined in the Warrant Agreement.
"Warrant Agreement" means the Warrant Purchase Agreement,
dated of even date herewith, by and between the Purchaser and the
Company, as in effect on the date hereof and as hereafter
amended, supplemented, restated or otherwise modified.
"Warrant Securities" is defined in the Warrant Agreement.
"Warrants" is defined in the Warrant Agreement.
(b) Cross-References. Unless otherwise specified,
references in this Agreement to any Article or Section are
references to such Article or Section of this Agreement, and
unless otherwise specified, references in any Article, Section,
or definition to any clause are references to such clause of such
Section, Article or definition.
SECTION 2. Registration of Securities by the Company.
(a) Piggyback Registration. If at any time or from
time to time the Company shall propose to file on its behalf or
on behalf of any of its security holders a registration statement
under the Securities Act on Form S-1, S-2 or S-3 (or on any other
form for the general registration of securities) with respect to
any class of securities (other than a Shelf Registration
Statement filed pursuant to Section 3), the Company shall in each
case:
(i) promptly give written notice to each
Holder at least thirty (30) days before the anticipated
filing date, indicating the proposed offering price and
describing the plan of distribution;
(ii) include in such registration (and any related
qualification under blue sky or other state securities
laws or other compliance) and, at the request of any
Holder, in any underwriting involved therein, all the
Registrable Securities specified by any Holder or
Holders of Registrable Securities (the "Specified
Registrable Securities") in a written request (the
"Registration Request") made within twenty (20) days
after receipt of such written notice from the Company,
specifying the number or amount of Specified
Registrable Securities; and
(iii) use its best efforts to cause the managing
underwriter(s) of such proposed underwritten offering
to permit the Specified Registrable Securities to be
included in the Registration Statement for such
offering on the same terms and conditions as any
similar securities of the Company included therein.
Notwithstanding the foregoing, if the managing
underwriter(s) of such offering advise(s) the Holders of
Specified Registrable Securities in writing that marketing
considerations require a limitation on the securities, other than
the securities the Company intends to sell, to be included in any
Registration Statement filed under this Section 2 to a certain
number of shares (the "Available Securities"), then the Company
shall in such case be obligated to such Holders only with respect
to such number of Available Securities. The limitation on the
number of Specified Registrable Securities will be imposed pro
rata (based upon the ratio of the number of shares of Specified
Registrable Securities which the managing underwriter(s) propose
to include at the anticipated initial public offering price to
the number of Specified Registrable Securities owned by each
Holder) among all Holders of Specified Registrable Securities.
Notwithstanding any other provision of this Agreement to the
contrary, neither the delivery of the notice by the Company nor
of the Registration Request by any Holder shall in any way
obligate the Company to file a Registration Statement and,
notwithstanding such filing, the Company may, at any time prior
to the effective date thereof, in its sole discretion, determine
not to offer the securities to which the Registration Statement
relates without liability to any of the Holders, other than to
pay Registration Expenses in connection with such Registration
Statement. No registration of Registrable Securities effected
under this Section 2 shall relieve the Company of its obligation
to effect the registration of Registrable Securities pursuant to
Section 3.
(b) Piggyback Registration Procedures. If and when
the Company shall be required by the provisions of this Section 2
to effect the registration of Registrable Securities under the
Securities Act, the Company will use its best efforts to effect
such registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto it will, as
expeditiously as possible:
(i) before filing a Registration Statement or
Prospectus or any amendments or supplements thereto,
furnish to the Holders of the Registrable Securities
covered by such Registration Statement and the
underwriter(s), if any, copies of all such documents
proposed to be filed, which documents will be made
available, on a timely basis, for review by such
Holders and underwriters;
(ii) prepare and file with the SEC such amendments
and post-effective amendments to any Registration
Statement, and such supplements to the Prospectus, as
may be reasonably requested by any Holder of
Registrable Securities or the managing underwriter(s),
if any, or as may be required by the Securities Act,
the Exchange Act or by the rules, regulations or
instructions applicable to the registration form
utilized by the Company or as may otherwise be
necessary to keep such Registration Statement effective
for the applicable period; and cause the Prospectus as
so supplemented to be filed pursuant to Rule 424 (or
any successor rule) under the Securities Act; and
comply with the provisions of the Securities Act with
respect to the disposition of all securities covered
by such Registration Statement during the applicable
period in accordance with the intended methods of
disposition by the sellers thereof set forth in such
Registration Statement or Prospectus;
(iii) promptly notify the selling Holders of
Registrable Securities and the managing underwriter(s),
if any, and if requested by any such Person, confirm
such advice in writing:
(a)of the filing of the Prospectus or any
supplement to the Prospectus and of the
effectiveness of the Registration Statement
and/or any post-effective amendment,
(b)of any request by the SEC for amendments or
supplements to the Registration Statement or the
Prospectus or for additional information,
(c)of the issuance by the SEC of any stop
order suspending the effectiveness of the
Registration Statement or the initiation of any
proceedings for that purpose,
(d)of the Company's becoming aware at any time
that the representations and warranties of the
Company contemplated by paragraph (xiv)(a) below
have ceased to be true and correct,
(e)of the receipt by the Company of any
notification with respect to the suspension of
the qualification of the Registrable Securities
for sale in any jurisdiction or the initiation
or threat of any proceeding for such purpose,
and
(f)of the existence of any fact which, to the
knowledge of the Company, results in the
Registration Statement, the Prospectus or any
document incorporated therein by reference
containing an untrue statement of material fact
or omitting to state a material fact required to
be stated therein or necessary to make the
statements therein not misleading;
(iv) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of
the Registration Statement or any qualification
referred to in paragraph (iii)(e) at the earliest
possible moment;
(v) if reasonably requested by the managing
underwriter(s) or the Required Holders of Registrable
Securities being sold in connection with an
underwritten offering, immediately incorporate in a
supplement to the Prospectus or post-effective
amendment to the Registration Statement such
information as the managing underwriter(s) or the
Required Holders of the Registrable Securities being
sold reasonably request to have included therein
relating to the plan of distribution with respect to
such Registrable Securities, including, without
limitation, information with respect to the amount of
Registrable Securities being sold to such underwriters,
the purchase price being paid therefor by such
underwriters and any other terms of the underwritten
(or best-efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and
make all required filings of such supplement to the
Prospectus or post-effective amendment to the
Registration Statement as soon as notified of the
matters to be incorporated in such supplement to the
Prospectus or post-effective amendment to the
Registration Statement;
(vi) at the request of any selling Holder of
Registrable Securities, furnish to such selling Holder
of Registrable Securities and each managing
underwriter, if any, without charge, at least one
signed copy of the Registration Statement and any post-
effective amendment thereto, including financial
statements and schedules, all documents incorporated
therein by reference and all exhibits (including those
incorporated by reference);
(vii) deliver to each selling Holder of Registrable
Securities and the managing underwriter(s), if any,
without charge, as many copies of the Registration
Statement, each Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto (in
each case including all exhibits), as such Persons may
reasonably request, together with all documents
incorporated by reference in such Registration
Statement or Prospectus, and such other documents as
such selling Holder may reasonably request in order to
facilitate the disposition of its Registrable
Securities covered by such Registration Statement; the
Company consents to the use of each Prospectus and any
supplement thereto by each of the selling Holders of
Registrable Securities and the managing underwriter(s),
if any, in connection with the offering and sale of the
Registrable Securities covered by each Prospectus or
any supplement thereto;
(viii) prior to any public offering of Registrable
Securities, register or qualify or reasonably cooperate
with the selling Holders of Registrable Securities, the
managing underwriter(s), if any, and their respective
counsel in connection with the registration or
qualification of such Registrable Securities for offer
and sale under the securities or blue sky laws of such
jurisdictions as any selling Holder or managing
underwriter(s) reasonably request(s) and do any and all
other acts or things necessary to enable the
disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement;
(ix) cooperate with the selling Holders of
Registrable Securities and the managing underwriter(s),
if any, to facilitate the timely preparation and
delivery of certificates representing Registrable
Securities to be sold and not bearing any legends
restricting the transfer thereof; and enable such
Registrable Securities to be in such denominations and
registered in such names as the managing underwriters
may request at least two Business Days prior to any
sale of Registrable Securities to the underwriters;
(x) use its best efforts to cause the Registrable
Securities covered by the applicable Registration
Statement to be registered with or approved by such
United States, state and local governmental agencies or
authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable
Securities;
(xi) if any fact contemplated by paragraph (iii)(b)
or (iii)(f) above shall exist, promptly notify each
Holder on whose behalf Registrable Securities have been
registered and promptly prepare and furnish to such
Holders a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any
document incorporated therein by reference and promptly
file any other required document so that, as thereafter
delivered to the purchasers of the Registrable
Securities, neither the Registration Statement nor the
Prospectus will contain an untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(xii) if requested by the Required Holders of the
Registrable Securities or by the managing
underwriter(s), if any, cause all Registrable
Securities covered by the Registration Statement to be
(A) listed on each securities exchange on which
securities of the same class are then listed or (B)
admitted for trading in any inter-dealer quotation
system on which securities of the same class are then
traded;
(xiii) not later than the effective date of the
applicable Registration Statement, provide a CUSIP
number for all Registrable Securities covered by the
Registration Statement and provide the applicable
transfer agent with printed certificates for such
Registrable Securities which are in a form eligible for
deposit with Depository Trust Company;
(xiv) enter into agreements (including underwriting
agreements) and take all other reasonable actions in
order to expedite or facilitate the disposition of such
Registrable Securities and in such connection, except
as otherwise provided, whether or not an underwriting
agreement is entered into and whether or not the
registration is an underwritten registration:
(a)make such representations and warranties to
the Holders selling such Registrable Securities
and, in connection with any underwritten
offering, to the underwriters, in form,
substance and scope as are customarily made by
issuers to underwriters in similar underwritten
offerings;
(b)obtain opinions of counsel to the Company
and updates thereof addressed to each selling
Holder and the underwriters, if any, covering
the matters customarily covered in opinions
requested in similar underwritten offerings and
such other matters as may be reasonably
requested by such Holders and underwriters,
which counsel and opinions shall be reasonably
satisfactory (in form, scope and substance) to
the managing underwriters, if any, and the
Required Holders of such Registrable Securities;
(c)in connection with any underwritten
offering, obtain so-called "cold comfort"
letters and updates thereof from the Company's
independent certified public accountants
addressed to the selling Holders of Registrable
Securities and the underwriters, such letters to
be in customary form and covering matters of the
type customarily covered in "cold comfort"
letters to underwriters in connection with
similar underwritten offerings;
(d)if an underwriting agreement is entered
into, cause the same to set forth in full the
indemnification and contribution provisions and
procedures of Section 6 (or such other
substantially similar provisions and procedures
as the underwriters shall reasonably request)
with respect to all parties to be indemnified
pursuant to said Section 6; and
(e)deliver such documents and certificates as
may reasonably be requested by the Required
Holders of the Registrable Securities being
sold, or the managing underwriter(s), if any, to
evidence compliance with this paragraph (xiv)
and with any customary conditions contained in
the underwriting agreement or other agreement
entered into by the Company;
the foregoing to be done upon each closing under any
underwriting or similar agreement as and to the extent
required thereunder and from time to time as may reasonably
be requested by any selling Holder of Registrable Securities
in connection with the disposition of Registrable Securities
pursuant to such Registration Statement, all in a manner
consistent with customary industry practice;
(xv) upon execution and delivery of such
confidentiality agreements as the Company may
reasonably request, make available to the Holders of
the Registrable Securities being sold, any underwriter
participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant
retained by such Holders or underwriter, all financial
and other records, pertinent corporate documents and
properties of the Company, and cause the Company's
officers, directors and employees to supply all
information reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with
the registration, at such time or times as the Person
requesting such information shall reasonably determine;
(xvi) otherwise use its best efforts to comply with
the Securities Act, the Exchange Act, all applicable
rules and regulations of the SEC and all applicable
state blue sky and other securities laws, rules and
regulations, and make generally available to its
security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, as
soon as practicable, but in no event later than ninety
(90) days after the end of the 12 calendar month period
commencing after the effective date of the Registration
Statement;
(xvii) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due
diligence investigation by any underwriter (including
any "qualified independent underwriter" that is
required to be retained in accordance with the rules
and regulations of the NASD); and
(xviii) prior to the filing of any document which is
being prepared for incorporation by reference into the
Registration Statement or the Prospectus, upon receipt
of such confidentiality agreements as the Company may
reasonably request, provide copies of such document to
counsel to the selling Holders of Registrable
Securities, and to the managing underwriter(s), if any,
and make the Company's representatives available for
discussion of such document.
SECTION 3. Shelf Registration.
(a) Filing of Shelf Registration Statement. Promptly
after the date hereof, the Company shall cause to be filed the
Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities in accordance with
the terms hereof, and the Company will use its best efforts to
cause such Shelf Registration Statement to be declared effective
by the SEC on or before May 30, 1997. The Company agrees to use
its best efforts to keep the Shelf Registration Statement with
respect to the Registrable Securities continuously effective so
long as any Holder holds Registrable Securities until such time
as each Holder has received an opinion of counsel to the Company
(which opinion and counsel shall be reasonably satisfactory to
the Holder) to the effect that each such Holder is permitted
under Rule 144 to dispose of all of its Registrable Securities
within three months without such registration. The Company
further agrees to amend the Shelf Registration Statement if and
as required by the rules, regulations or instructions applicable
to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or any rules and
regulations thereunder; provided, however, that the Company
shall not be deemed to have used its best efforts to keep the
Shelf Registration Statement effective during the applicable
period if it voluntarily takes any action that would result in
selling Holders not being able to sell Registrable Securities
covered thereby during that period, unless such action is
permitted by this Agreement or required under applicable law or
the Company has filed a post-effective amendment to the Shelf
Registration Statement and the SEC has not declared it effective.
(b) Shelf Registration Procedures. In connection with
the obligations of the Company with respect to the Shelf
Registration Statement contemplated by this Section 3, the
Company shall use its best efforts to effect such registration to
permit the sale of such Registrable Securities in accordance with
the intended method or methods of disposition thereof, and
pursuant thereto it will, as expeditiously as possible:
(i) before filing a Shelf Registration Statement or
Shelf Prospectus or any amendments or supplements thereto,
furnish to the Holders of the Registrable Securities covered
by such Shelf Registration Statement and the underwriter(s),
if any, copies of all such documents proposed to be filed,
which documents will be made available, on a timely basis,
for review by such Holders and underwriters; and the Company
will not file any Shelf Registration Statement or amendment
thereto or any Shelf Prospectus or any supplement thereto to
which the Required Holders of the Registrable Securities
covered by such Shelf Registration Statement or the managing
underwriter(s), if any, shall reasonably object;
(ii) prepare and file with the SEC, within the time
period set forth in Section 3(a) hereof, the Shelf
Registration Statement, which Shelf Registration Statement
(a) shall be available for the sale of the Registrable
Securities in accordance with the intended method or methods
of distribution by the selling Holders thereof and (b) shall
comply as to form in all material respects with the
requirements of the applicable form and include all
financial statements required by the SEC to be filed
therewith;
(iii) (a) prepare and file with the SEC such amendments
to such Shelf Registration Statement as may be reasonably
requested by any Holder of Registrable Securities or the
managing underwriter(s), if any, or as may be required by
the Securities Act, the Exchange Act or by the rules,
regulations or instructions applicable to the registration
form utilized by the Company or as may otherwise be
necessary to keep such Shelf Registration Statement
effective for the applicable period; (b) cause the Shelf
Prospectus to be amended or supplemented as may be
reasonably requested by any Holder of Registrable Securities
or the managing underwriter(s), if any, or as may be
required by the Securities Act, the Exchange Act or by the
rules, regulations or instructions applicable to the
registration form utilized by the Company or as may
otherwise be necessary to keep such Shelf Registration
Statement effective for the applicable period; (c) cause the
Shelf Prospectus as so amended or supplemented to be filed
pursuant to Rule 424 (or any successor rule) under the
Securities Act; (d) respond as promptly as practicable to
any comments received from the SEC with respect to the Shelf
Registration Statement or any amendment thereto; and (e)
comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Shelf Registration Statement during the applicable period in
accordance with the intended method or methods of
distribution by the selling Holders thereof;
(iv) promptly notify the selling Holders of Registrable
Securities and the managing underwriter(s), if any, and if
requested by any such Person, confirm such advice in
writing:
(a) of the filing of the Shelf Prospectus or any
supplement to the Shelf Prospectus and of the
effectiveness of the Shelf Registration Statement
and/or any post-effective amendment,
(b) of any request by the SEC for amendments or
supplements to the Shelf Registration Statement or the
Shelf Prospectus or for additional information,
(c) of the issuance by the SEC of any stop order
suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for
that purpose,
(d) of the Company's becoming aware at any time
that the representations and warranties of the Company
contemplated by paragraph (xv)(a) below have ceased to
be true and correct,
(e) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Registrable Securities for sale
in any jurisdiction or the initiation or threat of any
proceeding for such purpose, and
(f) of the existence of any fact which, to
the knowledge of the Company, results in the Shelf
Registration Statement, the Shelf Prospectus or any
document incorporated therein by reference containing
an untrue statement of material fact or omitting to
state a material fact required to be stated therein or
necessary to make the statements therein not
misleading;
(v) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
Shelf Registration Statement or any qualification referred
to in paragraph (iii)(e) at the earliest possible moment;
(vi) if reasonably requested by the managing
underwriter(s) or the Required Holders of Registrable
Securities being sold in connection with an underwritten
offering, immediately incorporate in a supplement to the
Shelf Prospectus or post-effective amendment to the Shelf
Registration Statement such information as the managing
underwriter(s) or the Required Holders of the Registrable
Securities being sold reasonably request to have included
therein relating to the plan of distribution with respect to
such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable
Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other
terms of the underwritten (or best-efforts underwritten)
offering of the Registrable Securities to be sold in such
offering; and make all required filings of such supplement
to the Shelf Prospectus or post-effective amendment to the
Shelf Registration Statement as soon as notified of the
matters to be incorporated in such supplement to the Shelf
Prospectus or post-effective amendment to the Shelf
Registration Statement;
(vii) at the request of any selling Holder of
Registrable Securities, furnish to such selling Holder of
Registrable Securities and each managing underwriter, if
any, without charge, at least one signed copy of the Shelf
Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(viii) deliver to each Holder of Registrable Securities
and the managing underwriter(s), if any, without charge, as
many copies of the Shelf Registration Statement, each Shelf
Prospectus and any amendment or supplement thereto (in each
case including all exhibits), as such Persons may reasonably
request, together with all documents incorporated by
reference in such Shelf Registration Statement or Shelf
Prospectus, and such other documents as such selling Holder
may reasonably request in order to facilitate the
disposition of its Registrable Securities; the Company
consents to the use of the Shelf Prospectus and any
amendment or supplement thereto by each such Holder of
Registrable Securities and the underwriter(s), if any, in
connection with the offering and sale of the Registrable
Securities covered by the Shelf Prospectus or amendment or
supplement thereto;
(ix) prior to the time the Shelf Registration Statement
is declared effective by the SEC, register or qualify the
Registrable Securities or reasonably cooperate with the
selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such
jurisdictions as any selling Holder or managing
underwriter(s), if any, reasonably request(s), keep each
such registration or qualification effective during the
period such Shelf Registration Statement is required to be
kept effective, and do any and all other acts or things
necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Shelf Registration
Statement;
(x) cooperate with the selling Holders of Registrable
Securities and the managing underwriter(s), if any, to
facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold
and not bearing any legends restricting the transfer
thereof; and enable such Registrable Securities to be in
such denominations and registered in such names as the
selling Holders or the managing underwriters, if any, may
request at least two Business Days prior to any sale of
Registrable Securities;
(xi) use its best efforts to cause the Registrable
Securities covered by the Shelf Registration Statement to be
registered with or approved by such United States, state and
local governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such
Registrable Securities;
(xii) if any fact contemplated by paragraph (iv)(b) or
(iv)(f) above shall exist, promptly notify each Holder on
whose behalf Registrable Securities have been registered and
promptly prepare and furnish to such Holders a supplement or
post-effective amendment to the Shelf Registration Statement
or the related Shelf Prospectus or any document incorporated
therein by reference and promptly file any other required
document so that, as thereafter delivered to the purchasers
of the Registrable Securities, neither the Shelf
Registration Statement nor the Shelf Prospectus will contain
an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(xiii) if requested by the Required Holders of the
Registrable Securities or by the managing underwriter(s), if
any, cause all Registrable Securities covered by the Shelf
Registration Statement to be (A) listed on each securities
exchange on which securities of the same class are then
listed or (B) admitted for trading in any inter-dealer
quotation system on which securities of the same class are
then traded;
(xiv) not later than the effective date of the Shelf
Registration Statement, provide a CUSIP number for all
Registrable Securities covered by the Shelf Registration
Statement and provide the applicable transfer agent with
printed certificates for such Registrable Securities which
are in a form eligible for deposit with Depository Trust
Company;
(xv) enter into agreements (including underwriting
agreements) and take all other reasonable actions in order
to expedite or facilitate the disposition of such
Registrable Securities and in such connection, except as
otherwise provided, whether or not an underwriting agreement
is entered into and whether or not the registration is an
underwritten registration:
(a) make such representations and warranties
to the Holders selling such Registrable Securities
and, in connection with any underwritten offering,
to the underwriters, in form, substance and scope as
are customarily made by issuers to underwriters in
similar underwritten offerings;
(b) obtain opinions of counsel to the Company
and updates thereof addressed to each selling Holder
and the underwriters, if any, covering the matters
customarily covered in opinions requested in similar
underwritten offerings and such other matters as may
be reasonably requested by such Holders and
underwriters, which counsel and opinions shall be
reasonably satisfactory (in form, scope and
substance) to the managing underwriters, if any, and
the Required Holders of such Registrable Securities;
(c) in connection with any underwritten
offering, to obtain so-called "cold comfort" letters
and updates thereof from the Company's independent
certified public accountants addressed to the
selling Holders of Registrable Securities and the
underwriters, if any, such letters to be in
customary form and covering matters of the type
customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten
offerings;
(d) if an underwriting agreement is entered
into, cause the same to set forth in full the
indemnification and contribution provisions and
procedures of Section 6 (or such other substantially
similar provisions and procedures as the
underwriters shall reasonably request) with respect
to all parties to be indemnified pursuant to said
Section 6; and
(e) deliver such documents and certificates as
may reasonably be requested by the Required Holders
of the Registrable Securities being sold, or the
managing underwriter(s), if any, to evidence
compliance with this paragraph (xiv) and with any
customary conditions contained in the underwriting
agreement or other agreement entered into by the
Company;
the foregoing to be done upon each closing under any
underwriting or similar agreement as and to the extent
required thereunder and from time to time as may reasonably
be requested by any selling Holder of Registrable Securities
in connection with the disposition of Registrable Securities
pursuant to such Shelf Registration Statement, all in a
manner consistent with customary industry practice;
(xvi) upon execution and delivery of such
confidentiality agreements as the Company may reasonably
request, make available to the Holders of the Registrable
Securities being sold, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement,
and any attorney or accountant retained by such Holders or
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply
all information reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with the
registration, at such time or times as the Person requesting
such information shall reasonably determine;
(xvii) otherwise use its best efforts to comply with the
Securities Act, the Exchange Act, all applicable rules and
regulations of the SEC and all applicable state blue sky and
other securities laws, rules and regulations, and make
generally available to its security holders, as soon as
practicable, an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due
diligence investigation by any underwriter (including any
"qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the
NASD); and
(xix) prior to the filing of any document which is being
prepared for incorporation by reference into the
Registration Statement or the Prospectus, upon receipt of
such confidentiality agreements as the Company may
reasonably request, provide copies of such document to
counsel to the selling Holders of Registrable Securities,
and to the managing underwriter(s), if any, and make the
Company's representatives available for discussion of such
document.
(c) Covenants of Holders. In connection with and as a
condition to the Company's obligations with respect to the Shelf
Registration Statement pursuant to this Section 3, each Holder
covenants and agrees that (i) upon receipt of any notice from
the Company contemplated by Section 3(b)(iv) (in respect of the
occurrence of an event contemplated by clause (f) of Section
3(b)(iv)), such Holder shall not offer or sell any Registrable
Securities pursuant to the Shelf Registration Statement until
such Holder receives copies of the supplemented or amended Shelf
Prospectus contemplated by Section 3(b)(xii) hereof and receives
notice that any post-effective amendment has become effective,
and, if so directed by the Company, such Holder will deliver to
the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such
Holder's possession, of the Shelf Prospectus as amended or
supplemented at the time of receipt of such notice; (ii) such
Holder and any of its officers, directors or affiliates, if any,
will comply with the provisions of Rule 10b-6 and 10b-7 under the
Exchange Act as applicable to them in connection with sales of
Registrable Securities pursuant to the Shelf Registration
Statement; and (iii) such Holder and any of its officers,
directors or affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them
in connection with sales of Registrable Securities pursuant to
the Shelf Registration Statement.
(d) Mechanics of Shelf Registration. Each
registration effected pursuant to this Section 3 shall be
effected by the filing of a Shelf Registration Statement on Form
S-1 or Form S-3 (provided that if Form S-3 is used the Shelf
Prospectus shall contain the information that would have been
required to be included therein had Form S-1 been used), unless
the use of a different form has been agreed upon in writing by
the Required Holders; provided, however, that if the intended
method of disposition by the requesting Holders is to be an
underwritten offering, the Company shall use such form of
Registration Statement as is acceptable to the underwriter(s).
(e) Representation, Warranty and Covenant of the
Company.The Company represents and warrants that it meets all the
requirements for the use of Form S-3 for the registration and
sale by the Holders of the Registrable Securities, and the
Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such
eligibility for the use of Form S-3.
(f) Holdback Agreement. From the date of this
Agreement until the first anniversary thereof, each Holder of
Registrable Securities agrees not to effect any public or private
sale or distribution of Registrable Securities.
SECTION 4. Registration Expenses.
(a) All expenses incident to the Company's performance
of or compliance with its obligations under this Agreement
(excluding underwriting discounts, selling commissions and
brokerage fees, which will be paid by the selling Holders) will
be paid by the Company, regardless of whether Registrable
Securities are sold pursuant to any Registration Statement or
Shelf Registration Statement, including, without limitation:
(i) all registration, filing and listing fees;
(ii) fees and expenses of compliance with
securities or blue sky laws (including, without
limitation, the fees and disbursements of counsel for
the underwriters, if any, or selling Holders in
connection with blue sky and state securities
qualifications of Registrable Securities and
determination of their eligibility for investment under
the laws of such jurisdictions as the managing
underwriter(s), if any, or the Required Holders of the
Registrable Securities covered by such Registration
Statement or Shelf Registration Statement may
reasonably designate);
(iii) printing (including, without limitation,
expenses of printing or engraving certificates for the
Registrable Securities in a form eligible for deposit
with Depository Trust Company and of printing
prospectuses), messenger, telephone and delivery
expenses;
(iv) fees and disbursements of counsel for the
Company and, subject to Section 4(b), counsel for the
selling Holders of the Registrable Securities;
(v) fees and disbursements of all independent
certified public accountants of the Company (including,
without limitation, the expenses of any special audit
and, in connection with any underwritten offering,
"cold comfort" letters required by or incident to such
performance);
(vi) Securities Act liability insurance if the
Company so desires or if the managing underwriters, if
any, so require(s);
(vii) fees and expenses of other Persons (including
special experts) retained by the Company; and
(viii) fees and expenses associated with any NASD
filing required to be made in connection with any
Registration Statement or Shelf Registration Statement,
including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel)
that is required to be retained in accordance with the
rules and regulations of the NASD.
The Company will, in any event, pay its internal expenses,
the expense of any annual audit, the fees and expenses incurred
in connection with the listing of the securities to be registered
on each securities exchange on which securities of the same class
are then listed or the qualification for trading of the
securities to be registered in each inter-dealer quotation system
in which securities of the same class are then traded, and rating
agency fees.
(b) In connection with each Registration Statement or
Shelf Registration Statement required hereunder, the Company will
reimburse the Holders of Registrable Securities being registered
pursuant to such Registration Statement or Shelf Registration
Statement for the reasonable fees and disbursements of not more
than one counsel chosen by the Required Holders of the
Registrable Securities being sold; the expense of any additional
counsel for the Holders shall be paid by the Holders.
(c) The term "Registration Expenses" shall mean the
expenses payable by the Company pursuant to the provisions of
this Section 4.
SECTION 5. Conditions to Registration.
Each Holder's right to have Registrable Securities included
in any Registration Statement or Shelf Registration Statement
filed by the Company in accordance with the provisions of Section
2 or Section 3 shall be subject to the following conditions:
(a) The Holders on whose behalf such Registrable
Securities are to be included shall be required to furnish the
Company in a timely manner with all information required by the
applicable rules and regulations of the SEC concerning the
proposed method of sale or other disposition of such securities,
the identity of and compensation to be paid to any proposed
underwriters to be employed in connection therewith, and such
other information as may be reasonably required by the Company
properly to prepare and file such Registration Statement or Shelf
Registration Statement in accordance with applicable provisions
of the Securities Act;
(b) If any such Holder desires to sell and distribute
Registrable Securities over a period of time, or from time to
time, at then prevailing market prices, then any such Holder
shall execute and deliver to the Company such written
undertakings as the Company and its counsel may reasonably
require in order to assure full compliance with relevant
provisions of the Securities Act and the Exchange Act;
(c) In the case of any registration requested pursuant
to the provisions of Section 2, the offering price for any
Registrable Securities to be so registered shall be no less than
for any securities of the same class then to be registered for
sale for the account of the Company or other security holders,
unless such Registrable Securities are to be offered from time to
time based on the prevailing market price;
(d) Upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraph (xi) of
Section 2(b) or paragraph (xii) of Section 3(b), such Holder will
forthwith discontinue disposition of Registrable Securities until
such Holder's receipt of the copies of the supplemented
Prospectus contemplated by such paragraph, or until it is advised
in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice; and
(e) In the case of any underwritten offering on behalf
of the Holders of Registrable Securities, such Holders will enter
into such agreements (including underwriting agreements and lock-
up agreements) as the managing underwriters shall reasonably
request and as are customary in similar circumstances.
SECTION 6. Indemnification.
(a) Indemnification by the Company. In the event of
the registration of any Registrable Securities under the
Securities Act pursuant to the provisions hereof, the Company
will indemnify and hold harmless the seller of such Registrable
Securities, its partners, directors, officers, employees and
agents, each underwriter, broker and dealer, if any, who
participates in the offering or sale of such securities, and each
other Person, if any, who controls such seller or any such
underwriter, broker or dealer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act (each such Person being hereinafter sometimes referred to as
an "Indemnified Person", provided that for purposes of clauses
(b), (c) and (d) of this Section 6 "Indemnified Person" shall
include the Company, its partners, directors, officers, employees
and agents, and each other Person, if any who controls the
Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act) from and against any
losses, claims, damages, liabilities or expenses, joint or
several, to which such indemnified Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained or incorporated by reference in any Registration
Statement, Shelf Registration Statement, Prospectus or Shelf
Prospectus or any amendment or supplement thereto, or any
document incorporated by reference therein, or arise out of or
are based upon the 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
each such Indemnified Person for any legal or other expenses
reasonably incurred by such Indemnified Person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the
Registration Statement, Shelf Registration Statement, Prospectus
or Shelf Prospectus or any amendment or supplement thereto, in
reliance upon and in conformity with written information
furnished to the Company by such Indemnified Person for use in
preparation thereof. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf
of such Indemnified Person and shall survive the transfer of such
Registrable Securities by such seller.
(b) Indemnification by Holders of Registrable
Securities. In the event of the registration of any Registrable
Securities under the Securities Act pursuant to the provisions
hereof, each Holder on whose behalf such Registrable Securities
shall have been registered will indemnify and hold harmless each
and every Indemnified Person against any losses, claims, damages
or liabilities, joint or several, to which such Indemnified
Person may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of a material fact contained or incorporated by
reference in any Registration Statement, Shelf Registration
Statement, Prospectus or Shelf Prospectus or any amendment or
supplement thereto or any document incorporated by reference
therein, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, which untrue statement or alleged untrue statement or
omission or alleged omission has been made or incorporated
therein in reliance upon and in conformity with written
information furnished to the Company by such Holder specifically
stating that it is for use in preparation thereof, and will
reimburse each such Indemnified Person for any legal and other
expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
liability of each Holder hereunder shall be limited to the
proceeds received by such Holder from the sale of Registrable
Securities covered by such Registration Statement or Shelf
Registration Statement.
(c) Procedure. Promptly after receipt by an
Indemnified Person of notice of the commencement of any action
(including any governmental investigation or inquiry), such
Indemnified Person will, if such Indemnified Person intends to
make a claim in respect thereof against the party agreeing to
indemnify such Indemnified Person pursuant to paragraphs (a) or
(b) hereof (each such Person being hereinafter referred to as an
"Indemnifying Person"), give written notice to such Indemnifying
Person of the commencement thereof, but the omission so to notify
the Indemnifying Person shall not relieve the Indemnifying Person
from any of its obligations pursuant to the provisions of this
Section 6 except to the extent that the Indemnifying Person is
actually prejudiced by such failure to give notice. In case any
such action is brought against any Indemnified Person and it
notifies an Indemnifying Person of the commencement thereof, the
Indemnifying Person shall be entitled to participate in, and to
the extent that it may wish, jointly with any other Indemnifying
Person similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person, and
after notice from the Indemnifying Person to such Indemnified
Person, the Indemnifying Person shall not, except as hereinafter
provided, be responsible for any legal or other expenses
subsequently incurred by such Indemnified Person in connection
with the defense thereof. No Indemnifying Person will consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Person of a release
from all liability in respect of such claim or litigation.
Such Indemnified Person shall have the right to employ
separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall
be the expense of such Indemnified Person unless (a) the
Indemnifying Person has agreed to pay such fees and expenses or
(b) the Indemnifying Person shall have failed to assume the
defense of such action or proceeding or has failed to employ
counsel reasonably satisfactory to such Indemnified Person in any
such action or proceeding or (c) the named parties to any such
action or proceeding (including any impleaded parties) include
both such Indemnified Person and the Indemnifying Person and such
Indemnified Person shall have been advised by counsel that
representation of both parties by the same counsel would be
inappropriate due to actual or potential material differing
interests between them (in which case, if such Indemnified Person
notifies the Indemnifying Person in writing that it elects to
employ separate counsel at the expense of the Indemnifying
Person, the Indemnifying Person shall not have the right to
assume the defense of such action or proceeding on behalf of such
Indemnified Person). The Indemnifying Person shall not be liable
for any settlement of any such action or proceeding effected
without its written consent, which consent shall not unreasonably
be withheld, delayed or conditioned, but if settled with its
written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding, the Company agrees to
indemnify and hold harmless such Indemnified Persons from and
against any loss or liability by reason of such settlement or
judgment.
(d) Contribution. If the indemnification provided for
in this Section 6 is unavailable to a party that would have been
an Indemnified Person under this Section 6 in respect of any
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to herein, then each party that would
have been an Indemnifying Person thereunder shall, in lieu of
indemnifying such Indemnified Person, contribute to the amount
paid or payable by such Indemnified Person as a result of such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person on the one hand and
the Indemnified Person on the other in connection with the
statement or omission which resulted in such losses, claims,
damages, liabilities or expenses (or actions in respect thereof),
as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission of a material
fact relates to information supplied by the Indemnifying Person
or the Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable
by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 6(c),
any legal or other fees or expenses reasonably incurred by such
party in connection with the investigation or defense of any
action or claim. The Company and each Holder of Registrable
Securities agrees that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in
this Section 6. Notwithstanding the provisions of this Section
6(d), no Holder of Registrable Securities shall be required to
contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by it exceeds the
amount of any damages which such Holder has otherwise been
required to pay by reason of 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.
Indemnification or, if appropriate, contribution, similar to
that specified in the preceding provisions of this Section 6
(with appropriate modifications) shall be given by the Company
and each seller of Registrable Securities with respect to any
required registration or other qualification of such securities
under any federal or state law or regulation or governmental
authority other than the Securities Act.
In the event of any underwritten offering of Registrable
Securities under the Securities Act pursuant to the provisions of
Section 2 or Section 3, the Company and each Holder on whose
behalf such Registrable Securities shall have been registered
agree to enter into an underwriting agreement, in standard form,
with the underwriters, which underwriting agreement may contain
additional provisions with respect to indemnification and
contribution in lieu thereof.
SECTION 7. Exchange Act Registration; Rule 144 Reporting.
The Company covenants and agrees that until such time as the
Holders no longer hold any Registrable Securities it will:
(a) if required by law, maintain an effective
registration statement (containing such information and documents
as the SEC shall specify) with respect to the Common Stock of the
Company under Section 12(g) of the Exchange Act;
(b) make and keep public information available, as
those terms are understood and defined in Rule 144 under the
Securities Act, at all times after the effective date that the
Company becomes subject to the reporting requirements of the
Securities Act or the Exchange Act (even if the Company
subsequently ceases to be subject to such reporting
requirements);
(c) file with the SEC in a timely manner all reports
and documents required of the Company under the Securities Act
and the Exchange Act;
(d) furnish to any Holder promptly upon request (i) a
written statement by the Company as to its compliance with the
reporting requirements of Rule 144 (and any similar or successor
rules) and of the Securities Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company
(beginning after the Company becomes subject to such reporting
requirements), and (iii) such other reports and documents of the
Company and other information in the possession of or reasonably
attainable by the Company as such Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing
such Holder to sell any such securities without registration; and
(e) take such further action as any Holder of
Registrable Securities may from time to time reasonably request
to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of
the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC.
The Company represents and warrants that such registration
statement or any information, document or report filed with the
SEC in connection therewith or any information so made public
shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not
misleading. The Company agrees to indemnify and hold harmless
(or to the extent the same is not enforceable, make contribution
to) the Holders, their partners, officers, directors, employees
and agents, each broker, dealer or underwriter (within the
meaning of the Securities Act) acting for any Holder in
connection with any offering or sale by such Holder of
Registrable Securities or any Person controlling (within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act) such Holder and any such broker, dealer or
underwriter from and against any and all losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arising
out of or resulting from any breach of the foregoing
representation or warranty, all on terms and conditions
comparable to those set forth in Section 6.
SECTION 8. Limitation on Registration Rights of Others.
The Company represents and warrants that, except as set
forth on Exhibit D to the Warrant Agreement, it has not granted
to any Person the right to request or require the Company to
register any securities issued by the Company. The Company
covenants and agrees that, so long as any Holder holds any
Warrant Securities, the Company will not, directly or indirectly,
grant to any Person or agree to or otherwise become obligated in
respect of (a) any registration rights of securities of the
Company upon the demand of any Person (including any shelf
registration) without the prior written consent of the Required
Holders; or (b) rights of registration in the nature or
substantially in the nature of those set forth in Section 2
unless such rights are expressly subject and subordinated to the
rights of registration of the Holders pursuant to Section 2
hereof on terms reasonably satisfactory to the Required Holders.
SECTION 9. Mergers, etc.
In addition to any other restrictions on mergers,
consolidations and reorganizations contained in the Credit
Agreement, the Warrant Agreement or in the certificate of
incorporation, by-laws or agreements of the Company, the Company
covenants and agrees that it shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which
the Company shall not be the surviving corporation and in which
the Holders shall not have had the right to receive cash for all
their Registrable Securities, unless the surviving corporation
shall, prior to such merger, consolidation or reorganization,
agree in a writing satisfactory in form, scope and substance to
the Required Holders to assume the obligations of the Company
under this Agreement, and for such purpose references hereunder
to "Registrable Securities" shall be deemed to include the
securities which such Holders would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger,
consolidation or reorganization.
If, and as often as, there are any changes in the
Registrable Securities by way of stock split, stock dividend,
combination or classification, or through merger, consolidation,
reorganization or recapitalization, or by any other means,
appropriate adjustments shall be made in the provisions hereof as
may be required, so that the rights and privileges granted hereby
shall continue with respect to the Registrable Securities as so
changed.
SECTION 10. Notices, etc.
All notices, consents, approvals, agreements and other
communications provided hereunder shall be in writing or by telex
or telecopy and shall be sufficiently given to the Purchasers,
the Holders and the Company if addressed or delivered to them in
accordance with Section 20 of the Warrant Agreement.
SECTION 11. Entire Agreement.
The parties hereto agree that this Agreement and the
agreements specifically referred to in Section 33 of the Warrant
Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior
agreements and understandings between them as to such subject
matter; and there are no restrictions, agreements, arrangements,
oral or written, between any or all of the parties relating to
the subject matter hereof which are not fully expressed or
referred to herein or therein.
SECTION 12. Waivers and Further Agreements.
Any waiver of any terms or conditions of this Agreement
shall not operate as a waiver of any other breach of such terms
or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of
such provision or of any other provision hereof; provided,
however, that no such written waiver unless it by its own terms
explicitly provides to the contrary, shall be construed to effect
a continuing waiver of the provision being waived and no such
waiver in any instance shall constitute a waiver in any other
instance or for any other purpose or impair the right of the
party against whom such waiver is claimed in all other instances
or for all other purposes to require full compliance with such
provision. Each of the parties hereto agrees to execute all such
further instruments and documents and to take all such further
action as the other parties may reasonably require in order to
effectuate the terms and purposes of this Agreement.
SECTION 13. Amendments.
This Agreement may not be amended nor shall any waiver,
change, modification, consent or discharge be effected except by
an instrument in writing executed by or on behalf of the party or
parties against whom enforcement of any amendment, waiver,
change, modification, consent or discharge is sought; provided,
however, that any waiver sought from the Holders of any provision
of this Agreement which affects the Holders generally, and any
action required to be taken by the Holders as a group pursuant to
this Agreement, shall be given or taken by the Required Holders,
and any such waiver or action so given or taken shall be binding
on all Holders. No failure or delay by any party in exercising
any right or remedy hereunder shall operate as a waiver thereof,
and a waiver of a particular right or remedy on one occasion
shall not be deemed a waiver of any other right or remedy or a
waiver of the same right or remedy on any subsequent occasion.
SECTION 14. Assignment; Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and permitted
assigns, including, without limitation, any Holders, from time to
time of the Registrable Securities. Anything in this Agreement
to the contrary notwithstanding, the term "Holders" as used in
this Agreement shall be deemed to include the registered Holders
from time to time of the Warrant Securities.
SECTION 15. Severability.
If any provision of this Agreement shall be held or deemed
to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because
any provision conflicts with any constitution, statute, rule or
public policy, or for any other reason, such circumstance shall
not have the effect of rendering the provision or provisions in
question, invalid, inoperative or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering
any other provision or provisions herein contained invalid,
inoperative or unenforceable to the extent that such other
provisions are not themselves actually in conflict with such
constitution, statute, rule or public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case
as if such invalid, inoperative or unenforceable provision had
never been contained herein and such provision reformed so that
it would be valid, operative and enforceable to the maximum
extent permitted in such jurisdiction or in such case.
SECTION 16. Counterparts.
This Agreement may be executed in two or more counterparts
(each of which need not be executed by each of the parties), each
of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be
necessary to produce more than one such counterpart.
SECTION 17. Section Headings.
The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 18. Gender; Usage.
Whenever used herein the singular number shall include the
plural, the plural shall include the singular, and the use of any
gender shall include all genders. The words "hereof," "herein"
and "hereunder," and words of similar import, when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
SECTION 19. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 20. Termination.
The rights of any Holder under Sections 2 and 3 of this
Agreement shall terminate as to any Registrable Securities when
such Registrable Securities have been effectively registered
under the Securities Act and sold pursuant to a Registration
Statement or Shelf Registration Statement covering such
Registrable Securities. The indemnification and contribution
provisions of Sections 6 and 7 shall survive any termination of
this Agreement.
SECTION 21. Expenses.
The Company shall be obligated to pay to the Holders, on
demand, all costs and expenses (including, without limitation,
court costs and reasonable attorneys' fees and expenses and
interest to the extent permitted by applicable law on overdue
amounts) paid or incurred in collecting any sums due from, or
enforcing any other obligations of, the Company.
SECTION 22. Specific Performance.
The Company recognizes that the rights of the Holders under
this Agreement are unique and, accordingly, the Holders shall, in
addition to such other remedies as may be available to any of
them at law or in equity, have the right to enforce their rights
hereunder by actions for injunctive relief and specific
performance to the extent permitted by law. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of
this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate. This Agreement is not intended to limit or abridge any
rights of the Holders which may exist apart from this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
AFGL INTERNATIONAL, INC.
By:/s/
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By:/s/