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Exhibit 10.16
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PARTICIPATION AND REGISTRATION RIGHTS AGREEMENT
among
UGS Capital Corp.
UGS Capital Corp. II
UGS Holdings, Inc.
UGS Corp.
and
Certain Stockholders of UGS Capital Corp. and UGS Capital Corp.
II
Dated as of May 24, 2004
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TABLE OF CONTENTS
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1. EFFECTIVENESS;
DEFINITIONS.............................................................................
2
1.1.
Closing........................................................................................
2
1.2.
Definitions....................................................................................
2
2. RIGHT OF
PARTICIPATION.................................................................................
2
2.1. Right of
Participation.........................................................................
2
2.1.1.
Offer.................................................................................
2
2.1.2.
Exercise..............................................................................
3
2.1.3. Other
Securities......................................................................
4
2.1.4. Certain Legal
Requirements............................................................
4
2.1.5. Further
Assurances....................................................................
4
2.1.6.
Expenses..............................................................................
5
2.1.7.
Closing...............................................................................
5
2.2. Post-Issuance
Notice...........................................................................
5
2.3. Excluded
Transactions..........................................................................
6
2.4. Certain Provisions Applicable to Options, Warrants and
Convertible Securities.................. 6
2.5. Acquired
Shares................................................................................
7
2.6.
Period.........................................................................................
7
3. REGISTRATION
RIGHTS....................................................................................
7
3.1. Demand Registration Rights for Investor Registrable
Securities................................. 7
3.1.1.
General...............................................................................
7
3.1.2.
Form..................................................................................
8
3.1.3. Payment of
Expenses...................................................................
8
3.1.4. Additional
Procedures.................................................................
8
3.1.5. Suspension of
Registration............................................................
9
3.2. Piggyback Registration
Rights..................................................................
9
3.2.1. Piggyback
Registration................................................................
9
3.2.2. Payment of
Expenses...................................................................
10
3.2.3. Additional
Procedures.................................................................
10
3.2.4. Registration Statement
Form...........................................................
11
3.3. Certain Other
Provisions.......................................................................
11
3.3.1. Underwriter's
Cutback.................................................................
11
3.3.2. Registration
Procedures...............................................................
13
3.3.3. Selection of Underwriters and
Counsel................................................. 16
3.3.4. Company
Lock-Up.......................................................................
16
3.3.5. Holders and Other Holders
Lock-Up..................................................... 16
3.3.6. Other
Agreements......................................................................
17
3.4. Indemnification and
Contribution...............................................................
17
3.4.1. Indemnities of the
Company............................................................
17
3.4.2. Indemnities to the
Company............................................................
18
3.4.3.
Contribution..........................................................................
18
3.4.4. Limitation on Liability of Holders of Registrable
Securities.......................... 19
3.4.5. Indemnification
Procedures............................................................
19
3.5. Permitted Registration Rights
Assignees........................................................
20
3.5.1. Registration
Rights...................................................................
20
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4.
REMEDIES...............................................................................................
20
4.1.
Generally......................................................................................
20
5. PERMITTED
TRANSFEREES..................................................................................
21
5.1. Transfers by
Investors.........................................................................
21
5.2. Transfers by Managers or Manager
Designees.....................................................
21
6. AMENDMENT, TERMINATION,
ETC............................................................................
21
6.1. Oral
Modifications.............................................................................
21
6.2. Written
Modifications..........................................................................
21
6.3. Withdrawal from
Agreement......................................................................
22
6.4. Effect of
Termination..........................................................................
22
7.
DEFINITIONS............................................................................................
22
7.1. Certain Matters of
Construction................................................................
22
7.2.
Definitions....................................................................................
23
8.
MISCELLANEOUS..........................................................................................
31
8.1. Authority:
Effect.............................................................................
31
8.2.
Notices........................................................................................
31
8.3. Binding Effect,
Etc............................................................................
33
8.4. Descriptive
Heading............................................................................
33
8.5.
Counterparts...................................................................................
33
8.6.
Severability...................................................................................
33
8.7. No
Recourse....................................................................................
34
8.8. Aggregation of
Shares..........................................................................
34
8.9. Obligations of Company, Midco, Holdings and
OpCo............................................... 34
9. GOVERNING
LAW..........................................................................................
34
9.1. Governing
Law..................................................................................
34
9.2. Consent to
Jurisdiction........................................................................
34
9.3. WAIVER OF JURY
TRIAL...........................................................................
35
9.4. Exercise of Rights and
Remedies................................................................
35
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PARTICIPATION AND REGISTRATION RIGHTS AGREEMENT
This Participation and Registration Rights Agreement (the
"Agreement") is
made as of May 24, 2004 by and among:
(i) UGS Capital Corp., a Delaware corporation (formerly known as
BSW
Holdings, Inc.) (together with its successors and assigns,
the
"Company");
(ii) UGS Capital Corp. II, a Delaware corporation (together with
its
successors and assigns, "Midco");
(iii) UGS Holdings, Inc., a Delaware corporation (together with
its
successors and assigns, "Holdings");
(iv) UGS Corp., a Delaware corporation (together with its
successors and
assigns, "AcquisitionCo");
(v) each Person executing this Agreement and listed as an
Investor on
the signature pages hereto (collectively with their
Permitted
Transferees, the "Investors");
(vi) each Person executing this Agreement and listed as a
Manager on the
signature pages hereto and such other Persons, if any, that
from
time to time become party hereto as Managers (collectively,
the
"Managers");
(vii) each Person executing this Agreement and listed as a
Manager
Designee on the signature pages hereto and such other Persons,
if
any, that from time to time become party hereto as Manager
Designees
(collectively, the "Manager Designees" and together with the
Investors and the Managers, the "Stockholders")
(viii) such other Persons, if any, that from time to time become
party
hereto as holders of Other Holder Shares (as defined below)
pursuant
to Section 3.5 solely in the capacity of permitted assignees
with
respect to certain registration rights hereunder (collectively,
the
"Other Holders").
RECITALS
1. The Company has been formed for the purpose of acquiring
(the
"Acquisition"), indirectly through one or more subsidiaries,
pursuant to a Stock
Purchase Agreement, dated as of March 12, 2004, as amended (the
"Acquisition
Agreement"), between Electronic Data Systems Corporation, the
Company and UGS
PLM Solutions Inc. ("OpCo"), all outstanding shares of UGS PLM
Solutions Inc.
2. Upon the Closing (as defined below), the Common Stock (as
defined
below) of the Company, the common stock and the Preferred Stock
(as defined
below) of Midco and all Options (as defined below) will be held
as set forth on
Schedule I hereto.
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3. In connection with the purchase of such securities, the
Company,
Midco, Holdings, AcquisitionCo, the Investors and certain other
Stockholders of
the Company and Midco have entered into a stockholders agreement
dated as of the
date hereof (the "Stockholders Agreement").
4. The parties believe that it is in the best interests of the
Company,
Midco, Holdings, AcquisitionCo and the Stockholders to set forth
their
agreements regarding participation and registration rights.
AGREEMENT
Therefore, the parties hereto hereby agree as follows:
1. EFFECTIVENESS; DEFINITIONS.
1.1. Closing. This Agreement shall become effective upon the
initial
purchase of Stock by the Investors in connection with the
consummation of the
closing under the Acquisition Agreement (the "Closing").
1.2. Definitions. Certain terms are used in this Agreement
as
specifically defined herein. These definitions are set forth or
referred to in
Section 7 hereof.
2. RIGHT OF PARTICIPATION. Subject to Section 2.3, the Company
shall not, and
shall not permit any direct or indirect subsidiary of the
Company (the Company
and each such subsidiary, an "Issuer") to, issue or sell any
shares of any of
its capital stock or any securities convertible into or
exchangeable for any
shares of its capital stock, issue or grant any options or
warrants for the
purchase of, or enter into any agreements providing for the
issuance (contingent
or otherwise) of, any of its capital stock or any stock or
securities
convertible into or exchangeable for any shares of its capital
stock, in each
case, to any Person (each an "Issuance" of "Subject
Securities"), except in
compliance with the provisions of Section 2.1 or Section
2.2.
2.1. Right of Participation.
2.1.1. Offer. Not fewer than ten business days prior to the
consummation of an Issuance, a notice (the "Participation
Notice") shall
be furnished by the Issuer to each holder of Participation
Shares (the
"Participation Offerees"). The Participation Notice shall
include:
(a) the principal terms and conditions of the proposed
Issuance, including (i) the amount, kind and terms of the
Subject
Securities to be included in the Issuance, (ii) the number
of
Equivalent Shares represented by such Subject Securities (if
applicable), (iii) the percentage of the total Purchase Price
Value
of Shares outstanding as of immediately prior to giving effect
to
such Issuance which the Purchase Price Value of Participation
Shares
held by such Participation Offeree constitutes (the
"Participation
Portion"), (iv) the maximum and minimum price (including if
applicable, the maximum and minimum Price Per Equivalent Share)
per
unit of the Subject Securities, including a description of
any
non-cash
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consideration sufficiently detailed to permit valuation thereof,
(v)
the proposed manner of disposition, (vi) the name and address of
the
Person to whom the Subject Securities will be issued (the
"Prospective Subscriber") and (vii) if known, the proposed
Issuance
date; and
(b) an offer by the Issuer to issue, at the option of each
Participation Offeree, to such Participation Offeree such
portion of
the Subject Securities to be included in the Issuance as may
be
requested by such Participation Offeree (not to exceed the
Participation Portion of the total amount of Subject Securities
to
be included in the Issuance), on the same terms and conditions,
with
respect to each unit of Subject Securities issued to the
Participation Offerees, as each of the Prospective Subscribers
shall
be issued units of Subject Securities.
2.1.2. Exercise.
(a) General. Each Participation Offeree desiring to accept
the offer contained in the Participation Notice shall accept
such
offer by furnishing a written notice of such acceptance to
the
Issuer within eight business days after the date of delivery of
the
Participation Notice specifying the amount of Subject
Securities
(not in any event to exceed the Participation Portion of the
total
amount of Subject Securities to be included in the Issuance)
which
such Participation Offeree desires to be issued (each a
"Participating Buyer"). Each Participation Offeree who does
not
accept such offer in compliance with the above requirements,
including the applicable time periods, shall be deemed to
have
waived all of such holder's rights to participate in such
Issuance,
and the Issuer shall thereafter be free to issue Subject
Securities
in such Issuance to the Prospective Subscriber and any
Participating
Buyers, at a price no less than the minimum price set forth in
the
Participation Notice and on other principal terms not
substantially
more favorable to the Prospective Subscriber than those set
forth in
the Participation Notice, without any further obligation to
such
non-accepting Participation Offerees pursuant to Section 2.
If,
prior to consummation, the terms of such proposed Issuance
shall
change with the result that the price shall be less than the
minimum
price set forth in the Participation Notice or the other
principal
terms shall be substantially more favorable to the
Prospective
Subscriber than those set forth in the Participation Notice,
it
shall be necessary for a separate Participation Notice to be
furnished, and the terms and provisions of this Section 2.1
separately complied with, in order to consummate such
Issuance
pursuant to this Section 2.1; provided, however, that in such
case
of a separate Participation Notice, the applicable period to
which
reference is made in Section 2.1.1 and in the first sentence
of
Section 2.1.2(a) shall be three business days and two business
days
respectively.
(b) Irrevocable Acceptance. The acceptance of each
Participating Buyer shall be irrevocable except as
hereinafter
provided, and each such Participating Buyer shall be bound
and
obligated to acquire in the Issuance on the same terms and
conditions, with respect to each unit of Subject Securities
issued,
as the
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Prospective Subscriber, such amount of Subject Securities as
such
Participating Buyer shall have specified in such
Participating
Buyer's written commitment.
(c) Time Limitation. If at the end of the 180th day after
the
date of the effectiveness of the Participation Notice the Issuer
has
not completed the Issuance, each Participating Buyer shall
be
released from such holder's obligations under the written
commitment, the Participation Notice shall be null and void, and
it
shall be necessary for a separate Participation Notice to be
furnished, and the terms and provisions of this Section 2.1
separately complied with, in order to consummate such
Issuance
pursuant to this Section 2.1; provided, however, that in such
case
of a separate Participation Notice on substantially the same
terms
and conditions, the applicable period to which reference is made
in
Section 2.1.1 and in the first sentence of Section 2.1.2(a)
shall be
three business days and two business days, respectively.
2.1.3. Other Securities. The Issuer may condition the
participation
of the Participation Offerees in an Issuance upon the purchase
by such
Participation Offerees of any securities (including debt
securities) other
than Subject Securities ("Other Securities") in the event that
the
participation of the Prospective Subscriber in such Issuance is
so
conditioned. In such case, each Participating Buyer shall
acquire in the
Issuance, together with the Subject Securities to be acquired by
it, Other
Securities in the same proportion to the Subject Securities to
be acquired
by it as the proportion of Other Securities to Subject
Securities being
acquired by the Prospective Subscriber in the Issuance, on the
same terms
and conditions, as to each unit of Subject Securities and Other
Securities
issued to the Participating Buyers, as the Prospective
Subscriber shall be
issued units of Subject Securities and Other Securities.
2.1.4. Certain Legal Requirements. In the event that the
participation in the Issuance by a Participation Offeree as
a
Participating Buyer would require under applicable law (i)
the
registration or qualification of such securities or of any
Person as a
broker or dealer or agent with respect to such securities where
such
registration or qualification is not otherwise required for the
Issuance
or (ii) the provision to any participant in the Sale of any
specified
information regarding the Company or any of its subsidiaries or
the
securities that is not otherwise required to be provided for the
Issuance,
such Participation Offeree shall not have the right to
participate in the
Issuance. Without limiting the generality of the foregoing, it
is
understood and agreed that neither the Company nor the Issuer
shall be
under any obligation to effect a registration of such securities
under the
Securities Act or similar state statutes.
2.1.5. Further Assurances. Each Participating Buyer shall take
or
cause to be taken all such reasonable actions as may be
necessary or
reasonably desirable in order expeditiously to consummate each
Issuance
pursuant to this Section 2.1 and any related transactions,
including
executing, acknowledging and delivering consents, assignments,
waivers and
other documents or instruments; filing applications, reports,
returns,
filings and other documents or instruments with governmental
authorities;
and otherwise cooperating with the Issuer and the Prospective
Subscriber.
Without limiting the generality of the foregoing, each such
Participating
Buyer agrees to execute and deliver
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such subscription and other agreements specified by the Issuer
to which
the Prospective Subscriber will be party.
2.1.6. Expenses. All costs and expenses incurred by the Issuer
in
connection with any proposed Issuance of Subject Securities
(whether or
not consummated), including all attorney's fees and charges,
all
accounting fees and charges and all finders, brokerage or
investment
banking fees, charges or commissions, shall be paid by the
Company or the
Issuer. The reasonable fees and charges of a single legal
counsel for each
Investor Group in connection with such proposed Issuance of
Subject
Securities (whether or not consummated) shall be paid by the
Company or
the Issuer. Any other costs and expenses incurred by or on
behalf of any
holder of Shares in connection with such proposed Issuance of
Subject
Securities (whether or not consummated) shall be borne by such
holder.
2.1.7. Closing. The closing of an Issuance pursuant to Section
2.1
shall take place on (i) the proposed date of Issuance, if any,
set forth
in the Participation Notice (provided that consummation of any
Transfer
may be extended beyond such date to the extent necessary to
obtain any
applicable governmental approval or other required approval or
to satisfy
other conditions), (ii) if no proposed Transfer date was
required to be
specified in the Participation Notice, at such time as the
Issuer shall
specify by notice to each Participating Buyer, provided that
such closing
with respect to a Participating Buyer shall not be prior to the
date that
is ten business days after the Company issues the applicable
Participation
Notice without the consent of such Participating Buyer and (iii)
at such
place as the Issuer shall specify by notice to each
Participating Buyer.
At the closing of any Issuance under this Section 2.1.7,
each
Participating Buyer shall be delivered the notes, certificates
or other
instruments evidencing the Subject Securities (and, if
applicable, Other
Securities) to be issued to such Participating Buyer, registered
in the
name of such Participating Buyer or such holder's designated
nominee, free
and clear of any liens or encumbrances, with any transfer tax
stamps
affixed, against delivery by such Participating Buyer of the
applicable
consideration.
2.2. Post-Issuance Notice. Notwithstanding the requirements of
Section
2.1, the Issuer may proceed with any Issuance prior to having
complied with the
provisions of Section 2.1; provided that the Issuer shall:
(a) provide to each holder of Shares who would have been a
Participation Offeree in connection with such Issuance (i)
with
prompt notice of such Issuance and (ii) the Participation
Notice
described in Section 2.1.1 in which the actual price per unit
of
Subject Securities (and, if applicable, actual Price Per
Equivalent
Share) shall be set forth;
(b) offer to issue to such holder of Shares such number of
securities of the type issued in the Issuance as may be
requested by
such holder of Shares (not to exceed the Participation Portion
that
such holder of Shares would have been entitled to pursuant
to
Section 2.1 multiplied by the sum of (a) the number of
Subject
Securities included in the Issuance and (b) the aggregate number
of
shares issued pursuant to this Section 2.2 with respect to
such
Issuance) on the same
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economic terms and conditions with respect to such securities as
the
subscribers in the Issuance received; and
(c) keep such offer open for a period of ten business days,
during which period, each such holder may accept such offer
by
sending a written acceptance to the Issuer committing to
purchase an
amount of such securities (not in any event to exceed the
Participation Portion that such holder would have been entitled
to
pursuant to Section 2.1 multiplied by the sum of (a) the number
of
Subject Securities included in such issuance and (b) the
aggregate
number of shares issued pursuant to this Section 2.2 with
respect to
such Issuance).
2.3. Excluded Transactions. The provisions of this Section 2
shall not
apply to Issuances by the Company or any subsidiary of the
Company as follows:
(a) Any Issuance of Stock upon the exercise or conversion of
any Stock, Options, Warrants or Convertible Securities
outstanding
on the date hereof or Issued after the date hereof in
compliance
with the provisions of this Section 2;
(b) Any Issuance of shares of Stock, Options, Warrants or
Convertible Securities, in each case to the extent approved by
the
Board, to officers, employees, directors or consultants of
the
Company or its subsidiaries in connection with such Person's
employment or consulting arrangements with the Company or
its
subsidiaries;
(c) Any Issuance of shares of Stock, Options, Warrants or
Convertible Securities, in each case to the extent approved by
the
Board, (i) in any business combination or acquisition
transaction
involving the Company or any of its subsidiaries, (ii) in
connection
with any joint venture or strategic partnership or (iii) in
connection with the incurrence or guarantee of indebtedness by
the
Company or any of its subsidiaries;
(d) Any Issuance of Stock pursuant to a Qualified Public
Offering;
(e) The Issuance of Shares to the Investors, Managers and
Manager Designees in connection with the Closing; or
(f) Any Issuance of shares of Stock in connection with any
stock split, stock dividend or recapitalization approved by
the
Board.
2.4. Certain Provisions Applicable to Options, Warrants and
Convertible
Securities. In the event that the Issuance of Subject Securities
shall result in
any increase in the number of shares of Stock issuable upon
exercise, conversion
or exchange of any Options, Warrants or Convertible Securities,
the number of
shares (or Equivalent Shares, if applicable) of Subject
Securities (and Other
Securities, if applicable) which the holders of such Options,
Warrants or
Convertible Securities, as the case may be, shall be entitled to
purchase
pursuant to Section 2.1, if any, shall be reduced, share for
share, by the
amount of any such increase.
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2.5. Acquired Shares. Any Subject Securities constituting Stock
acquired
by any Investor, Manager or Manager Designee pursuant to this
Section 2 shall be
deemed for all purposes hereof to be Shares hereunder and under
the Stockholders
Agreement.
2.6. Period. Each of the foregoing provisions of this Section 2
shall
expire on the earlier of (a) a Change of Control or (b) the
closing of the
Initial Public Offering.
3. REGISTRATION RIGHTS. The Company will perform and comply, and
cause each
of its subsidiaries to perform and comply, with such of the
following provisions
as are applicable to it. Each Holder will perform and comply
with such of the
following provisions as are applicable to such Holder.
3.1. Demand Registration Rights for Investor Registrable
Securities.
3.1.1. General. One or more Investors or direct or indirect
Permitted Registration Rights Assignees of Investors (the
"Initiating
Investors"), by notice to the Company specifying the intended
method or
methods of disposition, may request that the Company effect
the
registration under the Securities Act for a Public Offering of
all or a
specified part of the Registrable Securities held by such
Initiating
Investors; provided, however, that the value of Registrable
Securities
that the Initiating Investors propose to sell in such Public
Offering is
at least fifty million dollars ($50,000,000) or such lower
amount as
agreed by the Requisite Stockholder Majority; and provided,
further, that
the Initial Public Offering may not be initiated pursuant to
this Section
3.1 without the approval of the Requisite Stockholder Majority.
The
Company will then use its best efforts to (i) effect the
registration
under the Securities Act (including by means of a shelf
registration
pursuant to Rule 415 under the Securities Act if so requested by
a
majority of the Investors that then hold a number of shares of
Class A
Common Stock equal to at least $100 million of aggregate
Purchase Price
Value (in respect of shares originally issued as Class A Common
Stock,
Class L Common Stock or otherwise) and if the Company is then
eligible to
use such registration) of the Registrable Securities which the
Company has
been requested to register by such Initiating Investors together
with all
other Registrable Securities which the Company has been
requested to
register pursuant to Section 3.2 by other Holders, all to the
extent
requisite to permit the disposition (in accordance with the
intended
methods thereof as aforesaid and as otherwise specified by the
Principal
Participating Holders) of the Registrable Securities which the
Company has
been so requested to register, and (ii) if requested by the
Principal
Participating Holders, obtain acceleration of the effective date
of the
registration statement relating to such registration; provided,
however,
that the Company shall not be obligated to take any action to
effect any
such registration pursuant to this Section 3.1.1:
(a) during the effectiveness of any Principal Lock-Up
Agreement entered into in connection with any registration
statement
pertaining to an underwritten public offering of securities of
the
Company for its own account (other than a Rule 145 Transaction,
or a
registration relating solely to employee benefit plans);
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(b) upon the request of Initiating Investors that are or
were
members of an Investor Group on any form other than Form S-3 (or
any
successor form) if the Company has previously effected a number
of
registrations of Registrable Securities under this Section
3.1.1
upon the request of Initiating Investors that are or were
members of
such Investor Group on any form other than Form S-3 (or any
successor form) equaling or exceeding three (3) with respect to
such
Investor Group; provided, however, that any registration of
Registrable Securities (i) which does not become and remain
effective for at least 270 days in accordance with the
provisions of
this Section 3 or (ii) pursuant to which the Initiating
Investors
and all other holders of Registrable Securities joining therein
are
not able to include at least 90% of the Registrable Securities
which
they desired to include, shall not be included in the
calculation of
the numbers of registrations contemplated by this clause (b);
or
(c) if a registration statement requested under this Section
3.1.1 became effective within the preceding 90 days.
3.1.2. Form. Except as otherwise provided above or required by
law,
each registration requested pursuant to Section 3.1.1 shall be
effected by
the filing of a registration statement on Form S-3 (or any other
form
which includes substantially the same information as would be
required to
be included in a registration statement on such form as
currently
constituted); provided that if any registration requested
pursuant to this
Section 3.1 is proposed to be effected on Form S-3 (or any
successor or
similar shortform registration statement) and is in connection
with an
underwritten offering, and if the managing underwriter shall
advise the
Company in writing that, in its opinion, it is of material
importance to
the success of such proposed offering to file a registration
statement on
Form S-1 (or any successor or similar registration statement) or
to
include in such registration statement information not required
to be
included pursuant to Form S-3 (or any successor or similar
shortform
registration statement), then the Company will file a
registration
statement on Form S-1 or supplement Form S-3 (or any successor
or similar
shortform registration statement) as reasonably requested by
such managing
underwriter.
3.1.3. Payment of Expenses. The Company shall pay all
Registration
Expenses in connection with registrations of Registrable
Securities
pursuant to this Section 3.1, including all reasonable expenses
(other
than fees and disbursements of counsel that do not constitute
Registration
Expenses) that any Holder incurs in connection with each
registration of
Registrable Securities requested pursuant to this Section
3.1.
3.1.4. Additional Procedures. In the case of a registration
pursuant
to Section 3.1 hereof, whenever the Principal Participating
Holders shall
request that such registration shall be effected pursuant to
an
underwritten offering, the Company shall include such
information in the
written notices to Holders referred to in Section 3.2. In such
event, the
right of any Holder to have securities owned by such Holder
included in
such registration pursuant to Section 3.1 shall be conditioned
upon such
Holder's participation in such underwriting and the inclusion of
such
Holder's Registrable Securities in the underwriting (unless
otherwise
mutually agreed upon by the Principal
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Participating Holders and such Holder). If requested by the
Principal
Participating Holders, the Company together with the Holders
proposing to
distribute their securities through the underwriting will enter
into an
underwriting agreement with the underwriters for such offering
containing
such representations and warranties by the Company and such
Holders and
such other terms and provisions as are customarily contained
in
underwriting agreements with respect to secondary distributions,
including
customary indemnity and contribution provisions (subject, in
each case, to
the limitations on such liabilities set forth in this
Agreement).
3.1.5. Suspension of Registration. If the filing, initial
effectiveness or continued use of a registration statement,
including a
shelf registration statement pursuant to Rule 415 under the
Securities
Act, in respect of a registration pursuant to this Section 3.1
at any time
would require the Company to make a public disclosure of
material
non-public information, which disclosure in the good faith
judgment of the
Board (after consultation with external legal counsel) (i) would
be
required to be made in any registration statement so that
such
registration statement would not be materially misleading, (ii)
would not
be required to be made at such time but for the filing,
effectiveness or
continued use of such registration statement and (iii) would
have a
material adverse effect on the Company or its business or on the
Company's
ability to effect a material proposed acquisition, disposition,
financing,
reorganization, recapitalization or similar transaction, then
the Company
may, upon giving prompt written notice of such action to the
Holders
participating in such registration, delay the filing or
initial
effectiveness of, or suspend use of, such registration
statement;
provided, that the Company shall not be permitted to do so (i)
more than
two times during any 12 month period, (ii) for a period
exceeding 30 days
on any one occasion or (iii) for a period exceeding 60 days in
any 12
month period. In the event the Company exercises its rights
under the
preceding sentence, such Holders agree to suspend, promptly upon
their
receipt of the notice referred to above, their use of any
prospectus
relating to such registration in connection with any sale or
offer to sell
Registrable Securities. The Company shall promptly notify such
Holders of
the expiration of any period during which it exercised its
rights under
this Section 3.1.5. The Company agrees that, in the event it
exercises its
rights under this Section 3.1.5, it shall, within 30 days
following such
Holders' receipt of the notice of suspension, update the
suspended
registration statement as may be necessary to permit the Holders
to resume
use thereof in connection with the offer and sale of their
Registrable
Securities in accordance with applicable law.
3.2. Piggyback Registration Rights.
3.2.1. Piggyback Registration.
(a) General. Each time the Company proposes to register any
shares of Common Stock under the Securities Act on a form
which
would permit registration of Registrable Securities for sale to
the
public, for its own account and/or for the account of any
other
Person (pursuant to Section 3.1 or otherwise) for sale in a
Public
Offering, the Company will give notice to all Holders of its
intention to do so. Any Holder may, by written response
delivered to
the
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<PAGE>
Company within 20 days after the date of delivery of such
notice,
request that all or a specified part of such Holder's
Registrable
Securities be included in such registration. The Company
thereupon
will use its best efforts to cause to be included in such
registration under the Securities Act all Registrable
Securities
which the Company has been so requested to register by such
Holders,
to the extent required to permit the disposition (in accordance
with
the methods to be used by the Company or, pursuant to Section
3.1,
other Holders in such Public Offering) of the Registrable
Securities
to be so registered; provided that (i) if, at any time after
giving
written notice of its intention to register any securities,
the
Company shall determine for any reason not to proceed with
the
proposed registration of the securities to be sold by it,
the
Company may, at its election, give written notice of such
determination to each Holder and, thereupon, shall be relieved
of
its obligation to register any Registrable Securities in
connection
with such registration (but not from its obligation to pay
the
Registration Expenses in connection therewith), and (ii) if
such
registration involves an underwritten offering, all Holders
requesting to be included in the Company's registration must
sell
their Registrable Securities to the underwriters selected by
the
Company on the same terms and conditions as apply to the
Company
(with such differences as may be customary or appropriate in
combined primary and secondary offerings) or, in the case of
a
registration initiated pursuant to Section 3.1.1, the
Principal
Participating Holders. No registration of Registrable
Securities
effected under this Section 3.2 shall relieve the Company of any
of
its obligations to effect registrations of Registrable
Securities
pursuant to Section 3.1 hereof.
(b) Excluded Transactions. The Company shall not be
obligated
to effect any registration of Registrable Securities under
this
Section 3.2 incidental to the registration of any of its
securities
in connection with:
(i) Any Public Offering relating to employee benefit
plans or dividend reinvestment plans;
(ii) Any Public Offering relating to the acquisition or
merger after the date hereof by the Company or any of its
subsidiaries of or with any other businesses except to the
extent such Public Offering is for the sale of securities in
cash; or
(iii) The Initial Public Offering, unless such offering
shall have been initiated pursuant to Section 3.1.1 or the
Requisite Stockholder Majority determines otherwise.
3.2.2. Payment of Expenses. The Company will pay all
Registration
Expenses in connection with registrations of Registrable
Securities
pursuant to this Section 3.2.
3.2.3. Additional Procedures. Holders participating in any
Public
Offering pursuant to this Section 3.2 shall take all such
actions and
execute all such documents and instruments that are reasonably
requested
by the Company to effect the sale of their Registrable
Securities in such
Public Offering, including being parties to the
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<PAGE>
underwriting agreement entered into by the Company and any other
selling
shareholders in connection therewith and being liable in respect
of the
representations and warranties and the other agreements
(including
customary selling stockholder representations, warranties,
indemnifications and "lock-up" agreements) for the benefit of
the
underwriters contained therein; provided, however, that (a) with
respect
to individual representations, warranties, indemnities and
agreements of
sellers of Registrable Securities in such Public Offering, the
aggregate
amount of such liability shall not exceed such holder's net
proceeds from
such offering and (b) to the extent selling stockholders give
further
representations, warranties and indemnities, then with respect
to all
other representations, warranties and indemnities of sellers of
shares in
such Public Offering, the aggregate amount of such liability
shall not
exceed the lesser of (i) such holder's pro rata portion of any
such
liability, in accordance with such holder's portion of the total
number of
Registrable Securities included in the offering, and (ii) such
holder's
net proceeds from such offering.
3.2.4. Registration Statement Form. The Company shall select
the
registration statement form for any registration pursuant to
this Section
3.2 (other than a registration that is also pursuant to Section
3.1);
provided that if any registration requested pursuant to this
Section 3.2
is proposed to be effected on Form S-3 (or any successor form)
and is in
connection with an underwritten offering, and if the managing
underwriter
shall advise the Company in writing that, in its opinion, it is
of
material importance to the success of such proposed offering to
include in
such registration statement information not required to be
included
pursuant to such form, then the Company will supplement such
registration
statement as reasonably requested by such managing
underwriter.
3.3. Certain Other Provisions.
3.3.1. Underwriter's Cutback. In connection with any
registration of
shares, the underwriter may determine that marketing factors
(including an
adverse effect on the per share offering price) require a
limitation of
the number of shares to be underwritten. Notwithstanding any
contrary
provision of this Section 3 and subject to the terms of this
Section
3.3.1, the underwriter may limit the number of shares which
would
otherwise be included in such registration by excluding any or
all
Registrable Securities from such registration, it being
understood that,
if the registration in question involves a registration for sale
of
securities for the Company's own account, then the number of
shares which
the Company seeks to have registered in such registration shall
not be
subject to exclusion, in whole or in part, under this Section
3.3.1. Upon
receipt of notice from the underwriter of the need to reduce the
number of
shares to be included in the registration, the Company shall
advise all
holders of the Company's securities that would otherwise be
registered and
underwritten pursuant hereto, and the number of shares of such
securities,
including Registrable Securities, that may be included in the
registration
shall be allocated in the following manner, unless the
underwriter shall
determine that marketing factors require a different allocation:
shares,
other than Registrable Securities, requested to be included in
such
registration by other shareholders shall be excluded unless the
Company,
with the consent of the parties required to approve any
amendment or
waiver of this Agreement pursuant to Section 6.2, has granted
registration
rights which are to be treated on an equal basis with
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<PAGE>
Registrable Securities for the purpose of the exercise of the
underwriter
cutback (such shares afforded such equal treatment being "Parity
Shares");
and, if a limitation on the number of shares is still required,
the number
of Registrable Securities, Parity Shares and other shares of
Common Stock
that may be included in such registration shall be allocated
among the
holders thereof in proportion, as nearly as practicable, as
follows:
(a) there shall be first allocated to each such holder
requesting that its Registrable Securities or Parity Shares
be
registered in such registration a number of such shares to
be
included in such registration equal to the lesser of (A) the
number
of such shares requested to be registered by such holder, and
(B) a
number of such shares equal to such holder's Pro Rata
Portion;
(b) the balance, if any, not allocated pursuant to clause
(i)
above shall be allocated to those holders requesting that
their
Registrable Securities or Parity Shares be registered in
such
registration which requested to register a number of such shares
in
excess of such holder's Pro Rata Portion pro rata to each
such
holder based upon the number of Registrable Securities and
Parity
Shares held by such holder, or in such other manner as the
holders
requesting that their Registrable Securities or Parity Shares
be
registered in such registration may otherwise agree; and
(c) the balance, if any, not allocated pursuant to clause
(ii)
above shall be allocated to shares, other than Registrable
Securities and Parity Shares, requested to be included in
such
registration by other stockholders.
For purposes of any underwriter cutback, all Registrable
Securities held by any
Holder shall also include any Registrable Securities held by the
partners,
retired partners, shareholders or Affiliates of such Holder, or
the estates and
family members of any such Holder or such partners and retired
partners, any
trusts for the benefit of any of the foregoing Persons and, at
the election of
such Holder or such partners, retired partners, trusts or
Affiliates, any
Charitable Organization to which any of the foregoing shall have
contributed
Common Stock prior to the execution of the underwriting
agreement in connection
with such underwritten offering, and such Holder and other
Persons shall be
deemed to be a single selling Holder, and any pro rata reduction
with respect to
such selling Holder shall be based upon the aggregate amount of
Common Stock
owned by all entities and individuals included in such selling
Holder, as
defined in this sentence. No securities excluded from the
underwriting by reason
of the underwriter's marketing limitation shall be included in
such
registration. Upon delivery of a written request that
Registrable Securities be
included in the underwriting pursuant to Section 3.1.1 or
3.2.1(a), the Holder
thereof may not thereafter elect to withdraw therefrom without
the written
consent of the Principal Participating Holders; provided that,
if the managing
underwriter of any underwritten offering shall advise the
Holders participating
in a registration pursuant to Section 3.1 that the Registrable
Securities
covered by the registration statement cannot be sold in such
offering within a
price range acceptable to the Principal Participating Investors,
then the
Principal Participating Investors shall have the right to notify
the Company
that they have determined that the registration statement be
abandoned or
withdrawn, in which event the Company shall abandon or withdraw
such
registration statement; provided, further, that if the price to
the public at
which the Registrable Securities are proposed to be sold will be
less than 90%
of the average
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<PAGE>
closing price of the Class A-4 Common Stock during the 10
trading days preceding
the date on which notice of such offering was given pursuant to
Section
3.2.1(a), then the Investors participating in such registration
pursuant to
Section 3.1 or 3.2 may elect to withdraw from such registration
by written
notice to the Company. The Company may, but shall not be
required to, extend a
similar withdrawal right to other Holders of Registrable
Securities or Parity
Shares.
3.3.2. Registration Procedures. If and in each case when the
Company
is required to effect a registration of any Registrable
Securities as
provided in this Section 3, the Company shall promptly:
(a) prepare and, in any event within forty-five days (thirty
days in the case of a Form S-3 registration) after the end of
the
period under Section 3.2.1(a) within which a piggyback request
for
registration may be given to the Company, file with the
Commission a
registration statement with respect to such Registrable
Securities
and use its best efforts to cause such registration statement
to
become effective within ninety days of the initial filing;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used
in connection therewith as may be necessary to keep such
registration statement effective for a period not in excess of
270
days (or such shorter period which will terminate when all
Registrable Securities covered by such registration statement
have
been sold) and to 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
seller
or sellers thereof set forth in such registration statement;
provided that before filing a registration statement or
prospectus,
or any amendments or supplements thereto in accordance with
Sections
3.1 or 3.2, the Company will furnish to counsel selected
pursuant to
Section 3.3.3 hereof copies of all documents proposed to be
filed,
which documents will be subject to the review of such
counsel;
(c) furnish to each seller of such Registrable Securities
such
number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all
exhibits filed therewith), such number of copies of the
prospectus
included in such registration statement (including each
preliminary
prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as
such
seller may reasonably request in order to facilitate the
disposition
of the Registrable Securities by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities covered by such registration in such
jurisdictions as each seller shall reasonably request, and do
any
and all other acts and things which may be reasonably necessary
or
advisable to enable such seller to consummate the disposition
in
such jurisdictions of the Registrable Securities owned by
such
seller, except that the Company shall not for any such purpose
be
required to qualify generally to do
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<PAGE>
business as a foreign corporation in any jurisdiction where, but
for
the requirements of this clause (d), it would not be obligated
to be
so qualified or to consent to general service of process in any
such
jurisdiction;
(e) notify each seller of any such Registrable Securities
covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under
the
Securities Act, of the Company's becoming aware that the pro
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