EXHIBIT 4.4
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
DATED AS OF _________, 2006
among
CPI INTERNATIONAL, INC. (FORMERLY CPI ACQUISITION CORP.)
CYPRESS MERCHANT BANKING PARTNERS II L.P.
CYPRESS MERCHANT B II C.V.
55TH STREET PARTNERS II L.P.
and
CYPRESS SIDE-BY-SIDE LLC
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.................................................... 3
ARTICLE II REGISTRATION RIGHTS........................................... 6
Section 2.1. Demand Registration..................................... 6
Section 2.2. Piggy-Back Registration................................. 7
Section 2.3. Reduction of Offering................................... 8
ARTICLE III REGISTRATION PROCEDURES...................................... 8
Section 3.1. Filings; Information.................................... 8
Section 3.2. Registration Expenses................................... 11
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION.............................. 12
Section 4.1. Indemnification by the Company.......................... 12
Section 4.2. Indemnification by Holders of Registrable Securities.... 13
Section 4.3. Conduct of Indemnification Proceedings.................. 13
Section 4.4. Contribution............................................ 14
ARTICLE V MISCELLANEOUS.................................................. 15
Section 5.1. Participation in Underwritten Registrations............. 15
Section 5.2. Rule 144................................................ 15
Section 5.3. Holdback Agreements..................................... 15
Section 5.4. Other Registration Rights............................... 15
Section 5.5. No Inconsistent Agreements.............................. 16
Section 5.6. Successors and Assigns.................................. 16
Section 5.7. No Waivers, Amendments.................................. 16
Section 5.8. Notices................................................. 16
Section 5.9. Term of Agreement....................................... 17
SECTION 5.10. GOVERNING LAW; SUBMISSION TO JURISDICTION............... 17
Section 5.11. Section Headings........................................ 18
Section 5.12. Entire Agreement........................................ 18
Section 5.13. Severability............................................ 18
Section 5.14. Counterparts............................................ 18
Section 5.15. Parties in Interest..................................... 18
Section 5.16. Enforcement; Further Assurances......................... 18
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AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT dated as of
_________, 2006 (this "Agreement") among CPI International, Inc. (formerly known
as CPI Acquisition Corp.), a Delaware corporation (the "Company"), Cypress
Merchant Banking Partners II L.P., a Delaware limited partnership ("Cypress
Onshore"), Cypress Merchant B II C.V., a Netherlands limited partnership
("Cypress Offshore"), 00xx Xxxxxx Partners II L.P., a Delaware limited
partnership ("Cypress 55th Street"), and Cypress Side-by-Side LLC, a Delaware
limited liability company ("Cypress Side-by-Side," and together with Cypress
Onshore, Cypress Offshore, Cypress 55th Street, "Cypress"). Capitalized terms
used but not otherwise defined herein have the meanings given to them in the
Merger Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
November 17, 2003 (the "Merger Agreement"), among Communications & Power
Industries Holding Corporation ("Holding"), the Company, CPI Merger Sub Corp., a
Delaware corporation and wholly-owned Subsidiary (as hereinafter defined) of the
Company prior to the Merger (as hereinafter defined) ("Merger Sub"), and Green
Equity Investors II L.P., as Securityholders' Representative, the Company
acquired Holding pursuant to a merger (the "Merger") in which Merger Sub merged
with and into Holding with Holding as the surviving corporation (the "Merger");
WHEREAS, in connection with the closing of the Merger, the Company and
Cypress entered into a Registration Rights Agreement, dated as of January 23,
2004 (the "Original Agreement"), pursuant to which the Company granted to
Cypress certain registration rights;
WHEREAS, Cypress and the Company wish to amend and restate the
Original Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms have the following
meanings:
"Affiliate", as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
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management and policies of that Person, whether through the ownership of voting
securities (the ownership of more than 50% of the voting securities of an entity
shall for purposes of this definition be deemed to be "control"), by contract or
otherwise.
"Agreement" shall have the meaning set forth in the preamble of this
Agreement.
"Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks located in New York City are authorized or required to be
closed.
"Common Stock" shall mean the common stock, par value $0.01 per share,
of the Company.
"Company" shall have the meaning set forth in the preamble of this
Agreement.
"Cypress" shall have the meaning set forth in the preamble of this
Agreement.
"Cypress Onshore" shall have the meaning set forth in the preamble of
this Agreement.
"Cypress Offshore" shall have the meaning set forth in the preamble of
this Agreement.
"Cypress Side-by-Side" shall have the meaning set forth in the
preamble of this Agreement.
"Cypress 00xx Xxxxxx" shall have the meaning set forth in the preamble
of this Agreement.
"Exchange Act" shall mean the United States Securities and Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Holder" means (i) each of Cypress Onshore, Cypress Offshore, Cypress
Side-by-Side and Cypress 55th Street, (ii) any Affiliate of any of foregoing and
(iii) any other Person to whom any of the foregoing transfer Registrable
Securities; provided that (a) such Person agrees in writing to be bound by the
provisions of this Agreement, (b) to be entitled to exercise the rights of a
Holder pursuant to Section 2.1, a Holder or Holders pursuant to clause (iii)
must either individually or in the aggregate with all other Holders with whom it
is acting together to demand registration own at least 30% of the total number
of Registrable Securities and (c) no such Person pursuant to this clause (iii)
shall be permitted to further transfer any rights hereunder.
"Holding" shall have the meaning set forth in the recitals of this
Agreement.
"Indemnified Party" has the meaning set forth in Section 4.3.
"Indemnifying Party" has the meaning set forth in Section 4.3.
"Inspectors" has the meaning set forth in Section 3.1(h).
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"Initial Public Offering" shall mean the initial Public Offering
(other than pursuant to a registration statement on Form S-8 (or comparable form
for a private issuer or otherwise relating to equity securities issuable under
any employee benefit plan)) of the Common Stock.
"Merger" shall have the meaning set forth in the recitals of this
Agreement.
"Merger Agreement" shall have the meaning set forth in the recitals of
this Agreement.
"Merger Sub" shall have the meaning set forth in the recitals of this
Agreement.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, limited liability company, unincorporated
association, joint venture or other entity of whatever nature.
"Piggy-Back Registration" has the meaning set forth in Section 2.2.
"Public Offering" shall mean any public offering of equity securities
of the Company pursuant to an effective registration statement under the
Securities Act.
"Records" has the meaning set forth in Section 3.1(h).
"Registrable Security" means any outstanding shares of Common Stock
held by a Holder; provided, however, such Common Stock shall cease to be
Registrable Securities when (i) a registration statement covering such Common
Stock has been declared effective by the Commission and such stock has been
disposed of pursuant to such effective registration statement, (ii) such stock
is sold pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act or (iii) such Common Stock can be sold pursuant to Rule 144 (or
any similar provisions then in force) without regard to the volume and manner of
sale limitations set forth in Rule 144 (or any similar provisions then in
force).
"Registration Expenses" has the meaning set forth in Section 3.2.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement under the Securities Act.
"Subsidiary" shall mean, with respect to any Person, any corporation
or other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar function at the time directly or
indirectly owned by such Person.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
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ARTICLE II
REGISTRATION RIGHTS
Section 2.1. Demand Registration.
(a) Request for Registration. At any time on or after the date
180 days following the consummation of an Initial Public Offering or such
earlier date as permitted by the managing underwriters for the Initial Public
Offering, any Holder may request registration under the Securities Act of all or
part of its or their Registrable Securities (a "Demand Registration"); provided
that such request specifies the number of shares of Registrable Securities
proposed to be sold and the intended method of disposition thereof. Holders
shall be entitled to request no more than six (6) Demand Registrations in the
aggregate.
(b) Selection of Underwriters. If the Holder making the Demand
Registration so elects, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of an underwritten offering. Such
Holder shall select, subject to the Company's reasonable approval, one or more
nationally recognized firms of investment bankers to act as the book-running
managing Underwriter or Underwriters in connection with such offering and shall
select, subject to the Company's reasonable approval, any additional investment
bankers and managers to be used in connection with the offering.
(c) Effective Registration Statement. A registration effected
pursuant to this Section 2.1 will not be deemed to have been effected unless it
has become effective and has remained continuously effective for a period of 90
days (or, with respect to a registration that is effected pursuant to Form S-3
(or any successor or similar short-form registration), 9 months) or such shorter
period which will terminate when all of the Registrable Securities requested to
be registered thereunder have been sold.
(d) Registration Statement Form. The Company shall select the
registration statement form for any registration pursuant to this Section 2.1;
provided, that if any registration requested pursuant to this Section 2.1 is
proposed to be effected on Form S-3 (or any successor or similar short-form
registration) 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.
(e) Withdrawal. Each demanding Holder may, no less than five
Business Days before any registration statement becomes effective pursuant to
this Section 2.1, withdraw some or all of its Registrable Securities from
inclusion in such registration statement. If all of the Registrable Securities
are withdrawn from inclusion in a registration statement, then the Company may
withdraw such registration statement. If the Company withdraws a registration
statement pursuant to the preceding sentence, then the requested registration
shall be deemed to have been a Demand Registration for purposes of the
limitations on the number of Demand Registrations contained in Section 2.1
unless (i) at the time of the Holders' withdrawal of Registrable Securities,
there has been a material adverse change in the operating results, financial
condition, or business of the Company that was not publicly known at the time
that the
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demand for registration was made, or (ii) the Company has postponed its
obligations under this Agreement as described in paragraph (f).
(f) Restrictions on Demand Registrations. The Company will not be
obligated to effect any Demand Registration within three months after the
effective date of a Public Offering by the Company pursuant to Section 2.1 or a
Public Offering for which Piggy-Back Registration was fully available. If at the
time of the request to register Registrable Securities pursuant to Section
2.1(a), the Company is engaged, or has fixed plans (which have been or are
reasonably expected to be approved by the Board of Directors within 30 days) to
engage within 90 days of the time of the request, in a registered public
offering as to which the Holders may include such Registrable Securities
pursuant to Section 2.2 hereof, or is engaged in any activity which, in the good
faith determination of the Board of Directors, would be adversely affected by
the requested registration to the material detriment of the Company, then the
Company may at its option direct that such request be delayed for a period not
in excess of 120 days from the effective date of such offering, or in the case
of such other material activity, the date of such request for registration, such
right to delay a request to be exercised by the Company, not more than once
within any twelve-month period. A request for Demand Registration may be
withdrawn if the Company delays the requested Demand Registration pursuant to
this paragraph (f).
Section 2.2. Piggy-Back Registration. If at any time following the
consummation of an Initial Public Offering, the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company for its own account and/or for the account of any of its security
holders (including in connection with a Demand Registration) of any Common Stock
(other than (i) a registration statement on Form S-4 (or F-4) or S-8 (or any
substitute form that may be adopted by the Commission) or (ii) a registration
statement filed in connection with an exchange offer or an offering of
securities solely to the Company's existing securityholders), then the Company
shall give written notice of such proposed filing to the Holders as soon as
practicable (but in no event less than 15 days before the anticipated filing
date), and such notice shall identify the anticipated filing date and offer such
Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof and shall be delivered to the Company at
least two days prior to the anticipated filing date) (a "Piggy-Back
Registration"). The Company shall use its commercially reasonable efforts to
cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Holder shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any registration statement pursuant to this Section 2.2 by giving
written notice to the Company of its request to withdraw. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it becomes
effective, provided that, in such event, the Company shall reimburse Holders
requested to be included in such Piggy-Back Registration for all Registration
Expenses (including reasonable counsel fees and expenses) incurred prior to such
withdrawal.
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Section 2.3. Reduction of Offering. Notwithstanding anything
contained herein, if the managing Underwriter(s) of an offering described in
Section 2.1 or 2.2 determine that the offering that the Holders, the Company
and/or such other Persons intend to make is such that the success of the
offering would be materially and adversely affected by inclusion of the
Registrable Securities requested to be included, then the Company shall include
in such registration: (a) in the case of a demand registration, (i) first, an
amount of securities requested to be included in such registration by any holder
exercising "demand registration rights" (such amount to be allocated among such
holders in proportion to the number of securities held by such holders) and (ii)
second, the Registrable Securities and any other securities of the Company
requested to be included in such registration (such amount to be allocated among
such holders in proportion to the number of shares of Common Stock held by such
holders); and (b) in the case of a piggy-back registration, (i) first, the
shares, if any, proposed to be registered by the Company for its own account or
for the account of a holder exercising "demand registration rights"; and (ii)
second, an amount of securities requested to be included in such registration
(including pursuant to Section 2.2) by the holders exercising "piggy-back
registration rights" (such amount to be allocated among such holders in
proportion to the number of shares of Common Stock held by such holders).
ARTICLE III
REGISTRATION PROCEDURES
Section 3.1. Filings; Information. Whenever the Holders have
requested that any Registrable Securities be registered pursuant to this
agreement, the Company will use its reasonable efforts to effect the
registration of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection with
any such request:
(a) The Company will as expeditiously as practicable prepare and
file with the Commission a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of the Registrable Securities to
be registered thereunder in accordance with the intended method of distribution
thereof (it being understood that the Company shall use Form S-3 (or any
replacement form) if such form is then available), and use its commercially
reasonable efforts to cause such filed registration statement to become
effective.
(b) The Company will 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 and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the Selling Holder or
Selling Holders thereof set forth in such registration statement.
(c) The Company will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to each Selling
Holder, counsel representing any Selling Holders, and each Underwriter, if any,
of the Registrable Securities covered by such registration statement copies of
such registration statement as proposed to be filed, together with
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exhibits thereto, which documents will be subject to review by the foregoing
within 5 Business Days after delivery, and thereafter furnish to such Selling
Holder, counsel and Underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Selling Holder or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder.
(d) After the filing of the registration statement, the Company
will promptly notify each Selling Holder covered by such registration statement
of any stop order issued or threatened by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(e) The Company will use its commercially reasonable efforts to
(i) register or qualify the Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States and such other
jurisdictions as any Selling Holder reasonably (in light of such Selling
Holder's intended plan of distribution) requests and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities in the United States as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Selling Holder to
consummate the disposition of the Registrable Securities owned by such Selling
Holder; provided that the Company will not be required to (A) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (e), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such
jurisdiction.
(f) The Company will immediately notify each Selling Holder of
such Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not 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, and will promptly make available to each
Selling Holder any such supplement or amendment.
(g) The Company will enter into customary agreements (including,
if applicable, an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities in accordance with the intended plan
of distribution of the Selling Holders.
(h) The Company will deliver promptly to each Selling Holder of
such Registrable Securities and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the Commission and
the Company and its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration
statement and make available for inspection by any Selling Holder of such
Registrable Securities, any
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Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
such Selling Holder or Underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably necessary to
enable them to perform a reasonable and customary due diligence investigation,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement. Records which the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such registration
statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided that prior to any disclosure or release pursuant to
clause (ii), the Inspectors shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to disclose such
Records; and provided, further, that if failing the entry of a protective order
or the waiver by the Company permitting the disclosure or release of such
Records, the Inspectors, upon advice of counsel, are compelled to disclose such
Records, the Inspectors may disclose that portion of the Records which counsel
has advised the Inspectors that the Inspectors are compelled to disclose. Each
Selling Holder of such Registrable Securities agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(i) The Company will furnish to each Underwriter, if any, (i) an
opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the managing Underwriter, if
any, therefor reasonably requests.
(j) The Company will use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its securityholders, as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(k) The Company will use its commercially reasonable efforts (a)
to cause all such Registrable Securities to be listed on a national securities
exchange (if such shares are not already so listed) and on each additional
national securities exchange on which similar securities issued by the Company
are then listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (b) to secure designation of all
such Registrable Securities covered by such registration statement as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to such Registrable
Securities with the NASD.
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(l) The Company will appoint a transfer agent and registrar for
all such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement.
The Company may require each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may from
time to time reasonably request and such other information as may be legally
required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3.1(f) hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders of
Registrable Securities covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of Section 3.1(f)
hereof.
(m) In connection with the first two (2) underwritten
registrations effected pursuant to Section 2.1 hereof, the Company shall, if
requested by the book running managing Underwriter(s), use its commercially
reasonable efforts to make the Company's senior executives reasonably available
for "road shows" in connection with such offerings. A registration statement
that is withdrawn pursuant to the first two sentences of Section 2.1(f) prior to
the roadshow shall not count as an underwritten registration for purposes of
this paragraph (m).
Section 3.2. Registration Expenses. In connection with any
registration statement filed pursuant to Section 2.1 or 2.2, the Company shall
pay the following registration expenses incurred in connection with any
registration hereunder (the "Registration Expenses"): (i) all registration and
filing fees, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (iii) printing expenses,
(iv) the Company's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (v) fees and expenses incurred in connection with the
listing of the Registrable Securities, (vi) reasonable fees and disbursements of
counsel for the Company and not more than one counsel for the Selling Holders,
as may be chosen by a majority of the Selling Holders, and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 3.1(i) hereof) and (vii)
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration.
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The Company shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.1. Indemnification by the Company. To the fullest
extent permitted by law, the Company agrees to indemnify and hold harmless each
Selling Holder of Registrable Securities, its officers, directors, employees and
agents, and each person, if any, who controls such Selling Holder within the
meaning of the Securities Act from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Common Stock) to which such Selling Holder, officer,
director, employee or agent or controlling Person may become subject under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement,
preliminary prospectus or final prospectus or any amendment or supplement
thereto relating to the Registrable Securities or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and shall reimburse each
Selling Holder and each such officer, director, employee, agent and controlling
Person for any legal and other expenses reasonably incurred by that Selling
Holder, officer, director, employee, agent or controlling Person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred, except insofar
as the same are contained in any information furnished in writing to the Company
by such Selling Holder expressly for use therein; provided, however, that the
Company shall not be liable to any Selling Holder or such Person's directors,
officers, agents or controlling Persons, in any such case for any such loss,
claim, damage or liability to the extent that it arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus or amendments or supplements thereto, in conformity with
written information relating to such Selling Holder furnished to the Company by
such Selling Holder expressly for inclusion therein in connection with such
registration; and, provided, further, that as to any preliminary prospectus or
any final prospectus, this indemnity agreement shall not inure to the benefit of
any Selling Holder or such Person's directors, officers, agents or controlling
Persons, on account of any loss, claim, damage or liability arising from the
sale of Registrable Securities to any Person by such Selling Holder if such
Selling Holder or its representatives failed to send or give a copy of the final
prospectus or a prospectus supplement, as the case may be (excluding documents
incorporated by reference therein), as the same may be amended or supplemented,
to that Person within the time required by the Securities Act, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such preliminary prospectus or final
prospectus was corrected in the final prospectus or such prospectus supplement,
as the case may be (excluding documents incorporated by reference therein),
unless such failure resulted from the non-compliance by the Company with Section
3.1(f). The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.1. The
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indemnities provided by this Section 4.1 shall remain in full force and effect
regardless of any investigation made by or on behalf of such Selling Holder or
Underwriter.
Section 4.2. Indemnification by Holders of Registrable
Securities. To the fullest extent permitted by law, each Selling Holder agrees,
severally but not jointly, to indemnify and hold harmless the Company its
officers, directors and agents and each Person, if any, who controls the Company
within the meaning of the Securities Act to the same extent as the indemnity
from the Company to such Selling Holder pursuant to clauses (i) and (ii) of
Section 4.1, but only with reference to information related to such Selling
Holder furnished in writing by such Selling Holder or on such Selling Holder's
behalf expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus; provided that the obligation to indemnify will be
individual to each Selling Holder and will be limited to the net amount of
proceeds received by such Selling Holder from the sale of Registrable Securities
pursuant to such Registration Statement. Each Selling Holder also agrees to
indemnify and hold harmless Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 4.2, subject to the proviso in the first sentence of
this Section 4.2. Notwithstanding the foregoing, the indemnity set forth in this
Section 4.2, shall not apply to amounts paid in settlements effected without the
consent of such Selling Holder (which consent shall not be unreasonably withheld
or delayed).
Section 4.3. Conduct of Indemnification Proceedings. Promptly
after receipt by any person in respect of which indemnity may be sought pursuant
to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the person against whom such indemnity may be
sought (an "Indemnifying Party") notify the Indemnifying Party in writing of the
claim or the commencement of such action, provided that the failure to notify
the Indemnifying Party shall not relieve it from any liability which it may have
to an Indemnified Party otherwise than under Section 4.1 or 4.2, except to the
extent of any actual prejudice resulting therefrom. If any such claim or action
shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its controlling Persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any claim or
pending or
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threatened proceeding in respect of which the Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
Section 4.4. Contribution. If the indemnification provided for in
this Article IV is unavailable to the Indemnified Parties in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses (i) as between the
Company and the Selling Holders on the one hand and the Underwriters on the
other, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Holders on the one hand and the
Underwriters on the other from the offering of the Registrable Securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and the Selling Holders on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Company on the one
hand and each Selling Holder on the other, in such proportion as is appropriate
to reflect the relative fault of the Company and of each Selling Holder in
connection with such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Holders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Holders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
the Company and the Selling Holders on the one hand and of the Underwriters on
the other 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 to state a material fact relates to information supplied by the Company
and the Selling Holders or by the Underwriters. The relative fault of the
Company on the one hand and of each Selling Holder on the other 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 to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 4.4 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public
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were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Selling Holder were
offered to the public (less underwriting discounts and commissions) exceeds the
amount of any damages which such Selling 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. Each Selling
Holder's obligations to contribute pursuant to this Section 4.4 are several in
proportion to the proceeds of the offering received by such Selling Holder and
not joint.
ARTICLE V
MISCELLANEOUS
Section 5.1. Participation in Underwritten Registrations. No
Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
Registration Rights.
Section 5.2. Rule 144. The Company covenants that it will file
any reports required to be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
Section 5.3. Holdback Agreements. If any registration hereunder
shall be in connection with an underwritten public offering, each Holder of
Registrable Securities agrees not to effect any sale or distribution of the
securities being registered or of a similar security of the Company or any
securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act, during the 14
days prior to, and during (i) the 180-day period beginning on the consummation
of the Initial Public Offering, unless the investment banks or underwriters
managing the public offering otherwise agree, and (ii) the 90-day period
beginning on, the effective date of any other public offering to be underwritten
on a firm commitment basis (except as part of such underwritten registration),
unless the investment banks or underwriters managing the public offering
otherwise agree.
Section 5.4. Other Registration Rights. Notwithstanding anything
contained in this Agreement to the contrary, no provision herein or therein
shall be interpreted to limit (i) the right of the Company to grant to any other
Person any right of registration in respect of any securities of the Company
(provided, however, that the Company shall not enter into any
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agreement with respect to the Registrable Securities which would prevent the
Company from complying with its obligations under this Agreement) or (ii) the
number of times the Company may grant any such right of registration under the
Securities Act to any Person.
Section 5.5. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders in this Agreement.
Section 5.6. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, and their
respective successors and permitted assigns.
Section 5.7. No Waivers, Amendments. (a) Except as expressly set
forth herein, no failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
(b) Any amendment, modification or supplement to this Agreement
shall not be enforced against any party hereto unless such amendment,
modification or supplement is signed by the Company and each of the Holders.
(c) Any provision of this Agreement may be waived if, but only
if, such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
Section 5.8. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telex,
telecopier or similar writing) and shall be given to such party at its address
or telecopier number set forth below, or such other address or telecopier number
as such party may hereinafter specify for the purpose to the party giving such
notice. Each such notice, request or other communication shall be effective (a)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and the appropriate answerback is received or, (b) if
given by overnight courier or express mail service, when delivery is confirmed
or, (c) if given by any other means, when delivered at the address specified in
this Section 4.7. In each case, notice shall be sent to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(i) if to the Company:
CPI International, Inc.
000 Xxxxxx Xxx, Mail Stop X-000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
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The Cypress Group L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
and
Irell & Xxxxxxx LLP
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier: (000) 000-0000
(ii) if to Cypress:
c/o The Cypress Group L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
Section 5.9. Term of Agreement. This Agreement shall terminate at
such time as the Holders cease to beneficially own any Registrable Securities;
provided that any termination pursuant to this Section 5.9 will not relieve any
party for any liability arising from a breach of representation, warranty,
covenant or agreement occurring prior to such termination.
SECTION 5.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. Each of the parties hereto
hereby (a) submits to the jurisdiction of the courts of the State of Delaware
and the United States District Court for the District of Delaware with respect
to matters arising out of or relating hereto, (b) agrees that all claims with
respect to such matters may be heard and determined in an action or proceeding
in such Delaware courts, and (c) agrees that a final judgment in any such action
or proceeding will be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
Section 5.11. Section Headings. The section headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
Section 5.12. Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings (including without limitation, the
Original Agreement), written or oral, relating to the subject matter hereof.
Section 5.13. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdictions, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
Section 5.14. Counterparts. This Agreement may be signed in
counterparts, each of which shall constitute an original and which together
shall constitute one and the same agreement.
Section 5.15. Parties in Interest. This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. Except as expressly set forth herein,
neither this Agreement nor any of their rights hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties.
Section 5.16. Enforcement; Further Assurances. (a) The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall be entitled to
specific performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity.
(b) The parties hereto agree to execute, acknowledge, deliver,
file and record such further certificates, amendments, instruments, agreements
and documents, and to do all such other acts and things, as may be required by
law or as may be necessary or advisable to carry out the intent and purposes of
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date set forth above.
CPI INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
CYPRESS MERCHANT BANKING PARTNERS
II L.P.
By: Cypress Associates II LLC,
as general partner
By:
------------------------------------
Name:
Title:
CYPRESS MERCHANT B II C.V.
By: Cypress Associates II LLC,
as managing general partner
By:
------------------------------------
Name:
Title:
CYPRESS SIDE-BY-SIDE LLC
By:
------------------------------------
Name:
Title:
-00-
00XX XXXXXX PARTNERS II L.P.
By: Cypress Associates II LLC,
as general partner
By:
------------------------------------
Name:
Title:
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