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EXHIBIT 4.2
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REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
KOMAG, INCORPORATED
AND
FLEET NATIONAL BANK
F/K/A BANKBOSTON, N.A.
BANK OF MONTREAL
BEAR, STEARNS & CO. INC.
COMERICA BANK - CALIFORNIA
OLYMPUS SECURITIES, LTD.
NELSON PARTNERS LTD
THE BANK OF NOVA SCOTIA
UNION BANK OF CALIFORNIA, N.A.
LOEB PARTNERS CORPORATION
THE DAI-ICHI KANGYO BANK, LIMITED
THE INDUSTRIAL BANK OF JAPAN, LIMITED, SAN FRANCISCO AGENCY
THE MITSUBISHI TRUST AND BANKING CORPORATION
SANWA BANK CALIFORNIA
THE FIRST NATIONAL BANK OF CHICAGO
THE FUJI BANK, LIMITED
THE SUMITOMO BANK, LIMITED
DATED AS OF MAY 25, 2000
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
SECTION 1. Definitions ............................................ 1
SECTION 2. Securities Subject to this Agreement ................... 2
(a) Registrable Securities ............................ 2
(b) Holders of Registrable Securities ................. 2
SECTION 3. Piggyback Registrations ................................ 3
(a) Piggyback Registration ............................ 3
(b) Demand Registrations............................... 4
SECTION 4. Registration Procedures ................................ 5
SECTION 5. Registration Expenses .................................. 10
SECTION 6. Indemnification ........................................ 11
(a) Indemnification by Company ........................ 11
(b) Indemnification by Holder of Registrable Securities 12
(c) Contribution ...................................... 13
SECTION 7. Rule 144 ............................................... 13
SECTION 8. Participation in Underwritten Registrations ............ 14
SECTION 9. Miscellaneous .......................................... 14
(a) Termination ....................................... 14
(b) No Inconsistent Agreements ........................ 14
(c) Adjustments Affecting Registrable Securities ...... 14
(d) Amendments and Waivers ............................ 14
(e) Notices ........................................... 15
(f) Successors and Assigns ............................ 15
(g) Counterparts ...................................... 16
(h) Headings .......................................... 16
(i) Governing Law ..................................... 16
(j) Severability ...................................... 16
(k) Entire Agreement .................................. 16
</TABLE>
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This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of May
25, 2000, and entered into by and between Komag, Incorporated, a Delaware
corporation (the "Company"), and Fleet National Bank f/k/a BankBoston, N.A.,
Bank of Montreal, Bear Stearns & Co., Inc., Comerica Bank - California, Olympus
Securities, Ltd., Nelson Partners, Ltd., The Bank of Nova Scotia, Union Bank of
California, N.A., Loeb Partners Corporation, The Dai-Ichi Kangyo Bank, Limited,
The Industrial Bank of Japan, Limited, San Francisco Agency, The Mitsubishi
Trust and Banking Corporation, Sanwa Bank California, The First National Bank of
Chicago, The Fuji Bank, Limited, and The Sumitomo Bank, Limited (collectively,
"Banks").
This Agreement is made pursuant to the Warrant Agreement dated as of the
date hereof, between the Company and Banks (the "Warrant Agreement"). To induce
Banks to enter into the Warrant Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.
The parties hereby agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Agent: Any Person authorized to act and who acts on behalf of a Bank with
respect to the transactions contemplated by this Agreement.
Common Stock: The common stock, $0.01 par value per share, of the
Company.
Exchange Act: The Securities Exchange Act of 1934, as amended from time
to time.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or other business entity, or a
government or agency or political subdivision thereof.
Prospectus: The prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
Registrable Securities: The Warrant Shares. Registrable Securities shall
also include any securities which may be issued or distributed with respect to,
or in exchange for, such Registrable Securities pursuant to a stock dividend,
stock split or other distribution, merger, consolidation, recapitalization or
reclassification or similar transaction; provided, however, that any such
Registrable Securities shall cease to be Registrable Securities to the extent
(i) a Registration Statement with respect to the sale of such Registrable
Securities has been declared
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effective under the Securities Act and such Registrable Securities have been
disposed of in accordance with the plan of distribution set forth in such
Registration Statement, (ii) such Registrable Securities are distributed
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) such Registrable Securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting transfer
under the Securities Act shall have been delivered by the Company and they may
be publicly resold without subsequent registration under the Securities Act or
in compliance with Rule 144 thereunder; provided, further, however, that any
securities that have ceased to be Registrable Securities cannot thereafter
become Registrable Securities, and any securities that are issued or distributed
in respect of securities that have ceased to be Registrable Securities are not
Registrable Securities.
Registration: A Piggyback Registration (as defined in Section 3(a)) or
Demand Registration (as defined in Section 3(b)) of the Company's securities for
sale to the public under a Registration Statement.
Registration Expenses: See Section 6 hereof.
Registration Statement: Any registration statement of the Company filed
with the Securities and Exchange Commission under the rules and regulations
promulgated under the Securities Act, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.
Securities Act: The Securities Act of 1933, as amended from time to time.
SEC: The Securities and Exchange Commission.
Underwritten Registration or Underwritten Offering: A Registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
Warrants: The Series A Common Stock Purchase Warrants and the Series B
Common Stock Purchase Warrants both to purchase shares of Common Stock, issued
and sold pursuant to the Warrant Agreement.
Warrant Shares: Any shares of Common Stock issued or issuable upon
exercise of any of the Warrants.
SECTION 2. Securities Subject to this Agreement.
(a) Registrable Securities. The securities entitled to the
benefits of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. Subject to Section 10(f), a
Person is deemed to be a holder of Registrable Securities whenever such Person
owns Registrable Securities or the Warrants.
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SECTION 3. Registrations.
(a) Piggyback Registrations.
(1) Participation. Subject to Section 3(a)(2) hereof, if at
any time from and after the date hereof the Company proposes to file a
Registration Statement under the Securities Act with respect to any
offering of any of its securities of the same class as the Registrable
Securities, whether or not by the Company for its own account (other than
(i) a registration on Form S-4 or S-8 or any successor form to such
Forms, or (ii) any registration of securities as it relates to an
offering and sale by any employee stock plan or other employee benefit
plan arrangement), then, as promptly as practicable, the Company shall
give written notice of such proposed filing to each holder of Registrable
Securities and such notice shall offer the holders of Registrable
Securities the opportunity to register such number of Registrable
Securities as each such holder may request (a "Piggyback Registration").
Subject to Section 3(b), the Company shall include in such Registration
Statement all Registrable Securities requested within 30 days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder) to be included in
the Registration for such offering pursuant to a Piggyback Registration.
Each holder of Registrable Securities shall be permitted to withdraw all
or part of such holder's Registrable Securities from a Piggyback
Registration at any time prior to the earlier of the effective date or
any request for the acceleration of the effective date thereof. The
Company shall keep any Registration Statement filed pursuant to this
Section 3(a)(1) current and effective for a period expiring on the
earlier of six months from the effective date of such Registration
Statement or until all of the Registrable Securities registered pursuant
to this Section 3(a) have been sold. Notwithstanding the foregoing, in
the event that, in the good faith judgment of the Company's Board of
Directors, it is advisable to suspend use of the Prospectus due to
impending corporate developments, public filings with the SEC or similar
events, the Company shall deliver promptly a written certificate to each
holder of Registrable Securities and the managing underwriters, if any,
to the effect that the use of the Prospectus is to be suspended until the
Company shall deliver a written notice that the use of the Prospectus may
be resumed. Thereafter, the use of the Prospectus shall be suspended, and
the Company shall not be required to maintain the effectiveness of, or
amend or update the Registration Statement, or amend or supplement the
Prospectus; provided, however, that the Company shall only be permitted
to suspend the use of the Prospectus for a period not to exceed 45 days
in any six-month period or two periods not to exceed an aggregate of 90
days in any 12-month period. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as soon as, in the
good faith judgment of the Company's Board of Directors, disclosure of
the material relating to such pending development, filing or event would
not have a materially adverse effect on the Company. If the Company shall
give any suspension notice pursuant to this Section 3(a)(1), the period
contemplated by Section 4(b) hereof shall be extended by the number of
days during such period from and including the date of giving notice to
and including the date of giving such notice to and including the date
when each holder of
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Registrable Securities shall have received notice that the use of the
Prospectus may be resumed.
(2) Underwriter's Cutback. The Company shall use its best
efforts to cause the managing underwriter or underwriters of a proposed
Underwritten Offering to permit the Registrable Securities requested to
be included in the Registration for such offering under Section 3(a)(1)
(the "Piggyback Securities"), to be included on the same terms and
conditions as any similar securities included therein. Notwithstanding
the foregoing, if the managing underwriter of any such proposed
Underwritten Offering determines that marketing factors require a
limitation of the number of securities to be underwritten, the managing
underwriter may limit or exclude the amount of Registrable Securities to
be included in the registration and underwriting as follows: the Company
will include in such registration (i) first, all of the securities the
Company proposes to sell and (ii) second, the Piggyback Securities and
other securities sought to be registered, on a pro rata basis, based upon
the number of securities sought to be registered by the holders of the
Piggyback Securities and the holders of the other securities sought to be
registered. If the managing underwriter makes such a determination, the
Company shall promptly advise the holders of the Registrable Securities,
in writing, that a limitation or inclusion of fewer than all of the
Piggyback Securities is likely. If a reduction in the total amount of
securities to be included in such offering is necessary as described in
the prior sentence, the Company shall not treat the holders of the
Piggyback Securities less favorably than directors, officers, controlling
stockholders and their affiliates seeking piggyback registration rights.
(b) Demand Registrations.
(1) Obligation to File. At any time following the issuance
of Warrants pursuant to the Warrant Agreement, promptly upon the written
request of holders of a majority of the then outstanding Registrable
Securities, the Company will use its reasonable best efforts to file with
the SEC a Registration Statement under the Securities Act for the
offering of all of the Registrable Securities which such holders request
to be registered (the "Demand Registration"), provided, that the number
of Registrable Securities to be registered (i) are not less than 200,000
or (ii) if less than 200,000, constitutes all of the remaining
Registrable Securities. The Demand Registration shall be on an
appropriate form and the Demand Registration and any form of prospectus
included therein shall reflect such plan of distribution or method of
sale as such holders notify the Company, including the sale of some or
all of the Registrable Securities in a public offering. The Company shall
use its reasonable best efforts to cause the Demand Registration to
become effective, and, upon the request of any of such holders, keep the
Demand Registration effective for up to 60 days, unless the distribution
of securities registered thereunder has been earlier completed. During
the period during which the Demand Registration is effective, the Company
shall supplement or make amendments to the Demand Registration, if
required by the Securities Act, including to reflect any specific plan of
distribution or method of sale, and shall use its reasonable best efforts
to have such supplements and amendments declared effective, if required,
as soon as practicable after filing. Notwithstanding the foregoing, the
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Company shall have the right to delay any Demand Registration for a
period of not more than 90 days after the date of any request to register
the Registrable Securities pursuant to the Demand Registration, if, at
the time of such request, the Company is preparing, or within ten days
thereafter engages an underwriter, and commences in good faith to
prepare, a Registration Statement for a public offering (other than a
registration relating solely to employee benefit plans) which is in fact
filed and becomes effective within 90 days after the date the holders of
the Registrable Securities have provided the written registration
request, or is engaged in any material acquisition or divestiture or
other business transaction with a third party which the Board of
Directors of the Company reasonably determines in good faith would be
adversely affected by the Demand Registration to the material detriment
of the Company.
(2) Number of Demand Registrations. The Company shall be
obligated to effect, under this Section 3(b), (i) not more than two
Demand Registrations during any 12 month period covering Registrable
Securities issued or issuable within the two year period prior to the
request for such Demand Registration, and (ii) not more than one Demand
Registration during any 12 month period covering Registrable Securities
issued more than two years before the request for such Demand
Registration in the event that Rule 144 of the Securities Act does not
permit such Registrable Securities to be freely tradeable by the
purchasers thereof, provided, however, that, in any event, the Company
shall not be obligated to effect more than one Demand Registration during
the 12 month period after the Company files a Registration Statement on
which holders of Registrable Securities that so elect are permitted to
include as many Piggyback Securities as such holder desires without any
reduction in the amount of such Piggyback Securities pursuant to
paragraph 3(a)(2) hereof. A Demand Registration shall not be deemed to
have been effected, nor shall it be sufficient to reduce the number of
Demand Registrations available to the holders of Registrable Securities
requesting a Demand Registration under this Section 3(b), if such
registration cannot be used by holders of Registrable Securities for more
than 120 days as a result of any stop order, injunction or other order of
the SEC or other government authority for any reason other than an act or
omission of such holders and all the Registrable Securities registered
thereunder are not sold.
(3) Selection of Underwriters. Any and all underwriters or
other agents involved in any sale of Registrable Securities pursuant to a
Registration Statement contemplated by this Section 3(b) shall include
such underwriter(s) or other agent(s) as selected by the holders of a
majority of Registrable Securities being registered and approved of by
the Company, which approval shall not be unreasonably withheld; provided
that any affiliate of a holder requesting a Demand Registration shall in
all events be approved by the Company.
SECTION 4. Registration Procedures.
In connection with the Company's registration obligations pursuant to
Section 3 hereof, the Company will use its commercially reasonable efforts to
effect such registration to permit the sale
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of such Registrable Securities in accordance with the intended methods or
methods of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
(a) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the holders of the Registrable
Securities covered by such Registration Statement and the underwriters, if any,
copies of all such documents proposed to be filed, which documents will be
subject to the review of such holders and underwriters, and the Company will not
file any Registration Statement or amendment thereto or any Prospectus or any
supplement thereto to which the holders of a majority of the Registrable
Securities covered by such Registration Statement or the underwriters, if any,
shall reasonably object within three days after such documents are delivered;
(b) prepare and file with the SEC a Registration Statement or
Registration Statements relating to the applicable Demand Registration or
Piggyback Registration including all exhibits and financial statements required
by the SEC to be filed therewith, and use its commercially reasonable efforts to
cause such Registration Statement to become effective under the Securities Act;
and prepare and file with the SEC such amendments and post-effective amendments
to such Registration Statement, and such supplements to the Prospectus, as may
be required by the rules, regulations or instructions applicable to the
registration form utilized by the Company or by the Securities Act or rules and
regulations otherwise necessary to keep the Registration Statement effective for
a period of not less than 180 days (or such shorter period which will terminate
when all Registrable Securities covered by such Registration Statement have been
sold or withdrawn), or, if such Registration Statement relates to an
Underwritten Offering, such longer period as in the opinion of counsel for the
underwriters a Prospectus is required by law to be delivered in connection with
sales of Registrable Securities by an underwriter or dealer; and cause the
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(c) notify the selling holders of Registrable Securities and the
managing underwriters, if any, promptly;
(1) when the Prospectus or any Prospectus supplement or
posteffective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of any request by the SEC during the period of
effectiveness for amendments or supplements to the Registration
Statement or the Prospectus or for additional information relating to the
Registration Statement,
(3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose,
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(4) if at any time the representations and warranties of
the Company contemplated by paragraph (n) below cease to be true and correct,
(5) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, and
(6) of the existence of any fact known which results in the
Registration Statement, the Prospectus or any document incorporated therein by
reference containing an untrue statement of material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(e) if requested by the managing underwriter or underwriters or a
holder of Registrable Securities being sold in connection with an Underwritten
Offering, immediately incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and the holders of a
majority of the Registrable Securities being sold require to be included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
amount of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of the underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(f) deliver to each selling holder of Registrable Securities and
the underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request (it being understood that the Company
consents to the use of the Prospectus or any amendment or supplement thereto by
each of the selling holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto) and such other
documents as such selling holder and the underwriters, if any, may reasonably
request in order to facilitate the disposition of the Registrable Securities by
such holder and underwriters, if any, but only while the Company shall be
required under the provisions hereof to cause the Registration Statement to
remain current;
(g) prior to any public offering of Registrable Securities, use
its commercially reasonable efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any selling holder of Registrable Securities or any
underwriter reasonably requests in writing and do any and all other acts or
things reasonably
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necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject;
(h) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(i) use its commercially reasonable efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
within the U.S. as may be necessary to enable the seller or sellers thereof or
the underwriters, if any, to consummate the disposition of such Registrable
Securities; provided that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process in any such
jurisdiction where it is not then so subject;
(j) if any fact contemplated by paragraph (c)(6) above shall
exist, prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, the 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, but only while the Company shall be required under the provisions
hereof to cause the Registration Statement to remain current;
(k) use its commercially reasonable efforts to cause all
Registrable Securities covered by the Registration Statement to be quoted on the
NASDAQ National Market or listed on each securities exchange on which similar
securities issued by the Company are then listed;
(l) enter into agreements (including underwriting agreements) and
take all other appropriate actions that are reasonable, necessary and in typical
form for such transactions in order to expedite or facilitate the disposition of
such Registrable Securities.
The above shall be done at the effectiveness of such Registration Statement,
each closing under any underwriting or similar agreement as and to the extent
required thereunder and from time to time as may be requested by any selling
holder in connection with the disposition of Registrable Securities pursuant to
such Registration Statement, but only while the Company shall be required under
the provisions hereof to cause the Registration Statement to remain current;
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(m) make available for inspection at reasonable times and upon
reasonable notice by a representative of the holders of a majority of the
Registrable Securities, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant retained
by the sellers or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with the registration; provided that any records, information or documents that
are designated by the Company in writing as confidential shall be kept
confidential by such Persons unless disclosure of such records, information or
documents is required by court or administrative order; and
(n) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make generally
available to its security holders, earnings statements satisfying the provisions
of Section 11(a) of the Securities Act, no later than 45 days after the end of
any fiscal quarter (or 90 days after the end of any fiscal year) (1) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in an Underwritten Offering, or, if not sold to underwriters in
such an offering, (2) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement, which statements shall cover said 12-month periods
The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
distribution of such securities as the Company may from time to time reasonably
request in writing, and shall take such commercially reasonable action as may be
reasonably required in order to permit the Company and any underwriters to
comply with all applicable requirements of the SEC and the NASD. Such provision
of information and materials is a condition precedent to the obligations of the
Company pursuant to this Agreement.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Sections 4(c)(3), 4(c)(4),
4(c)(5), 4(c)(6) or 4(j) hereof, such holder will forthwith discontinue
disposition of Registrable Securities until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplate by Sections 4(c)(3),
4(c)(4), 4(c)(5), 4(c)(6) or 4(j) hereof, or until it is advised in writing by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time periods
during which such Registration Statement shall be maintained effective shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement either receives
the copies of the supplemented or
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amended prospectus contemplated by Sections 4(c)(3), 4(c)(4), 4(c)(5), 4(c)(6)
or 4(j) hereof or is advised in writing by the Company that the use of the
Prospectus may be resumed.
SECTION 5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be paid by the Company, regardless of
whether the Registration Statement becomes effective, including without
limitation:
(1) all registration and filing fees (including all filings
required to be made with the SEC and the NASD;
(2) fees and expenses of compliance with securities or blue
sky laws (including fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the
managing underwriters or holders of a majority of the Registrable
Securities being sold may designate);
(3) printing (including expenses of printing certificates
for the Registrable Securities in a form eligible for deposit with the
Depository Trust Company and of printing prospectus), messenger,
telephone and delivery expenses;
(4) fees and disbursements of counsel for the (i) Company,
(ii) the underwriters and (iii) the sellers of the Registrable Securities
(subject to the provisions of Section 6(b) hereof);
(5) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance);
(6) fees and disbursements of underwriters (including, if
applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained in
accordance with the rules and regulations of the NASD, but excluding
discounts, commissions or fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals relating to the
distribution of the Registrable Securities or legal expenses of any
Person other than the Company, the underwriters and the selling holders);
(7) securities acts liability insurance if the Company so
desires or if the underwriters or selling holders of a majority of the
Registrable Securities so require; and
(8) fees and expenses of other Persons retained by the
Company,
(all such expenses being herein called "Registration Expenses").
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The Company will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed, rating agency fees and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with each Registration Statement required
hereunder, the Company will reimburse the holders of Registrable Securities
being registered pursuant to such Registration Statement for the reasonable fees
and disbursements of not more than one counsel chosen by the holders of a
majority of such Registrable Securities.
SECTION 6. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify
and hold harmless each holder of Registrable Securities, its officers,
directors, employees and Agents and each Person who controls such holder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such person being sometimes hereinafter referred to as an
"Indemnified Holder") from and against all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation and legal expenses)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus, in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon 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, except insofar as such losses, claims, damages, liabilities or
expenses arises out of or are based upon any such untrue statement or omission
or allegation thereof based upon information furnished in writing to the Company
by or on behalf of such holder expressly for use therein; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
any such Registration Statement or Prospectus or preliminary prospectus, if such
untrue statement or alleged untrue statement, omission or alleged omission is
completely corrected in an amendment or supplement to such Registration
Statement or Prospectus or preliminary prospectus and if, having previously been
furnished by or on behalf of the Company with copies of the Prospectus or
preliminary prospectus as so amended or supplemented, such holder thereafter
fails to deliver such Prospectus or preliminary prospectus as so amended or
supplemented, prior to or concurrently with the sale of a Registrable Security
to the Person asserting such loss, claim, damage, liability or expense who
purchased such Registrable Security which is the subject thereof from such
holder. The indemnity will be in addition to any liability which the Company may
otherwise have. The Company will also indemnify underwriters, selling brokers,
dealer managers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls such
Persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Indemnified Holders of Registrable Securities.
11
<PAGE> 14
If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Holder in respect of which indemnity may be sought from the Company, such
Indemnified Holder shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel
satisfactory to such Indemnified Holder and the payment of all expenses. Such
Indemnified Holder shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Holder unless (a) the
Company has agreed to pay such fees and expenses or (b) the Company shall have
failed to assume the defense of such action or proceeding and has failed to
employ counsel reasonably satisfactory to such Indemnified Holder in any such
action or proceeding (including any impleaded parties) include both such
Indemnified Holder and the Company or (c) such Indemnified Holder shall have
been advised in writing by counsel that there is a conflict of interest between
such Indemnified Holder and the Company or that there are additional defenses or
claims that it may assert that are adverse to or not in the interest of the
Company and separate counsel is required to represent such interests (in which
case, if such Indemnified Holder notifies the Company in writing that it elects
to employ separate counsel at the expense of the Company, the Company shall not
have the right to assume the defense of such action or proceeding on behalf of
such Indemnified Holder, it being understood, however, that the Company shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for such Indemnified Holder and any other Indemnified Holders, which firm
shall be designated in writing by such Indemnified Holders). The Company shall
not be liable for any settlement of any such action or proceeding effected
without its written consent, but if settled with its written consent, or if
there be a final judgment for the plaintiff in any such action or proceeding for
which the Company received notice hereunder, the Company agrees to indemnify and
hold harmless such Indemnified Holder from and against any loss or liability by
reason of such settlement or judgment.
(b) Indemnification by Holder of Registrable Securities. Each
holder of Registrable Securities agrees to indemnify and holder harmless the
Company, its directors and officers and each Person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such holder, but only with respect to information relating to such
holder furnished in writing by such holder expressly for use in any Registration
Statement or Prospectus, or any amendment thereto, or any preliminary
prospectus. In case any action or proceeding shall be brought against the
Company or directors or officers or any such controlling person, in respect of
which indemnity may be sought against a holder of Registrable Securities, such
holder shall have the rights and duties given the Company and the Company or its
directors or officers or such controlling person shall have the rights and
duties given to each holder by the preceding paragraph. In no event shall the
liability of any selling holder of Registrable Securities hereunder be greater
in amount than the gross amount of the proceeds (before expenses and
commissions) from the sale of Registrable Securities by such holder giving rise
to such indemnification obligation.
12
<PAGE> 15
The Company and each holder of Registrable Securities shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such Person specifically for inclusion in any
Prospectus or Registration Statement or any amendment or supplement thereto, or
any preliminary prospectus.
(c) Contribution. If the indemnification provided for in this
Section 7 is unavailable to an indemnified party under Section 7(a) or Section
7(b) hereof (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable 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 in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and of the Indemnified Holder on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the Indemnified 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 the Company or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, subject to the limitations set forth in the
second paragraph of Section 7(a), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and each holder of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 7(c)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
7(c), an Indemnified Holder shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities sold by
such Indemnified Holder or its affiliated Indemnified Holders and distributed to
the public were offered to the public exceeds the amount of any damages which
such Indemnified Holder or its affiliated Indemnified 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 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 7. Rule 144.
The Company covenants that it will file the reports required to be filed
by it under the Securities Acts and the Exchange Act and rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities made
after the first anniversary of the date hereof, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and it will take such further action as any holder of
Registrable Securities may reasonably request, all to
13
<PAGE> 16
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it had complied with such information and requirements.
SECTION 8. 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 required under the terms of such underwriting arrangements.
SECTION 9. Miscellaneous.
(a) Termination. The registration rights set forth in this
Agreement shall terminate (a) at any time, upon mutual agreement in writing of
the Parties hereto or (b) upon such time as all of the Registrable Securities
then held by the parties hereto can be sold by such parties in a three-month
period in accordance with Rule 144 under the Securities Act. Notwithstanding the
foregoing, the obligations of each party to this Agreement pursuant to Section
12 hereof, shall survive the termination of registration rights sets forth in
this Agreement.
(b) No Inconsistent Agreements. The Company will not on or after
the date of this Agreement enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.
(c) Adjustments Affecting Registrable Securities. The Company will
not take any action, or permit any change to occur, with respect to the
Registrable Securities which would (i) adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or (ii) adversely affect the
marketability of such Registrable Securities in any such registration.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and holders of at
least a majority of the outstanding Registrable Securities affected by such
amendment. Notwithstanding the foregoing, a waiver or consent to departure from
the provisions hereof that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the Registrable Securities being sold.
14
<PAGE> 17
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to a holder of Registrable Securities, at the most
current address given by such holder to the Company in accordance
with the provisions of this Section 10(e).
With a copy to:
Stroock & Stroock & Lavan LLP
2029 Century Park East, 16th Floor
Los Angeles, California 90067
Facsimile: 310-556-5959
Attention: Gregory A. Bray, Esq.
(ii) if to the Company, initially to:
Komag, Incorporated
1710 Automation Parkway
San Jose, California 95131-1873
Facsimile: 408-944-9234
Attention: Chief Financial Officer
and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section
10(e),
With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Facsimile: 650-493-6811
Attn: Alan K. Austin, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent permitted holders of Registrable Securities.
15
<PAGE> 18
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
[Signature Pages To Follow]
16
<PAGE> 19
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
KOMAG, INCORPORATED
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
1710 Automation Parkway
San Jose, California 95131-1873
Facsimile: (408) 944-9234
Attention: Chief Financial Officer
FLEET NATIONAL BANK f/k/a BANKBOSTON, N.A.,
as Restructure Agent and as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
100 Federal Street, Mail Stop 01-06-01
Boston, MA 02110
Facsimile: (617) 434-4775
Attention: Donald Sheehan
BANK OF MONTREAL, as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
115 S. LaSalle Street, 12 West
Chicago, IL 60603
Facsimile: (312) 750-6057
Attention: Jack J. Kane
S-1
<PAGE> 20
BEAR, STEARNS & CO. INC.,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
245 Park Avenue
New York, New York 10167
Facsimile: (212) 272-8102
Attention:
-------------------------------------------
COMERICA BANK - CALIFORNIA,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
55 Almaden Boulevard
Mail Code: 4041
San Jose, California 95113
Facsimile: (408) 556-5855
Attention: Carol A. Palestro
OLYMPUS SECURITIES, LTD.,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
c/o Citadel Investment Group, LLC
225 West Washington Street, 9th Floor
Chicago, Illinois 60606
Facsimile: (312) 368-4650
Attention: Bradford Couri
S-2
<PAGE> 21
NELSON PARTNERS LTD.,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
c/o Citadel Investment Group, LLC
225 West Washington Street, 9th Floor
Chicago, Illinois 60606
Facsimile: (312) 368-4650
Attention: Bradford Couri
THE BANK OF NOVA SCOTIA,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-5205
Attention: Norm Gillespie
UNION BANK OF CALIFORNIA, N.A.,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
350 California Street, 7th Floor
San Francisco, California 94104
Facsimile: (415) 705-7390
Attention: Christiana Creekpaum
S-3
<PAGE> 22
LOEB PARTNERS CORPORATION,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
61 Broadway, 24th Floor
New York, New York 10006
Facsimile: (212) 574-2003
Attention: Robert Grubin
THE DAI-ICHI KANGYO BANK, LIMITED,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
Corporate Finance Department I
One World Trade Center, Suite 4911
New York, NY 10048
Facsimile: (212) 912-1879
Attention: Nelson Chang
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
SAN FRANCISCO AGENCY,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
555 California Street, Suite 3110
San Francisco, California 94104
Facsimile: (415) 982-1917
Attention: Joseph A. Endoso
S-4
<PAGE> 23
THE MITSUBISHI TRUST AND BANKING CORPORATION,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
520 Madison Avenue, 26th Floor
New York, NY 10022
Facsimile: (212) 644-6825
Attention: Daniel Chang
SANWA BANK CALIFORNIA,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
444 Market Street, 22nd Floor
San Francisco, CA 94111
Facsimile: (415) 597-5491
Attention: George Vetek
THE FIRST NATIONAL BANK OF CHICAGO,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
The First National Bank of Chicago
c/o Bank One
Western Region Managed Assets
AZ1-1283
201 N. Central Avenue
Phoenix, AZ 85004-2267
Facsimile: (602) 221-1737
Attention: Dennis Warren
S-5
<PAGE> 24
THE FUJI BANK, LIMITED,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
333 South Hope Street
Los Angeles, CA 90071
Facsimile: (213) 253-4178
Attention:
-------------------------------------------
THE SUMITOMO BANK, LIMITED,
as a Restructure Lender
By:
--------------------------------------------------
Title:
-----------------------------------------------
Address:
555 California Street, Suite 3350
San Francisco, California 94104
Facsimile: (415) 398-3580
Attention: Azar Shakeri
S-6
