EXHIBIT 1.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of November 20, 1996, by and among ABM Industries Incorporated, a Delaware
corporation (the "Company"), and the persons whose signatures are on the
signature page hereof (the "Securityholders").
WHEREAS, the Company and the Securityholders are parties to the
Transaction Agreement, dated as of an even date herewith (the "Transaction
Agreement"), pursuant to which the Company will exchange (i) 348,323 shares of
its Common Stock on the date hereof, and (ii) up to a maximum of 348,323
additional shares of its Common Stock over a five-year period following the date
hereof pursuant to the terms of the Earnout (as defined in the Transaction
Agreement, which term includes shares of the Company's Common Stock, if any,
issued pursuant to any equitable adjustment as set forth therein), for
substantially all of the assets of each of XXXX Electrical and Maintenance
Corp., a New York corporation, and Ozone Lighting Distributors, Inc., a New York
corporation, all of which corporations' issued and outstanding capital stock is
collectively owned by the Securityholders (the shares to be exchanged pursuant
to clauses (i) and (ii) above are referred to herein collectively as the
"Shares").
WHEREAS, the Company wishes to grant certain registration rights to
the Securityholders with respect to the Shares.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:
(1) CERTAIN DEFINED TERMS. For purposes of this Agreement:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement;
(b) The term "Registrable Securities" means the Shares issued on
or after the date hereof to any Securityholder pursuant to the Transaction
Agreement. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (A) such securities shall have been
registered under the Securities Act, the registration statement with respect to
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of pursuant to such effective
registration statement, (B) such securities shall have been sold or distributed
or are eligible for sale pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act, or (C) such securities shall cease to be
outstanding;
(c) The term "Holder" means a Securityholder;
(d) The term "Securities Act" means the Securities Act of 1933,
as amended, and any successor statute;
(e) The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, and any successor statute;
(f) The term "SEC" means the Securities and Exchange Commission;
and
(g) The term "Person" means a corporation, an association, a
limited liability company, a partnership, an organization, a business, an
individual, a government or a subdivision thereof, or a governmental agency or
authority.
(2) DEMAND REGISTRATION.
(a) Except as set forth below, if any Holder or Holders who hold
in the aggregate a majority of the Shares issued and held by the Securityholders
as of the date of such request, shall request that the Company file a
registration statement with respect to the Registrable Securities, the
reasonably anticipated aggregate price to the public of which, net of
underwriting discounts and commissions, would exceed $100,000, the Company shall
(i) within 30 days of receipt of such request, file with the SEC a registration
statement covering such Registrable Securities, and (ii) use its commercially
reasonable best efforts to cause such registration statement to be declared
effective by the SEC and to be qualified under applicable state blue sky or
other securities laws; PROVIDED, HOWEVER, that the Company shall not be required
to effect more than one registration pursuant to this Section (2) in any 12
month period. The Company shall be required use its commercially reasonable
best efforts to keep such registration statement effective for a period of at
least two months (notwithstanding Section (20) hereof), after which time, the
Company shall have the right to de-register any securities so registered.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section (2):
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration unless the Company is already subject to
service in such jurisdiction;
(ii) if the Company, within 10 days of the receipt of the
request of the Holders, gives notice of its BONA FIDE intention to effect
the filing of a registration statement with the Commission within 90 days
of receipt of such request (other than a registration statement relating to
a Rule 145 transaction, an offering solely to employees or any other
registration statement which is not appropriate for the registration of
Registrable Securities) PROVIDED THAT the Company files such registration
statement within 90 days of receipt of such request;
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(iii) during the period starting with the date 60 days prior
to the Company's estimated date of filing of, and ending on the date six
months immediately following the effective date of, any registration
statement pertaining to securities of the Company for the Company's account
(other than a registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan); PROVIDED THAT the Company is actively
applying in good faith all reasonable efforts to cause such registration
statement to become effective;
(iv) if the Company shall furnish to such Holders a
certificate signed by the President of the Company (A) stating that in the
good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its stockholders for a registration statement
to be filed at such time and (B) setting forth the factors underlying such
determination, then the Company's obligation to register under this Section
(2) shall be deferred for a period not to exceed 180 days from the date of
receipt of such written request from the Holders; or
(v) after the Company has effected seven registrations
pursuant to this Section (2) and each such registration shall have been
declared or ordered effective by the SEC.
(3) PIGGYBACK REGISTRATION. If the Company proposes to register any
of its Common Stock under the Securities Act in connection with the public
offering of such Common Stock solely for cash for its own account or for the
account of one or more securityholders exercising their respective registration
rights (other than a registration relating solely to the sale of securities to
participants in a Company stock plan (e.g., a registration of securities on Form
S-8), or a registration on any form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities (e.g., a registration of
securities on Form S-4), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within 20 days after mailing of such notice by the Company, the
Company shall, subject to the provisions of this Agreement (including, without
limitation, Sections (4) and (5) hereof), cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be registered.
(4) UNDERWRITING REQUIREMENTS IN PIGGYBACK REGISTRATIONS. In
connection with any offering involving an underwriting covered by Section (3)
hereof, the Company shall not be required under Section (3) hereof to include
any of the Holders' Registrable Securities in such underwriting unless such
Holders accept the terms of the underwriting agreement between the Company
and the underwriters selected by it (or by other Persons entitled to select
the underwriters), and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of securities (including
Registrable Securities) requested by Holders and other securityholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities
(including Registrable Securities) which the underwriters determine in their
sole
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discretion will not jeopardize the success of the offering (the securities
requested by the Holder or Holders pursuant hereto to be sold in such
offering shall be reduced prior to any reduction in the securities requested
to be sold by the Company).
(5) ALLOCATION OF SHARES IN PIGGYBACK REGISTRATION. In the event
that the underwriter's representative limits the number of shares to be included
by selling stockholders in a registration pursuant to Section (4) hereof, the
number of shares to be included in such registration shall be allocated in the
following manner: The number of shares that may be included in the registration
and underwriting by selling stockholders shall be allocated among all Holders
thereof and other holders of securities other than Registrable Securities
requesting to include shares in such registration, in proportion, as nearly as
practicable, to the respective percentages of securities (including Registrable
Securities) which such Holders and such other holders own or in such other
proportions as shall be mutually agreed to by such Holders and such other
holders. No Registrable Securities excluded from the underwriting by reason of
Section (4) hereof and this Section (5) shall be included in the Registration
Statement.
(6) REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep each
Holder advised in writing as to the initiation of each registration and as to
the completion thereof. Whenever Holders have requested that any Registrable
Securities be registered pursuant to Sections (2) or (3) hereof, the Company
will at its expense and as expeditiously as possible:
(a) Cause the registration statement and related prospectus to
be supplemented by any required prospectus supplement, and as so supplemented,
to be filed pursuant to Rule 424 under the Securities Act, and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement or supplement to such prospectus;
(b) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus as
a Holder from time to time may reasonably request;
(c) Notify each Holder of Registered Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the request of any such Holder, prepare and furnish to such
Holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing;
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(d) Cause all such Registered Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed or, if not then listed, cause such Registered Securities to be included
in a national automated quotation system;
(e) Provide a transfer agent and registrar for all Registered
Securities and a CUSIP number for all such Registered Securities, in each case
not later than the effective date of such registration;
(f) Make available for inspection during regular business hours
by any Holder of Registrable Securities covered by such registration statement,
any underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any such
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
exercise their due diligence responsibility, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by such Holder, underwriter, attorney or accountant 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
(A) the disclosure of such Records is necessary to avoid or correct any
misstatement or omission in the registration statement, (B) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (C) the disclosure of such Records is required by any
governmental regulatory body with jurisdiction over any seller of Registrable
Securities. Such Holder, upon learning, that disclosure of such Records is
sought in a court of competent jurisdiction, shall notify the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(g) Cooperate with the Holders of Registered Securities covered
by such registration statement and the managing underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing the
Registered Securities to be sold, without any restrictive legends, in such
denominations and registered in such names as the managing underwriter(s) may
request at least two business days prior to any sale thereof to the
underwriters, if applicable;
(h) Make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the first month
after the effective date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act; and
(i) Use its commercially reasonable best efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Securityholders to consummate the disposition of such
Registrable Securities.
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(7) RULE 144 REPORTING. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) Make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) Use its commercially reasonable best efforts to file with
the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish
to such Holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing a Holder to sell any such securities without registration.
(8) FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(9) EXPENSES OF REGISTRATION. Except as set forth below, the Company
shall bear and pay all expenses incurred in connection with any registration,
filing, listing and qualification of Registrable Securities effected pursuant to
Sections (2) and (3) hereof, including, without limitation, all registration,
filing, listing and qualification fees, printers' and accounting fees relating
or apportionable thereto, costs of appraisals and other reports, the fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders selected by them, but
excluding underwriting discounts and commissions relating to Registrable
Securities.
Notwithstanding the foregoing, if one or more Holders require the
Company to include shares of Registrable Securities in a registration statement
which becomes effective and 50% or more of such shares are not sold within 60
days of effectiveness, such Holder or Holders shall bear the SEC registration
fee attributable to such shares if such Holder or Holders require the Company to
re-register such shares in a subsequent year; PROVIDED THAT the Company shall
not have caused any delay in the registration process which resulted in the
failure to sell such shares.
(10) NO DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration
of the Company as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
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(11) INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company shall indemnify
and hold harmless each Holder, any underwriter (as defined in the Securities
Act) for such Holder and each Person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, or the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions, or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; and, subject to the provisions of subsection (10)(c) below, the
Company shall pay to each such Holder, underwriter or controlling Person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
subsection (10)(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs (A) in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter, or controlling Person or (B) as a
result of the failure of any Holder, underwriter, or controlling Person to
deliver a prospectus in connection with the offer and sale of Registrable
Securities when legally required to do so.
(b) To the extent permitted by law, each selling Holder shall
jointly and severally indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement,
each Person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter, and any controlling Person of any such
underwriter, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing Persons may become subject under the
Securities Act, or the Exchange Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for
use in connection with such registration; and, subject to the provisions of
subsection (10)(c) below, each such Holder shall pay, any legal or other
expenses reasonably incurred by any Person intended to be indemnified
pursuant to this subsection (10)(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED,
HOWEVER, that the indemnity agreement contained in this subsection (10)(b)
shall not apply to amounts paid in settlement of any such loss, claim,
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damage, liability, or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
PROVIDED, FURTHER, THAT, in no event shall any indemnity under this
subsection (10)(b) exceed the gross proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this
Section (10) of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section (10),
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party
(together, in the case of the Holders with all other Holders and control Persons
who are indemnified parties and, in the case of an underwriter with all other
underwriters and control Persons who are indemnified parties) shall have the
right to retain one separate counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party or parties
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party or
parties and the indemnifying party. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of any liability to the indemnified
party under this Section (10) to the extent such failure shall be prejudicial to
its ability to defend such action, but the omission so to deliver written notice
to the indemnifying party shall not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section (10).
(d) The obligations of the Company and Holders under this
Section (10) shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement, and otherwise.
(12) NO ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may not be
assigned or otherwise transferred without the prior written consent of the
Company. Any such attempted assignment or other transfer without such consent
shall be void.
(13) "MARKET STAND-OFF" AGREEMENT. During the period of duration
specified by the Company and an underwriter of Common Stock or other securities
of the Company, but not to exceed 180 days, following the effective date of a
registration statement of the Company for its own account filed under the
Securities Act, any Holder which is an executive officer, director or holder of
5% or more of the outstanding stock of the Company shall not, to the extent
requested by the Company and such underwriter, directly or indirectly, sell,
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) the Shares other than Shares registered
thereunder (the "Unregistered Shares"); PROVIDED THAT the executive officers,
directors and 5% stockholders of the Company enter into agreements on
substantially similar terms.
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In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions (with the Company's stock transfer agent or
otherwise) until the end of such period with respect to any Unregistered Shares
of any Holder which is an executive officer, director or holder of 5% or more of
the outstanding stock of the Company.
(14) AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section (13) shall be binding upon each
Holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
(15) NOTICES. All notices, requests, demands, or other communications
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given upon receipt, if
delivered by hand, by telecopy or telegram, or three days after deposit in the
U.S. mail, postage prepaid, addressed to the Securityholders at the addresses
listed on the signature page(s) hereto and to the Company as follows:
Company: ABM Industries Incorporated
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: General Counsel
Facsimile: (000) 000-0000
Copy to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party may designate for itself by notice given
as provided in this Agreement.
(16) BINDING AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon and enforceable against the parties and their successors and
assigns, including administrators, executors, representatives, heirs, legatees,
and devisees of Securityholders and any pledgee holding Registrable Securities
as collateral.
(17) GOVERNING LAW. This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
New York (without regard to its choice of law provisions).
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(18) ATTORNEYS' FEES. In the event of any legal action or proceeding
to enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
(19) EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
(20) EXPIRATION OF REGISTRATION RIGHTS. Notwithstanding anything else
herein to the contrary, the Company shall have no further obligations to
register shares of any Holders under this Agreement (including, without
limitation, any obligations under Sections (2) or (3) hereof) upon the earlier
to occur of (i) the date the seventh registration effected by the Company
pursuant to Section (2) hereof shall have been declared or ordered effective by
the SEC, or (ii) 60 days after the delivery by the Company of the last Share
pursuant to the Earnout in the Fifth Annual Earnout Period (as defined in the
Transaction Agreement), UNLESS the Company shall have delayed any registration
pursuant to any clause under subsection (2)(b) hereof, in which case the
expiration of this Agreement pursuant to this clause (ii) shall be delayed for
30 days plus the number of days equal to the aggregate number of days the
Company shall have so delayed one or more registrations. Notwithstanding this
Section (20), the Company shall keep any registration statement filed pursuant
to Section (2) hereof effective for at least two months as set forth in
subsection (2)(a) hereof.
(21) COUNTERPARTS. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
[Signature Page Next]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
ABM INDUSTRIES INCORPORATED
By: /s/ X. Xxxxxx
----------------------------
Name: X. X. Xxxxxx
Title: Senior Vice President
SECURITYHOLDERS:
/s/ Xxxxxxx X. Xxxx
----------------------------
Xxxxxxx X. Xxxx
Address:
/s/ Xxxxxxx X. Xxxx
----------------------------
Xxxxxxx X. Xxxx
Address:
/s/ Xxxxx Xxxx
----------------------------
Xxxxx Xxxx
Address:
/s/ Xxxxx Xxxx Xxxxxx
----------------------------
Xxxxx Xxxx XxXxxx
Address:
/s/ Xxx Xxxx XxXxxxxx
----------------------------
Xxx Xxxx XxXxxxxx
Address:
/s/ Xxxxxx Xxxx
----------------------------
Xxxxxx Xxxx
Address:
