Exhibit 4.1
FORM OF STOCKHOLDER AND
REGISTRATION RIGHTS AGREEMENT
This STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"),
dated as of March ___, 1996, is among (a) Friendly Ice Cream Corporation, a
Massachusetts corporation (the "COMPANY"), (b) the Lenders listed on the
signature pages hereto and any other Lender who becomes a party to this
Agreement by executing an Assignment and Acceptance (an "ASSIGNMENT AND
ACCEPTANCE") in the form of EXHIBIT H to the Lender Subscription Agreement (as
defined herein) or an Instrument of Accession in the form of EXHIBIT I to the
Lender Subscription Agreement (collectively, the "LENDERS"), (c) Xxxxxx'x
Operating Company, Inc., a Delaware corporation ("XXXXXX'X"), (d) Investment
Limited Partnership, a Delaware limited partnership ("ILP"), (e) Xxxxxx X. Xxxxx
("XXXXX"), (f) Xxxxx X. Xxxxx ("JOOST"), (g) Xxxxx X. Xxxxxx ("XXXXXX";
Xxxxxx'x, ILP, Xxxxx, Xxxxx and Xxxxxx being referred to herein collectively as
the "CLASS A STOCKHOLDERS"), (h) Quidnet Partners, a Texas general partnership
("QUIDNET"), (i) Bedrock Asset Trust I, a Delaware business trust, and ML Life
Insurance Company of New York, a New York life insurance company (collectively,
the "EXISTING WARRANTHOLDERS"), and (j) each other Person who becomes a party to
this Agreement by executing an Instrument of Accession (an "INSTRUMENT OF
ACCESSION") in the form of SCHEDULE I hereto.
WHEREAS, the parties hereto wish to set forth their relative rights with
regard to the transfer of the Company's securities and certain other matters:
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
Section 1. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
AFFILIATE. Affiliate means, with respect to any Stockholder, any Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Stockholder and shall include (a) any Person who is a
director or beneficial holder of at least 10% of the then outstanding capital
stock (or partnership interests or other shares of beneficial interest) of such
Stockholder and Family Members of any such Person, (b) any Person of which such
Stockholder or an Affiliate (as defined in clause (a) above) of such Stockholder
directly or indirectly, either beneficially owns at least 10% of the then
outstanding capital stock (or partnership interests or other shares of
beneficial interest) or constitutes at least a 10% equity participant, (c) any
Person of which an Affiliate (as defined in clause (a) above) of such
Stockholder is a partner, director, officer or
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executive employee, and (d) in the case of a specified Person who is an
individual, Family Members of such Person.
AGENT means The First National Bank of Boston, as Agent under the Agency
Agreement, and any successor Agent thereunder.
AGENCY AGREEMENT has the meaning set forth in the Subscription Agreement.
ASSIGNMENT AND ACCEPTANCE. See preamble.
CHARTER. Charter means the Company's Restated Articles of Organization and
all additional restatements or amendments thereto.
CLASS A COMMON STOCK. See definition of "COMMON STOCK."
CLASS A STOCKHOLDERS. Class A Stockholders means Xxxxxx'x, ILP, Xxxxx,
Xxxxx and Xxxxxx and any other person or entity who holds any capital stock of
the Company subject to the Class A Stockholder's Agreement.
CLASS A STOCKHOLDERS' AGREEMENT. Class A Stockholders' Agreement shall
mean the FICC Stockholders Agreement dated as of March ___, 1996 by and among
the Company, Xxxxxx'x, ILP, Xxxxx, Xxxxx and Xxxxxx, as in effect from time to
time.
CLASS B COMMON STOCK. See definition of "COMMON STOCK."
CLASS C COMMON STOCK. See definition of "COMMON STOCK."
CLASS H STOCK. Class H Stock has the meaning specified in the Class A
Stockholders Agreement.
CLASS I STOCK. Class I Stock has the meaning specified in the Class A
Stockholders Agreement.
CLASS S STOCK. Class S Stock has the meaning specified in the Class A
Stockholders Agreement.
COMMON STOCK. Common Stock means (a) the Company's Class A Voting Common
Stock, $.01 par value per share (the "CLASS A COMMON STOCK"), (b) the Company
Class B Voting Common Stock, $.01 par value per share (the "CLASS B COMMON
STOCK"), (c) the Company's Class C Non-Voting Common Stock, $.01 par value per
share (the "CLASS C COMMON STOCK"), and (d) any shares of any other class of
capital stock of the Company hereafter issued which are (i) not preferred as to
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dividends or assets over any class of stock of the Company, (ii) not subject to
redemption pursuant to the terms thereof, or (iii) issued to the holders of
shares of Common Stock upon any reclassification thereof.
COMPANY. See preamble.
CREDIT AGREEMENT. Credit Agreement means that certain Second Amended and
Restated Revolving Credit and Term Loan Agreement dated as of January 1, 1996,
by and among the Company, as borrower, Dogwood II, Inc., Family Restaurants
Franchise, Inc., Friendly's International, Inc., and Dogwood Restaurants, Inc.,
as guarantors, The First National Bank of Boston, as administrative agent and as
collateral agent for itself and the other Lenders referred to therein and as
issuing bank with respect to letter of credit, and the Lenders referred to
therein, as amended and in effect from time to time.
EVENT OF DEFAULT. Event of Default has the meaning specified in the Credit
Agreement.
EXISTING STOCKHOLDERS. Existing Stockholders means Quidnet, the Class A
Stockholders and the Existing Warrantholders, collectively.
EXISTING WARRANTHOLDERS. See preamble.
EXISTING WARRANTS. Existing Warrants means the following:
(a) Warrant in favor of Xxxxx for 70.68 shares of Class A Common Stock;
(b) Warrant in favor of Xxxxxx for 6.76 shares of Class A Common Stock;
(c) Warrant in favor of ML Life Insurance Company of New York for
0.68480 shares of Class A Common Stock; and
(d) Warrant in favor of Bedrock Asset Trust I for 14.29520 shares of
Class A Common Stock;
in each case in the form attached as part of SCHEDULE 3.2(B)(I) of the Lender
Subscription Agreement, and any warrant or warrants issued upon transfer,
exchange or replacement thereof.
FAMILY MEMBERS. Family Members means, with respect to any individual, any
Related Person or Family Trust of such individual.
FAMILY TRUST. Family Trust means, with respect to any individual, any
trust created for the benefit of one or more of such individual's Related
Persons and controlled by such individual.
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INSTRUMENT OF ACCESSION. See preamble.
LENDER. See preamble.
LENDER SECURITIES. Lender Securities means (a) the shares of Common Stock
issued to the Lenders pursuant to the Lender Subscription Agreement, (b) all
shares of Common Stock issued or issuable upon conversion of such shares of
Common Stock, (c) the Lender Warrants and the shares of Common Stock issued or
issuable upon exercise of the Lender Warrants in accordance with their terms,
(d) all shares of Common Stock issued or issuable upon conversion of such shares
of Common Stock, (e) [intentionally omitted], (f) all shares of the Company's
capital stock issued with respect to such shares by way of stock dividend or
stock split or in connection with any merger, consolidation, recapitalization or
other reorganization affecting the Company's capital stock. Lender Securities
will continue to be Lender Securities in the hands of any holder and each
transferee thereof will succeed to the rights and obligations of a holder of
Lender Securities hereunder, PROVIDED that shares of Lender Securities will
cease to be Lender Securities when transferred (i) to the Company, (ii) pursuant
to a Public Sale or (iii) to a holder of Other Securities.
LENDER STOCKHOLDERS. Lender Stockholders means the Lenders for so long as
the Lenders hold Lender Securities and any other Person to whom Lender
Securities are transferred and who has executed either (A) prior to the Loan
Repayment Date, and Assignment and Acceptance or (B) thereafter, an Instrument
of Accession, for so long as such Person holds any Lender Securities.
LENDER SUBSCRIPTION AGREEMENT. Lender Subscription Agreement means the
Subscription Agreement, dated as of the date hereof, among the Company, the
Lenders named therein, and The First National Bank of Boston, as agent for the
Lenders, as in effect from time to time.
LENDER WARRANTS. Lender Warrants means the Common Stock Purchase Warrant
issued to The First National Bank of Boston, as agent for the Lenders, pursuant
to the Lender Subscription Agreement, and any warrant or warrants issued upon
transfer, exchange or replacement thereof.
LOAN REPAYMENT DATE. Loan Repayment Date has the meaning specified in the
Charter.
MAJORITY LENDER STOCKHOLDERS. Majority Lender Stockholders means the
holders at any time of 51% of the aggregate issued and outstanding shares of
Class B Common Stock and Class C Common Stock that at the time constitute Lender
Securities for purposes of this Agreement (or, in the event that all of the
shares of Class B Common Stock and Class C Common Stock have been automatically
converted into Class A Common Stock pursuant to the Charter, the holders of a
majority of the Class A Common Stock that at the time constitute Lender
Securities for purposes of this Agreement), taken together as a class.
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MANAGEMENT SECURITIES. Management Securities means (a) all shares of
Common Stock issued to participants in the Management Stock Plan or the Old
Option Plan and (b) all shares of the Company's capital stock issued with
respect to such shares by way of stock dividend or stock split or in connection
with any merger, consolidation, recapitalization or other reorganization
affecting the Company's capital stock. Management Securities will continue to
be Management Securities in the hands of any holder and each transferee thereof
will succeed to the rights and obligations of a holder of Management Securities
hereunder, provided that shares of Management Securities will cease to be
Management Securities when transferred (i) to the Company (unless such shares
are reissued pursuant to the Management Stock Plan), (ii) pursuant to a Public
Sale or (iii) to a holder of Other Securities or Lender Securities.
MANAGEMENT STOCK PLAN. Management Stock Plan has the meaning set forth in
the Lender Subscription Agreement.
MANAGEMENT STOCKHOLDERS. Management Stockholders means the participants in
the Management Stock Plan or Old Option Plan for so long as such Persons hold
Management Securities and any other Person to whom Management Securities are
transferred in compliance with the provisions of the Management Stock Plan and
who has executed an Instrument of Accession, for so long as such Person holds
any Management Securities.
OLD OPTION PLAN. Old Option Plan has the meaning set forth in the Lender
Subscription Agreement.
OTHER SECURITIES. Other Securities means (a) the shares of Common Stock
held by any of the Existing Stockholders on the date hereof, (b) [intentionally
omitted], (c) the Existing Warrants and the shares of Common Stock issued or
issuable upon exercise of the Existing Warrants in accordance with their terms,
(d) all shares of Common Stock issued or issuable upon conversion of such shares
of Common Stock, (e) [intentionally omitted] and (f) all shares of the Company's
capital stock issued with respect to such shares by way of stock dividend or
stock split or in connection with any merger, consolidation, recapitalization or
other reorganization affecting the Company's capital stock. Other Securities
will continue to be Other Securities in the hands of any holder and each
transferee thereof will succeed to the rights and obligations of a holder of
Other Securities hereunder, PROVIDED that shares of Other Securities will cease
to be Other Securities when transferred (i) to the Company, (ii) pursuant to a
Public Sale or (iii) to a holder of Lender Securities.
OTHER STOCKHOLDERS. Other Stockholders means the Existing Stockholders for
so long as such Person holds Other Securities and any other Person to whom Other
Securities are transferred and who has executed an Instrument of Accession, for
so long as such Person holds any Other Securities.
OFFER NOTICE. See Section 2.2.
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PERSON. Person means an individual, partnership, corporation, limited
liability company, association, trust, joint venture, unincorporated
organization, or any government, government department or agency or political
subdivision thereof.
PUBLIC OFFERING. Public Offering means any sale of Common Stock pursuant
to a public offering registered under the Securities Act.
PUBLIC SALE. Public Sale means any sale of Common Stock pursuant to a
Public Offering or to the public pursuant to the provisions of Rule 144 (or any
successor rule) adopted under the Securities Act.
QUALIFIED PUBLIC OFFERING. Qualified Public Offering has the meaning
specified in the Charter.
QUIDNET. See preamble.
REGISTRATION PERIOD. Registration Period means a period of time equal to
eighteen months from and after the end of the period of time the Stockholders
have agreed not to sell stock of the Company pursuant to lockup agreements
entered into in connection with the Company's initial Public Offering; PROVIDED,
HOWEVER, that such eighteen-month period shall be tolled during any period in
which the Company has elected to delay filing a Registration Statement under
Section 5.2(c) hereof.
RELATED PERSONS. Related Persons means, with respect to any individual,
such individual's parents, spouse, children and grandchildren.
SECURITIES. Securities means the Lender Securities and the Other
Securities.
SECURITIES ACT. Securities Act means the Securities Act of 1933, as
amended.
SPECIAL EVENT OF DEFAULT. Special Event of Default has the meaning
specified in the Charter.
STOCKHOLDERS. Stockholders means, collectively, the Lender Stockholders,
the Other Stockholders and Management Stockholders.
SUBSIDIARY. Subsidiary means any corporation, association, trust, or other
business entity, of which the designated parent shall at any time own or control
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding shares of capital stock (or other shares
of beneficial interest) entitled ordinarily to vote for the election of such
business entity's directors (or in the case of a business entity that is not a
corporation, for those Persons exercising functions similar to directors of a
corporation).
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TRANSFER. See Section 2.1.
VOTING SECURITIES. Voting Securities means, collectively, the Class A
Common Stock and the Class B Common Stock.
Section 2. [intentionally omitted]
Section 3. [intentionally omitted]
Section 4. [intentionally omitted]
Section 5. REGISTRATION RIGHTS.
5.1 PIGGYBACK REGISTRATION RIGHTS.
(a) If, at any time during the Registration Period, the Company
proposes to file a Registration Statement in connection with a Public Offering
(other than a Public Offering initiated pursuant to the demand registration
provisions of Section 5.2) other than its initial Public Offering, the Company
will provide written notice thereof to the Stockholders at least sixty (60) days
prior to the filing of the first such Registration Statement. For purposes of
this Agreement, "REGISTRATION STATEMENT" shall mean a registration statement on
the appropriate form in order to register shares of Common Stock under the
Securities Act (otherwise than in connection with the registration of shares of
Common Stock issuable pursuant to an employee stock option, stock purchase or
similar plan or pursuant to a merger, exchange offer or in a transaction of the
type specified in Rule 145(a) under the Securities Act); "UNDERWRITER" or
"UNDERWRITERS" shall mean, in the case of a Public Offering under Section 5.1,
an underwriter selected by the Company or, in the case of a Public Offering
initiated under Section 5.2, an underwriter selected by the Company and approved
by Stockholders owning a majority of the Registration Shares to be included in
such registration (which approval shall not be unreasonably withheld); and
"UNDERWRITERS' MAXIMUM NUMBER" means (for any registration which is an
underwritten registration) that number of securities to which such registration
should, in the written opinion of the managing Underwriters of such registration
in the light of marketing factors, be limited. At the written request of any
Stockholder delivered to the Company within fifteen (15) days after the receipt
of such notice from the Company, which request shall state the number of shares
of Common Stock held by such Stockholder that such Stockholder wishes to sell
under the Registration Statement (shares of Common Stock held by any Stockholder
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that are requested to be offered and sold pursuant to this Section 5.1 together
with shares of Common Stock that are requested to be offered and sold pursuant
to Section 5.2 are herein referred to as "REGISTRATION SHARES"), the Company
agrees, subject to Section 5.1(b), to use its best efforts to cause all of the
Registration Shares to be registered under the Securities Act on such
Registration Statement to the extent and under the conditions such registration
is permissible under the Securities Act and the rules and regulations of the
Securities and Exchange Commission (the "COMMISSION") thereunder.
(b) The number of Registration Shares to be registered pursuant to
Section 5.1(a) for the benefit of any particular Stockholder is subject to
mandatory reduction as follows: if, in an underwritten Public Offering, the
managing Underwriter(s) thereof advise the Company in writing of an
Underwriters' Maximum Number, the Company will include in such registration:
(i) first, that number of shares that the Company proposes to
sell for its own account, and which does not exceed the
Underwriters' Maximum Number;
(ii) second, if the Underwriters' Maximum Number exceeds the
number of securities which the Company proposes to offer and
sell for its own account (with such excess referred to as
the "FIRST AVAILABLE AMOUNT"), that number of Registration
Shares requested to be included in such registration by the
Management Stockholders, Lender Stockholders and Other
Stockholders up to the lesser of (A) the First Available
Amount and (B) the total number of Registration Shares
requested to be included in such registration by the other
Stockholders, Lender Stockholders and Management
Stockholders.
The number of shares to be registered pursuant to clause (ii) above with respect
to any Stockholder shall be based on the number of Registration Shares requested
to be included in such registration by such Stockholder as compared to the total
number of Registration Shares requested to be included in such registration by
all of the Stockholders referred to in such clause.
5.2 DEMAND REGISTRATION RIGHTS.
(a) At any time during the Registration Period either (x) the
Stockholders holding a majority of the aggregate number of all outstanding
Lender Securities, Management Securities and Other Securities or (y) the
Majority Lender Stockholders may by written notice (a "DEMAND") request the
Company to file a Registration Statement in order to register all (or any
portion as determined by such Stockholders) of the shares of Common Stock owned
by such Stockholders. In the event that the Company receives a Demand, the
Company will give prompt written notice thereof to all other Stockholders.
Subject to paragraph (b) below, the Company will be required to include in such
registration all Registration Shares requested to be included in such
registration by any other Stockholder responding in writing fifteen (15) days of
the Company's notice.
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(b) The number of Registration Shares to be registered pursuant to
Section 5.2(a) for the benefit of any particular Stockholder is subject to
mandatory reduction, in the event that the managing Underwriter(s) advise the
Company of an Underwriter's Maximum Number, as follows: the Company will
include in such registration:
(i) first, the total number of Registration Shares requested to
be included in such registration by all Stockholders up to
the Underwriter's Maximum Number, with the amount to be
registered for the account of any Stockholder not to exceed
such Stockholder's PRO RATA portion of the Underwriter's
Maximum Number; and
(ii) in the event the number of shares to be registered pursuant
to clause (i) above is less than the Underwriter's Maximum
Number, the number of shares the Company wishes to register
for its own account.
(c) Upon receipt of a Demand, the Company shall promptly (and in any
event within ninety (90) days) use its best efforts to file such Registration
Statement under the Securities Act with respect to the applicable Registration
Shares subject to the following
(i) If the Company has commenced taking action with respect to
any financing, acquisition, reorganization or other
transaction or development material to the Company, and in
the reasonable and good faith opinion of the Company Board,
filing a Registration Statement would not be in the best
interests of the Company, the Company may delay filing the
Registration Statement until the earlier of (A) the
termination of activities with respect to any such
transaction or development, (B) the consummation or
abandonment of any agreement with respect to such
transaction or development or (C) ninety (90) days following
the Company's receipt of the Stockholder's notice of a
Demand pursuant to this Section 5.2.
(ii) If filing a Registration Statement could require the Company
to undergo a special interim audit, and in the reasonable
and good faith opinion of the Board of Directors, the cost
of such special interim audit would exceed $50,000, the
Company may delay filing a Registration Statement until
ninety (90) days after the close of the fiscal year in which
the request by the applicable Stockholder for registration
of shares of Common Stock is made, unless the Stockholders
making such Demand agree to reimburse the Company for the
cost of such special interim audit.
In the event that the Company elects to delay filing a Registration
Statement in accordance with this Section 5.2, it will promptly notify the
Stockholders thereof. The Stockholders responsible
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for the applicable Demand may, within twenty (20) days following receipt of such
notice, decide to withdraw its request that the Company file a Registration
Statement, in which case the withdrawn request will not count as an exercise of
Stockholder's right to request the Company to file a Registration Statement
pursuant to this Section 5.2.
(d) If the Company so requests, it shall not be required to effect a
Public Offering under Section 5.2 for a period not to exceed six (6) months
immediately following the date any other Public Offering was commenced and
consummated.
(e) The Stockholders will not be entitled to submit more than one (1)
Demand to the Company. No party may require the Company to file any
Registration Statement on Form S-1 (or other comparable form adopted by the
Commission) unless Form S-3 (or any comparable form adopted by the Commission)
is not available for such filing. Any registration initiated by a group of
Stockholders pursuant to a Demand pursuant to Section 5.2(a) above shall not,
for purposes of this paragraph (e), count as a Demand unless and until such
registration shall have become effective and, if such registration is an
underwritten offering, at least 80% of the Registration Shares included in such
registration (other than any Registration Shares included in any over-allotment
option granted to the underwriters) shall have been actually sold. No party may
require the Company to file a Registration Statement pursuant to a Demand unless
the Registration Statement is one for the registration of Registration Shares
having an expected price to the public (determined in accordance with Rule 457
promulgated under the Securities Act) of at least $5,000,000.
(f) Any registration initiated by Stockholders pursuant to a Demand may
be revoked by such Stockholders by giving written notice thereof to the Company
at any time before such registration shall have become effective; PROVIDED,
HOWEVER, that in the event of such a revocation either such Stockholders shall
pay all expenses of such registration required to be paid by the Company
pursuant to Section 5, in which case such registration shall not, for purposes
of this Section 5.2(a), count as a Demand, or if such Stockholders fail to pay
such expenses within a reasonable period of time after receipt of appropriate
documentation for such expenses, such registration shall count as a Demand for
purposes of this Section 5.2(a).
5.3 PROCEDURES
Whenever the Company shall include Registration Shares owned by a
Stockholder ("SELLING STOCKHOLDER") in a Registration Statement, the Company
shall:
(i) prepare and file with the Commission a Registration Statement with
respect to such Registration Shares and use its best efforts to
cause such Registration Statement to become promptly effective and
furnish to each Selling Stockholder copies of the Registration
Statement and any amendments or supplements thereto and any
Prospectus included therein prior to filing;
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(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep such
Registration Statement effective for the lesser of (A) a period of
time necessary to permit each Selling Stockholder to dispose of all
of such Registration Shares and (B) six (6) months (as
appropriately extended to reflect any periods when a Selling
Stockholder is not permitted to sell Registration Shares pursuant
to such Registration Statement), and comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such
effective period in accordance with the intended methods of
disposition by the Selling Stockholders set forth in such
Registration Statement and cause the Prospectus to be supplemented
by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act;
(iii) Upon request, furnish to each Selling Stockholder such number of
copies of such Registration Statement, each amendment and
supplement thereto, the Prospectus included in such Registration
Statement (including each a preliminary Prospectus and each
Prospectus filed under Rule 424 of the Securities Act) and such
other documents as each such Selling Stockholder may reasonably
request in order to facilitate the disposition of the Registration
Shares owned by each such Selling Stockholder (it being understood
that the Company consents to the use of the Prospectus and any
amendment or supplement thereto by such Selling Stockholder in
connection with the offering and Sale of the Registration Shares
covered by the Prospectus or any amendment or supplement thereto);
(iv) use its best efforts to register or quality such Registration
Shares under such other securities or blue sky laws of such
jurisdictions as determined by the managing Underwriter after
consultation with the Company (or, if there is no managing
Underwriter, as determined by the Company), use its best efforts to
keep such registration or qualification effective, including
through new filings, amendments or renewals, during the period such
Registration Statement is required to be kept effective, and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Selling Stockholder to consummate the
disposition in such jurisdictions of the Registration Shares;
PROVIDED that the Company will not be required (A) to qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph (iv),
(B) to subject itself to taxation in any such jurisdiction, (C) to
consent to general service of process in any such jurisdiction, (D)
register or qualify as a broker-dealer in any such jurisdiction or
(E) to qualify or register in any particular state if such state
refuses to permit such registration or qualification because of the
expense allocation provisions set forth in Section 5.5;
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(v) notify the Selling Stockholders, 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 contains an
untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of
any Selling Stockholder, the Company will promptly prepare (and,
when completed, give notice to each Selling Stockholder) a
supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of such Registration Shares, such
Prospectus will not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein
not misleading; PROVIDED that upon such notification by the
Company, each Selling Stockholder will not offer to sell such
Registration Shares until the Company has notified such Selling
Stockholder that it has prepared a supplement or amendment to such
Prospectus and delivered copies of such supplement or amendment to
such Selling Stockholder;
(vi) use its best efforts to cause all such Registration Shares to be
listed, prior to the date of the first sale of such Registration
Shares pursuant to such registration, on each securities exchange
on which similar securities issued by the Company are then listed,
and, if not so listed, to be listed with The NASDAQ Stock Market;
(vii) enter into all such customary agreements (including underwriting
agreements in customary form) and take all such other actions as
the holders of a majority of the Registration Shares being sold or
the Underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registration Shares
(including, without limitation, effecting a stock split or a
combination of shares);
(viii) make available for inspection on a confidential basis by any
Selling Stockholder, any Underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney, accountant or other agent retained by any such Selling
Stockholder or Underwriter (in each case after reasonable prior
notice), all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to
supply on a confidential basis all information reasonably requested
by any such Selling Stockholder, Underwriter, attorney, accountant
or agent in connection with such Registration Statement;
(ix) use its best efforts to cause the Registration Shares to be
registered with or approved by such other governmental agencies or
authorities within the United States and having jurisdiction over
the Company as may reasonably be necessary to enable the Selling
Stockholders or the Underwriter or Underwriters, if any, to
consummate the disposition of such Registration Shares;
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(x) obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters; and
(xi) cause the Company's counsel to provide customary legal opinions in
connection with such Registration Statement.
5.4 INDEMNIFICATION
(a) The Company will indemnify and hold harmless each Stockholder, the
officers, directors, partners, and partners of partners of such Stockholder, and
each Underwriter of shares of Common Stock sold pursuant to Section 5.1 or 5.2
(and any person who controls such Stockholder or any such Underwriter within the
meaning of Section 15 of the Securities Act) against all claims, losses,
damages, liabilities and expenses resulting from any untrue statement or alleged
untrue statement of a material fact contained in a Registration Statement or in
any related prospectus, notification or the like and from 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 (i)
as the same may have been based on information furnished in writing to the
Company by such Stockholder or such Underwriter expressly for use therein and
used in accordance with such writing or (ii) as such claims, losses, damages,
liabilities and expenses result from a breach by a Stockholder of its
obligations under Section 5.3(v).
(b) Each Stockholder, by acceptance of the registration provisions
provided herein, agrees to furnish to the Company such information concerning
such Stockholder and the proposed sale or distribution as shall, in the opinion
of counsel for the Company, be necessary in connection with any such
registration or qualification of any shares of stock proposed to be made
pursuant to Section 5.1 or 5.2 and to indemnify and hold harmless the Company,
its officers and directors, each of its Underwriters and the other Stockholders
(and any person who controls the Company or such Underwriters or such other
Stockholders within the meaning of Section 15 of the Securities Act and the
officers, directors, partners and partners of partners of such Stockholders)
against all claims, losses, damages, liabilities and expenses resulting from any
untrue statement or alleged untrue statement of a material fact furnished in
writing to the Company by such Stockholder expressly for use in connection with
such registration or qualification and used in accordance with such writing and
from any omission therefrom or alleged omission therefrom of a material fact
needed to be furnished or necessary to make the information furnished not
misleading; PROVIDED, HOWEVER, that no Stockholder shall have liability under
this paragraph (b) in excess of the net proceeds received by such Stockholder
from the sale of Registration Shares.
(c) If any party (the "INDEMNITEE") receives notice of any claim or the
commencement of any action or proceeding with respect to which any other party
(or parties) is obligated to provide indemnification (the "INDEMNIFYING PARTY")
pursuant to this Section 5.4, the Indemnitee shall
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promptly give the Indemnifying Party notice thereof. If the Indemnitee does not
promptly give this notice, the Indemnifying Party shall not be obligated to
provide indemnification hereunder to the extent that the liability for which
such indemnification is claimed could have been avoided or mitigated if the
Indemnitee had promptly given notice to the Indemnifying Party. The
Indemnifying Party may compromise, defend or settle, at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, any such
matter involving the asserted liability of the Indemnitee. If the Indemnifying
Party chooses to defend any claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents within its control that
are necessary or appropriate for such defense.
5.5 EXPENSES
Subject to Section 5.2(f), the Company shall pay all of the expenses in
connection with a Public Offering in which a Selling Stockholder participates in
accordance with Section 5.1 or 5.2, including, without limitation, costs of
complying with federal and state securities laws and regulations, attorneys' and
accounting fees of the Company, printing expenses and federal and state filing
fees, except that transfer taxes, underwriting commissions, fees and expenses
incurred by the Selling Stockholders and fees and disbursements of counsel (if
any) to the Selling Stockholders will be borne by the Selling Stockholders.
5.6 RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRATION SHARES.
(a) Each Stockholder, if the Company or the managing underwriters so
request in connection with any underwritten offering subject to the provisions
of this Section 5 other than the Company's initial Public Offering, will not,
without the prior written consent of the Company or such underwriters, effect
any public sale or other distribution of any equity securities of the Company,
including any sale pursuant to Rule 144, during the seven (7) days prior to, and
during the ninety-day period commencing on, the effective date of such
underwritten registration, except in connection with such underwritten
registration; PROVIDED that each executive officer and director of the Company
and each other person who is also an Affiliate of the Company who, in either
case, is a holder of securities of the Company, shall enter into similar
agreements; and PROVIDED, FURTHER, that such Stockholder is permitted to include
in such registration at least 80% of the Registration Shares requested to be
included in such registration by such Selling Stockholder.
(b) In connection with the Company's initial Public Offering, each
Stockholder will not, without the prior written consent of the Company's
underwriters in such Public Offering (which consent may be withheld in the sole
discretion of such underwriters), directly or indirectly, sell, offer, contract
or grant any option to sell (including without limitation any short sale),
pledge, transfer, establish an open "put equivalent position" within the meaning
of Rule 16a-1(h) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities
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exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Exchange Act), other than shares purchased in or after such
initial Public Offering that are not "restricted securities" within the meaning
of Rule 144 of the Securities Act, or publicly announce such Stockholder's
intention to do any of the foregoing during the three hundred sixty-day period
commencing on the date of the prospectus relating to such initial Public
Offering; PROVIDED that each executive officer and director of the Company and
each other person who is also an Affiliate of the Company who, in either case,
is a holder of securities of the Company, shall enter into an agreement
substantially similar to this Section 5.6(b); and PROVIDED, FURTHER, that,
notwithstanding this Section 5.6(b), the Lender Stockholders may, for so long
as the restrictions on transfer on Lender Securities set forth in Section
11.1(a) of the Lender Subscription Agreement are in effect, transfer Lender
Securities along with a proportional amount of Obligations (as defined in the
Credit Agreement) in the manner prescribed in the Credit Agreement and the
Lender Subscription Agreement .
(c) Notwithstanding anything to the contrary in Sections 5.6(a) and
(b), any Stockholder (other than a Management Stockholder) may transfer equity
securities of the Company to any Person that was a Stockholder immediately
prior to the sale of Common Stock by the Company in consummation of the
Company's initial Public Offering.
Section 6. NO INCONSISTENT AGREEMENTS. The Company will not enter into
any registration rights or other agreement that conflicts with its obligations
under this Agreement.
Section 7. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 8. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and thereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
Section 9. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure
to the benefit of and be enforceable by the Company and the Stockholders and
their respective successors and assigns.
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Section 10. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
Section 11. REMEDIES. The Stockholders will be entitled to enforce
their rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Stockholder may
in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violation of the provisions of this Agreement. In the
event of any dispute involving the terms of this Agreement, the prevailing party
shall be entitled to collect reasonable fees and expenses incurred by the
prevailing party in connection with such dispute from the other parties to such
dispute.
Section 12. NOTICES. Any notice provided for in this Agreement will be
in writing and will be deemed properly delivered if either personally delivered
or sent by telecopier, overnight courier or mailed certified or registered mail,
return receipt requested, postage prepaid to the recipient (a) if to any
Stockholder, at the address listed for such Stockholder in the stock records of
the Company and (b) if to the Company, to 0000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx. Any such notice shall be
effective (i) if delivered personally or by telecopier, when received, (ii) if
sent by overnight courier, when receipted for, and (iii) if mailed, 3 days after
being mailed as described above. The Company agrees to make available to each
Stockholder upon request an address list of all Stockholders to ensure correct
delivery of all notices hereunder.
Section 13. AMENDMENT AND WAIVER. No modification, amendment or waiver
of any provision of this Agreement will be effective against the Company or the
Stockholders unless such modification, amendment or waiver is approved in
writing by the Majority Lender Stockholders and holders of a majority of the
Other Securities then outstanding. The failure of any party to enforce any of
the provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
Section 14. TERMINATION. The provisions of Section 2 of this Agreement
will terminate upon the earliest to occur of (a) the completion of any voluntary
or involuntary liquidation or dissolution of the Company or (b) the completion
of a Qualified Public Offering. As noted in Section 3.9, the provisions of
Section 3 shall terminate upon the Loan Repayment Date.
Section 15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL
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BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 16. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 17. CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party.
