Exhibit 2
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U.S. OFFICE PRODUCTS COMPANY
REGISTRATION RIGHTS AGREEMENT
Dated as of June 10, 1998
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. Background......................................................................................1
2. Definitions.....................................................................................1
3. Registration....................................................................................7
3.1 Demand Registration..................................................................7
(a) Requests....................................................................7
(b) Obligation to Effect Registration...........................................7
(c) Shelf Registration..........................................................7
(d) Effective Registration Statement............................................8
(e) Pro Rata Allocation.........................................................8
(f) Inclusion of Other Securities in Demand Registration........................8
3.2 Piggyback Registration...............................................................9
3.3 Registration Procedures.............................................................11
3.4 Underwritten Offerings..............................................................17
(a) Underwritten Offerings Exclusive...........................................17
(b) Underwriting Agreement.....................................................17
(c) Selection of Underwriters..................................................18
(d) Hold Back Agreements.......................................................18
3.5 Preparation; Reasonable Investigation...............................................19
3.6 Other Registrations.................................................................19
3.7 Indemnification.....................................................................19
(a) Indemnification by the Company.............................................19
(b) Indemnification by the Sellers.............................................20
(c) Notices of Claims, etc.....................................................21
(d) Other Indemnification......................................................22
(e) Other Remedies.............................................................22
(f) Officers and Directors.....................................................23
3.8 Expenses...................................................................................23
4. Miscellaneous..................................................................................23
4.1 Rule 144; Legended Securities; etc..................................................23
4.2 Amendments and Waivers..............................................................23
4.3 Nominees for Beneficial Owners......................................................24
4.4 Successors, Assigns and Transferees.................................................24
Page
4.5 Notices.............................................................................24
4.6 No Inconsistent Agreements..........................................................26
4.7 Remedies; Attorneys' Fees...........................................................26
4.8 Severability........................................................................26
4.9. Headings............................................................................26
4.10. Counterparts........................................................................27
4.11. Governing Law.......................................................................27
4.12 No Third Party Beneficiaries........................................................27
4.13 Consent to Jurisdiction.............................................................27
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 10,
1998, among U.S. Office Products Company, a Delaware corporation (the
"Company"), and CDR-PC Acquisition, L.L.C., a Delaware limited liability company
(the "Purchaser").
1. Background. (a) The Company is a party to an Investment Agreement,
dated as of January 12, 1998 (as amended, the "Investment Agreement"), with the
Purchaser, pursuant to which the Company agreed to sell to the Purchaser and the
Purchaser agreed to purchase from the Company for an aggregate purchase price of
$270 million (the "Investment"), upon the terms and subject to the conditions
set forth therein, (x) 9,092,106 shares of Common Stock (as such number of
shares may be adjusted as contemplated by the letter agreement, dated the date
hereof, between the Company and the Purchaser, the "Shares"), (y) Special
Warrants representing the right to acquire a number of shares of Common Stock
equal to the difference between (i) 24.9% of the sum of (A) the outstanding
shares of Common Stock as of the Closing Date after giving effect to the
issuance of the Shares and the exercise of the Special Warrants, and assuming
the conversion into Common Stock of all the 2001 Notes outstanding on the
Closing Date at the conversion price resulting from adjustments made as a result
of the Tender Offer and the Distributions and (B) the number of any shares of
Contingent Stock that are issued, and (ii) the number of Shares and (z) Warrants
to purchase one share of Common Stock for each Share so purchased and for each
share into which the Special Warrants become exercisable.
In order to induce the Purchaser to enter into the Investment
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement for the benefit of the Purchaser and its direct and indirect
transferees. The execution and delivery of this Agreement is a condition to the
Purchaser's obligations pursuant to the Investment Agreement.
(b) This Agreement shall become effective with respect to any
Registrable Securities upon the issuance or sale of Registrable Securities
pursuant to the Investment Agreement. This Agreement shall remain in effect upon
the assignment or transfer of Registrable Securities by the Purchaser or a
Holder to an Affiliate, a Distributee or other successors, assigns and
transferees of Purchaser of such Holder pursuant to Section 4.4.
2. Definitions. For purposes of this Agreement, the following terms
have the following respective meanings:
"2001 Notes" mean all of the Company's issued and outstanding 5 1/2%
Convertible Subordinated Notes due 2001 issued pursuant to an Indenture, dated
as of February 7, 1996, between the Company and State Street Bank and Trust
Company.
"Additional Shares" means shares of Common Stock (other than Warrant
Shares and Special Warrant Shares) acquired by Purchaser after the Closing Date,
to the extent that the acquisition of such shares is not prohibited by the
Investment Agreement.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such first Person. "Control" means the power to direct or cause the direction of
management or policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise. Any director,
member of management or other employee of the Company or any of its Subsidiaries
who would not otherwise be an Affiliate of the Purchaser shall not be deemed to
be an Affiliate of the Purchaser.
"Agreement" is defined in the first paragraph of this Agreement.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required to close.
"Closing Date" means the date the Investment is made under the
Investment Agreement.
"Common Stock" means the Common Stock, par value of $.001 per share, of
the Company.
"Company" is defined in the first paragraph of this Agreement.
"Contingent Stock" means Common Stock issued after the Closing Date
pursuant to (i) the Amendment to Stock Purchase Agreement, dated as of June 20,
1996, by and between the Company and ▇▇▇▇ ▇▇▇▇▇▇ or (ii) any security, option,
warrant, call, subscription, right, contract, commitment, arrangement or
understanding in existence on January 12, 1998 or June 10, 1998 but not
disclosed on the Revised Option Schedule, dated June 10, 1998 and delivered to
the Purchaser on such date, listing options, warrants, convertible securities
and other rights relating to capital stock of the Company.
"DTC" means the Depository Trust Company.
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"Distributee" means any person that is a member, stockholder or partner
of Purchaser, or any person that is a member, stockholder or partner of a
Distributee to which Registrable Securities are transferred or distributed by
Purchaser or Distributee.
"Distributions" is defined in the Investment Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations thereunder which
shall be in effect at the time. Any reference to a particular section thereof
shall include a reference to the corresponding section, if any, of any such
successor federal statute, and the rules and regulations thereunder.
"Holder" means any holder of Registrable Securities, including an
Affiliate, a Distributee or other successors, assigns and transferees of
Purchaser or a Holder that has received Registrable Securities pursuant to
Section 4.4.
"Investment" is defined in Section 1(a).
"Investment Agreement" is defined in Section 1(a).
"Legacy Agreement" means the Subscription Agreement, dated as of March
28, 1996, between the Company and Legacy Capital Fund, Inc., as in effect on
January 12, 1998.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental entity or other
entity.
"Postponement Period" is defined in Section 3.3(p).
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), 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 such Registration Statement and
all other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
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"Purchaser" is defined in the introduction to this Agreement.
"Registrable Securities" means (a) the Shares, (b) the Additional
Shares, (c) the Warrant Shares, (d) the Warrants, (e) the Special Warrant
Shares, (f) the Special Warrants and (g) any securities issued or issuable with
respect to any Shares, Additional Shares, Warrants or Special Warrants referred
to in the foregoing clauses (a) through (g), (i) upon any conversion or exchange
thereof, (ii) by way of stock dividend or other distribution, stock split or
reverse stock split or (iii) in connection with a combination of shares,
recapitalization, merger, consolidation, exchange offer or other reorganization.
As to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (A) a 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 in accordance
with such Registration Statement, (B) such securities shall have been
distributed to the public in reliance upon Rule 144, (C) subject to the
provisions of Section 4.1(b)(ii), such securities shall have been otherwise
transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act or any similar state
law then in force or (D) such securities shall have been acquired by the
Company. In determining the number of Registrable Securities outstanding at any
time or whether the Holders of the requisite number of Registrable Securities
have taken any action hereunder and in calculating the number of Registrable
Securities for all other purposes under this Agreement, each Warrant and Special
Warrant shall be deemed to have been exercised (to the fullest extent then
determinable) and such calculation shall include the number of Warrant Shares
and Special Warrant Shares then deliverable upon the exercise of such Warrant or
Special Warrant (to the fullest extent then determinable).
"Registration Expenses" All fees and expenses incident to the
performance of or compliance with the provisions of this Agreement, whether or
not any registration statement is filed or becomes effective, including, without
limitation, all (i) registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering, (B) fees and expenses of compliance with state
securities or blue sky laws (including, without limitation, fees and
disbursements of counsel for the underwriter or underwriters in connection with
blue sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as provided in Section 3.3(e)), and (C) fees and other expenses
associated with the listing of the Warrants, Warrant Shares, Special Warrants,
Special Warrant Shares and Additional Shares on the Nasdaq Stock Market and any
other applicable exchange, (ii) printing expenses (including, without
limitation,
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expenses of printing certificates for Registrable Securities in a form eligible
for deposit with DTC and of printing prospectuses), (iii) fees and disbursements
of all independent certified public accountants referred to in Section 3.3
(including, without limitation, the reasonable expenses of any special audit and
"cold comfort" letters required by or incident to such performance), (iv) the
fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Rule 2720 of the
NASD Rules of Conduct, (v) liability insurance under the Securities Act or any
other securities laws, if the Company desires such insurance, (vi) fees and
expenses of all attorneys, advisers, appraisers and other persons retained by
the Company or any Subsidiary of the Company, (vii) internal expenses of the
Company and its Subsidiaries (including, without limitation, all salaries and
expenses of officers and employees of the Company and its Subsidiaries
performing legal or accounting duties), (viii) the expense of any annual audit,
(ix) the expenses relating to printing, word processing and distributing all
registration statements, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply with this
Agreement and (x) the reasonable out-of-pocket expenses of the Holders of the
Registrable Securities being registered in such registration incurred in
connection therewith including, without limitation, the reasonable fees and
disbursements of not more than one counsel (together with appropriate local
counsel) chosen by the Holders of a majority of the Registrable Securities to be
included in such Registration Statement. "Registration Expenses" shall not
include any underwriting discounts or commissions or any transfer taxes payable
in respect of the sale of Registrable Securities by the Holders thereof.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 (or any successor provision) under the
Securities Act.
"Rule 145" means Rule 145 (or any successor provision) under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time. Any reference to a particular section thereof shall
include a
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reference to the corresponding section, if any, of any such successor federal
statute, and the rules and regulations thereunder.
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
"Shares" is defined in Section 1(a).
"Special Registration" means the registration of shares of equity
securities and/or options or other rights in respect thereof to be offered
solely to directors, members of management, employees, consultants or sales
agents, distributors or similar representatives of the Company or its direct or
indirect Subsidiaries, solely on Form S-8 or any successor form.
"Special Warrants" is defined in the Investment Agreement.
"Special Warrant Shares" means shares of Common Stock issuable upon
exercise of the Special Warrants.
"Subsidiary" means, with respect to any Person, any corporation or
Person, a majority of the outstanding voting stock or other equity interests of
which is owned, directly or indirectly, by that Person.
"Tender Offer" is defined in the Investment Agreement.
"underwritten registration" or "underwritten offering" means a
registration in which securities of the Company (including Registrable
Securities) are sold to an underwriter for reoffering to the public.
"Warrants" means warrants entitling the holder thereof to purchase one
share of Common Stock for each Share and Special Warrant purchased by the
Purchaser pursuant to the Investment Agreement, on the terms and subject to the
conditions set forth in Exhibit 2 thereof.
"Warrant Shares" means shares of Common Stock issuable upon exercise of
the Warrants.
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3. Registration.
3.1 Demand Registration.
(a) Requests. Subject to the provisions of Section 3.6, at any time or
from time to time as of the date hereof, Holders of not less than 25% of the
then outstanding Registrable Securities shall have the right to make written
requests that the Company effect up to four registrations under the Securities
Act of all or part of the Registrable Securities of the Holders making such
request, which requests shall specify the intended method of disposition thereof
by such Holders, including whether the registration requested is for an
underwritten offering. For a registration to be underwritten, a majority of the
Holders requesting registration (as measured by ownership of Registrable
Securities) must so request. The Company shall not be required to effect more
than four registrations under this Section 3.1.
(b) Obligation to Effect Registration. Within 10 days after receipt by
the Company of any request for registration pursuant to Section 3.1(a), the
Company shall promptly give written notice of such requested registration to all
Holders, and thereupon will use its best efforts to effect the registration
under the Securities Act of
(i) the Registrable Securities which the Company has been so requested
to register pursuant to Section 3.1(a), and
(ii) all other Registrable Securities which the Company has been
requested to register by the Holders thereof by written request given to
the Company within 10 days after the Company has given such written notice
(which request shall specify the intended method of disposition of such
Registrable Securities),all to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid)
of the Registrable Securities so to be registered.
(c) Shelf Registration. If requested by Holders of a majority of the
Registrable Securities as to which registration has been requested pursuant to
this Section 3.1, and if the Company is eligible to file such Registration
Statement on Form S-3, the Registration Statement covering such Registrable
Securities shall provide for the sale by the Holders thereof of the Registrable
Securities from time to time on a delayed or a continuous basis under Rule 415
under the Securities Act. If more than one underwritten offering is requested
under any particular shelf registration, each such additional underwritten
offering shall constitute a separate "demand" registration for purposes of
Section 3.1(a).
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(d) Effective Registration Statement. A registration requested pursuant
to Section 3.1(a) shall not be deemed to have been effected unless it is
declared effective by the SEC and remains effective for the period specified in
Section 3.3(b). Not withstanding the preceding sentence, a registration
requested pursuant to Section 3.1(a) that does not become effective after the
Company has filed a Registration Statement with respect thereto by reason of the
refusal to proceed of the Holders of Registrable Securities requesting the
registration, or by reason of a request by a majority of the Selling Holders
participating in such registration that such registration be withdrawn, shall be
deemed to have been effected by the Company at the request of such Holders.
(e) Pro Rata Allocation. If the Holders of a majority of the
Registrable Securities for which registration is being requested pursuant to
Section 3.1(a) determine, based on consultation with the managing underwriters
or, in an offering which is not underwritten, with an investment banker, that
the number of securities to be sold in any such offering should be limited due
to market conditions or otherwise, Holders of Regis trable Securities proposing
to sell their securities in such registration shall share pro rata in the number
of securities being offered (as determined by the Holders holding a major ity of
the Registrable Securities for which registration is being requested in
consultation with the managing underwriters or investment banker, as the case
may be) and registered for their account, such sharing to be based on the number
of Registrable Securities as to which registration was requested by such
Holders.
(f) Inclusion of Other Securities in Demand Registration.
(i) The Company may, subject to the remainder of this Section 3.1(f),
elect to include in any Registration Statement made pursuant to Section 3.1(a),
authorized but unissued shares of Common Stock or shares of Common Stock held as
treasury stock.
(ii) Notwithstanding any other provision of this Section 3(f), the
Company shall not register securities (other than Registrable Securities) for
sale for the account of any Person (other than the Company) in any registration
requested pursuant to Section 3.1(a) unless (x) permitted to do so by the
written consent of the Holders holding at least a majority of the Registrable
Securities proposed to be sold in such registration or (y) required pursuant to
Section 10 of the Legacy Agreement.
(iii) If any Registration Statement made pursuant to Section 3.1(a)
involves an underwritten offering and the managing underwriter of such offering
(or, in connection with an offering that is not underwritten, an investment
banker) shall advise the Company that, in its view, the number of securities
requested to be included in such
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Registration exceeds the largest number that can be sold in an orderly manner in
such offering within a price range acceptable to the selling Holders, the
Company shall include in such Registration:
(A) first, all shares of Common Stock requested to be included in
such Registration by the selling Holders as provided in Section 3.1(e); and
(B) second, to the extent that the number of securities to be
registered pursuant to clause (A) is less than the largest number that can be
sold in an orderly manner in such offering within a price range acceptable to
the selling Holders, securities that the Company proposes to register (except to
the extent otherwise required pursuant to Section 10 of the Legacy Agreement);
and
(C) third, to the extent that the number of shares registered
pursuant to clauses (A) and (B) is less than the largest number that can be sold
in an orderly manner in such offering within a price range acceptable to the
selling Holders, the securities requested to be included by any other holders
(if permitted by the Holders pursuant to Section 3.2(f)(ii)).
The securities to be included in any such registration pursuant to clause (C)
shall be allocated on a pro rata basis among all holders requesting that
securities be included in such registration pursuant to such clause on the basis
of the number of securities requested to be included by such holders.
3.2 Piggyback Registration. If the Company at any time proposes to
register any of its common stock under the Securities Act (other than a
Registration relating solely to the sale of securities to participants in a
Company stock plan, on Form S-4 with respect to any merger, consolidation or
acquisition, pursuant to Section 3.1 or pursuant to a Special Registration),
whether or not for sale for its own account, and the registration form to be
used may be used for the registration of Registrable Securities, it shall each
such time give prompt written notice to all Holders of Registrable Securities of
its intention to do so and, upon the written request of any Holder of
Registrable Securities given to the Company within 10 days after the Company has
given any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such holder and the intended method of disposition
thereof), the Company will use its best efforts to effect the registration under
the Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holders thereof, to the extent required to permit
the disposition (in accordance with the intended methods thereof as aforesaid)
of the Registrable Securities so to be registered, provided that:
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(a) if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of
the Registration Statement filed in connection with such registration,
the Company shall determine for any reason not to register such
securities, the Company may, at its election, give written notice of
such determination to each Holder that was previously notified of such
registration and, thereupon, shall not register any Registrable
Securities in connection with such registration (but shall nevertheless
pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of any Holders to request that a
registration be effected under Section 3.1; and
(b) if the Company shall be advised in writing by the
managing underwriters (or, in connection with an offering which is not
underwritten, by an investment banker) that in their or its opinion the
number of securities requested to be included in such registration
(whether by the Company, pursuant to this Sec tion 3.2 or pursuant to
any other rights granted by the Company to a holder or holders of its
securities to request or demand such registration or inclusion of any
such securities in any such registration) exceeds the number of such
securities which can be sold in such offering in an orderly manner
within a price range that is acceptable to the Company, the Company
shall include in such Registration:
(i) first, all shares of Common Stock that the
Company proposes to register for its own account (except to
the extent otherwise required pursuant to Section 10 of the
Legacy Agreement); and
(ii) second, to the extent that the number of
shares registered pursuant to clause (i) is less than the
largest number that can be sold in an orderly manner in such
offering within a price range acceptable to the Company, (x)
the Registrable Securities requested to be included by the
Holders and (y) in the case of a registration initially
requested or demanded by a holder or holders of securities
other than the Registrable Securities, the securities
requested or demanded to be registered by such other
holders; and
(iii) third, to the extent that the number of
shares registered pursuant to clauses (i) and (ii) is less
than the largest number that can be sold in an orderly
manner in such offering within a price range acceptable to
the Company, the securities requested to be included by any
other holders,
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and the Company shall so provide in any registration agreement
hereinafter entered into with respect to any of its securities.
The securities to be included in any such registration
pursuant to clause (ii) or (iii) shall be allocated on a pro rata basis among
all holders requesting that securities be included in such registration pursuant
to such clause on the basis of the number of securities requested to be included
by such holders.
No registration effected under this Section 3.2 shall
relieve the Company from its obligation to effect registrations upon request
under Section 3.1. The Company shall not be obligated to cause any "piggyback"
registration to be underwritten.
3.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 3.1 and 3.2, the
Company shall:
(a) prepare and file with the SEC, as soon as practicable, a
Registration Statement with respect to such securities, make all
required filings with the NASD and use best efforts to cause such
Registration Statement to become effective at the earliest possible
date;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith and such other documents as may be necessary to
keep such Registration Statement effective until the earlier of (i) 30
days after the effective date of such Registration Statement (360 days
in the case of a Shelf Registration pursuant to Section 3.1(c)) or (ii)
the consummation of the disposition by the Holders of all the
Registrable Securities covered by such Registration Statement and
otherwise comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration
Statement;
(c) furnish to counsel (if any) selected by the Holders of a
majority of the Registrable Securities covered by such Registration
Statement and to counsel for the underwriters in any underwritten
offering copies of all documents proposed to be filed with the SEC in
connection with such registration a reasonable time prior to the
proposed filing thereof and give reasonable consideration in good faith
to any comments of such Holders, counsel and underwriters. The Company
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto pursuant to a registration under
Section 3.1(a) if the Holders of a majority of the Registrable
Securities
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covered by such Registration Statement, their counsel, or the
underwriters, if any, shall reasonably object in writing;
(d) furnish to each seller of Registrable Securities,
without charge, such reasonable number of conformed copies of such
Registration Statement and of each such amendment and supplement
thereto (in each case, including all exhibits (including exhibits
incorporated by reference), financial statements, schedules and all
documents incorporated therein, deemed to be incorporated therein by
reference or filed therewith, except that the Company shall not be
obligated to furnish any seller of securities with more than two copies
of such exhibits and documents), such number of copies of the
Prospectus included in such Registration Statement (including each
preliminary prospectus and any summary prospectus) in conformity with
the requirements of the Securities Act, and such other documents, as
such seller may reasonably request in order to facilitate the
disposition of the securities owned by such seller;
(e) use its best efforts to register or qualify and
cooperate with the Holders of Registrable Securities, the underwriters
and their respective counsels in connection with the registration or
qualification (or exemption from such registration or qualification) of
the securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
request; provided, however, that where Registrable Securities are
offered other than through an underwritten offering, the Company agrees
to cause its counsel to perform blue sky investigations and file
registrations and qualifications required to be filed pursuant to this
Section 3.3(e); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be effective hereunder and do any and all
other acts and things which may be necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it is not so qualified,
subject itself to taxation in any jurisdiction wherein it is not so
subject, or take any action which would subject it to general service
of process in any jurisdiction wherein it is not so subject;
(f) in connection with an underwritten public offering only,
furnish to each seller of Registrable Securities a signed counterpart,
addressed to the sellers, of
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(i) an opinion of counsel for the Company
experienced in securities law matters, dated the effective
date of the Registration Statement, and
(ii) a "cold comfort" letter signed by the
independent public accountants who have issued an audit
report on the Company's financial statements included in the
Registration Statement, subject to such seller having
executed and delivered to the independent public accountants
such certificates and documents as such accountants shall
reasonably request,
covering substantially the same matters with respect to the
Registration Statement (and the Prospectus included therein) and, in
the case of such accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of securities;
(g) (i) notify each Holder of Registrable Securities
subject to such Registration Statement if such Registration
Statement, at the time it or any amendment thereto became effective,
(x) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading upon discovery by the
Company of such material misstatement or omission or (y) upon
discovery by the Company of the happening of any event as a result
of which the Company believes there would be such a material
misstatement or omission, and, as promptly as practicable, prepare
and file with the SEC a post-effective amendment to such
registration statement and use best efforts to cause such
post-effective amendment to become effective such that such
registration statement, as so amended, shall not contain 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, and (ii) notify each Holder of Registrable
Securities subject to such Registration Statement, at any time when
a Prospectus relating thereto is required to be delivered under the
Securities Act, if the Pro spectus 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, in light
of the circum stances under which they were made, not misleading
upon discovery by the Company of such material misstatement or
omission or upon discovery by the Company of the happening of any
event as a result of which the Company believes there would be a
material misstatement or omission, and,
13
as promptly as is practicable, 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 securities, 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, in light of the circumstances under which they
were made, not misleading;
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement of the Company complying with the provisions of Section 11(a)
of the Securities Act and Rule 158 under the Securities Act (or any
similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Securities are sold
to an underwriter or to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to an underwriter or
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of the
relevant Registration Statement, which statements shall cover said
12-month periods;
(i) promptly notify each Holder of any Registrable
Securities covered by such Registration Statement, their counsel and
the underwriters (i) when such Registration Statement, or any
post-effective amendment to such Registration Statement, shall have
become effective, or any amendment of or supplement to the Prospectus
used in connection therewith shall have been filed, (ii) of any request
by the SEC to amend such Registration Statement or to amend or
supplement such Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of
such Registration Statement or of any order preventing or suspending
the use of any preliminary prospectus or the initiation or threatening
of any proceedings for any of such purposes, (iv) of the suspension of
the qualification of such securities for offering or sale in any
jurisdiction, or of the institution of any proceedings for any of such
purposes and (v) if at any time when a Prospectus is to be required by
the Securities Act to be delivered in connection with the sale of the
Registrable Securities, the representations and warranties of the
Company contained in any agreement (including the underwriting
agreement contemplated in Section 3.4(b) below), to the knowledge of
the Company, cease to be true and correct in any material respect;
14
(j) use its best efforts to prevent the issuance of any
order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any
of the Registrable Securities covered thereby for sale in any
jurisdiction, and, if any such order is issued, to obtain the
withdrawal of any such order at the earliest possible moment;
(k) if requested by the managing underwriter, if any, or the
Holders of a majority of the Registrable Securities being sold in
connection with an underwriting offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as
the managing underwriter, if any, or such Holders reasonably request to
be included therein to comply with applicable law and (ii) make all
required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(l) cooperate with the Holders and the managing underwriter,
if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends whatsoever and
shall be in a form eligible for deposit with DTC, and enable such
Registrable Securities to be in such denominations and registered in
such names as the underwriters, if any, or Holders may reasonably
request at least two business days prior to any sale of Registrable
Securities in a firm commitment underwritten public offering;
(m) use its best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with, and to
obtain the consent or approval of, each governmental agency or
authority, whether federal, state, local or foreign, which may be
required to effect such registration or the offering or sale in
connection therewith or to enable the selling Holders to offer, or to
consummate the disposition of, the Registrable Securities subject to
such Registration Statement, except as may be required solely as a
consequence of the nature of such selling Holder's business, in which
case the Company will cooperate in all reasonable respects with the
filing of the Registration Statement and the granting of such
approvals;
(n) prior to the effective date of the Registration
Statement, (i) provide the registrar for the Common Stock or such other
Registrable Securities with printed certificates for such securities in
a form eligible for deposit with DTC and (ii) provide a CUSIP number
for such securities; and
15
(o) cause the Warrants, Warrant Shares, Special Warrants and
Special Warrant Shares to be listed on the NASDAQ NMS (or such other
automated trading system or exchange as shall be the primary trading
system or exchange for the Common Stock) in the event that the
Registrable Securities covered by such Registration Statement include
any Warrants, Warrant Shares, Special Warrants or Special Warrant
Shares not already so listed; and
(p) have the right -- if the Board of Directors of the
Company, in its good faith judgment, determines that any Registration
of shares of Common Stock should not be made or continued because it
would materially interfere with any material financing, acquisition,
corporation reorganization, merger, or other transaction involving the
Company or any of its subsidiaries (a "Valid Business Reason") -- (i)
to postpone filing a Registration Statement until such Valid Business
Reason no longer exists, but in no event for more than 90 days, and
(ii) to cause any Registration Statement that has already been filed to
be withdrawn and its effectiveness terminated or to postpone amending
or supplementing such Registration Statement until such Valid Business
Reason no longer exists, but in no event for more than 90 days (the
"Postponement Period"); provided, however, that in no event shall the
Company be permitted to postpone or withdraw a Registration Statement
within 190 days after the expiration of the Postponement Period.
The Company may require each Holder of any Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding such Holder and the distribution of such
securities as the Company may from time to time reasonably request in writing
and as shall be required by law in connection therewith. Each such Holder agrees
to furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.
The Company agrees not to file or make any amendment to any
Registration Statement with respect to any Registrable Securities, or any
amendment of or supplement to the Prospectus used in connection therewith, which
refers to any seller of any securities covered thereby by name, or otherwise
identifies such seller as the holder of any securities of the Company, without
the consent of such seller, such consent not to be unreasonably withheld, except
that no such consent shall be required for any disclosure that is required by
law.
By the acquisition of Registrable Securities, each Holder
shall be deemed to have agreed that upon receipt of any notice from the Company
pursuant to Section 3.3(g) or (p), such Holder will promptly discontinue such
Holder's disposition of
16
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Holder shall have received, in the case of
clause (i) of Section 3.3(g), notice from the Company that such Registration
Statement has been amended, as contemplated by Section 3.3(g); in the case of
clause (ii) of Section 3.3(g), copies of the supplemented or amended Prospectus
contemplated by Section 3.3(g); or, in the case of Section 3.3(p), the time
period specified has elapsed or such Holder has received notice from the Company
that the Postponement Period has been terminated. If so directed by the Company,
each Holder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, in such Holder's possession of the Prospectus
covering such Registrable Securities at the time of receipt of such notice. In
the event that the Company shall give any such notice, the period mentioned in
Section 3.3(b) 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 any Registrable Secu rities covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 3.3(g).
3.4 Underwritten Offerings. The provisions of this Section
3.4 do not establish additional registration rights but instead set forth
procedures applicable, in addi tion to those set forth in Sections 3.1 through
3.3, to any registration that is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a
registration requested pursuant to Section 3.1 is for an underwritten offering,
only securities that are to be distributed by the underwriters may be included
in the registration.
(b) Underwriting Agreement. If requested by the
underwriters for any underwritten offering by Holders pursuant to a
registration requested under Section 3.1, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Holders
of a majority of the Registrable Securities to be covered by such
registration and to the underwriters and to contain such representations and
warranties by the Company and such other terms and provisions as are
customarily contained in agreements of this type, including, but not limited
to, indemnities to the effect and to the extent provided in Section 3.7,
provisions for the delivery of officers' certificates, opinions of counsel
and accountants' "cold comfort" letters, and hold-back arrangements. The
Holders of Registrable Securities to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that any or all of the represen tations and warranties by, and the
agreements on the part of, the Company to and for the benefit of such
underwriters be made to and for the benefit of such Holders and that any or
all of the conditions precedent to the
17
obligations of such underwriters under such underwriting agreement shall also be
conditions precedent to the obligations of such Holders. No such Holder shall be
required by the Company to make any representations or warranties to, or
agreements with, the Company or the underwriters other than as set forth in
Section 3.4(d) and representations, warranties or agreements regarding such
Holder and such Holder's intended method of distribution.
(c) Selection of Underwriters. Whenever a registration
requested pursuant to Section 3.1 is for an underwritten offering, the Holders
of a majority of the Registrable Securities to be registered pursuant to such
offering shall have the right to select one or more underwriters to administer
the offering, subject to the consent of the Company, which shall not be
unreasonably withheld. If the Company at any time proposes to register any of
its securities under the Securities Act for sale for its own account and such
securities are to be distributed by or through one or more underwriters, the
Company shall have the right to select one or more underwriters to administer
the offering, subject to the consent of the Holders of a majority of Registrable
Securities to be registered pursuant to such offering, which shall not be
unreasonably withheld. In all cases in this Section 3.4(c), at least one of the
underwriters chosen by the Holders or the Company shall be an underwriter of
nationally recognized standing.
(d) Hold Back Agreements. If and whenever the Company
proposes to register any of its equity securities under the Securities Act,
whether or not for its own account (other than pursuant to a Special
Registration), or is required to use its best efforts to effect the registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1
or 3.2, each Holder, if required by the managing underwriter in an underwritten
offering, agrees by acquisition of such Registrable Securities not to effect
(other than pursuant to such registration) any public sale or distribution,
including, but not limited to, any sale pursuant to Rule 144, of any Registrable
Securities, any other equity securities of the Company or any securities
convertible into or exchangeable or exercisable for any equity securities of the
Company during the 10 days prior to, and for 90 days after, the effective date
of such registration, to the extent timely notified in writing by the Company or
the managing underwriter, and the Company agrees to cause each holder of any
equity security, or of any security convertible into or exchangeable or
exercisable for any equity security, of the Company purchased from the Company
at any time other than in a public offering to enter into a similar agreement
with the Company. The foregoing provisions shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering into any
such agreement; provided, however, that any such Holder shall undertake, in its
request to participate in any such underwritten offering, not to effect any
public sale or distribution of any applicable class of Registrable Securities
commencing on the date
18
of sale of such applicable class of Registrable Securities unless it has
provided 45 days prior written notice of such sale or distribution to the
underwriter or underwriters. The Company further agrees not to effect (other
than pursuant to such registration or pursuant to a Special Registration) any
public sale or distribution, or to file any Registration Statement (other than
such registration or a Special Registration) covering any, of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the 10 days prior to, and for 90 days after, the
effective date of such registration if required by the managing underwriter.
3.5 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each Registration Statement registering
Registrable Securities under the Securities Act, the Company shall give the
Holders of such Registrable Securities so to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such Registration Statement,
each Prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto, and shall give each of them such access to all
pertinent financial, corporate and other documents and properties of the Company
and its Subsidiaries, and such opportunities to discuss the business of the
Company with its officers, directors, employees and the independent public
accountants who have issued audit reports on its financial statements as shall
be necessary, in the opinion of such Holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
3.6 Other Registrations. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securi ties Act pursuant to Section 3.1 or 3.2, and if such
registration shall not have been with drawn or abandoned, the Company shall not
be obligated to and shall not file any Registration Statement with respect to
any of its securities (including Registrable Securities) under the Securities
Act (other than a Special Registration), whether of its own accord or at the
request or demand of any holder or holders of such securities, until a period of
180 days shall have elapsed from the effective date of such previous registra
tion, provided that the Company shall not be excused from filing a registration
statement by virtue of this Section 3.6 more than once in a 360 day period.
3.7 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
Section 3.1 or 3.2, the Company shall indemnify and hold harmless the seller of
such securities, its directors, officers, and employees, each other person who
participates as an underwriter, broker or dealer in the offering or sale of such
securities and each other person, if any, who
19
controls such seller or any such participating person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which such seller or any such director, officer, employee, participating person
or controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any Prospectus or preliminary prospectus included therein, or
any amendment or supplement thereto, or (ii) any omission or alleged omission to
state a material fact required to be stated in any such Registration Statement,
Prospectus, preliminary prospectus, amendment or supplement or necessary to make
the statements therein not misleading; and the Company shall reimburse such
seller and each such director, officer, employee, participating person and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding as such expenses are incurred; provided 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 omission made in any such Registration Statement, Prospectus,
preliminary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such seller or
participating person expressly for use in the preparation thereof.
(b) Indemnification by the Sellers. In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
Section 3.1 or 3.2, each of the prospective sellers of such securities, will
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall sign such Registration Statement, and each
other person, if any, who controls the Company or any such participating person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which the Company or any such director, officer, employee,
partici pating person or controlling person may become subject under the
Securities Act or other wise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such securities were
registered under the Securities Act, any Prospectus or preliminary prospectus
included therein, or any amendment or supplement thereto, or any omission or
alleged omission to state a material fact with respect to such seller required
to be stated in any such Registration Statement, Prospectus, preliminary
prospectus, amendment or supplement or necessary to make the statements therein
not misleading if such statement or omission was made in reliance upon and in
20
conformity with written information furnished to the Company by such seller
expressly for use in the preparation of any such Registration Statement,
Prospectus, preliminary prospectus, amendment or supplement; provided that the
liability of each such seller shall be in proportion to and limited to the net
amount received by such seller (after deducting any underwriting discount and
expenses) from the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim re ferred to in the preceding paragraphs of this Section 3.7,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party hereunder, give prompt written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided therein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 3.7 unless the failure to provide prompt written notice shall cause
actual prejudice to the indemnifying party. In case any such action is brought
against an indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to retain
counsel reasonably satisfactory to such indemnified party to defend against such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel and the payment of such fees by the indemnifying party
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them or (iii) the indemnifying
party has not retained counsel to defend such proceeding, in which case (under
any of such clauses (i), (ii) or (iii)) it is understood that (x) the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties and (y)
such firm shall be designated in writing by the Holders of a majority of the
Registrable Securities included in such Registration Statement in the case of
parties indemnified pursuant to Section 3.7(a) and by the Company in the case of
parties indemnified pursuant to Section 3.7(b). All fees and expenses that an
indemnified party is entitled to receive from an indemnifying party under this
Section 3.7 shall be reimbursed as they are incurred, provided that each such
indemnified party shall promptly repay such fees and expenses if it is finally
judicially determined that such indemnified party is not entitled to
indemnification hereunder. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such
21
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such judgment or settlement includes as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 3.7 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
such Registrable Securities under any federal or state law or regulation of
governmental authority other than the Securities Act.
(e) Other Remedies. If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold harmless an indemnified
party, other than by reason of the exceptions provided therein, then the
indemnifying party shall contribute to the amount paid or payable by the
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 indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault 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 the Holders of Registrable Securities
covered by the Registration Statement in question and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 3.7 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. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph of this Section 3.7 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
22
misrepresentation. No party shall be liable for contribution under this Section
3.7(e) except to the extent and under such circumstances as such party would
have been liable to indemnify under this Section 3.7 if such indemnification
were enforceable under applicable law.
(f) Officers and Directors. As used in this Section 3.7, the
terms "officers" and "directors" shall include the partners of Holders which are
partnerships and the members of Holders which are limited liability companies.
3.8 Expenses. The Company shall pay all Registration
Expenses in connection with each registration of Registrable Securities pursuant
to this Section 3.
4. Miscellaneous.
4.1 Rule 144; Legended Securities; etc. (a) The Company
shall file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder
(or, if the Company is not required to file such reports, it shall, upon the
request of any Holder, make publicly available such information as necessary to
permit sales pursuant to Rule 144 or Rule 145), and shall take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such holder to sell shares of Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 or Rule 145. Upon the request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) The Company shall issue new certificates for Registrable
Securities without a legend restricting further transfer if (i) such securities
have been sold to the public pursuant to an effective Registration Statement
under the Securities Act (other than Form S-8 if the Holder of such Registrable
Securities is an Affiliate) or Rule 144, or (ii) (x) such issuance is otherwise
permitted under the Securities Act, (y) the Holder of such shares has delivered
to the Company an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company, to such effect and (z) the Holder of
such shares expressly requests the issuance of such certificates in writing.
4.2 Amendments and Waivers. This Agreement may be amended,
modified or supplemented, and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the Holder or Holders of at least a majority of the
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions
23
hereof with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect, impair, limit or compromise the
rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing. Any such waiver shall constitute a waiver only with respect to
the specific matter described in such writing and shall in no way impair the
rights of the party or parties granting such waiver in any other respect or at
any other time.
4.3 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election and unless notice is otherwise
given to the Company by the record owner, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders pursuant to this Agreement or any determination of any number or
percentage of shares of Registrable Securities held by any Holder or Holders
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
4.4 Successors, Assigns and Transferees. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors assign and transferees. Purchaser or a Holder may
assign its rights hereunder to an Affiliate or to a Distributee or to other
successors, assigns and transferees of Purchaser or such Holder. This Agreement
shall survive any transfer of Registrable Securities to and shall inure to the
benefit of an Affiliate, a Distributee or such other successors, assigns and
transferees of Purchaser or such Holder. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the parties hereto other than the Company shall also be
for the benefit of and enforceable by any subsequent Holder of Registrable
Securities, subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities required in order to be entitled
to certain rights, or take certain actions, contained herein.
4.5 Notices. All notices and other communications in
connection with this Agreement shall be in writing. Any notice or other
communication in connection herewith shall be deemed duly given to any party (a)
two Business Days after it is sent by express, registered or certified mail,
return receipt requested, postage prepaid, (b)
24
one Business Day after it is sent by overnight courier, (c) when delivered by
hand, if personally delivered or (d) when receipt is acknowledged by the
addressee, if telecopied. Notices shall be addressed, if to any Holder not a
party hereto on the date hereof, to the address of such Holder in the stock
record books of the Company, and if to the Company to the following address:
U.S. Office Products Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Director
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address or addresses as the Company may have designated in
writing to each holder of Registrable Securities at the time outstanding. Copies
of any notice or other communication given under the Agreement shall also be
given to:
▇▇▇▇▇▇▇, Dubilier & Rice Fund V
Limited Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Dubilier & Rice, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
25
and to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Any party may give any notice or other communication in connection herewith
using any other means (including, but not limited to, messenger service, telex
or ordinary mail), but no such notice or other communication shall be deemed to
have been duly given unless and until it is actually received by the individual
for whom it is intended.
4.6 No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement, or amend any existing agreement, with
respect to its securities if such agreement would be inconsistent with the
rights granted to the Holders by this Agreement.
4.7 Remedies; Attorneys' Fees. Each Holder of Registrable
Securities, in addition to being entitled to exercise all rights provided herein
or granted by law, in cluding recovery of damages, shall be entitled to specific
performance of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any provision of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. As between the parties to this Agreement, in any action or proceeding
brought to enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorney's fees in addition to its costs and expenses and
any other available remedy.
4.8 Severability. If any clause, provision or section of
this Agreement shall be invalid, illegal or unenforceable, the invalidity,
illegality or unenforceability of such clause, provision or section shall not
affect the enforceability or validity of any of the remaining clauses,
provisions or sections hereof to the extent permitted by applicable law. The
invalidity of any one or more phrases, sentences, clauses, Sections or sub
sections of this Agreement shall not affect the remaining portions of this
Agreement.
4.9. Headings. The headings contained in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.
26
4.10. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
4.11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without giving effect to its principles or rules of conflict of laws that
would require the application of the laws of any other jurisdiction.
4.12 No Third Party Beneficiaries. Except as provided in
Sections 3.7 and 4.4, nothing in this Agreement shall confer any rights upon any
person or entity other than the parties hereto, each such party's respective
successors and permitted assigns.
4.13 Consent to Jurisdiction. Each party irrevocably submits
to the personal exclusive jurisdiction of the United States District Court for
the Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
(and, to the extent permitted under applicable rules of procedure, agrees not to
commence any action, suit or proceeding relating hereto except in such court).
Each party further agrees that service of any process, summons, notice or
document hand delivered or sent by registered mail to such party's respective
address set forth in Section 4.5 will be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction as set forth in the immediately preceding
sentence. Each party irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in the United States District Court for
the Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in such court that any
such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.
27
IN WITNESS WHEREOF, each of the undersigned has executed
this Agreement or caused this Agreement to be executed on its behalf as of the
date first written above.
U.S. OFFICE PRODUCTS COMPANY
By:
-------------------------
Name:
Title:
CDR-PC ACQUISITION, L.L.C.
By:
-------------------------
Name:
Title:
28
