EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
October 30, 1996
To: Burlington Industries, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Advanced Textiles, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This will confirm that in consideration of your agreement to consummate
the sale and purchase of all of the capital stock of Advanced Textiles, Inc.
("ATI") to Brunswick Technologies, Inc., a Maine corporation (the "Company"),
for consideration in the form of, (a) to Burlington Industries, Inc. ("BI"), a
convertible subordinated promissory note in the principal amount of $7,296,500
(the "Note"), and cash in the amount of $600,000 as more fully described in the
Stock Purchase Agreement dated October 22, 1996 as amended to date (the "Stock
Purchase Agreement"), and, (b) to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("DeWalt"), 118 shares of the
Company. The Note is convertible into shares of common stock of the Company upon
the terms set forth in the Note (the "Conversion Shares"), and the Company and
DeWalt have entered into an Employment Agreement (the "Employment Agreement"),
dated as of even date herewith, pursuant to which, subject to the approval by
the stockholders of the Company, DeWalt shall be eligible to receive additional
shares of the common stock of the Company in the future pursuant to its terms
and an option to be granted to him by the Company (the "Option"). Pursuant to
the Stock Purchase Agreement between the Company and you and (as to DeWalt) the
Employment Agreement between the Company and you and as an inducement to you to
consummate the transactions contemplated thereby, the Company covenants and
agrees with you as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock of the Company .
"Conversion Shares" shall mean the shares of Common Stock issued upon
conversion of the Note or any part thereof.
"DeWalt Shares" shall mean the shares of Common Stock issued to DeWalt
as consideration for the sale and purchase of his shares of capital stock of ATI
and also the shares, if any, that DeWalt may receive in the future pursuant to
the Employment Agreement or Option.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Qualified Public Offering" shall mean any firm underwritten public
offering of shares of Common Stock of the Company at a price greater than or
equal to Two Hundred Fifty Dollars ($250) per share (as adjusted) and in which
the aggregate net proceeds of the Company are not less than Five Million Dollars
($5,000,000).
"Registration Expenses" shall mean the expenses so described in Section
7.
"Restricted Stock" shall mean (i) the Conversion Shares, and (ii) the
DeWalt Shares, but excluding those shares which have been (a) registered under
the Securities Act pursuant to an effective registration statement filed
thereunder and disposed of in accordance with the registration statement
covering them or (b) may be publicly sold pursuant to Rule 144 under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8.
2. Restrictive Legend. Each certificate representing Conversion Shares
or DeWalt Shares shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 OF THE ACT. THESE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
UNLESS (i) THE TRANSACTION IS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE AND THE ISSUER AS RECEIVED AN OPINION REASONABLY SATISFACTORY
TO CORPORATE COUNSEL TO THAT EFFECT."
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A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act.
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Conversion Shares or DeWalt Shares (other than under the circumstances described
in Sections 4 or 5), the holder thereof shall give written notice to the Company
of its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company to the effect
that the proposed transfer may be effected without registration under the
Securities Act, whereupon the holder of such stock shall be entitled to transfer
such stock in accordance with the terms of its notice; provided, however, that
no such opinion of counsel shall be required for a transfer to one or more
partners of the transferor (in the case of a transferor that is a partnership)
or to an affiliated corporation (in the case of a transferor that is a
corporation). Each certificate for Conversion Shares or DeWalt Shares
transferred as above provided shall bear the legend set forth in Section 2,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act. The restrictions provided for in this Section 3 shall not
apply to securities which are not required to bear the legend prescribed by
Section 2 in accordance with the provisions of that Section.
4. Required Registration.
(a) At any time commencing ninety (90) days after any registration
statement covering a Qualified Public Offering shall have become effective and
ending ten (10) years after the date of said Qualified Public Offering, the
holder of the Note may request the Company to register under the Securities Act
all or any portion of the shares of Restricted Stock held by such requesting
holder for sale in the manner specified in such notice and the Company will use
its best efforts to cause such stock to be registered, provided, that the shares
of Restricted Stock for which registration has been requested shall constitute
at least 20% of the total shares of the Company's Common Stock issued or
issuable upon the conversion of the Note if such holder or holders shall request
the registration of less than all shares of Restricted Stock then held by such
holder. For Purposes of this Section 4 and Sections 5, 12(a) and 12(d), the term
"Restricted Stock" shall be deemed to include the number of shares of Restricted
Stock which would be issuable to a holder of the Note upon conversion of the
entire outstanding principal of the Note, provided, however, that the only
securities which the Company shall be required to register pursuant hereto shall
be shares of Common Stock, and provided, further, however, that, in any
underwritten public offering contemplated by this Section 4 or Sections 5 and 6,
the holders of Conversion Shares or DeWalt Shares shall be entitled to sell such
Conversion Shares or DeWalt Shares to the underwriters for conversion and sale
of the shares of Common Stock issued upon conversion thereof. Notwithstanding
anything to the contrary contained herein, (i) no request may be
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made under this Section 4 (a) within the Restricted Period (as defined below),
and (ii) the Company will not be obligated to effect more than two (2)
registrations under this Section 4 (a).
For purposes of this Agreement, "Restricted Period" shall mean the
period beginning on the effective date of a registration statement filed by the
Company either (x) for its own account pursuant to a firm commitment
underwritten public offering, or (y) pursuant to a demand under Section 4(a) of
the Amended and Restated Registration Rights Agreement dated as of August 25,
1993, as amended to date (the "1993 Agreement"), and ending on the earlier of
the completion of the distribution pursuant to such registration statement or
120 days after such effective date.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom notice has
not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within thirty (30) days after the giving of such
notice by the Company). If such method of disposition shall be an underwritten
public offering, the holders of a majority of the shares of Restricted Stock to
be sold in such offering may designate the managing underwriter of such
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed. The Company shall be obligated to register
Restricted Stock pursuant to this Section 4 on two occasions only, provided,
however, that such obligation shall be deemed satisfied only when a registration
statement covering all shares of Restricted Stock specified in notices received
as aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Except for registration statements
on Form ▇-▇, ▇-▇ or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other stockholders during the Restricted
Period.
5. Incidental Registration.
If the Company at any time (other than pursuant to Section 4) proposes
to register any of its securities under the Securities Act for sale to the
public, whether for its own account or for the account of other security holders
or both (except with respect to registration statements on Forms ▇-▇, ▇-▇ or
another form not available for registering the
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Restricted Stock for sale to the public), each such time it will give written
notice to all holders of outstanding Restricted Stock of its intention so to do.
Upon the written request of any such holder, received by the Company within
thirty (30) days after the giving of any such notice by the Company, to register
any of its Restricted Stock (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit the sale or
other disposition by the holder (in accordance with its written request) of such
Restricted Stock so registered. In the event that any registration pursuant to
this Section 5 shall be, in whole or in part, an underwritten public offering of
Common Stock, (i) as a condition to the exercise of its rights under this
Section 5, each holder of Restricted Stock must agree to participate in the
underwriting arrangements described in the notice, and (ii) the number of shares
of Restricted Stock to be included in such an underwriting may be reduced (pro
rata among all requesting holders pursuant hereto and other holders of rights
similar to those described in this Section 5, based upon (i) as to the holders
requesting hereunder, the number of shares of Restricted Stock owned by such
holders, and (ii) as to any other holders of similar rights, shares of Common
Stock owned by or issuable to such holders as to which such rights are
applicable, if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein. In order to facilitate the
allocation of shares as provided herein, the Company or the underwriter may
round the number of shares allocated to any holder to the nearest 100 shares.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 5 without thereby incurring
any liability to the holders of Restricted Stock.
The Company, as an inducement to BI and DeWalt to enter into this
Agreement, hereby: (i) represents that the 1993 Agreement contains the same
restrictions on the rights of the parties thereto (other than the Company) to
effect an incidental registration of shares of capital stock of the Company
owned by them or issuable to them (the"Existing Holders' Restrictions") as are
set forth in this Section 5 relative to the incidental registration rights of BI
and DeWalt, and (ii) covenants and agrees to effect no amendment to the Existing
Holders' Restrictions without the prior written consent of BI and DeWalt during
the effectiveness of this Agreement.
6. Registration Procedure. If and whenever the Company is required by
the provisions of Sections 4 or 5 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
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(b) 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 period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each underwriter
such number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably may
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions within the United States as the sellers of Restricted
Stock or, in the case of an underwritten public offering, the managing
underwriter reasonably shall request, provided, however, that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any seller of
Restricted Stock, the Company shall use its best efforts to furnish on the date
that Restricted Stock is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters and to such
seller, stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters
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or by such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
For purposes of Sections 6(a) and 6(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby or one hundred
(120) days after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws. In connection with each registration pursuant to Sections 4 or
5 covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
7. Expenses. All expenses incurred by the Company in complying with
Sections 4 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of its counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance, and fees and
disbursements of one counsel for the sellers of Restricted Stock, but excluding
any Selling Expenses, are called "Registration Expenses". All underwriting
discounts and selling commissions applicable to the sale of Restricted Stock are
called "Selling Expenses".
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The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4 or 5. All Selling Expenses in connection
with each registration statement under Sections 4 or 5 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.
8. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 4 or 5, the Company will indemnify and
hold harmless each seller of such Restricted Stock thereunder, each underwriter
of such Restricted Stock thereunder and each other person, if any, who controls
such seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4 or 5, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 4 or 5, each seller of such Restricted
Stock thereunder, severally and not jointly, will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such officer, director, underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Sections 4 or 5, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material
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fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the proceeds received
by such seller from the sale of Restricted Stock covered by such registration
statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 8 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 8 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 8 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assert such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 8 but it is judicially determined (by the entry of a
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final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 8 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any such selling holder
or any such controlling person in circumstances for which indemnification is
provided under this Section 8; then, and in each such case, the Company and such
holder will contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such proportion
so that such holder is responsible for the portion represented by the percentage
that the public offering price of its Restricted Stock offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for the
remaining portion; provided, however, that, in any such case, (A) no such holder
will be required to contribute any amount in excess of the public offering price
of all such Restricted Stock offered by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
9. Changes in Common Stock or Conversion Shares or DeWalt Shares. If,
and as often as, there is any change in the Common Stock or the Conversion
Shares or DeWalt Shares by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock or the Conversion Shares or DeWalt
Shares as so changed.
10. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, at all times
after ninety (90) days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
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11. Representations and Warranties of the Company. The Company
represents and warrants as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Charter or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
12. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any Conversion Shares or DeWalt Shares or Restricted
Stock), whether so expressed or not, provided, however that registration rights
contained herein for the holders of Conversion Shares or DeWalt Shares shall
only inure to the benefit of a transferee of Conversion Shares or DeWalt Shares
if (i) there is transferred to such transferee at least 20% of the aggregate
total of Conversion Shares and DeWalt Shares issued or issuable to the direct or
indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder or affiliate of a party hereto, which transferee (and such shares)
shall continue to be subject to the aggregate threshold for demand rights
hereunder and all other provisions hereof and such transferee shall execute and
deliver to the Company an agreement to such effect.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by certified or registered mail, return
receipt requested, postage prepaid, or telecopied, addressed as follows:
if to the Company or any other party hereto, at the address of
such party set forth in the Stock Purchase Agreement;
if to any subsequent holder of Conversion Shares or DeWalt
Shares, to it at such address as may have been furnished to the Company
in writing by such holder; or
in any case, at such other address or addresses as shall have
been furnished in writing to the Company (in the case of a holder of
Conversion Shares or DeWalt
11
Shares) or to the holders of Conversion Shares or DeWalt Shares (in the
case of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maine.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of Restricted Stock.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered in such offering), without the consent of such underwriters, for a
period of not more than ninety (90) days following the effective date of the
registration statement relating to such offering; provided, however, that all
persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering and all executive officers and directors of the
Company shall also have agreed not to sell publicly their Common Stock under the
circumstances and pursuant to the terms set forth in this Section 12(f).
(g) Notwithstanding the provisions of Section 6(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed ninety (90) days in any twenty-four (24) month period if there exists at
the time material non-public information relating to the Company which, in the
reasonable opinion of the Company, should not be disclosed.
(h) The Company shall not grant to any third party any registration
rights more favorable than any of those contained herein, so long as any of the
registration rights under this Agreement remains in effect.
(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(j) This Agreement constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith.
12
13
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
BRUNSWICK TECHNOLOGIES, INC.
By: ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
thereunto duly authorized
BURLINGTON INDUSTRIES, INC.
By: -------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
thereunto duly authorized
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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