Exhibit 4.2
EXECUTION COPY
FALCON PRODUCTS, INC.
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 15, 2004
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
---------
entered into as of June 15, 2004, by and between Falcon Products, Inc., a
Delaware corporation (the "Company"), and OCM Principal Opportunities Fund
-------
II, L.P., a Delaware limited partnership ("Oaktree"). Capitalized terms used
-------
but not otherwise defined herein are defined in Section 8 hereof.
---------
The Company and Oaktree are parties to the Amended and
Restated Loan and Security Agreement, dated as of January 15, 2004 (as the
same has been and may be amended, restated or modified from time to time,
the "Loan Agreement"), among Fleet Capital Corporation, a Rhode Island
--------------
corporation, individually as a Lender and as Agent for itself and any other
financial institution which is or becomes a party thereto (each such
financial institution, including Fleet, individually, a "Lender"), the
------
Lenders (including Oaktree) and each of the Company, Xxxxxx Xxxxxxxx
Industries, Inc., a Delaware corporation, and Sellers & Xxxxxxxxx Inc., a
New Jersey corporation. The Company desires that Oaktree waive certain
defaults under the Loan Agreement, amend certain provisions thereof and make
an additional loan thereunder.
In order to induce Oaktree to take such actions, the
Company has agreed to sell to Oaktree a warrant to purchase shares of the
Company's Common Stock (the "Warrant") on the terms and subject to the
-------
conditions set forth therein and to provide the registration and other
rights described herein (including, without limitation, the right to cause
the registration of the shares of Common Stock issued or issuable upon
exercise of the Warrant).
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
SECTION 1. DEMAND REGISTRATIONS
1A. REQUESTS FOR REGISTRATION. Subject to Section 1B, at
------------------------- ----------
any time and from time to time, the holder(s) of a majority of the
Registrable Securities may request registration under the Securities Act (a
"Demand Registration") of all or any portion of such holders' Registrable
-------------------
Securities on Form S-1 or any similar long-form registration (a "Long-Form
---------
Registration") or, if available, on Form S-2 or S-3 or any similar
------------
short-form registration (a "Short-Form Registration"). Each request for a
-----------------------
Demand Registration shall specify the approximate number of Registrable
Securities requested to be registered and the anticipated per share price
range for such offering. Within ten (10) days after receipt of any such
request, the Company will give written notice of such requested registration
to all other holders of Registrable Securities and, subject to Section 1D
----------
below, will include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion
therein within fifteen (15) days after the receipt of the Company's notice.
1B. LONG-FORM REGISTRATIONS. The holder(s) of a majority
-----------------------
of the Registrable Securities will be entitled to request two (2) Long-Form
Registrations for which the Company will pay all Registration Expenses
incurred in connection therewith; provided that, in the event the holder(s)
--------
of a majority of the Registrable Securities are unable to sell at least 80%
of the
Registrable Securities initially requested to be included in such
registration by such holders, then such request and related registration
shall not count as any of the two (2) Long-Form Registrations to which such
holders are entitled to request pursuant to this Section 1B, and the Company
----------
shall nevertheless pay all Registration Expenses incurred in connection with
such registration.
1C. SHORT-FORM REGISTRATIONS. In addition to the Long-Form
------------------------
Registrations provided pursuant to Section 1B, the holder(s) of a majority
----------
of the Registrable Securities will be entitled to request an unlimited
number of Short-Form Registrations for which the Company will pay all
Registration Expenses incurred in connection therewith. Demand Registrations
will be Short-Form Registrations whenever the Company is permitted to use
any applicable short form. The Company will use its reasonable best efforts
to make Short-Form Registrations available for the sale of Registrable
Securities. If the Company has filed with the Securities and Exchange
Commission, pursuant to the request of the holder(s) of a majority of the
Registrable Securities, a registration statement under the Securities Act on
Form S-3 pursuant to Rule 415 under the Securities Act (the "Required
--------
Registration"), then the Company shall use its best efforts to cause the
------------
Required Registration to be declared effective under the Securities Act as
soon as practicable after filing, and, once effective, the Company shall
cause such Required Registration to remain effective until the date on which
all Registrable Securities have been sold pursuant to the Required
Registration.
1D. PRIORITY ON DEMAND REGISTRATIONS. The Company will not
--------------------------------
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holder(s) of a majority
of the Registrable Securities initially requested to be included in such
Demand Registration. If a Demand Registration is an underwritten offering
and the managing underwriters advise the Company in writing that in their
opinion the number of Registrable Securities and, if permitted hereunder,
other securities requested to be included in such offering exceeds the
number of Registrable Securities and other securities, if any, which can be
sold in an orderly manner in such offering within a price range acceptable
to the holder(s) of a majority of the Registrable Securities initially
requested to be included in such Demand Registration (the "Optimal Number"),
--------------
the Company shall include in such registration, if any, (i) first, the
Registrable Securities requested to be included in such registration up to
the Optimal Number, pro rata among the holders of such Registrable
Securities on the basis of the number of Registrable Securities owned by
each such holder, and (ii) second, if all Registrable Securities requested
to be included in such registration by the holders thereof have been so
included, such other securities requested to be included in such
registration, if permitted hereunder, up to a number of such securities
that, when combined with the Registrable Securities included in such
registration, causes the total number of securities (including all
Registrable Securities) included in such registration to be less than or
equal to the Optimal Number.
1E. RESTRICTIONS ON DEMAND REGISTRATIONS. The Company
------------------------------------
shall not be obligated to effect any Long-Form Registration within 90 days
after the effective date of a previous Long-Form Registration or a previous
registration in which the holders of Registrable Securities were given
piggyback rights pursuant to Section 2 and there was no reduction in the
---------
number of Registrable Securities requested to be included in such
registration. The Company may postpone for up to 90 days the filing or the
effectiveness of a registration statement for a
2
Demand Registration if the Board determines that such Demand Registration
would reasonably be expected to have an adverse effect on any proposal or
plan by the Company or any of its Subsidiaries to engage in any acquisition
of assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or similar transaction; provided that, in such
--------
event, the holder(s) of a majority of the Registrable Securities initially
requested to be included in such Demand Registration will be entitled to
withdraw such request. The Company may postpone a Demand Registration
hereunder only once in any twelve-month period.
1F. SELECTION OF UNDERWRITERS. If any Demand Registration
-------------------------
is an underwritten offering, the holder(s) of a majority of the Registrable
Securities will have the right to select the investment banker(s) and
manager(s) which will administer such offering.
1G. OTHER REGISTRATION RIGHTS. Except as provided in this
-------------------------
Agreement, the Company will not grant to any Person(s) the right to request
the Company to register any equity securities of the Company, or any
securities convertible or exchangeable into or exercisable for such
securities, whether as a demand registration or a piggyback registration,
without the prior written consent of the holder(s) of a majority of the
Registrable Securities.
1H. DEMAND REGISTRATION EXPENSES. The Registration
----------------------------
Expenses in connection with any Demand Registration will be paid by the
Company, including the reimbursement of the holders of Registrable
Securities included in such registration for the reasonable fees and
disbursements of one counsel chosen by the holder(s) of a majority of the
Registrable Securities included in such registration.
SECTION 2. PIGGYBACK REGISTRATIONS
2A. RIGHT TO PIGGYBACK. Whenever the Company proposes to
------------------
register any of its securities under the Securities Act (other than (i)
pursuant to a Demand Registration (but subject to the rights of holders of
Registrable Securities to participate in Demand Registrations pursuant to
Section 1) or (ii) pursuant to a registration on Form S-4 or S-8 or any
---------
successor or similar forms) and the registration form to be used may be used
for the registration of Registrable Securities (a "Piggyback Registration"),
----------------------
the Company will give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and will use its
reasonable best efforts to include in such registration all Registrable
Securities with respect to which the Company has received written requests
for inclusion therein within fifteen (15) days after the receipt of the
Company's notice.
2B. PIGGYBACK EXPENSES. The Registration Expenses of the
------------------
holders of Registrable Securities will be paid by the Company in all
Piggyback Registrations.
2C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
---------------------------------
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering in an
orderly manner within a price range acceptable to the Company (the "Primary
-------
Optimal Number"), the Company will include in such registration, if any, (i)
--------------
first, the securities the Company proposes
3
to sell on its own behalf up to the Primary Optimal Number, (ii) second, if
all securities the Company proposes to sell on its own behalf are included
in such registration, the Registrable Securities requested to be included in
such registration, pro rata among the holders of such Registrable Securities
on the basis of the number of shares owned by each such holder, up to an
aggregate number of such Registrable Securities that, when combined with the
securities being sold by the Company on its own behalf in such registration,
causes the total number of securities (including all Registrable Securities)
included in such registration to be less than or equal to the Primary
Optimal Number, and (iii) third, if all Registrable Securities requested to
be included in such registration by the holders thereof have been so
included, such other securities requested to be included in such
registration, if permitted hereunder, up to a number of such securities
that, when combined with the securities being sold by the Company on its own
behalf and the Registrable Securities included in such registration, causes
the total number of securities (including all securities being sold by the
Company on its own behalf and all Registrable Securities) included in such
registration to be equal to the Primary Optimal Number.
2D. OTHER REGISTRATIONS. If the Company has previously
-------------------
filed a registration statement with respect to Registrable Securities
pursuant to Section 1 or pursuant to this Section 2 and such previous
--------- ---------
registration has not been withdrawn or abandoned, then, unless such previous
registration is a Required Registration, the Company will not file or cause
to be effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-4 or S-8 or any
successor form and except pursuant to Section 1 hereof), whether on its own
---------
behalf or at the request of any holder or holders of such securities, until
at least six (6) months have elapsed from the effective date of such
previous registration.
2E. POSTPONEMENT OR WITHDRAWAL. If, at any time after
--------------------------
giving written notice of its intention to register any of its securities as
set forth in Section 2A and prior to the effective date of such registration
----------
statement filed in connection with such registration, the Board shall
determine in its good faith judgment for any reason not to register such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and thereupon shall
be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation hereunder to
pay the Registration Expenses incurred prior to such notice in connection
therewith).
SECTION 3. HOLDBACK AGREEMENTS
3A. AGREEMENT OF HOLDERS OF REGISTRABLE SECURITIES. To the
----------------------------------------------
extent not inconsistent with applicable law, no holder of Registrable
Securities shall effect any public sale or distribution of any equity
securities of the Company, or any securities, options or rights convertible
into or exchangeable or exercisable for any such securities, during the
seven (7) days prior to or the 180-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration, unless the underwriters managing such registered public
offering otherwise agree in writing.
3B. COMPANY AGREEMENT. The Company shall (i) not effect
-----------------
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or
4
exercisable for any such securities, during the seven (7) days prior to or
the 180-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except in
each case as part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form), unless the
underwriters managing such registered public offering otherwise agree in
writing, and (ii) cause each holder of shares of Common Stock, or any
securities convertible into or exchangeable or exercisable for shares of
Common Stock, purchased from the Company at any time after the date of this
Agreement (other than shares of Common Stock constituting Registrable
Securities hereunder and other than shares of Common Stock purchased
pursuant to an Excluded Issuance (as defined in the Warrant) or an
underwritten public offering) to agree not to, directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer any such shares or other
securities, in either case during the seven (7) days prior to or the 180-day
period beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except in each case
as part of such underwritten registration, but only if permitted hereunder),
unless the underwriters managing such registered public offering otherwise
agree in writing.
SECTION 4. REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have
requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use its reasonable best efforts to effect the
registration and the sale of such Registrable Securities in accordance with
the intended method of disposition thereof, and pursuant thereto the Company
will as expeditiously as reasonably possible:
(i) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable
Securities and thereafter use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
--------
statement or prospectus or any amendments or supplements thereto, the
Company will furnish to the counsel selected by the holder(s) of a majority
of the Registrable Securities initiating such registration statement copies
of all such documents proposed to be filed, which documents will be subject
to review of such counsel);
(ii) notify each holder of Registrable Securities of the
effectiveness of each Registration Statement filed hereunder and prepare and
file with the Securities and Exchange 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 a period of either (i) not less than six (6) months (subject
to extension pursuant to Section 7) or, if such registration statement
---------
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be delivered
in connection with sales of Registrable Securities by an underwriter or
dealer, or (ii) such shorter period as will terminate when all of the
securities covered by such registration statement have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but in any event not
before the expiration of any longer period required under the Securities
Act), and to comply with the
5
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of
such securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement; provided that the Company shall not be obligated to
--------
maintain the effectiveness of any registration statement for a period of
more than twenty-four (24) months from the date on which the such
registration statement initially becomes effective;
(iii) furnish to each seller of Registrable Securities
such number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company will
--------
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction);
(v) notify each seller of such Registrable Securities,
at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the discovery of the
happening of any event as a result of which, the prospectus included in such
registration statement contains an untrue statement of a material fact or
omits any fact necessary to make the statements therein not misleading in
the light of the circumstances under which they were made, and, at the
request of any such seller, the Company will prepare and furnish to such
seller a reasonable number of copies of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement
of a material fact or omit to state any fact necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made;
(vi) cause all such Registrable Securities to be listed
on each securities exchange or market on which similar securities issued by
the Company are then listed and, if not so listed, to be listed on the NASD
automated quotation system and, if listed on the NASD automated quotation
system, use its best efforts to secure designation of all such Registrable
Securities covered by such registration statement as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 of the Securities
and Exchange Commission or, failing that, to secure NASDAQ authorization for
such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such
with respect to such Registrable Securities with the NASD;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
6
(viii) enter into such customary agreements (including
underwriting agreements in customary form) as may be requested by the
underwriters and take all such other actions as the holder(s) of a majority
of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities (including, without limitation, effecting a
stock split or a combination of shares);
(ix) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or
other agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(xi) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, which in
the reasonable judgment of such holder and its counsel should be included;
(xii) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Securities included in such registration statement for
sale in any jurisdiction, the Company will use its reasonable best efforts
promptly to obtain the withdrawal of such order;
(xiii) obtain one or more comfort letters, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing
under the underwriting agreement), signed by the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by comfort letters as the holder(s) of a majority of the
Registrable Securities being sold reasonably request (provided that such
--------
Registrable Securities constitute at least 10% of the securities covered by
such registration statement); and
(xiv) as required by the Securities Act or by an
underwriter, provide a legal opinion of the Company's outside counsel, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing
under the underwriting agreement), with respect to the registration
statement, each amendment and supplement thereto, the prospectus included
therein (including the preliminary prospectus)
7
and such other documents relating thereto in customary form and covering
such matters of the type customarily covered by legal opinions of such
nature.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing.
SECTION 5. REGISTRATION EXPENSES
5A. COMPANY EXPENSES. All expenses incident to the
----------------
Company's performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the Company
and all independent certified public accountants, underwriters (excluding
discounts and commissions) and other Persons retained by the Company (all
such expenses being herein called "Registration Expenses"), will be borne as
---------------------
provided in this Agreement, except that the Company will, in any event, pay
its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the expense of
any liability insurance and the expenses and fees for listing the securities
to be registered on each securities exchange on which similar securities
issued by the Company are then listed or on the NASD automated quotation
system.
5B. REIMBURSEMENT. In connection with each Demand
-------------
Registration and each Piggyback Registration, the Company will reimburse the
holders of Registrable Securities covered by such registration for the
reasonable fees and disbursements of one counsel chosen by the holder(s) of
a majority of the Registrable Securities included in such registration. In
addition, in connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable
Securities included in such registration for the reasonable fees and
disbursements of each additional counsel retained by any holder of
Registrable Securities to the extent related to the rendering of any legal
opinion required by the Company or the managing underwriter(s) to be
rendered on behalf of such holder in connection with any underwritten Demand
Registration or underwritten Piggyback Registration.
SECTION 6. INDEMNIFICATION
6A. INDEMNIFICATION OBLIGATION OF THE COMPANY. The Company
-----------------------------------------
agrees to indemnify and hold harmless, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each Person
who controls such holder (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses caused by (i) any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or, (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, except in so far as the same are
caused by or contained in any information furnished in writing to the
Company by or on behalf of such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration
8
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each Person
who controls such underwriters (within the meaning of the Securities Act) to
the same extent as provided above with respect to the indemnification of the
holders of Registrable Securities.
6B. INDEMNIFICATION OF THE COMPANY. In connection with any
------------------------------
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify and hold harmless the Company, its
directors and officers and each other Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses caused by (i) any untrue or alleged untrue
statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or (ii) any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by or on
behalf of such holder; provided that the obligation to indemnify will be
--------
individual to each holder and will be limited to the net amount of proceeds
received by such holder from the sale of Registrable Securities pursuant to
such registration statement.
6C. INDEMNIFICATION PROCEDURES. Any Person entitled to
--------------------------
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification (provided that the failure to give prompt notice shall not
--------
impair any Person's right to indemnification hereunder to the extent such
failure has not adversely affected the indemnifying party) and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.
6D. OTHER INDEMNIFICATION PROVISIONS. The indemnification
--------------------------------
provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified
party and will survive the transfer of securities. The Company and any other
indemnifying party with respect to the matters set forth in Sections 1
----------
through 6 of this Agreement also agree to make such provisions, as are
-
reasonably requested by any indemnified
9
party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any registration hereunder
which is underwritten unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved
by the Person or Persons entitled hereunder to approve such arrangements
(including, without limitation, pursuant to the terms of any over-allotment
or "green shoe" option requested by the managing underwriter(s), provided
--------
that no holder of Registrable Securities will be required to sell more than
the number of Registrable Securities that such holder has requested the
Company to include in any registration) and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements. Each Person that is participating in any registration
hereunder agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in Section 4(v) above, such
------------
Person will forthwith discontinue the disposition of its Registrable
Securities pursuant to the registration statement until such Person's
receipt of the copies of a supplemented or amended prospectus as
contemplated by such Section 4(v). In the event the Company shall give any
------------
such notice, the applicable time period mentioned in Section 4(ii) during
-------------
which a Registration Statement is to remain effective shall be extended by
the number of days during the period from and including the date of the
giving of such notice pursuant to this Section 7 to and including the date
---------
when each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(v).
------------
SECTION 8. DEFINITIONS
"Affiliate" of any Person means any other Person
---------
controlling, controlled by or under common control with such Person and, in
the case of any holder of Registrable Securities that is a partnership or
limited liability company, any partner or member, as applicable, of such
holder; provided that the Company shall not be deemed to be an Affiliate of
any holder of Registrable Securities, nor shall any other Person be deemed
to be an Affiliate of any holder of Registrable Securities solely by reason
of such holder's ownership of equity securities of the Company.
"Agreement" has the meaning set forth in the Preamble.
---------
"Common Stock" means the Company's Common Stock, par value
------------
$0.02 per share.
"Company" has the meaning set forth in the Preamble.
-------
"Demand Registration" has the meaning set forth in Section
------------------- -------
1A.
--
"Loan Agreement" has the meaning set forth in the
--------------
Preamble.
"Long-Form Registrations" has the meaning set forth in
-----------------------
Section 1A.
----------
10
"Oaktree" has the meaning set forth in the Preamble.
-------
"Optimal Number" has the meaning set forth in Section 1D.
-------------- ----------
"Person" means an individual, a partnership, a
------
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
"Piggyback Registration" has the meaning set forth in
----------------------
Section 2A.
----------
"Primary Optimal Number" has the meaning set forth in
----------------------
Section 2C.
----------
"Public Sale" means any sale of Registrable Securities (i)
-----------
to the public pursuant to an offering registered under the Securities Act or
(ii) to the public through a broker, dealer or market maker pursuant to the
provisions of Rule 144 adopted under the Securities Act.
"Registrable Securities" means (i) any shares of Common
----------------------
Stock issuable or issued from time to time upon exercise of the Warrant,
(ii) any shares of Common Stock otherwise acquired by Oaktree or any of its
Affiliates, (iii) any shares of Common Stock issued or issuable upon
conversion of any capital stock or other equity securities from time to time
acquired by Oaktree or any of its Affiliates, and (iv) any equity securities
issued or issuable directly or indirectly with respect to the securities
referred to in any of clauses (i) through (iii) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Registrable Securities, such shares will
cease to be Registrable Securities when they have been transferred pursuant
to a Public Sale. For purposes of this Agreement, a Person will be deemed to
be a holder of Registrable Securities whenever such Person has the right to
acquire directly or indirectly such Registrable Securities (upon conversion
or exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such
right), whether or not such acquisition has actually been effected.
"Registration Expenses" has the meaning set forth in
---------------------
Section 5A.
----------
"Required Registration" has the meaning set forth in
---------------------
Section 1C.
----------
"Securities Act" means the Securities Act of 1933, as
--------------
amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any
----------------------------------
governmental body or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange
-----------------------
Act of 1934, as amended, or any similar federal law then in force.
"Short-Form Registrations" has the meaning set forth in
------------------------
Section 1A.
----------
11
"Warrant" has the meaning set forth in the Preamble.
-------
SECTION 9. MISCELLANEOUS
9A. AMENDMENT AND WAIVER. Except as otherwise provided
--------------------
herein, no modification, amendment or waiver of any provision of this
Agreement shall be effective against the Company or any holder of
Registrable Securities unless such modification, amendment or waiver is
approved in writing by the Company and the holder(s) of a majority of the
Registrable Securities; provided that in the event that such amendment or
--------
waiver by its terms disproportionately treats any holder or group of holders
of Registrable Securities adversely relative to other holders of Registrable
Securities, then such amendment or waiver will require the consent of such
holder or, in the case of such a group of holders, the holders in such group
who hold a majority of the Registrable Securities held by all holders in
such group so disproportionately and adversely treated. No failure by any
party to insist upon the strict performance of any covenant, duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent
upon a breach thereof shall constitute a waiver of any such breach or any
other covenant, duty, agreement or condition.
9B. SEVERABILITY. Whenever possible, each provision of
------------
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held
to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or the effectiveness
or validity of any provision in any other jurisdiction, and this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
9C. ENTIRE AGREEMENT. Except as otherwise expressly set
----------------
forth herein, this Agreement, the Warrant, the Loan Agreement and the
documents referenced therein embody the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
9D. NO INCONSISTENT AGREEMENTS. The Company will not
--------------------------
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of
Registrable Securities in this Agreement.
9E. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The
--------------------------------------------
Company will not take any action, or permit any change to occur, with
respect to its securities which would adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement or which would
adversely affect the marketability of such Registrable Securities in any
such registration (including, without limitation, effecting a stock split or
a combination of shares).
9F. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
----------------------
inure to the benefit of and be enforceable by (i) Oaktree and each
subsequent holder of any Registrable
12
Securities, and the respective successors and assigns of each of them, in
each case so long as such Person holds any Registrable Securities, and (ii)
the Company and its successors. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of Oaktree are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities. Notwithstanding the foregoing,
in order to obtain the benefit of this Agreement, any subsequent holder of
Registrable Securities must execute a counterpart to this Agreement, thereby
agreeing to be bound the terms hereof.
9G. COUNTERPARTS. This Agreement may be executed in
------------
separate counterparts each of which shall be an original and all of which
taken together shall constitute one and the same agreement.
9H. REMEDIES. The parties hereto agree and acknowledge
--------
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company and any holder of
Registrable Securities shall have the right to injunctive relief, in
addition to all of its rights and remedies at law or in equity, to enforce
the provisions of this Agreement. Except as otherwise expressly provided in
Section 9F, nothing contained in this Agreement shall be construed to confer
----------
upon any Person who is not a signatory hereto any rights or benefits, as a
third party beneficiary or otherwise.
9I. NOTICES. Any notice provided for in this Agreement
-------
shall be in writing and shall be either personally delivered, or received by
certified mail, return receipt requested, or sent by reputable overnight
courier service (charges prepaid) to the Company at the address set forth
below and to any other recipient at the address indicated on such
recipient's counterpart signature page hereto or at such other address or to
the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices will be deemed to have
been given hereunder (i) when delivered personally to the recipient, (ii)
one (1) business day after being sent to the recipient by reputable
overnight courier service (charges prepaid), (iii) upon machine-generated
acknowledgment of receipt after transmittal by facsimile if so acknowledged
to have been received before 5:00 p.m. on a business day at the location of
receipt and otherwise on the next following business day, provided that such
notice, demand or other communication is also deposited within 24 hours
thereafter with a reputable overnight courier service (charges prepaid) for
delivery to the same Person, or (iv) five (5) days after being mailed to the
recipient by certified or registered mail, return receipt requested and
postage prepaid. The Company's address is:
Falcon Products, Inc.
0000 Xxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Chief Executive Officer
9J. GOVERNING LAW. The corporate law of Delaware will
-------------
govern all issues concerning the relative rights of the Company and the
holders of Registrable Securities. All other issues concerning this
Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware without giving effect to any choice of law or conflict
of law
13
provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the law of any
jurisdiction other than the State of Delaware.
9K. DESCRIPTIVE HEADINGS. The descriptive headings of this
--------------------
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
* * * * *
14
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement on the day and year first above written.
THE COMPANY:
FALCON PRODUCTS, INC.
By:______________________________
Its:_____________________________
OAKTREE:
OCM PRINCIPAL OPPORTUNITIES
FUND II, L.P.
By: Oaktree Capital Management, LLC
Its: General Partner
By:______________________________
Its:_____________________________
By:______________________________
Its:_____________________________
[END OF SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
