EXHIBIT 10.5
RIGHTS AGREEMENT
between
XXXX INTERNATIONAL HOLDINGS, INC.
and
THE PARTICIPATING STOCKHOLDERS PARTY HERETO
December 22, 1998
TABLE OF CONTENTS
Page
ARTICLE I DEMAND REGISTRATIONS 2
1.1 Requests for Registration. 2
1.2 Long-Form Registrations. 3
1.3 Short-Form Registrations. 4
1.4 Effective Registration Statement. 4
1.5 Priority on Demand Registrations. 5
1.6 Selection of Underwriters. 6
1.7 Other Registration Rights. 6
1.8 Black-Out Rights and Postponement. 6
ARTICLE II PIGGYBACK REGISTRATIONS 7
2.1 Right to Piggyback. 7
2.2 Piggyback Expenses. 7
2.3 Priority on Primary Registrations. 7
2.4 Priority on Secondary Registrations. 8
ARTICLE III HOLDBACK AGREEMENTS 8
3.1 Holder's Holdback Obligations. 8
3.2 Company's Holdback Obligations. 8
ARTICLE IV REGISTRATION PROCEDURES 9
ARTICLE V REGISTRATION EXPENSES 13
5.1 Fees and Expenses Generally. 13
5.2 Counsel Fees. 14
ARTICLE VI UNDERWRITTEN OFFERINGS 14
6.1 Demand Underwritten Offerings. 14
6.2 Incidental Underwritten Offerings. 14
ARTICLE VII INDEMNIFICATION 15
7.1 Indemnification by the Company. 15
7.2 Indemnification by a Selling Shareholder. 16
7.3 Indemnification Procedure. 17
7.4 Underwriting Agreement. 18
7.5 Contribution. 18
7.6 Periodic Payments. 19
ARTICLE VIII RULE 144 20
ARTICLE IX PARTICIPATION IN UNDERWRITTEN REGISTRATIONS 20
ARTICLE X TRANSFER RESTRICTIONS; RIGHTS OF INCLUSION; DUTY OF
FIRST OFFER 21
10.1 Transfer Restrictions 21
10.2 Rights of Inclusion. 22
ARTICLE XI DEFINITIONS 25
11.1 Terms. 25
11.2 Other Defined Terms. 30
11.3 0Defined Terms in Corresponding Sections. 30
ARTICLE XII MISCELLANEOUS 31
12.1 No Inconsistent Agreements. 31
12.2 Specific Performance. 31
12.3 Amendments and Waivers. 31
12.4 Successors and Assigns. 32
12.5 Notices. 32
12.6 Headings, Certain Conventions. 33
12.7 Gender. 33
12.8 Invalid Provisions. 34
12.9 Governing Law. 34
12.10 Consent to Jurisdiction and Service of Process 34
12.11 Waiver of Jury Trial 34
12.12 Counterparts. 35
SCHEDULE I Addresses for Notices to Participating Stockholders
EXHIBIT A-1 Form of Joinder Agreement For Permitted Transferees
EXHIBIT A-2 Form of Joinder Agreement For Additional Stockholders
RIGHTS AGREEMENT dated as of December 22, 1998, by and among Xxxx
International Holdings, Inc., a Delaware corporation (the "Company"), LIH
Holdings, LLC, a Delaware limited liability company ("LIH Holdings I"), LIH
Holdings II, LLC, a Delaware limited liability company ("LIH Holdings II"), LIH
Holdings III, LLC, a Delaware limited liability company ("LIH Holdings III"; LIH
Holdings I, LIH Holdings II and LIH Holdings III being hereinafter collectively
referred to as the "LIH Entities"), BancBoston Capital Inc., a Massachusetts
corporation ("BancBoston"), Liberty Mutual Insurance Company, a Massachusetts
corporation ("Liberty Mutual"), Massachusetts Mutual Life Insurance Company, a
Massachusetts corporation ("MMLIC"), MassMutual Corporate Value Partners
Limited, a company organized under the laws of the Cayman Islands ("MMCVP"),
MassMutual Corporate Investors, a Massachusetts business trust ("MMCI"),
MassMutual Participation Investors, a Massachusetts business trust ("MMPI";
MMLIC, MMCVP, MMCI and MMPI being hereinafter collectively referred to as the
"MassMutual Entities"), and National City Venture Corporation, a Delaware
corporation ("NCVC"; NCVC and the MassMutual Entities being hereinafter
collectively referred to as the "Mezzanine Entities"). Capitalized terms are
used as defined in Article XI hereto.
RECITALS
WHEREAS, on the date hereof, LIH Holdings I is the owner of 1,686,893
shares of Common Stock, and LIH Holdings II is the owner of 874,400 shares of
Common Stock and 1,493,398 shares of the Class B-1 Common Stock, par value $0.01
per share (the "Class B-1 Common Stock"), of the Company;
WHEREAS, in connection with the Company's acquisition on the date
hereof of all the outstanding capital stock of Auto Ventshade Corporation, the
Company, LIH Holdings III, BancBoston, Liberty Mutual and the MassMutual
Entities have entered into that certain Investment Agreement (as the same may be
amended, supplemented or otherwise modified from time to time, the "AVS
Investment Agreement") dated as of December 22, 1998, whereby the Company
desires to sell and LIH Holdings III, BancBoston, Liberty Mutual and the
MassMutual Entities desire to purchase, in the aggregate, 1,047,412 shares of
Common Stock and 252,401.8 shares of the Series B Preferred Stock, par value
$.01 per share (the "Series B Preferred Stock"), of the Company, all for an
aggregate purchase price equal to $25,000,000;
WHEREAS, in connection with the proposed acquisition by the Company of
all the outstanding capital stock of Smitty Bilt, Inc., the Company, LIH
Holdings III, BancBoston, Liberty Mutual and the MassMutual Entities have
entered into that certain Investment Agreement (as the same may be amended,
supplemented or otherwise modified from time to time, the "SB Investment
Agreement"; the AVS Investment Agreement and the SB Investment Agreement being
hereinafter collectively referred to as the " Investment Agreements") dated as
of December 22, 1998, whereby the Company
desires to sell and LIH Holdings III, BancBoston, Liberty Mutual and the
MassMutual Entities desire to purchase, in the aggregate, 316,056 shares of
Common Stock and 39,822.9 shares of Series B Preferred Stock, all for an
aggregate purchase price equal to $5,000,000;
WHEREAS, the Company, certain of its subsidiaries and each of the
Mezzanine Entities, in connection with the issuance to the Mezzanine Entities of
subordinated notes in an aggregate principal amount equal to $25,000,000, are
entering into those certain Securities Purchase Agreements (as each may be
amended, supplemented or otherwise modified from time to time, collectively, the
"Securities Purchase Agreements") dated December 23, 1998, whereby, among other
things, the Company desires to sell and the Mezzanine Entities desire to
purchase, in the aggregate, Warrants (including any securities (other than any
shares of Common Stock or Series B Preferred Stock) issued in exchange therefor
or replacement thereof, in each case as the same may be amended, supplemented or
otherwise modified from time to time, the "Warrants") to purchase up to either
70,484 shares of Series B Preferred Stock or 704,839 shares of Common Stock;
WHEREAS, each of the LIH Entities, BancBoston, Liberty Mutual, the
Mezzanine Entities and the Company desires to enter into this Agreement to
provide for, among other things, registration rights with respect to the Common
Stock and to impose restrictions on, and conditions to, certain transfers of
equity securities of the Company;
WHEREAS, each Investment Agreement, among other things, provides that
the execution and delivery of an agreement in substantially the form hereof is a
condition to the consummation of the other transactions contemplated by such
Investment Agreement; and
WHEREAS, each Securities Purchase Agreement, among other things,
provides that the execution and delivery of an agreement in substantially the
form hereof is a condition to the consummation of the other transactions
contemplated by such Securities Purchase Agreement.
NOW THEREFORE, in connection with the Investment Agreements and the
Securities Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
I. ARTICLE
DEMAND REGISTRATIONS
A. REQUESTS FOR REGISTRATION. (a) Subject to Sections 1.2, 1.3 and 1.8, at any
time after September 9, 2000, any or all of the Required LIH
Stockholders, the Required BancBoston Stockholders, the Required Liberty Mutual
Stockholders and the Required Mezzanine Stockholders may request in writing
registration under the Securities Act of all or part of their Registrable
Securities (i) on Form S-1 or Form S-2 or any similar or successor long-form
registration statement (any such registration, a "Long-Form Registration") or
(ii) on Form S-3 or any similar or successor short-form registration statement
(any such registration, a "Short-Form Registration") if the Company qualifies to
use such short form. Within 10 days after its receipt of any such request, the
Company will give written notice of such request to all other Participating
Stockholders. Thereafter, the Company will use all reasonable efforts to effect
the registration under the Securities Act on the form requested by the
Requesting Investors, and to include in such registration, (i) all Registrable
Securities which the Requesting Investors have so requested to be included
therein, and (ii) all other Registrable Securities with respect to which the
Company has received written requests for inclusion therein by the Participating
Stockholders within 30 days after their receipt of the Company's notice, subject
in each case to the provisions of Section 1.5. Each Long-Form Registration or
Short-Form Registration requested in accordance with this Section 1.1 is
referred to herein as a "Demand Registration."
(b) The Requesting Investors which request a Demand Registration
pursuant to this Section 1.1 may, at any time prior to the effective date of the
registration statement relating to such Demand Registration, revoke such request
by providing written notice to the Company; provided, however, that
notwithstanding such revocation, such Demand Registration shall be deemed a
request for purposes of Section 1.2 unless, after consultation with the Company
and any proposed underwriter, the Requesting Investors in good faith determine
that more than 25% of the amount of Registrable Securities which they have
requested to be registered (before giving effect to any cutback pursuant to
Section 1.5) would not be sold pursuant to such Demand Registration within a
reasonable amount of time or at a price reasonably acceptable to such Requesting
Investors.
(c) Any request for a Demand Registration pursuant to Section 1.1 shall
specify the number of Registrable Securities proposed to be sold by the
Requesting Investors and the intended method of disposition thereof.
A. LONG-FORM REGISTRATIONS. (a) The Required LIH Stockholders will be entitled
to request pursuant to Section 1.1 one Long-Form Registration, (b) the Required
BancBoston Stockholders will be entitled to request pursuant to Section 1.1 one
Long-Form Registration, (c) the Required Liberty Mutual Stockholders will be
entitled to request pursuant to Section 1.1 one Long-Form Registration, and (d)
the Required Mezzanine Stockholders will be entitled to request pursuant to
Section 1.1 up to two Long-Form Registrations; provided, however, that no such
request for a Long-Form Registration shall be made unless such request is for
the registration of at least 450,000 shares of Common Stock (which number of
shares shall be appropriately adjusted for any stock dividend, stock split,
combination of shares or other similar event that occurs after the date hereof).
The Company will pay all Registration
Expenses in connection with any such Long-Form Registration; provided, however,
that in the case of any Long-Form Registration as to which LIH Stockholders
comprise the Requesting Investors, such LIH Stockholders will pay for any
special audits required to be undertaken by the Company in connection therewith.
All Long-Form Registrations (unless otherwise requested by the Requisite
Registration Participants) shall be underwritten registrations.
A. SHORT-FORM REGISTRATIONS. In addition to the Long-Form Registrations
contemplated by Section 1.2, the Required LIH Stockholders, the Required
BancBoston Stockholders, the Required Liberty Mutual Stockholders, and the
Required Mezzanine Stockholders will each be entitled to request an unlimited
number of Short-Form Registrations in which the Company will pay all
Registration Expenses; provided, however, that (a) in the case of any Short-Form
Registration as to which LIH Stockholders comprise the Requesting Investors,
such LIH Stockholders will pay for any special audits required to be undertaken
by the Company in connection therewith, (b) no such request for a Short-Form
Registration shall be made unless such request is for the registration of at
least 200,000 shares of Common Stock (which number of shares shall be
appropriately adjusted for any stock dividend, stock split, combination of
shares or other similar event that occurs after the date hereof) and (c) in any
12 month period, the Company shall not be obligated to effect more than two
Short-Form Registrations pursuant to this Agreement.
A. EFFECTIVE REGISTRATION STATEMENT. No Demand Registration shall be deemed to
have been requested or effected for purposes of Section 1.1(a) or 1.2:
a) unless a registration statement with respect thereto has been
declared effective by the Commission (other than in connection with a
revocation notice delivered pursuant to Section 1.1(b)) and the Company
has complied in all material respects with all obligations required to
be performed by it on or prior to the date of such declaration in
connection with such Demand Registration;
a) if after such registration statement has become effective, any stop
order, injunction or other order or requirement of the Commission or
any other Governmental or Regulatory Authority affecting any of the
Registrable Securities covered by such registration statement, is for
any reason threatened in writing or issued by the Commission or such
other Governmental or Regulatory Authority and, as a result thereof,
none of the Registrable Securities covered thereby have been sold;
a) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such
Demand Registration are not satisfied by reason of a failure by or
inability of the Company to satisfy any of such conditions to closing;
a) if the Company declines to effect such Demand Registration pursuant
to Section 1.8(a) or delivers a Black-Out Notice with respect to such
Demand Registration;
a) if the Requesting Investors have made the determination contemplated
by the proviso to Section 1.1(b) with respect to such Demand
Registration and have notified the Company of such determination in
accordance with Section 1.1(b);
a) if the Requesting Investors are not able to register and sell at
least 75% of the amount of Registrable Securities which they requested
(before giving effect to any cutback effected pursuant to Section 1.5)
to be included in such registration; or
a) if the registration statement with respect to such Demand
Registration does not remain effective for a period of at least 180
days beyond the effective date thereof or, in the case of any Demand
Registration that constitutes an underwritten offering of Registrable
Securities, until 45 days after the commencement of the distribution by
the holders of the Registrable Securities included in such Demand
Registration, in each case unless all of the Registrable Securities
included in such Demand Registration have been sold to the public prior
thereto in accordance with the plan of distribution specified in such
registration statement.
If a Demand Registration requested pursuant to this Article I is deemed
not to have been requested or effected as provided in this Section 1.4, then the
Company shall continue to be obligated to effect the number of Demand
Registrations set forth in Section 1.2 without giving effect to such requested
Demand Registration and will pay all Registration Expenses in connection with
such Demand Registration.
A. PRIORITY ON DEMAND REGISTRATIONS. The Company will not include in any Demand
Registration any securities which are not Registrable Securities of the
Participating Stockholders without the written consent of the Requisite
Registration Participants. If the Requesting Investors and other holders of
Registrable Securities request Registrable Securities to be included in a Demand
Registration which is an underwritten offering and the managing underwriter
advises the Company in writing that in its opinion the number of Registrable
Securities requested to be included exceeds the number of Registrable Securities
which can be sold in such offering within a price range acceptable to the
Requisite Requesting Investors, the Company will include any securities to be
sold in such Demand Registration in the following order: (i) (x) first, the
Registrable Securities requested to be included in such registration by the
Requesting Investors or by other Participating Stockholders in accordance with
Section 1.1(a), provided that if the managing underwriter determines in good
faith that a lower number of Registrable Securities should be included, then
only that lower number of Registrable Securities requested to be included by the
Requesting Investors and such other Participating Stockholders shall be included
in such registration, and the Requesting Investors and such other Participating
Stockholders shall participate in such registration on a pro rata basis in
accordance with the number of Registrable Securities requested to be included in
such registration by each of them; (y) second, the securities which the Company
proposes to sell; and (z) third, any securities other than Registrable
Securities to be sold by persons other than the Company included in such
registration in compliance with Section 1.7.
A. SELECTION OF UNDERWRITERS. The Requisite Registration Participants with
respect to any Demand Registration will have the right to select the
underwriters and the managing underwriter to administer such Demand Registration
(which underwriters and managing underwriters shall be reasonably acceptable to
the Company).
A. OTHER REGISTRATION RIGHTS. Except as provided in this Agreement, without the
written consent of the Participating Stockholders which then hold Registrable
Securities representing at least a majority (by number of shares) of the
Registrable Securities (on a Fully-Diluted Basis) then held by all Participating
Stockholders, the Company will not grant to any Person the right to request the
Company to register any equity securities of the Company, or any securities
convertible, exchangeable or exercisable for or into such securities, other than
piggyback registration rights entitling the holder thereof to participate in
Company-initiated registrations, subject to the prior rights of Participating
Stockholders to include their Registrable Securities in Company-initiated
registrations in accordance with Section 2.3.
A. BLACK-OUT RIGHTS AND POSTPONEMENT. (a) The Company shall not be required to
effect a Demand Registration if the Company, within the 120-day period preceding
the date of a request for a Demand Registration, has effected a registration of
securities in which the Participating Stockholders were able to register and
sell at least 75% of the amount of Registrable Securities which they requested
(before giving effect to any cutback effected pursuant to Section 1.5, 2.3 or
2.4) to be included in such registration pursuant to Demand Registration rights
under Article I or Piggyback Registration rights under Article II.
(b) The Company may, upon written notice (a "Black-Out Notice") to the
Requesting Investors requesting a Demand Registration, require such Requesting
Investors to withdraw such Demand Registration upon the good faith determination
by the
Company that such postponement is necessary (i) to avoid disclosure of material
non-public information or (ii) as a result of a pending material financing or
acquisition transaction, and in each case, each of the LIH Stockholders, the
BancBoston Stockholders, the Liberty Mutual Stockholders and the Mezzanine
Stockholders may not request another Demand Registration for a period of up to
120 days, as specified by the Company in such Black-Out Notice. The Company may
only give a Black-Out Notice where the giving of such notice has been
specifically approved by the Board of Directors of the Company. Upon receipt of
a Black-Out Notice, the related Demand Registration shall be deemed to be
rescinded and retracted and shall not be counted as a Demand Registration for
any purpose hereunder. The Company may not deliver more than three Black-Out
Notices in any 12-month period; provided, however, that the aggregate number of
days covered by Black-Out Notices in any 12-month period shall not under any
circumstances exceed 180.
I. ARTICLE
PIGGYBACK REGISTRATIONS
A. RIGHT TO PIGGYBACK. Whenever the Company proposes to register any of its
equity securities under the Securities Act (other than pursuant to a Demand
Registration and other than on Forms S-4 or S-8 or any successor forms), whether
for the Company's own account or for the account of any other Person, 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 (in any event within 10 days after its receipt of notice of any exercise
of other demand registration rights) to all Participating Stockholders of its
intention to effect such a registration. Such notice shall offer each
Participating Stockholder the opportunity to register, on the same terms and
conditions, such number of such Participating Stockholder's Registrable
Securities as such Participating Stockholder may request. The Company will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein by Participating
Stockholders within 30 days after their receipt of the Company's notice, subject
to the provisions of Sections 2.3 and 2.4. Such requests for inclusion shall
specify the number of Registrable Securities intended to be disposed of and the
intended method of distribution thereof.
A. PIGGYBACK EXPENSES. The Registration Expenses of the Participating
Stockholders will be paid by the Company in all Piggyback Registrations.
A. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriter advises the Company in writing that in its opinion the number of
securities requested to be included in such registration is such that the
success of the
Company's offering will be materially and adversely affected, then the Company
will include any securities to be sold in such Piggyback Registration in the
following order: (i) first, the securities the Company proposes to sell; (ii)
second, the Registrable Securities requested to be included in such registration
by the Participating Stockholders in accordance with Section 2.1, provided that
if the managing underwriter in good faith determines that a lower number of
Registrable Securities of the Participating Stockholders should be included,
then the Company shall be required to include in such registration only that
lower number of Registrable Securities, and the Participating Stockholders shall
participate in such registration on a pro rata basis in accordance with the
number of Registrable Securities requested to be included in such registration
by each Participating Stockholder; and (iii) third, if all Registrable
Securities requested to be included in such registration by the Participating
Stockholders in accordance with Section 2.1 are included in such registration,
any other securities requested to be included in such registration in compliance
with Section 1.7.
A. PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriter advises the Company in writing that in
its opinion the number of securities requested to be included in such
registration is such that the success of such holders' offering would be
materially and adversely affected, then the Company will include any securities
to be sold in such Piggyback Registration in the following order: (i) first, the
securities which such holders propose to sell in compliance with Section 1.7;
(ii) second, the Registrable Securities requested to be included in such
registration by the Participating Stockholders in accordance with Section 2.1,
provided that if the managing underwriter determines in good faith that a lower
number of Registrable Securities of the Participating Stockholders should be
included, then the Company shall be required to include in such registration
only that lower number of Registrable Securities, and the Participating
Stockholders shall participate in such registration on a pro rata basis in
accordance with the number of Registrable Securities requested to be included in
such registration by each; and (iii) third, any other securities proposed to be
included in such registration in compliance with Section 1.7.
I. ARTICLE
HOLDBACK AGREEMENTS
A. HOLDER'S HOLDBACK OBLIGATIONS. Each Participating Stockholder agrees not to
effect any public sale or distribution of Registrable Securities, or any
securities convertible, exchangeable or exercisable for or into Registrable
Securities during the seven days prior to, and the 180-day period beginning on,
the effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration in which such Participating Stockholder had an
opportunity to participate without cutback
under Article II hereof (in each case except as part of such underwritten
registration), unless the managing underwriter of such underwritten registration
otherwise agrees.
A. COMPANY'S HOLDBACK OBLIGATIONS. Unless the managing underwriter of the
relevant underwritten Demand Registration or an underwritten Piggyback
Registration otherwise agrees, the Company agrees (i) not to effect any public
sale or distribution of its equity securities, or any securities convertible,
exchangeable or exercisable for or into such securities, during the 14 days
prior to, and during the 90-day period beginning on, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration in
which holders of Registrable Securities are selling stockholders (except as part
of such underwritten registration or pursuant to registrations on Form S-4 or
S-8 or any successor forms), and (ii) to use all reasonable efforts to cause
each holder of at least 5% (on a Fully-Diluted Basis) of its equity securities
to agree not to effect any public sale or distribution of any such equity
securities or any securities convertible, exchangeable or exercisable for into
such equity securities during the 180-day period beginning on the effective date
of any underwritten Demand Registration or any underwritten Piggyback
Registration in which holders of Registrable Securities are selling stockholders
(except as part of such underwritten registration, if otherwise permitted).
I. ARTICLE
REGISTRATION PROCEDURES
Whenever Participating Stockholders have requested that any Registrable
Securities be registered in accordance with Article I or II, the Company will
use all reasonable 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 reasonably expeditiously as
possible (or, in the case of clause (p) below, will not):
1. promptly prepare and file with the Commission a registration statement with
respect to such Registrable Securities (such registration statement to include
all information which the Participating Stockholders holding the Registrable
Securities to be registered thereby shall reasonably request) and use all
reasonable efforts to cause such registration statement to become effective,
provided, that as promptly as practicable before filing a registration statement
or prospectus or any amendments or supplements thereto, the Company will (i)
furnish to one counsel selected by the Requisite Registration Participants
copies of all such documents proposed to be filed, and the Company shall not
file any such document to which such counsel shall have reasonably objected on
the grounds that such document does not comply in all material respects with the
requirements of the Securities Act, and (ii) notify each Participating
Stockholder holding Registrable Securities covered by such registration
statement of (x) any request by the Commission to amend such registration
statement or amend or
supplement any prospectus, or (y) any stop order issued or threatened by the
Commission, and take all reasonable actions required to prevent the entry of
such stop order or to promptly remove it if entered;
1. (i) 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 at all times
during the period commencing on the effective date of such registration
statement and ending on the first date as of which all Registrable Securities of
the Participating Stockholders covered by such registration statement are sold
in accordance with the intended plan of distribution set forth in such
registration statement and (ii) comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
1. furnish to each Participating Stockholder holding Registrable Securities
covered by such registration statement, without charge, such number of conformed
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus and, in each case, including all exhibits thereto and
documents incorporated by reference therein) and such other documents as such
Participating Stockholder may reasonably request in order to facilitate the
disposition of the Registrable Securities covered thereby that are held by such
Participating Stockholder;
1. use its best efforts to register or qualify the Registrable Securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions in the United States as any Participating Stockholder
holding any such Registrable Securities shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and to do any and all other acts and things which
may be reasonably necessary or advisable to enable such Participating
Stockholder to consummate the disposition in such jurisdictions of any such
Registrable Securities held by such Participating Stockholder; provided,
however, 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 clause (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
1. furnish to each Participating Stockholder holding Registrable Securities
covered by such registration statement a signed copy, addressed to such
Participating Stockholder (and the underwriters, if any) of an opinion of
counsel for the Company or special counsel to such Participating Stockholder
dated the effective date of such registration statement (and, if such
registration statement includes an underwritten public offering, dated the date
of the closing under the underwriting agreement), reasonably satisfactory in
form and substance to the Requisite Registration Participants, covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer's counsel delivered to the underwriters in underwritten public offerings,
and such other legal matters as the Requisite Registration Participants (or the
underwriters, if any) may reasonably request;
1. notify each Participating Stockholder holding Registrable Securities covered
by such registration statement, at a time when a prospectus relating to such
Registrable Securities is required to be delivered under the Securities Act, of
the occurrence of any event known to the Company as a result of which the
prospectus included in such registration statement, as then in effect, contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, and, at the
request of any such Participating Stockholder, (i) the Company will prepare and
furnish such Participating Stockholder 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 Registrable 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 not misleading in the light of the circumstances under which
they were made and (ii) the Company shall extend the period during which such
registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of such notice to
such Participating Stockholder to the date when the Company made available to
such Participating Stockholder an appropriately amended or supplemented
prospectus;
1. cause all Registrable Securities of the Participating Stockholders covered by
such registration statement to be listed on each securities exchange and
quotation system on which similar securities issued by the Company are then
listed and to enter into such customary agreements as may be required in
furtherance thereof, including listing applications and indemnification
agreements in customary form;
1. provide a transfer agent and registrar for the Registrable Securities of the
Participating Stockholders covered by such registration statement not later than
the effective date of such registration statement;
1. enter into such customary arrangements and take all such other actions as the
Requisite Registration Participants or the underwriters, if any, for the
offering of the Registered Securities covered by such registration statement
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including using its best efforts to effect a stock split
or combination of shares) and, in connection with an underwritten offering,
participate, to the extent reasonably requested by the managing underwriter for
the offering, in customary efforts to sell the securities in the offering,
including participating in "road shows";
1. make available for inspection by any Participating Stockholder holding
Registrable Securities covered by such registration statement, any underwriter
participating in any disposition of securities pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
Participating Stockholder or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and all
correspondence between the Commission and the Company or its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff in
connection with such registration statement, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such Participating Stockholder, underwriter,
attorney, accountant or agent in connection with such registration statement;
1. subject to other provisions hereof, use all reasonable efforts to cause the
Registrable Securities of the Participating Stockholders covered by such
registration statement to be registered with or approved by such Governmental or
Regulatory Authorities or self-regulatory organizations as may be necessary to
enable such Participating Stockholders thereof to consummate the disposition of
such Registrable Securities;
1. use all reasonable efforts to obtain a "cold comfort" letter, dated the
effective date of such registration statement (and, if such registration
includes an underwritten offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants who have
certified the Company's financial statements included in such registration
statement, addressed to the Company, to each Participating Stockholder holding
Registrable Securities covered by such registration statement, and to the
underwriters, if any, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other financial matters as
the Requisite Registration Participants (or the underwriters, if any) may
reasonably request;
1. otherwise use all reasonable efforts to comply with all applicable rules and
regulations of the Commission and make available to its security holders, in
each case as soon as practicable, an earnings statement covering a period of at
least 12 months, beginning with the first month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
1. permit any Participating Stockholder holding Registrable Securities covered
by such registration statement, which Participating Stockholder, in its sole
judgment exercised in good faith, might be deemed to be a controlling person of
the Company (within the meaning of the Securities Act or the Exchange Act) to
participate in the preparation of such registration statement and to include
therein material, furnished to
the Company in writing, which in the reasonable judgment of such Participating
Stockholder should be included and which is reasonably acceptable to the
Company;
1. promptly notify the Participating Stockholders holding the Registrable
Securities covered by such registration statement of the issuance by any state
securities commission or other Governmental or Regulatory Authority of any order
suspending the qualification or exemption from qualification of any such
Registrable Securities under any state securities or "blue sky" law, and use
every reasonable effort to obtain the lifting at the earliest possible time of
any stop order (whether issued by the Commission or otherwise) suspending the
effectiveness of such registration statement or of any order preventing or
suspending the use of any preliminary prospectus included therein;
1. at any time file or make any amendment to such registration statement, or any
amendment of or supplement to the prospectus included therein (including
amendments of the documents incorporated by reference into the prospectus), (i)
of which each Participating Stockholder holding Registrable Securities covered
by such registration statement or the managing underwriter, if any, shall not
have previously been advised and furnished a copy or (ii) to which the Requisite
Registration Participants, the managing underwriter (if any) or counsel for the
Requisite Registration Participants or any such managing underwriter shall
reasonably object;
1. make such representations and warranties (subject to appropriate disclosure
schedule exceptions) to the Participating Stockholders holding Registrable
Securities covered by such registration statement and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to underwriters
and selling holders, as the case may be, in underwritten public offerings of
substantially the same type;
1. during the period when the prospectus included in such registration statement
is required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act; and
1. if such registration statement refers to any Participating Stockholder
holding Registrable Securities covered thereby by name or otherwise as the
holder of any securities of the Company, then (whether or not, in the sole
judgment, exercised in good faith, of such Participating Stockholder, such
Participating Stockholder is or might be deemed to be a controlling person of
the Company), (i) at the request of such Participating Stockholder, insert
therein language, in form and substance reasonably satisfactory to such
Participating Stockholder, the Company and the managing underwriter (if any), to
the effect that the holding by such Participating Stockholder of such securities
is not to be construed as a recommendation by such Participating Stockholder of
the investment quality of the Company's Registrable Securities or the Company's
other securities covered thereby and that such holding does not imply that such
Participating
Stockholder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Participating
Stockholder by name or otherwise is not required by the Securities Act, any
similar Federal or state statute, or any rule or regulation of any Governmental
or Regulatory Authority having jurisdiction over the offering, then in force,
the Company shall be required at the request of such Participating Stockholder
to delete the reference to such Participating Stockholder.
I. ARTICLE
REGISTRATION EXPENSES
A. FEES AND EXPENSES GENERALLY. Subject to the next succeeding sentence, all
expenses incident to the Company's performance of or compliance with this
Agreement, including internal expenses (including all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual or special audit or quarterly review, the expense of any liability
insurance, the expenses and fees for listing securities on one or more
securities exchanges or quotation systems pursuant to clause (g) of Article IV,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding underwriting fees, discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), will be borne by the Company.
Notwithstanding anything in this Agreement to the contrary, (a) each
Participating Stockholder shall pay any underwriting fees, discounts or
commissions attributable to the sale of its Registrable Securities and (b) in
the case of any Demand Registration as to which LIH Stockholders comprise the
Requesting Investors, such LIH Stockholders shall pay for any special audits
required to be undertaken by the Company in connection therewith.
A. COUNSEL FEES. In connection with each Demand Registration, the Company will
reimburse the Participating Stockholders for the reasonable fees and
disbursements of one counsel selected by the Requisite Registration
Participants.
I. ARTICLE
UNDERWRITTEN OFFERINGS
A. DEMAND UNDERWRITTEN OFFERINGS. If requested by the underwriters for any
underwritten offering of Registrable Securities pursuant to a Demand
Registration, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be consistent with the terms
hereof, to contain such representations and warranties by the Company and such
other terms as are generally included in agreements of this type, including
indemnities customarily included in such agreements, and to be otherwise
reasonably satisfactory in form and substance to the Requisite Registration
Participants, the Company and the underwriters. The Participating Stockholders
holding the Registrable Securities to be distributed by such underwriters will
cooperate in good faith with the Company in the negotiation of the underwriting
agreement. The Participating Stockholders holding the Registrable Securities to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at the option of the Requisite Registration Participants,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Participating
Stockholders and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement also be conditions
precedent to the obligations of such Participating Stockholders. The Company
shall cooperate as reasonably requested by any such Participating Stockholder in
order to limit (a) any representations or warranties to, or agreements with, the
Company or the underwriters to be made by such Participating Stockholder only to
representations, warranties or agreements regarding such Participating
Stockholder, such Participating Stockholder's Registrable Securities and such
Participating Stockholder's intended method of distribution and any other
representation required by applicable law and (b) such Participating
Stockholder's maximum liability in respect of its indemnification and
contribution obligations under such underwriting agreement to an amount equal to
the net proceeds actually received by such Participating Stockholder (after
deducting any underwriting fees, discounts and expenses) from the sale of
Registrable Securities pursuant to such Demand Registration.
A. INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time proposes to
register any of its equity securities under the Securities Act as contemplated
by Article II and such equity securities are to be distributed by or through one
or more underwriters, the Company will, if requested by any Participating
Stockholder as provided in Article II, arrange for such underwriters to include
all the Registrable Securities to be offered and sold by such Participating
Stockholder, subject to the limitations set forth in Article II, among the
securities to be distributed by such underwriters. The Participating
Stockholders holding Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters (provided that such underwriting agreement is consistent
with the terms hereof), and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Stockholders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also be conditions precedent to the obligations of such
Participating Stockholders. The Company shall cooperate as reasonably requested
by any such Participating Stockholder in order to limit
(a) any representations or warranties to, or agreements with, the Company or the
underwriters to be made by such Participating Stockholder only to
representations, warranties or agreements regarding such Participating
Stockholder, such Participating Stockholder's Registrable Securities and such
Participating Stockholder's intended method of distribution and any other
representation required by applicable law and (b) such Participating
Stockholder's maximum liability in respect of its indemnification and
contribution obligations under such underwriting agreement to an amount equal to
the net proceeds actually received by such Participating Stockholder (after
deducting any underwriting fees, discounts and expenses) from the sale of
Registrable Securities pursuant to the applicable Piggyback Registration.
I. ARTICLE
INDEMNIFICATION
A. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold
harmless, to the fullest extent permitted by law, each of the Participating
Stockholders holding any Registrable Securities covered by a registration
statement that has been filed with the Commission pursuant to this Agreement,
each underwriter for such Participating Stockholder in connection therewith,
each other Person, if any, who controls such Participating Stockholder or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
and each of their respective managers, partners, officers, directors, employees
and general partners, as follows:
a) against any and all loss, liability, claim, damage or expense (other
than amounts paid in settlement) incurred by such Person arising out of
or based upon an untrue statement or alleged untrue statement of a
material fact contained in such registration statement (or any
amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus
included therein (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of 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;
a) against any and all loss, liability, claim, damage and expense
incurred by such Person to the extent of the aggregate amount paid in
settlement of any litigation, investigation or proceeding by any
Governmental or Regulatory Authority, in each case whether commenced or
threatened, or of any claim whatsoever, that is based upon any such
untrue statement or omission or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company (which consent shall not be unreasonably withheld or
delayed); and
a) against any and all expense incurred by such Person in connection
with investigating, preparing or defending against any litigation or
any investigation or proceeding by any Governmental or Regulatory
Authority, in each case whether commenced or threatened in writing, or
against any claim whatsoever, that is based upon any such untrue
statement or omission or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under clause (i) or
(ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of or based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Participating Stockholder expressly for use in
the preparation of such registration statement (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or in any
preliminary prospectus or prospectus included therein (or any amendment or
supplement thereto); and provided further, however, that the Company will not be
liable to any Participating Stockholder (or any other indemnified Person) under
the indemnity agreement in this Section 7.1, with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented, as the case may be, to the extent that any such loss, liability,
claim, damage or expense of such Participating Stockholder (or other indemnified
Person) results from the fact that such Participating Stockholder sold
Registrable Securities to a Person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus
or of the final prospectus as then amended or supplemented, whichever is most
recent, if the Company has previously and timely furnished copies thereof to
such Participating Stockholder. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such any
Participating Stockholder or any other Person eligible for indemnification under
this Section 7.1, and shall survive the transfer of the relevant Registrable
Securities by the Participating Stockholder who theretofore held them.
A. INDEMNIFICATION BY A SELLING SHAREHOLDER. In connection with any registration
statement which covers Registrable Securities of a Participating Stockholder
pursuant to this Agreement, each such Participating Stockholder agrees to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 7.1 of this Agreement), to the extent permitted by law, the
Company and each underwriter for the Company or any such Participating
Stockholder in connection therewith, each other Person who controls the Company
or any such underwriter within the meaning of the Securities Act or the Exchange
Act, and each of their respective managers, officers, directors and general
partners, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or
supplement thereto or to any such prospectus, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information that relates only to such Participating
Stockholder and its affiliates or the plan of distribution and that is furnished
to the Company by or on behalf of such Participating Stockholder expressly for
use in the preparation of such registration statement, preliminary, final or
summary prospectus or amendment or supplement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company or any other Person eligible under this Section 7.2, and shall
survive the transfer of Registrable Securities by such Participating
Stockholder. The obligations of each Participating Stockholder pursuant to this
Section 7.2 are to be several and not joint. Additionally, with respect to each
claim pursuant to this Section 7.2 and each corresponding claim for contribution
under Section 7.5, each such Participating Stockholder's maximum aggregate
liability under this Section 7.2 and Section 7.5 shall be limited to an amount
equal to the net proceeds actually received by such Participating Stockholder
(after deducting any underwriting fees, discounts and expenses) from the sale of
Registrable Securities being sold pursuant to such registration statement or
prospectus by such Participating Stockholder.
A. INDEMNIFICATION PROCEDURE. Within 10 days after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding involving a claim referred to in Section 7.1 or 7.2, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 7.1 or 7.2, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action or
proceeding is brought against an indemnified party, the indemnifying party will
be entitled to participate in and to assume the defense thereof, jointly with
any other indemnifying party similarly notified, it may, with counsel reasonably
satisfactory to such indemnified party; and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal fees and expenses subsequently incurred by the latter in connection
with the defense thereof, unless in such indemnified party's reasonable judgment
an actual or potential conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, in which case the
indemnifying party shall not assume the defense of such claim but also shall not
be liable for the fees and expenses of (i) in the case of a claim referred to in
Section 7.1, more than one counsel (in addition to any local counsel) for all
indemnified parties selected by the holders of a majority (by number of shares)
of the Registrable Securities held by such indemnified parties, or (ii) in the
case of a claim referred to in Section 7.2, more than one counsel (in addition
to any local counsel) for the Company, in each case in connection with any one
action or separate but similar or related actions or proceedings. An
indemnifying party who is not entitled to (pursuant to the immediately preceding
sentence), 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 (in addition to any local counsel) for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party an actual or potential conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel or counsels
as may be reasonable in light of such conflict. The indemnifying party will not,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit, investigation or proceeding in respect of which
indemnification may be sought hereunder (whether or not such indemnified party
or any Person who controls such indemnified party is a party to such claim,
action, suit, investigation or proceeding), unless such settlement, compromise
or consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit, investigation or proceeding.
An indemnified party will not settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit, investigation or
proceeding in respect of which it is then seeking (or thereafter seeks)
indemnification hereunder, in each case without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld or
delayed). Notwithstanding anything to the contrary set forth herein, and without
limiting any of the rights set forth above, an indemnified party hereunder will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
A. UNDERWRITING AGREEMENT. The Company and each Participating Stockholder
requesting registration of all or any part of its Registrable Securities
pursuant to Article I or II, shall provide for the foregoing indemnity (with
appropriate modifications) in any underwriting agreement entered into in
connection with a Demand Registration or a Piggyback Registration with respect
to any required registration or other qualification of Registrable Securities
under any Federal or state law or regulation of any Governmental or Regulatory
Authority.
A. CONTRIBUTION. If the indemnification provided for in Sections 7.1 and 7.2 of
this Agreement is unavailable to hold harmless an indemnified party under such
Section, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in Section 7.1 or 7.2, as the case may be,
in such proportion as is appropriate to reflect the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations, including the relative benefits received by each party
from the offering of the securities covered by the relevant registration
statement, the parties' relative knowledge and access to information concerning
the matter with respect to which the relevant claim was asserted and the
parties' relative opportunities to correct and prevent any relevant statement or
omission. Without limiting the generality of the
foregoing, the parties' 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 indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to relevant information and
opportunity to correct or prevent such alleged untrue or untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7.5 were to be determined by pro rata or
per capita allocation (even if the underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the first and second sentences of
this Section 7.5. The amount paid by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses referred to in the first
sentence of this Section 7.5 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending the relevant action or proceeding and shall be
limited as provided in Section 7.3 if the indemnifying party has assumed the
defense of the relevant action or proceeding in accordance with the provisions
of Section 7.3. Promptly after receipt by an indemnified party under this
Section 7.5 of notice of the commencement of any action or proceeding against
such party in respect of which a claim for contribution may be made against an
indemnifying party under this Section 7.5, such indemnified party shall notify
the indemnifying party in writing of the commencement thereof if the notice
specified in Section 7.3 has not been given with respect to such action or
proceeding; provided, howeve , that the omission to so notify the indemnifying
party shall not relieve the indemnifying party from any liability which it may
otherwise have to any indemnified party under this Section 7.5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. The Company and the Participating Stockholders agree with each
other, and will agree with and the underwriters of Registrable Securities
registered pursuant to Article I or II, if requested by such underwriters, that
(i) the underwriters' portion of the contribution paid to the Participating
Stockholders pursuant to this Section 7.5 shall not exceed the total
underwriting fees, discounts and commissions in connection with the relevant
offering of Registrable Securities and (ii) the total amount of such
Participating Stockholder's contributions under this Section 7.5 and any amounts
paid by such Participating Stockholder in respect of corresponding claims for
indemnification under Section 7.2 shall not exceed an amount equal to the net
proceeds actually received by such Participating Stockholder from the sale of
Registrable Securities in the offering to which the losses, liabilities, claims,
damages or expenses of the indemnified parties relate. 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 misrepresentation.
A. PERIODIC PAYMENTS. The indemnification required by this Article VII shall be
made by periodic payments of the amount thereof during the course of the
relevant investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred; provided, however, that if it is finally
determined by a court
of competent jurisdiction that the relevant indemnified party was not entitled
to indemnification hereunder in respect of such investigation or defense, such
indemnified party shall repay to the indemnifying party, on demand, all amounts
received by it in respect of such investigation or defense pursuant to this
Section 7.6, together with interest thereon at a rate per annum equal to the
"prime rate" (as published from time to time in the Wall Street Journal) for the
period from and including the date on which the indemnified party received the
relevant amount to but excluding the date on which it repaid such amount to the
indemnifying party.
I. ARTICLE
RULE 144
If the Company shall have filed a registration statement pursuant to
the requirements of Section 12 of the Exchange Act or pursuant to the
requirements of the Securities Act, the Company covenants that it will 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 Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Participating Stockholder, make publicly available other information), and it
will take such further action as any Participating Stockholder may reasonably
request, all to the extent required from time to time to enable such
Participating Stockholder to sell shares of Registrable Securities without
registration under the Securities Act in compliance with (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Participating Stockholder, the Company will deliver to such Participating
Stockholder a written statement as to whether it has complied with such
requirements.
I. ARTICLE
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Participating Stockholder may participate in any underwritten
registration hereunder unless such Participating Stockholder (i) agrees to sell
its Registrable Securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, escrow agreements and other
documents reasonably required under the terms of such underwriting arrangements
and consistent with the provisions of this Agreement. If the Requesting
Investors with respect to any Long-Form Demand Registration are subsequently not
entitled to participate in such Demand Registration solely by reason of their
failure to comply with any material requirement of this Article IX then,
notwithstanding anything in Section 1.1(b) or 1.4 to the contrary, the request
by such Requesting Investors for such Long-Form Registration shall continue to
be counted for purposes of Section 1.2.
I. ARTICLE
TRANSFER RESTRICTIONS; RIGHTS OF
INCLUSION; DUTY OF FIRST OFFER
10.1 TRANSFER RESTRICTIONS. (a) Each of the LIH Stockholders, the
BancBoston Stockholders, the Liberty Mutual Stockholders and the Mezzanine
Stockholders, severally and not jointly, agrees that it will not, for a period
of 180 days after the Closing Date (as defined in the SB Investment Agreement
or, if the closing under the SB Investment Agreement does not occur, as defined
in the AVS Investment Agreement), Transfer any Restricted Securities other than
(i) to a Permitted Transferee, who shall have executed a Joinder Agreement in
substantially the form of Exhibit A-1, and thereby become a party to this
Agreement, (ii) in the case of the BancBoston Stockholders, the Liberty Mutual
Stockholders and the Mezzanine Stockholders, to any LIH Stockholder (unless such
Transfer would result in a breach of the Amended and Restated Governance
Agreement), (iii) pursuant to Section 10.2 or (iv) pursuant to a transaction
that constitutes a Sale of the Company.
(b) Until the first date as of which (i) the market value of publicly
held shares of Common Stock calculated in accordance with Rules 4310 and 4450
under the Manual of the National Association of Securities Dealers, Inc. (the
"Manual"), as in effect from time to time (or any successor listing requirements
for NASDAQ)) has exceeded the minimum market value then required therefor by
Rule 4450(b)(3) under the Manual (or any successor listing requirement for
NASDAQ) by at least $15 million for a period of 90 consecutive trading days,
(ii) the number of shares of Common Stock that are publicly held (as so
calculated) exceeds the minimum number of shares required to be publicly held by
Rule 4450(b)(2) under the Manual (or any successor listing requirement for
NASDAQ) and (iii) the Company has issued the officer's certificate described in
the next succeeding sentence, each of the BancBoston Stockholders, the Liberty
Mutual Stockholders and the Mezzanine Stockholders agrees, severally and not
jointly, that it shall not, without the prior written consent of the independent
directors of the Company, (x) Transfer any Common Stock or Equity Equivalents to
any person or "group" (as defined for purposes of Rule 13d under the Exchange
Act) if, after giving effect to such Transfer, any of the shares of Common Stock
directly or indirectly beneficially owned by such person or any member of such
group would not be deemed to be publicly held for purposes of Rule 4450(b)(2) or
4450(b)(3) under the Manual (or any successor listing requirement for NASDAQ) or
(y) be a Transferee (or permit any person included in any group in which such
BancBoston Stockholder, Liberty Mutual Stockholder or Mezzanine Stockholder is
included to be a Transferee) of any Common Stock or Equity Equivalents if, after
giving effect to such Transfer, any of the shares of Common Stock directly or
indirectly beneficially owned by such Transferee (or by any member of any such
group) would not be deemed to be publicly held for purposes of Rule 4450(b)(2)
or 4450(b)(3) under the Manual (or any successor listing requirement for
NASDAQ); provided, however, that this Section 10.1(b) shall not apply to any
Transfer of Common Stock or Equity Equivalents (A) pursuant to Section 10.2, (B)
to any LIH Stockholder (unless such Transfer would
result in a breach of the Amended and Restated Governance Agreement), or (C)
pursuant to a transaction that constitutes a Sale of the Company. Within 10
Business Days following the first date as of which the requirements set forth in
clauses (i) and (ii) above have been satisfied, the Company shall provide each
of the BancBoston Stockholders, the Liberty Mutual Stockholders and the
Mezzanine Stockholders with an officer's certificate certifying as to, and
setting forth calculations demonstrating in reasonable detail, the satisfaction
of such requirements.
(c) Each of the Participating Stockholders that is then a Bank Entity
agrees, severally and not jointly, that it will not effect any Transfer of
Restricted Securities to any other Person, unless such Participating Stockholder
determines in good faith that such Transfer would not cause such Participating
Stockholder or any of its Affiliates to be in violation of the Bank Holding
Company Act.
10.2 RIGHTS OF INCLUSION. (a) Except for (i) any Transfer of Restricted
Securities to a Permitted Transferee, (ii) any Transfer of Restricted Securities
pursuant to a Demand Registration, a Piggyback Registration or a Rule 144
Transaction, and (iii) other Transfers of Restricted Securities (other than
Transfers in respect of which an Inclusion Notice is delivered pursuant to this
Section 10.2(a)) which, in the aggregate, comprise less than 20% of the LIH
Stockholders' Original Ownership Level, and subject to paragraph (f) below, if
any or all of the LIH Stockholders (the "Transferors") propose to Transfer any
Restricted Securities (the "Transferor Shares") to one or more persons (the
"Buyer"), then as a condition of such Transfer, the Transferors shall cause the
Buyer to include a written offer (the "Section 10.2 Offer") to each of the
BancBoston Stockholders, Liberty Mutual Stockholders and Mezzanine Stockholders
(collectively, the "Offerees"), to sell to the Buyer, at the option of each
Offeree, that number of shares of Restricted Securities determined in accordance
with Section 10.2(b), on the same terms and conditions as are applicable to the
Transferor Shares, all of which terms shall be specified in the Section 10.2
Offer. The terms of the Section 10.2 Offer shall not require any Offeree (i) to
provide any representation, warranty or covenant other than representations,
warranties and covenants which relate specifically to such Offeree or its
Restricted Securities, such as representations regarding such Offeree's power
and authority to effect a sale of its Restricted Securities pursuant to the
Section 10.2 Offer and such Offeree's title to and ownership of its Restricted
Securities, (ii) other than in connection with the representations, warranties
and covenants which such Offeree may be required to provide under clause (i)
above, to join in any indemnification obligations that are not allocated
severally (as opposed to jointly and severally) among the Transferors and the
Offerees on a pro rata basis (based on the Transferors' and each Offeree's
respective amounts of the aggregate consideration paid to them in connection
with the Transfer contemplated by the Section 10.2 Offer) or (iii) to indemnify
the Buyer with respect to an amount in excess of the net cash proceeds paid to
such Offeree in connection with such Transfer. The Transferors shall provide a
written notice (the "Inclusion Notice") of the Section 10.2 Offer to each
Offeree, which may accept the Section 10.2 Offer by providing
a written notice of acceptance of the Section 10.2 Offer to the Transferors
within 10 Business Days of delivery of the Inclusion Notice.
(b) Each Offeree shall have the right (an "Inclusion Right") to sell
pursuant to the Section 10.2 Offer the same percentage of its Restricted
Securities (calculated on a Fully-Diluted Basis) as the percentage of the
Transferors' Restricted Securities to be sold by the Transferors to the Buyer.
Any Offeree which owns Equity Equivalents may sell pursuant to the Section 10.2
Offer, in lieu of shares of Restricted Securities, Equity Equivalents
representing that number of shares of Restricted Securities which it could sell
pursuant to its Inclusion Right, and the purchase price therefor shall equal the
aggregate price that would be paid for the shares of Restricted Securities
issuable upon the exercise, exchange or conversion thereof minus the aggregate
exercise, exchange or conversion price under such Equity Equivalents for such
shares of Restricted Securities. If any Offeree exercises its Inclusion Right on
a timely basis pursuant to Section 10.2(a) with respect to any Inclusion Notice,
then prior to the expiration of the applicable 120-day period referred to in
Section 10.2(c), none of the Transferors shall consummate any sale to the Buyer
of any of the Transferor Shares covered by such Inclusion Notice unless such
Offeree is permitted to participate in such Transfer as provided in this Section
10.2 (it being understood that any Transfer of any such Transferor Shares after
the expiration of such 120-day period must comply with this Section 10.2).
(c) With reasonable promptness following its exercise of an Inclusion
Right, each Offeree shall deliver to the Transferors a certificate or
certificates representing the Restricted Securities to be Transferred pursuant
to the Section 10.2 Offer by such Offeree, free and clear of all Liens (other
than Liens which the Buyer permits to exist with respect to the Transferor
Shares at the time of its acquisition thereof), and a limited power-of-attorney
authorizing the Transferors to sell or otherwise dispose of such Restricted
Securities pursuant to the terms of the Section 10.2 Offer. The Transferors
shall have 120 days, commencing on the expiration of the 10-Business Day period
referred to in Section 10.2(a), in which to Transfer to the Buyer, on behalf of
itself and the Offerees, up to the number of Restricted Securities equal to the
sum of (i) the number of Restricted Securities covered by the Section 10.2 Offer
as to which Offerees shall have exercised their Inclusion Rights on a timely
basis pursuant to Section 10.2(a) plus (ii) the number of Transferor Shares. If
all such Restricted Securities and Transferor Shares are not sold to the Buyer,
the Transferors, at their option, may elect to sell, on behalf of themselves and
the Offerees that have exercised their Inclusion Rights on a timely basis
pursuant to Section 10.2(a), such number thereof as the Buyer will purchase,
allocated Pro Rata (as nearly as practicable) among the Transferors and such
Offerees. The material terms of any Transfer referred to in the two immediately
preceding sentences, including price and form of consideration, shall be as set
forth in the Inclusion Notice. If at the end of such 120-day period the
Transferors have not completed the Transfer of all the Transferor Shares and all
such Offerees' Restricted Securities (if any) proposed to be sold, the
Transferors shall return to each of the Offerees its respective certificates, if
any, representing Restricted Securities which the Offerees delivered for
Transfer pursuant to
this Section 10.2 and which were not sold pursuant to the Section 10.2 Offer,
and the provisions of this Section 10.2 shall continue to be in effect.
(d) Promptly after the Transfer of the Transferor Shares and Restricted
Securities (if any) of the Offerees to the Buyer pursuant to the Section 10.2
Offer, the Transferors shall notify the Offerees thereof. To the extent within
their control and at the expense of the requesting Offeree, the Transferors
shall furnish such evidence of the completion of such Transfer and the terms
thereof as may be reasonably requested by any Offerees that participated in such
Transfer.
(e) Notwithstanding anything to the contrary contained in this Section
10.2, (i) except for the Transferors' obligation to return to each Offeree any
certificates representing the Offerees' Restricted Securities there shall be no
liability on the part of any Transferor to any Participating Stockholder in the
event that any proposed Transfer pursuant to this Section 10.2 is not
consummated for any reason, and (ii) whether or not any sale of Restricted
Securities is effected pursuant to this Section 10.2 shall be in the sole and
absolute discretion of the Transferors.
(f) The provisions of paragraphs (a) through (e) above shall not apply
to any Transfer of Restricted Securities by any LIH Stockholder which occurs
following the first date as of which the LIH Stockholders, taken together, cease
to beneficially own Restricted Securities which comprise at least 20% of the LIH
Stockholders' Original Ownership Level.
I. ARTICLE
DEFINITIONS
A. Terms. As used in this Agreement, the following defined terms shall have the
meanings set forth below:
"Additional Stockholder" means any person to whom the Company has
granted registration rights in compliance with Section 1.7 and who has executed
a Joinder Agreement in substantially the form of Exhibit A-2, and its direct and
indirect Permitted Transferees, so long as any such Person shall hold
Registrable Securities.
"BancBoston Stockholders" means BancBoston, and its direct and indirect
Permitted Transferees, in each case so long as any such Person shall hold
Registrable Securities or Restricted Securities.
"Bank Entity" means, at any time of determination, any Person that is
then subject to regulation under Section 4 of the Bank Holding Company Act.
"Bank Holding Company Act" means the Bank Holding Company Act of 1956,
as amended, and the rules and regulations thereunder.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York or the State of Minnesota are
authorized or obligated to close.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.10 per share, of the
Company, any securities into which such Common Stock shall have been changed and
any securities resulting from any reclassification or recapitalization of such
Common Stock, and all other securities of any class or classes (however
designated) of the Company the holders of which have the right, without
limitation as to amount, after payment on any securities entitled to a
preference on dividends or other distributions upon any dissolution, liquidation
or winding up, either to all or to a share of the balance of payments upon such
dissolution, liquidation or winding up.
"Equity Equivalents" means (a) the Warrants, (b) any other securities
(other than employee options) which, by their terms, are or may be exercisable,
convertible or exchangeable for or into Common Stock at the election of the
holder thereof, (c) the shares of Class B-1 Common Stock and (d) the shares of
Series B Preferred Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any, of
any such similar Federal statute, and the rules and regulations thereunder.
"Fully-Diluted Basis" means with respect to the calculation of the
number of shares of Common Stock, (i) all shares of Common Stock outstanding at
the time of determination, (ii) all shares of Common Stock issuable upon the
exercise, conversion or exchange of any Equity Equivalents outstanding at the
time of determination and (iii) all shares of Common Stock issuable upon the
exercise, conversion or exchange of any securities that are issuable upon the
exercise, conversion or exchange of any Equity Equivalents outstanding at the
time of determination.
"Joinder Agreement" means a Joinder Agreement substantially in the form
attached hereto as Exhibit A-1 or A-2.
"Liberty Mutual Stockholders" means Liberty Mutual, and its direct and
indirect Permitted Transferees, in each case so long as any such Person shall
hold Registrable Securities or Restricted Securities.
"LIH Stockholders" means the LIH Entities, and their respective direct
and indirect Permitted Transferees, in each case so long as any such Person
shall hold Registrable Securities or Restricted Securities.
"Mezzanine Stockholders" means the Mezzanine Entities, and their
respective direct and indirect Permitted Transferees, in each case so long as
any such Person shall hold Registrable Securities or Restricted Securities.
"Original Ownership Level" means, with respect to the BancBoston
Stockholders, the LIH Stockholders, the Liberty Mutual Stockholders or the
Mezzanine Stockholders (as applicable), the number of shares of Common Stock, on
a Fully Diluted Basis, as adjusted for any stock splits, stock dividends or
reclassifications or other similar events, held by them in the aggregate on the
Closing Date immediately after the Closing (as such terms are defined in the SB
Investment Agreement or, if the Closing thereunder does not occur, as such terms
are defined in the AVS Investment Agreement).
"Participating Stockholders" means the LIH Stockholders, the BancBoston
Stockholders, the Liberty Mutual Stockholders, the Mezzanine Stockholders and
any Additional Stockholders or transferee of any of the foregoing persons who
has acquired Registrable Securities and who has executed a Joinder Agreement.
"Permitted Transferee" means:
(i) with respect to any Participating Stockholder who is a
natural person, the spouse or any lineal descendant (including by
adoption
and stepchildren) of such Participating Stockholder or any trust of
which such Participating Stockholder is the trustee and which is
established solely for the benefit of any of the foregoing individuals
and whose terms are not inconsistent with the terms of Article X; and
(ii) with respect to any Participating Stockholder who is not
a natural person, (A) any Affiliate of such Participating Stockholder
and any officer or director of such Participating Stockholder or any
such Affiliate, (B) any spouse or lineal descendant (including by
adoption and stepchildren) of the officers and directors referred to in
clause (A) above, and any trust in which all the beneficiaries thereof
are one or more of the persons described in this clause (B) and the
officers and directors described in clause (A) above and whose terms
are not inconsistent with the terms of Article X; and
(iii) as to any LIH Stockholder, (w) any other LIH
Stockholder, (x) any member or manager of such LIH Stockholder, (y) any
partner, officer or employee of any such manager or member, (z) any
Affiliate of such LIH Stockholder or of any such member, manager,
partner, officer or employee, and (xx) any liquidating trust or similar
entity established by such LIH Stockholder or any of the foregoing
entities for the benefit of its members, partners or other interest
holders and their Permitted Transferees for the purpose of holding
Registrable Securities;
(iv) as to any Mezzanine Stockholder, (w) any other Mezzanine
Stockholder, (x) any liquidating trust or similar entity established by
any Mezzanine Stockholder for the benefit of its Permitted Transferees
for the purpose of holding Registrable Securities, (y) with respect to
the MassMutual Entities only, any person (excluding individuals) that
is an investment fund for whom a MassMutual Entity (or any Affiliate
thereof) is the sole investment manager or investment advisor, and (z)
with respect to NCVC only, Great Lakes Capital Investments I, LLC, or
any other entity that is formed and controlled by and for the benefit
of the executive officers of NCVC; and
(v) as to any Liberty Mutual Stockholder, Liberty Mutual Fire
Insurance Company, Liberty Life Assurance Company of Boston and Liberty
Insurance Corporation, in each case so long as such Person is an
Affiliate of such Liberty Mutual Stockholder at the time of the
relevant Transfer;
provided, however, that notwithstanding anything in paragraphs
(i) through (v) above to the contrary, for the purposes of Article X
only, (w) the "Permitted Transferees" of the LIH Stockholders at any
time of determination shall not include any Person who is then a
BancBoston
Stockholder, a Liberty Mutual Stockholder, a Mezzanine Stockholder or a
Permitted Transferee of a BancBoston Stockholder, Liberty Mutual
Stockholder or Mezzanine Stockholder, (x) the "Permitted Transferees"
of the BancBoston Stockholders at any time of determination shall not
include any Person who is then an LIH Stockholder, a Liberty Mutual
Stockholder, a Mezzanine Stockholder or a Permitted Transferee of an
LIH Stockholder, Liberty Mutual Stockholder or Mezzanine Stockholder,
(y) the "Permitted Transferees" of the Liberty Mutual Stockholders at
any time of determination shall not include any Person who is then a
BancBoston Stockholder, an LIH Stockholder, a Mezzanine Stockholder or
a Permitted Transferee of a BancBoston Stockholder, LIH Stockholder or
Mezzanine Stockholder and (z) the "Permitted Transferees" of the
Mezzanine Stockholders at any time of determination shall not include
any Person who is then a Liberty Mutual Stockholder, a BancBoston
Stockholder, an LIH Stockholder or a Permitted Transferee of a Liberty
Mutual Stockholder, BancBoston Stockholder or LIH Stockholder.
"Pro Rata" means, with respect to one or more Stockholders, in
proportion to the number of shares of Common Stock on a Fully-Diluted Basis
owned by such Stockholder or Stockholders or which may be acquired by any such
Stockholder or Stockholders upon exercising any rights under any Equity
Equivalent owned by such Stockholder or Stockholders.
"Registrable Securities" means, at any time of determination, (i) the
shares of Common Stock then issued and outstanding or which are issuable upon
the conversion, exercise or exchange of Equity Equivalents, (ii) any then
outstanding securities into which shares of Common Stock shall have been changed
and (iii) any then outstanding securities resulting from any reclassification or
recapitalization of Common Stock; provided, however, that "Registrable
Securities" shall not include any shares of Common Stock or other securities
obtained or transferred pursuant to an effective registration statement under
the Securities Act or in a Rule 144 Transaction; and provided further, however,
that "Registrable Securities" shall not include any shares of Common Stock or
other securities which are held by a Person who is not a Participating
Stockholder.
"Requesting Investors" means, with respect to any Demand Registration,
the Required LIH Stockholders, the Required BancBoston Stockholders, the
Required Liberty Mutual Stockholders or the Required Mezzanine Stockholders (as
the case may be) that have requested such Demand Registration in accordance with
Section 1.1.
"Required BancBoston Stockholders" means, as of the date of any
determination thereof, BancBoston Stockholders which then hold Registrable
Securities representing at least a majority (by number of shares) of the
Registrable Securities (or, for purposes of any amendment, modification or
waiver of any provision of Article X, the
Restricted Securities), on a Fully-Diluted Basis, then held by all BancBoston
Stockholders.
"Required Liberty Mutual Stockholders" means, as of the date of any
determination thereof, Liberty Mutual Stockholders which then hold Registrable
Securities representing at least a majority (by number of shares) of the
Registrable Securities (or, for purposes of any amendment, modification or
waiver of any provision of Article X, the Restricted Securities),
on a Fully-Diluted Basis, then held by all Liberty Mutual Stockholders.
"Required LIH Stockholders" means, as of the date of any determination
thereof, LIH Stockholders which then hold Registrable Securities representing at
least a majority (by number of shares) of the Registrable Securities (or, for
purposes of any amendment, modification or waiver of any provision of Article X,
the Restricted Securities), on a Fully-Diluted Basis, then held by all LIH
Stockholders.
"Required Mezzanine Stockholders" means, as of the date of any
determination thereof, Mezzanine Stockholders which then hold Registrable
Securities representing at least a majority (by number of shares) of the
Registrable Securities (or, for purposes of any amendment, modification or
waiver of any provision of Article X, the Restricted Securities), on a
Fully-Diluted Basis, then held by all Mezzanine Stockholders.
"Requisite Registration Participants" means, with respect to any Demand
Registration or Piggyback Registration, Participating Stockholders which then
hold Registrable Securities representing at least a majority (by number of
shares) of the Registrable Securities requested to be included in such Demand
Registration (whether as Requesting Investors or otherwise) or Piggyback
Registration pursuant to Section 1.1 or 2.1, as applicable.
"Requisite Requesting Investors" means, as of the date of any
determination thereof with respect to any Demand Registration, Requesting
Investors which then hold a majority (by number of shares) of the Registrable
Securities, on a Fully-Diluted Basis, then held by all Requesting Investors of
such Demand Registration.
"Restricted Securities" means the Series B Preferred Stock, the Common
Stock, any Equity Equivalents and any securities issued with respect to any of
the foregoing as a result of any stock dividend, stock split, reclassification,
recapitalization, reorganization, merger, consolidation or similar event or upon
the conversion, exchange or exercise thereof.
"Rule 144 Transaction" means a transfer of Common Stock (a) complying
with Rule 144 under the Securities Act (or any successor statute or rule) as
such Rule (or such successor statute or rule, as the case may be) is in effect
on the date of such transfer (but not including a sale other than pursuant to a
"brokers transaction" as defined in clauses (1) and (2) of paragraph (g) of such
Rule as in effect on the date hereof) and (b) occurring at a time when shares of
Common Stock are registered pursuant to Section 12 of the Exchange Act (or any
successor to such Section).
"Sale of the Company" means the sale of the Company (whether by merger,
consolidation, recapitalization, reorganization, sale of securities of the
Company or sale of all or substantially all the assets of the Company) to one or
more Persons (other than the LIH Stockholders and their respective Affiliates)
who acquire securities
representing 50% or more of the total voting power of and equity interest in the
Company, in each case on a Fully-Diluted Basis.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any, of
any such similar Federal statute, and the rules and regulations thereunder.
"Transfer" means any direct or indirect sale, transfer, assignment,
grant of a participation in, gift, hypothecation, pledge or other disposition of
any Restricted Security or any interest therein or, as the context may require,
to sell, transfer, assign, grant a participation in, give as a gift,
hypothecate, pledge or otherwise dispose of, directly or indirectly, any
Restricted Security or any interest therein; provided, however, that the
exercise of any purchase, conversion or exchangeability right provided for in
the terms of the Series B Preferred Stock or any Equity Equivalent shall not be
deemed a "Transfer."
A. OTHER DEFINED TERMS. Unless otherwise defined herein, capitalized terms used
in this Agreement shall have the respective meanings assigned to them in the AVS
Investment Agreement.
A. DEFINED TERMS IN CORRESPONDING SECTIONS. The following defined terms, when
used in this Agreement, shall have the meaning ascribed to them in the
corresponding Sections of this Agreement listed below:
"AVS Investment Agreement" -- Recitals
"BancBoston -- Preamble
"Black-Out Notice" -- Section 1.8(b)
"Buyer" -- Section 10.2(a)
"Class B-1 Common Stock" -- Recitals
"Company" -- Preamble
"Demand Registration" -- Section 1.1
"Inclusion Notice" -- Section 10.2(a)
"Inclusion Right" -- Section 10.2(b)
"Investment Agreements" -- Recitals
"Liberty Mutual" -- Preamble
"LIH Holdings I" -- Preamble
"LIH Holdings II" -- Preamble
"LIH Holdings III" -- Preamble
"LIH Entities -- Preamble
"Long-Form Registration" -- Section 1.1(a)
"MassMutual Entities" -- Preamble
"Mezzanine Entities" -- Preamble
"MMCI" -- Preamble
"MMCVP" -- Preamble
"MMLIC" -- Preamble
"MMPI" -- Preamble
"NCVC" -- Preamble
"Offerees" -- Section 10.2(a)
"Piggyback Registration" -- Section 2.1
"Registration Expenses" -- Section 5.1
"SB Investment Agreement -- Recitals
"Section 10.2 Offer" -- Section 10.2(a)
"Securities Purchase Agreements" -- Recitals
"Series B Preferred Stock" -- Recitals
"Short-Form Registration" -- Section 1.1(a)
"Transferors" -- Section 10.2(a)
"Transferor Shares" -- Section 10.2(a)
"Warrants" -- Recitals
I. ARTICLE
MISCELLANEOUS
A. NO INCONSISTENT AGREEMENTS. The Company represents and warrants that it does
not currently have, and covenants that it will not hereafter enter into any
Contract which is inconsistent with, or would otherwise restrict the performance
by the Company of, its obligations hereunder.
A. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties hereto shall be entitled
to specific performance of the terms hereof, in addition to any other remedy
that may be available to any of them at law or equity; provided, however, that
each of the parties hereto agrees to provide the other parties hereto with
written notice at least two Business Days prior to filing any motion or other
pleading seeking a temporary restraining order, a temporary or permanent
injunction, specific performance, or any other equitable remedy and to give the
other parties hereto and their counsel a reasonable opportunity to attend and
participate in any judicial or administrative hearing or other proceeding held
to adjudicate or rule upon any such motion or pleading.
A. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, no modification,
amendment or waiver of any provision of this Agreement will be effective against
the Company or any holder of Registrable Securities or Restricted Securities,
unless such modification, amendment or waiver is approved in
writing by the Company, the Required LIH Stockholders, the Required BancBoston
Stockholders, the Required Liberty Mutual Stockholders and the Required
Mezzanine Stockholders. Each of the Participating Stockholders and the Company
shall be bound by each modification, amendment or waiver authorized in
accordance with this Section 12.3, regardless of whether the certificates
evidencing the Registrable Securities or the Restricted Securities shall have
been marked to indicate such modification, amendment or waiver. The failure of
any party hereto to enforce any of the provisions of this Agreement will in no
way be construed as a waiver of such provisions and will not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
A. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. Each of the Participating Stockholders hereby
agrees that it shall not Transfer any Restricted Securities to any of its
Permitted Transferees, unless such Permitted Transferee shall have executed a
Joinder Agreement, substantially in the form of Exhibit A-1, and thereby become
a party to this Agreement. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities, except to the
extent reserved to or by the Transferor in connection with any such Transfer;
provided, however, that the benefits of this Agreement shall inure to and be
enforceable by any Transferee of Registrable Securities only if such Transferee
acquired such Registrable Securities in accordance with the terms of Article X
and shall have executed a Joinder Agreement. Notwithstanding the immediately
preceding sentence, (a) nothing contained herein shall be construed as granting
any Participating Stockholder the right to Transfer any of its Restricted
Securities except in accordance with this Agreement and (b) unless otherwise
expressly contemplated by this Agreement, none of the provisions of Article X
shall apply to any Transfer of Restricted Securities (or to the Transferee
thereof) subsequent to a Transfer of those securities pursuant to Section 10.2.
A. NOTICES. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
against written receipt or by facsimile transmission or mailed by prepaid first
class certified mail, return receipt requested or mailed by reputable overnight
courier, fee prepaid, to the parties at the following addresses or facsimile
numbers:
(a) if to the Company, to:
Xxxx International Holdings, Inc.
000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Chief Executive Officer
with copies (which shall not constitute notice) to the other
holders of Registrable Securities or Restricted Securities and
to:
Xxxxxxx, Street and Deinard
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Xxxx Xxxxx, Esq.; and
(b) if to any Participating Stockholder, to the address for notices set
forth opposite its name in Schedule I.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 12.5, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 12.5, be deemed given upon receipt, (iii) if delivered
by mail in the manner described above to the address as provided in this Section
12.5, be deemed given on the earlier of the third full Business Day following
the day of mailing or upon receipt, and (iv) if delivered by overnight courier
to the address provided in this Section 12.5, be deemed given on the earlier of
the first Business Day following the date sent by such overnight courier or upon
receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice is
to be delivered pursuant to this Section 12.5). Any party from time to time may
change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other
parties hereto.
A. HEADINGS, CERTAIN CONVENTIONS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit any terms
or provisions hereof. Unless the context otherwise expressly requires, all
references herein to Articles, Sections and Exhibits are to Articles and
Sections of, and Exhibits to, this Agreement. The words "herein," "hereunder"
and "hereof" and words of similar import refer to this Agreement as a whole and
not to any particular Section or provision. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
A. GENDER. Whenever the pronouns "he" or "his" are used herein they shall also
be deemed to mean "she" or "hers" or "it" or "its" whenever applicable. Words in
the singular shall be read and construed as though in the plural and words in
the plural shall be construed as though in the singular in all cases where they
would so apply.
A. INVALID PROVISIONS. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or
obligations of any party hereto under this Agreement will not be materially and
adversely affected thereby, (i) such provision will be fully severable, (ii)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
A. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
A. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE PARTIES HERETO
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH OF
THE PARTIES HERETO ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
EACH OF THE PARTIES HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE
TO BECOME EFFECTIVE 15 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY
BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR
PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES
HERETO IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY
ANY APPLICABLE LAW.
A. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH
PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
A. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxxxx Vollmershausen
---------------------------------------
Name: Xxxxxx Vollmershausen
Title: President
LIH HOLDINGS, LLC
By: /s/ Xxx X. Xxxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Authorized Person
LIH HOLDINGS II, LLC
By: /s/ Xxx X. Xxxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Authorized Person
LIH HOLDINGS III, LLC
By: /s/ Xxx X. Xxxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Authorized Person
LIBERTY MUTUAL INSURANCE COMPANY
By: /s/ A. Xxxxxxxxx Xxxxxxxx
---------------------------------------
Name: A. Xxxxxxxxx Xxxxxxxx
Title: Senior Vice President and
Chief Investment Officer
[Signature Page to Rights Agreement]
BANCBOSTON CAPITAL INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED
By: Massachusetts Mutual Life Insurance
Company, as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MASSMUTUAL CORPORATE INVESTORS
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
The foregoing is executed on behalf of
MassMutual Corporate Investors, organized
under a Declaration of Trust, dated
September 13, 1985, as amended from time to
time. The obligations of such Trust are not
personally binding upon, nor shall resort be
had to the property of, any of the Trustees,
shareholders,
officers, employees or agents of such Trust,
but the Trust's property only shall be
bound.
[Signature Page to Rights Agreement]
MASSMUTUAL PARTICIPATION INVESTORS
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
The foregoing is executed on behalf of
MassMutual Participation Investors,
organized under a Declaration of Trust,
dated April 7, 1988, as amended from time to
time. The obligations of such Trust are not
personally binding upon, nor shall resort be
had to the property of, any of the Trustees,
shareholders, officers, employees or agents
of such Trust, but the Trust's property only
shall be bound.
NATIONAL CITY VENTURE CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxxxxxx X. Xxxx
Title: Vice President
[Signature Page to Rights Agreement]
Exhibit A-1
Form of Joinder Agreement
For Permitted Transferees
XXXX INTERNATIONAL HOLDINGS, INC.
000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the transfer to the undersigned of [DESCRIBE
SECURITY BEING TRANSFERRED] of XXXX INTERNATIONAL HOLDINGS, INC., a Delaware
corporation (the "Company"), the undersigned represents that it is a Permitted
Transferee of [INSERT NAME OF TRANSFEROR] and agrees that, as of the date
written below, [HE][SHE][IT] shall become a party to, and a Permitted Transferee
as defined in, that certain Rights Agreement dated as of December 22, 1998, as
such agreement may have been amended from time to time (the "Agreement"), among
the Company and the persons named therein, and as a Permitted Transferee shall
be fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement that were applicable to the undersigned's transferor, as though an
original party thereto, and shall be deemed a [LIH STOCKHOLDER] [BANCBOSTON
STOCKHOLDER] [LIBERTY MUTUAL STOCKHOLDER] [MEZZANINE STOCKHOLDER] [ADDITIONAL
STOCKHOLDER] for all purposes thereof.
Executed as of the day of , .
SIGNATORY:
Address:
ACKNOWLEDGED AND ACCEPTED:
XXXX INTERNATIONAL HOLDINGS, INC.
By:___________________________________
Name:
Title:
Exhibit A-2
Form of Joinder Agreement
For Additional Stockholders
XXXX INTERNATIONAL HOLDINGS, INC.
000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the issuance to the undersigned of [DESCRIBE
SECURITY BEING ISSUED] of XXXX INTERNATIONAL HOLDINGS, INC., a Delaware
corporation (the "Company"), the undersigned agrees that, as of the date written
below, [HE][SHE][IT] shall become a party to and an Additional Stockholder under
that certain Rights Agreement dated as of December 22, 1998, as such agreement
may have been amended from time to time (the "Agreement"), among the Company and
the persons named therein, and shall be fully bound by, and subject to, the
covenants, terms and conditions of the Agreement as provided under Section 12.4
of the Agreement as though an original party thereto.
Executed as of the day of , .
SIGNATORY:
Address:
ACKNOWLEDGED AND ACCEPTED:
XXXX INTERNATIONAL HOLDINGS, INC.
By:___________________________________
Name:
Title:
Schedule I
Names and Addresses
LIH Holdings III, LLC
c/o Harvest Partners, Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
Liberty Mutual Insurance Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxx
Facsimile No.: (000) 000-0000
BancBoston Capital Inc.
00 Xxxxxxx Xxxxxx
Mail Stop 75-10-01
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
MassMutual Corporate Value Partners Limited
c/o Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
MassMutual Corporate Investors
c/o Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
Schedule I cont'd
Names and Addresses
MassMutual Participation Investors
c/o Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
National City Venture Corporation
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxx
Facsimile No.: (000) 000-0000