EXHIBIT 10.86
(AS AMENDED AS OF SEPTEMBER 21, 2001)
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REGISTRATION RIGHTS AGREEMENT
by and among
XXXXXXX X. XXXXXX,
XXXXXXX X. XxXXXXXXX,
JENS HOHNEL
and
THE XXXX INVESTORS
and
XXXXXXX & XXXXXX CORPORATION
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Dated: July 3, 2001
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Definitions........................................................................... 2
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 Grant of Rights....................................................................... 5
2.2 Registrable Securities................................................................ 5
2.3 Holders of Registrable Securities..................................................... 6
ARTICLE III
DEMAND REGISTRATION
3.1 Request for Demand Registration....................................................... 6
3.2 Incidental or "Piggy-Back" Rights with Respect to a Demand Registration............... 7
3.3 Effective Demand Registration......................................................... 8
3.4 Expenses.............................................................................. 9
3.5 Underwriting Procedures............................................................... 9
3.6 Selection of Underwriters............................................................. 10
3.7 Company Preemption Right; Other Registration Rights Agreement......................... 10
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 Request for Incidental Registration................................................... 10
4.2 Expenses.............................................................................. 11
ARTICLE V
HOLDBACK AGREEMENTS
5.1 Restrictions on Public Sale by Designated Holders..................................... 12
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5.2 Restrictions on Public Sale by the Company............................................ 12
ARTICLE VI
REGISTRATION PROCEDURES
6.1 Obligations of the Company............................................................ 13
6.2 Seller Information.................................................................... 16
6.3 Notice to Discontinue................................................................. 17
6.4 Registration Expenses................................................................. 17
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 Indemnification by the Company........................................................ 18
7.2 Indemnification by Designated Holders................................................. 18
7.3 Conduct of Indemnification Proceedings................................................ 19
7.4 Contribution.......................................................................... 20
ARTICLE VIII
COVENANTS
8.1 Rule 144.............................................................................. 20
8.2 Xxxxxxxxxxx and Blackstone Priority of Sale........................................... 21
ARTICLE IX
MISCELLANEOUS
9.1 Recapitalizations, Exchanges, etc..................................................... 21
9.2 No Inconsistent Agreements; Timing of Demand Notices.................................. 21
9.3 Remedies.............................................................................. 22
9.4 Notices............................................................................... 22
9.5 Successors and Assigns; Third Party Beneficiaries..................................... 23
9.6 Amendments and Waivers................................................................ 24
9.7 Counterparts.......................................................................... 24
9.8 Headings.............................................................................. 24
9.9 GOVERNING LAW......................................................................... 24
9.10 Severability.......................................................................... 25
9.11 Rules of Construction................................................................. 25
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9.12 Entire Agreement...................................................................... 25
9.13 Further Assurances.................................................................... 25
9.14 Other Agreements...................................................................... 25
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated July 3, 2001, by and among
Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "Company"), Xxxxxxx
X. Xxxxxx, Xxxxxxx X. XxXxxxxxx and Jens Hohnel (the "Xxxxxx Investors") and
the Xxxx Investors (as defined below), if any, added as parties hereto.
WHEREAS, pursuant to an Agreement and Plan of Merger, dated May 14,
2001 (the "Merger Agreement"), by and among the Company, Xxxxxxx & Xxxxxx
Products Co. and the Xxxxxx Investors, the Xxxxxx Investors will receive (x) an
aggregate of 17,000,000 shares of common stock, par value $0.01 per share (the
"Common Stock"), of the Company and (y) warrants to purchase an aggregate of
500,000 shares (the "Warrant Shares") of Common Stock;
WHEREAS, concurrently herewith, the Company and the Xxxxxx Investors
are entering into the Stockholders Agreement (as hereinafter defined), pursuant
to which the parties thereto have agreed to, among other things, certain first
offer and tag-along rights;
WHEREAS, in order to induce each of the Xxxxxx Investors to purchase
its shares of Common Stock as provided in the Merger Agreement, the Company has
agreed to grant registration rights with respect to the Registrable Securities
(as hereinafter defined) as set forth in this Agreement; and
WHEREAS, the acquisition of Xxxx Automotive Industries, Inc. is
under consideration and remains subject to the negotiation of terms and
definitive documentation at the time that the Merger Agreement has been signed,
and the Xxxxxx Investors and the Company intend that, to the extent shares of
Common Stock are issued in connection with such acquisition, the recipients
(the "Xxxx Investors") of such shares receive the rights provided herein
pursuant to the same documentation to the extent agreed to by the Xxxx
Investors by executing the signature pages hereto (the "Xxxx Transaction").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" has the meaning specified in the Stockholders Agreement;
provided that, for purposes of Section 5.1 hereof, a Person shall not
be deemed to be an Affiliate of a Designated Holder merely due to the fact that
such Designated Holder is a member of the board of directors or similar
governing body of the aforementioned Person.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Approved Underwriter" has the meaning set forth in Section 3.6.
"Xxxxxx Investors" has the meaning set forth in the preamble to this
Agreement.
"Xxxxxx Stockholders" means the Xxxxxx Investors and their Direct
Permitted Transferees to whom Registrable Securities are transferred in
accordance with Section 2.2 of the Stockholders Agreement and Section 9.5 of
this Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" has the meaning set forth in the preamble to this
Agreement or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"Company" has the meaning set forth in the preamble to this Agreement
and shall mean any successor thereto that has issued common stock in exchange
for any Common Stock in connection with any merger or consolidation in which
Common Stock of the Company is converted or exchanged, in whole or in part,
into such common stock.
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"Company Offering" has the meaning set forth in Section 4.1.
"Company Underwriter" has the meaning set forth in Section 4.1.
"day" means any calendar day.
"Demand Registration" has the meaning set forth in Section 3.1.
"Designated Holder" means each of the Xxxxxx Stockholders and the
Xxxx Stockholders and any transferee of any of them to whom Registrable
Securities have been transferred in accordance with Section 9.5, other than a
transferee to whom Registrable Securities have been transferred pursuant to a
Registration Statement under the Securities Act or Rule 144 under the Securities
Act (or any successor rule thereto).
"Direct Permitted Transferee" has the meaning ascribed to such term
in the Stockholders Agreement.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
"Existing Registration Rights Agreement" means the Registration
Rights Agreement dated February 23, 2001 among Blackstone Capital Company II,
L.L.C., Heartland Industrial Partners, L.P. and the other named Heartland
Entities, Xxxxxxxxxxx/C&A Holdings, L.L.C. and the Company, as amended or
modified in accordance with its terms.
"Future Designated Holder" means each of (i) Textron Inc.
("Textron"), (ii) the New Private Equity Holders and (iii) any other Person
that directly or indirectly acquires shares of Common Stock of the Company from
Textron or any New Private Equity Holder and that is entitled to demand
registration rights pursuant to the terms of one or more registration rights
agreements entered into from time to time between the Company, on the one hand,
and Textron or one or more New Private Equity Holders, on the other hand.
"Holders' Counsel" has the meaning set forth in Section 6.1(a).
"Incidental Registration" has the meaning set forth in Section 4.1.
"Indemnified Party" has the meaning set forth in Section 7.3.
"Indemnifying Party" has the meaning set forth in Section 7.3.
"Initiating Xxxxxx Holders" has the meaning set forth in Section 3.1.
"Initiating Holders" has the meaning set forth in Section 3.1.
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"Initiating Xxxx Holders" has the meaning set forth in Section 3.1.
"Inspector" has the meaning set forth in Section 6.1(g).
"Xxxx Transaction" has meaning set forth in the preamble to this
Agreement.
"Xxxx Investors" has the meaning set forth in the preamble to this
Agreement.
"Xxxx Stockholders" means each Xxxx Investor and any Direct
Permitted Transferee thereof to whom Registrable Securities are transferred in
accordance with Section 2.2 of the Stockholders Agreement and Section 9.5 of
this Agreement.
"Liability" has the meaning set forth in Section 7.1.
"Majority of Xxxxxx Stockholders" means the Xxxxxx Stockholders
holding a majority of the Registrable Securities held by all Xxxxxx
Stockholders.
"Majority of the Xxxx Stockholders" means the Xxxx Stockholders
holding a majority of the Registrable Securities held by all Xxxx
Stockholders.
"Merger Agreement" has the meaning set forth in the preamble to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"New Private Equity Holders" means those Persons purchasing Common
Stock to finance, in part, the transactions contemplated by the proposed
transaction with Textron previously disclosed to each of the Xxxxxx Investors
and the Xxxx Investors.
"Non-Designated Stockholder" has the meaning set forth in Section
4.1.
"Non-Designated Stockholder Offering" has the meaning set forth in
Section 4.1.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.
"Priority Holders" has the meaning set forth in Section 3.2.
"Records" has the meaning set forth in Section 6.1(g).
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"Registrable Securities" means, subject to Section 2.2, each of the
following: (a) any and all shares of Common Stock acquired by the Designated
Holders, in the case of the Xxxxxx Investors pursuant to the Merger Agreement
and the documentation governing the transfer of shares on the date hereof of
Common Stock from Jens Hohnel to Xxxxxxx X. Xxxxxx, including the Warrant
Shares, and in the case of the Xxxx Investors pursuant to the Xxxx Transaction
(b) any shares of Common Stock issued or issuable to any of the Designated
Holders with respect to the Registrable Securities by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise and any shares of
Common Stock or voting common stock issuable upon conversion, exercise or
exchange thereof.
"Registration Expenses" has the meaning set forth in Section 6.4.
"Registration Statement" means a registration statement filed
pursuant to the Securities Act.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Shares" means shares of Common Stock.
"Valid Business Reason" has the meaning set forth in Section 3.1.
Any terms not defined herein shall have the meanings ascribed thereto
in the Stockholders Agreement.
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 Grant of Rights. The Company hereby grants registration rights
to the Designated Holders upon the terms and conditions set forth in this
Agreement.
2.2 Registrable Securities. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such securities has been declared effective
under the Securities Act by the Commission and such securities have been
disposed of pursuant to such effective Registration Statement or (ii) with
respect to a Designated Holder, the entire amount of such Designated Holder's
Registrable Securities may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and the Designated Holder, each in their reasonable
judgment, without any limita-
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tion as to volume pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act.
2.3 Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected. If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company may
act upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities
issuable upon exercise of an option or upon conversion of another security
shall be deemed outstanding for the purposes of this Agreement.
ARTICLE III
DEMAND REGISTRATION
3.1 Request for Demand Registration.
(a) A Majority of the Xxxxxx Stockholders (the "Initiating Xxxxxx
Holders"), and a Majority of the Xxxx Stockholders (the "Initiating Xxxx
Holders," each of the Initiating Xxxxxx Holders and the Initiating Xxxx Holders
shall be known as the "Initiating Holders," depending on which of the
Initiating Xxxxxx Holders or the Initiating Xxxx Holders makes the subject
demand), may each make a written request to the Company to register, and the
Company shall register, under the Securities Act (other than pursuant to a
Registration Statement on Form S-4 or S-8 or any successor thereto) (a "Demand
Registration"), the number of Registrable Securities stated in such request;
provided, however, that (1) the Company shall not be obligated to effect (x)
more than two (2) such Demand Registrations at the request of Initiating Xxxxxx
Holders, and (y) more than two (2) such Demand Registrations at the request of
Initiating Xxxx Holders and (2) the Company shall not be obligated to proceed
with a Demand Registration at any time prior to July 1, 2003. For purposes of
the preceding sentence, two or more Registration Statements filed in response
to one demand shall be counted as one Demand Registration; provided, however,
that any such Registration Statement filed at the request of an Initiating
Holder and subsequently withdrawn at the request of that Initiating Holder
shall be counted as a Demand Registration with respect to such Initiating
Holder unless the withdrawing Initiating Holder pays the expenses associated
with such Registration Statement, in which case such Demand Registration shall
not be so counted.
(b) Notwithstanding anything to the contrary contained herein, no
Demand Registration need be effected by the Company within six (6) months after
the effectiveness of
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any Registration Statement pursuant to a Demand Registration hereunder or a
"demand registration" (whether under the Existing Registration Rights Agreement
or any future Common Stock registration rights agreements) or any Registration
Statement for any Company Offering. The Company shall not be obliged to include
more than 10 million shares (as equitably adjusted for stock splits, stock
combinations and similar events occurring after the date hereof) of Common
Stock in any Registration Statement pursuant to a Demand Registration,
inclusive of any Shares to be included pursuant to any incidental or piggy-back
rights under this Agreement, the Existing Registration Rights Agreement or any
future Common Stock registration rights agreements. If the Board of Directors,
in its good faith judgment, determines that any registration of Registrable
Securities should not be made or continued because it would materially
interfere with any material financing, acquisition, corporate reorganization or
merger or other material transaction involving the Company (a "Valid Business
Reason"), the Company may (x) postpone filing a Registration Statement relating
to a Demand Registration until such Valid Business Reason no longer exists, but
in no event for more than 135 days, and (y) in case a Registration Statement
has been filed relating to a Demand Registration, if the Valid Business Reason
has not resulted from actions taken by the Company, the Company, upon the
approval of a majority of the Board of Directors may cause such Registration
Statement to be withdrawn and its effectiveness terminated or may postpone
amending or supplementing such Registration Statement. For the purposes of
certainty, the parties acknowledge that in the event a Registration Statement
is so withdrawn, it shall not count as having been a Demand Registration for
purposes of the limit on the number of Demand Registrations set forth above.
The Company shall give written notice of its determination to postpone or
withdraw a Registration Statement and of the fact that the Valid Business
Reason for such postponement or withdrawal no longer exists, in each case,
promptly after the occurrence thereof. Notwithstanding anything to the
contrary contained herein, the Company may not postpone or withdraw a filing
under this Section 3.1 more than once in any twelve (12) month period. Each
request for a Demand Registration by the Initiating Holders shall state the
number of the Registrable Securities proposed to be sold and the intended
method of disposition thereof.
3.2 Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) and Future Designated
Holders may offer its or his Registrable Securities in connection with any
Demand Registration pursuant to this Section 3.2. Within five (5) Business Days
after the receipt of a request for a Demand Registration from an Initiating
Holder, the Company shall (i) give written notice thereof to all of the
Designated Holders (other than Initiating Holders which have requested a
registration under Section 3.1) and Future Designated Holders and (ii) subject
to Section 3.5, include in such registration all of the Registrable Securities
held by such Designated Holders and Future Designated Holders from whom the
Company has received a written request for inclusion therein within ten (10)
days of the receipt by such Designated Holders and Future Designated Holders of
such written no-
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xxxx referred to in clause (i) above. Each such request by such Designated
Holders and Future Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any such Designated Holder
or Future Designated Holder to respond within such 10-day period referred to in
clause (ii) above shall be deemed to be a waiver of such Designated Holder's or
Future Designated Holder's rights under this Section 3.2 with respect to such
Demand Registration. Any such Designated Holder or Future Designated Holder may
waive its rights under this Article III prior to the expiration of such 10-day
period by giving written notice to the Company, with a copy to the Initiating
Holders. If a Designated Holder or Future Designated Holder sends the Company a
written request for inclusion of part or all of such Designated Holder's or
Future Designated Holder's Registrable Securities in a Demand Registration,
such Designated Holder or Future Designated Holder shall not be entitled to
withdraw or revoke such request without the prior written consent of the
Company in its sole discretion unless, as a result of facts or circumstances
arising after the date on which such request was made relating to the Company
or to market conditions, such Designated Holder or Future Designated Holder
reasonably determines that participation in such registration would have a
material adverse effect on such Designated Holder or Future Designated Holder.
Future Designated Holders and Designated Holders (other than the Initiating
Holders which have requested a registration under Section 3.1) may participate
in a Demand Registration pursuant to the provisions of this Section 3.2 as
"Priority Holders" (without being deemed to have requested a Demand
Registration under Section 3.1), but their participation rights will be limited
to one Demand Registration initiated by the Initiating Xxxxxx Holders and one
Demand Registration initiated by the Initiating Xxxx Holders with such
Initiating Holders electing at the time of their first request under Section
3.1 whether or not rights will be afforded to Priority Holders under this
Section 3.2. It is understood that Designated Holders and Future Designated
Holders may be entitled to rights under Section 4.1 even when they are not
Priority Holders.
3.3 Effective Demand Registration. Subject to Section 3.1, the
Company shall use its reasonable best efforts to cause any such Demand
Registration to become effective not later than 60 days after it receives a
request under Section 3.1. A registration shall not constitute a Demand
Registration until it has become effective and remains continuously effective
for the shorter of (i) 60 days and (ii) the period during which all Registrable
Securities registered in the Demand Registration are sold; provided, however,
that a registration shall not constitute a Demand Registration if (x) after
such Demand Registration has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason not
attributable to the Initiating Holders and such interference is not thereafter
eliminated or (y) the conditions specified in the underwriting agreement, if
any, entered into in connection with such Demand Registration are not satisfied
or waived by reason of a breach by the Company or (z) the Company exercises its
rights of postponement, termination or withdrawal under Section 3.1.
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3.4 Expenses. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective, except as otherwise provided herein.
3.5 Underwriting Procedures. If the Company or the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders so elect, the Company shall use its reasonable best efforts
to cause such Demand Registration to be in the form of a firm commitment
underwritten offering and the managing underwriter or underwriters selected for
such offering shall be the Approved Underwriter selected in accordance with
Section 3.6. In connection with any Demand Registration under this Article III
involving an underwritten offering, none of the Registrable Securities held by
any Designated Holder making a request for inclusion of such Registrable
Securities pursuant to Section 3.2 hereof shall be included in such
underwritten offering unless such Designated Holder accepts the terms of the
offering as agreed upon by the Company, the Initiating Holders and the Approved
Underwriter (including execution of an escrow agreement and/or a power of
attorney with respect to the disposition of the Registrable Securities), and
then only in such quantity as will not, in the opinion of the Approved
Underwriter, jeopardize the success of such offering by the Initiating Holders.
If the Approved Underwriter advises the Company that the aggregate amount of
such Registrable Securities requested to be included in such offering is
sufficiently large to have a material adverse effect on the success of such
offering, then the Company shall include in such registration only the
aggregate amount of Registrable Securities that the Approved Underwriter
believes may be sold without any such material adverse effect and shall reduce
the amount of Registrable Securities to be included in such registration to the
extent of the amount of Registrable Securities that the Approved Underwriter
believes may be sold without causing such material adverse effect. In such case
Registrable Securities shall be included in the following order of priority:
(1) first, any securities to be sold for the account of the Blackstone Holders
and Xxxxxxxxxxx Holders (each as defined in the Existing Registration Rights
Agreement), as required by Section 4.1 of the Existing Registration Rights
Agreement or Section 8.2 of this Agreement; (2) second, any Registrable
Securities and other shares of Common Stock to be sold for the account of the
Initiating Holders and Priority Holders (if any), pro rata based upon the
number of Registrable Securities and other shares of Common Stock then owned by
them; (3) third, any securities to be sold for the account of any Designated
Holders (other than the Initiating Holders) and Future Designated Holders that
are not Priority Holders, pro rata based upon the number of Registrable
Securities and other shares of Common Stock then owned by them; and (4) fourth,
by the Company or any other Person exercising incidental or piggyback
registration rights. If, by reason of the application of clause (1) or the
Priority Holders' rights (if any) in clause (2) or by reason of the 10 million
share limitation, less than 50% of the Registrable Securities which the
Initiating Holders of the subject Demand Registration requested be registered
are included in such registration, the registration shall not count as one of
the two Demand Registrations to which such Initiating Holders are
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entitled nor shall such registration count as a registration in which a
Priority Holder exercised its right to be treated as a Priority Holder under
Section 3.2.
3.6 Selection of Underwriters. If any Demand Registration of
Registrable Securities is in the form of an underwritten offering, the Company
shall select and obtain an investment banking firm of national reputation to
act as the managing underwriter of the offering (the "Approved Underwriter");
provided, however, that the Approved Underwriter shall, in any case, also be
approved by the Initiating Holders holding a majority of the Registrable
Securities held by all Initiating Holders such approval not to be unreasonably
withheld.
3.7 Company Preemption Right; Existing Registration Rights
Agreement. Notwithstanding anything herein to the contrary, to the extent that
a Valid Business Reason exists for deferring, postponing or suspending a Demand
Registration, the Company shall be entitled to elect to pursue a Company
Offering (as hereinafter defined) in furtherance of such Valid Business Reason
and to thereby preempt the Demand Registration and defer, postpone or suspend
the Demand Registration, in which case the applicable demand shall not count as
a Demand Registration. In the event of a conflict between this Agreement and
the Existing Registration Rights Agreement, the Existing Registration Rights
Agreement will govern.
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 Request for Incidental Registration. If the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering of Common Stock by the Company for its own account (other than a
Registration Statement (i) on Form S-4 or S-8 or any successor thereto and (ii)
with respect to an offering of Common Stock by the Company exclusively to its
existing stockholders) (a "Company Offering") or for the account of any
stockholder of the Company other than one in which all Designated Holders are
either Initiating Holders or Priority Holders under Article III (each such
Stockholder, a "Non-Designated Stockholder" and such offering, a
"Non-Designated Stockholder Offering"), then the Company shall give written
notice of such proposed filing to each of the Designated Holders at least ten
(10) Business Days before the anticipated filing date, and such notice shall
describe the proposed registration and distribution and offer such Designated
Holders the opportunity to register the number of Registrable Securities as
each such Designated Holder may request (an "Incidental Registration"). The
Company shall use its reasonable best efforts to cause the managing underwriter
or underwriters in the case of a proposed underwritten offering (the "Company
Underwriter") to permit each of the Designated Holders who have requested in
writing to participate in the Incidental Registration to include its or his
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company
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or the securities of such Non-Designated Stockholders, as the case may be,
included therein. In connection with any Incidental Registration under this
Section 4.1 involving an underwritten offering, the Company shall not be
required to include any Registrable Securities in such underwritten offering
unless the Designated Holders thereof accept the terms of the underwritten
offering as agreed upon between the Company, such Non-Designated Stockholders,
if any, and the Company Underwriter (including execution of an escrow agreement
and/or a power of attorney with respect to the disposition of the Registrable
Securities), and then only in such quantity as the Company Underwriter believes
will not jeopardize the success of such offering. If the Company Underwriter
determines that the registration of all or part of the Registrable Securities
which the Designated Holders have requested to be included would materially
adversely affect the success of such offering, then the Company shall be
required to include in such Incidental Registration the Registrable Securities
only to the extent of the amount of Registrable Securities that the Company
Underwriter believes may be sold without causing such material adverse effect,
(i) in the case of a Company Offering: first, all of the securities to be
offered for the account of the Company; second, any securities to be offered
for the account of Blackstone Holders and Xxxxxxxxxxx Holders, pro rata based
on the number of securities then owned by each; and third, any other Person
(including the Designated Holders) pro rata based on the number of Registrable
Securities and other shares of Common Stock of the Company then owned by each;
and (ii) in the case of a Non-Designated Stockholder Offering: first, the
securities to be offered for the account of Blackstone Holders and Xxxxxxxxxxx
Holders pro rata based on the number of Registrable Securities owned by each;
second, all of the securities to be offered by such Persons as are exercising
demand registration rights; third, all of the securities to be offered for the
account of the Company; fourth, any Persons exercising incidental or piggyback
registration rights under the Existing Registration Rights Agreement; and
fifth, any Registrable Securities and other shares of Common Stock requested to
be included in such offering by the Designated Holders or any other Person pro
rata based on the number of Registrable Securities and other shares of Common
Stock then owned by each. Nothing in this Section 4.1 shall create any
liability on the part of the Company or any other Person to the Designated
Holders if the Company, for any reason, decides not to file a Registration
Statement proposed to be filed pursuant to this Section 4.1 or to withdraw such
Registration Statement subsequent to its filing, regardless of any action
whatsoever that a Designated Holder may have taken, whether as a result of the
issuance by the Company of any notice under this Section 4.1 or otherwise.
4.2 Expenses. The Company shall bear all Registration Expenses in
connection with any Incidental Registration pursuant to this Article IV,
whether or not such Incidental Registration becomes effective.
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ARTICLE V
HOLDBACK AGREEMENTS
5.1 Restrictions on Public Sale by Designated Holders. To the extent
requested (A) by the Company, in the case of a non-underwritten public offering
and (B) by the Approved Underwriter or the Company Underwriter, as the case may
be, in the case of an underwritten public offering, each Designated Holder of
Registrable Securities agrees (x) not to effect any sale or distribution of any
Registrable Securities or of any securities convertible into or exchangeable or
exercisable for such Registrable Securities, including a sale pursuant to Rule
144 under the Securities Act, or offer to sell, contract to sell (including
without limitation any short sale), grant any option to purchase or enter into
any hedging or similar transaction with the same economic effect as a sale of
Registrable Securities and (y) not to make any request for a Demand
Registration under this Agreement, during the 180 day period or such shorter
period, if any, agreed to by the requesting party beginning on the effective
date of such Registration Statement (except as part of such registration);
provided, that, if the Company or any Approved Underwriter or Company
Underwriter requests that a Designated Holder be subject to clauses (x) and/or
(y), all Designated Holders shall thereupon become subject to the same
restrictions upon the same terms; provided, however, that, with respect to each
Designated Holder, the provisions of clause (x) shall terminate with respect to
any Registration Statement in which such Designated Holder is not a participant
if such Designated Holder and its Affiliates own less than 5% of the
outstanding shares of Common Stock of the Company before giving effect to any
such offering pursuant to such Registration Statement. No holder of 5% or more
of the outstanding shares of Common Stock of the Company (nor any person within
the common control of any such person or a family member of any such person)
subject to a registration rights agreement shall be released by the Company
from any obligation similar to the foregoing unless the Designated Holders are
also offered such a release. No Designated Holder of Registrable Securities
subject to this Section 5.1 shall be released from any obligation under any
agreement, arrangement or understanding entered into pursuant to this Section
5.1 except to the extent all other Designated Holders of Registrable Securities
subject to the same obligation are also released.
5.2 Restrictions on Public Sale by the Company. The Company agrees
(a) not to effect any sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor thereto),
during the period beginning on the effective date of any Registration Statement
in which the Designated Holders of Registrable Securities are participating and
ending on the date on which all Registrable Securities registered on such
Registration Statement are sold (except as part of such registration) and (b)
to use commercially reasonable efforts to cause its directors and executive
officers to agree not to effect any public sale or dis-
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tribution of any Common Stock (or securities convertible or exchangeable
therefor) of the Company owned or controlled by them or their respective
Affiliates at a time when the Company is restricted from selling or
distributing Common Stock under the preceding clause (a).
ARTICLE VI
REGISTRATION PROCEDURES
6.1 Obligations of the Company. Whenever registration of Registrable
Securities has been requested pursuant to Article III or Article IV of this
Agreement, the Company shall use its reasonable best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(a) prepare and file with the Commission a Registration Statement on
any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the
sale of such Registrable Securities in accordance with the intended method
of distribution thereof, and use its reasonable best efforts to cause such
Registration Statement to become effective; provided, however, that (x)
before filing a Registration Statement or prospectus or any amendments or
supplements thereto, the Company shall provide counsel selected by the
Designated Holders holding a majority of the Registrable Securities being
registered in such registration ("Holders' Counsel") and any other
Inspector with a reasonably adequate and appropriate opportunity to review
and comment on such Registration Statement and each prospectus included
therein (and each amendment or supplement thereto) to be filed with the
Commission, subject to such documents being under the Company's control,
and (y) the Company shall notify the Holders' Counsel and each seller of
Registrable Securities of any stop order issued or threatened by the
Commission and take all action required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective for the lesser of (x) 90 days and (y) such shorter
period which will terminate when all Registrable Securities covered by
such Registration Statement have been sold, and 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;
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(c) furnish to each seller of Registrable Securities, prior to
filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies
of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), and the prospectus included in
such Registration Statement (including each preliminary prospectus) and
any prospectus filed under Rule 424 under the Securities Act as each such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(d) register or qualify such Registrable Securities under such other
securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may reasonably request, and to continue such
qualification in effect in such jurisdiction for as long as required
pursuant to the laws of such jurisdiction, or for as long as any such
seller reasonably requests or until all of such Registrable Securities are
sold, whichever is shortest, and do any and all other acts and things
which may be reasonably necessary or advisable to enable any such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company shall
not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 6.1(d), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction;
(e) notify each seller of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as
a result of which, the prospectus included in such Registration Statement
contains an untrue statement of a material fact or omits to state any
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, and the Company shall promptly prepare a supplement
or amendment to such prospectus and furnish to each seller of Registrable
Securities a reasonable number of copies of such supplement to or an
amendment of such prospectus as may be necessary so that, after delivery
to the purchasers of such Registrable Securities, such prospectus shall
not contain an untrue statement of a material fact or omit to state any
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;
(f) enter into and perform customary agreements (including an
underwriting agreement in customary form with the Approved Underwriter or
Company Underwriter, if any, selected as provided in Article III or
Article IV, as the case may be) and take such other actions as are prudent
and reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities;
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(g) make available at reasonable times for inspection by any seller
of Registrable Securities, any managing underwriter participating in any
disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent
retained by any such seller or any managing underwriter (each, an
"Inspector" and collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company and
its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise their due diligence responsibility,
and cause the Company's and its subsidiaries' officers, directors and
employees, and the independent public accountants of the Company, to
supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and
the Inspectors shall confirm their agreement in writing in advance to the
Company if the Company shall so request) unless (x) the disclosure of such
Records is necessary, in the Company's judgment, to avoid or correct a
misstatement or omission in the Registration Statement, (y) the release of
such Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction after exhaustion of all appeals therefrom or (z)
the information in such Records was known to the Inspectors on a
non-confidential basis prior to its disclosure by the Company or has been
made generally available to the public. Each seller of Registrable
Securities agrees that it shall, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records deemed
confidential;
(h) if such sale is pursuant to an underwritten offering, cause to
be delivered "cold comfort" letters dated the effective date of the
Registration Statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by "cold
comfort" letters as Holders' Counsel or the managing underwriter
reasonably requests;
(i) if such sale is pursuant to an underwritten offering, cause to
be furnished, at the request of any seller of Registrable Securities on
the date such securities are delivered to the underwriters for sale
pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the Registration Statement with respect
to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such
request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the un-
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derwriters, if any, and such seller may reasonably request and are
customarily included in such opinions;
(j) comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable but no later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement
covering a period of twelve (12) months beginning after the effective date
of the Registration Statement, in a manner which satisfies the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed, provided that the applicable listing requirements are
satisfied;
(l) keep Holders' Counsel advised in writing as to the initiation
and progress of any registration under Article III or Article IV hereunder;
(m) cooperate with each seller of Registrable Securities and each
underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the NASD;
(n) make officers available to participate in customary road shows
and other informational meetings as reasonably requested by any Approved
Underwriter or Company Underwriter (it being understood that the Company,
in its discretion, may require that there be "road shows" and other
informational meetings in connection with a Demand Registration); and
(o) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
6.2 Seller Information. (a) It shall be a condition precedent to the
obligation of the Company to include any Registrable Securities of any
Designated Holder in a Registration Statement pursuant to this Agreement that
the Designated Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it, any other securities of the
Company held by it, and the intended method of disposition of such Registrable
Securities as shall be required to effect the registration of the Registrable
Securities held by such Designated Holder, including, without limitation, all
information required to be disclosed in order to make the information
previously furnished to the Company by such Designated Holder not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such Designated Holder necessary in order to make
the statements therein not misleading. Any such Information shall be provided
to the Company within any reasonable time period requested by the Company.
-17-
(b) Each Designated Holder shall notify the Company, at any time
when a prospectus is required to be delivered under applicable law, of the
happening of any event as a result of which the prospectus included in the
applicable Registration Statement, as then in effect, in each case only with
respect to information provided by such Holder, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing. Such Designated Holder shall immediately upon the
happening of any such event cease using such prospectus.
6.3 Notice to Discontinue. Each Designated Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 6.1(e) or 6.2(b), such Designated Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Designated Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.1(e) and, if so directed by the Company,
such Designated Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Designated Holder's
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 6.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 6.1(e) to and including the date when sellers of such
Registrable Securities under such Registration Statement shall have received
the copies of the supplemented or amended prospectus contemplated by and
meeting the requirements of Section 6.1(e).
6.4 Registration Expenses. The Company shall pay all expenses
arising from or incident to its performance of, or compliance with, this
Agreement, including, without limitation, (i) Commission, stock exchange and
NASD registration and filing fees, (ii) all fees and expenses incurred in
complying with securities or "blue sky" laws (including reasonable fees,
charges and disbursements of counsel to any underwriter incurred in connection
with "blue sky" qualifications of the Registrable Securities as may be set
forth in any underwriting agreement), (iii) all printing, messenger and
delivery expenses, (iv) the fees, charges and disbursements of counsel to the
Company and of its independent public accountants and any other accounting
fees, charges and expenses incurred by the Company (including, without
limitation, any expenses arising from any "cold comfort" letters or any special
audits incident to or required by any registration or qualification), (v) the
reasonable fees, charges and disbursements of Holders' Counsel not to exceed
$35,000 and (vi) any liability insurance or other premiums for insurance
obtained in connection with any Demand Registration or piggy-back registration
thereon or Incidental Registration pursuant to the terms of this Agreement,
regardless of whether such Registration Statement is declared effective. All of
the expenses de-
-18-
scribed in the preceding sentence of this Section 6.4 are referred to herein as
"Registration Expenses." The Designated Holders of Registrable Securities sold
pursuant to a Registration Statement shall bear the expense of any broker's
commission, underwriter's discount or commission or transfer taxes relating to
registration and sale of such Designated Holders Registrable Securities and,
subject to clause (v) above, shall bear the fees and expenses of their own
counsel.
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Designated Holder, its partners, directors, officers,
Affiliates and each Person who controls (within the meaning of Section 15 of
the Securities Act) such Designated Holder from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "Liability" and collectively, "Liabilities"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading under the
circumstances such statements were made or arising out of a violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
federal or state securities law or any rule or regulation promulgated under any
such legislation, except insofar as such Liability (i) arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission contained in such Registration Statement, preliminary
prospectus or final prospectus in reliance and in conformity with information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 6.2, or (ii) is caused
by any failure by the Designated Holder to deliver a prospectus or preliminary
prospectus (or amendment or supplement thereto) as and when required under the
Securities Act after such prospectus has been timely furnished by the Company .
The Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
7.2 Indemnification by Designated Holders. Each Designated Holder
agrees to indemnify and hold harmless the Company, the other Designated
Holders, any underwriter retained by the Company, each of their respective
officers, directors and Affiliates and each
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Person who controls the Company, the other Designated Holders or such
underwriter (within the meaning of Section 15 of the Securities Act) to the
same extent as the foregoing indemnity from the Company to the Designated
Holders, but only if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with information with
respect to such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use in such Registration Statement or
prospectus, including, without limitation, the information furnished to the
Company pursuant to Section 6.2; provided, however, that the total amount to be
indemnified by such Designated Holder pursuant to Section 6.2 shall be limited
to the net proceeds received by such Designated Holder in the offering to which
the Registration Statement or prospectus relates.
7.3 Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to give prompt
written notice to the indemnifying party (the "Indemnifying Party") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
to the Indemnified Party for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, however,
that the failure so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of any Liability that it may have to the Indemnified Party
hereunder (except to the extent that the Indemnifying Party is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action with counsel reasonably
satisfactory to the Indemnified Party or (iii) the named parties to any such
action (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and such parties have been advised by such counsel
that either (x) representation of such Indemnified Party and the Indemnifying
Party by the same counsel would be inappropriate under applicable standards of
professional conduct or (y) there may be one or more legal defenses available
to the Indemnified Party which are different from or additional to those
available to the Indemnifying Party. In any of such cases, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying
Party shall not be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Indemnified
Parties. No Indemnifying Party shall be liable for any settlement entered into
without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the consent of such Indemnified Party,
which consent shall
-20-
not be unreasonably withheld, effect any settlement of any pending or
threatened proceeding in respect of which such Indemnified Party is a party and
indemnity has been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
Liability for claims that are the subject matter of such proceeding.
7.4 Contribution. If the indemnification provided for in this
Article VII from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Liabilities referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Liabilities in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such Liabilities, as well as any other
relevant equitable considerations. The relative faults of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Sections 7.1, 7.2 and 7.3, any legal or other fees, charges or
expenses reasonably incurred by such party in connection with any investigation
or proceeding; provided that the total amount to be contributed by such
Designated Holder shall be limited to the net proceeds received by such
Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. 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.
ARTICLE VIII
COVENANTS
8.1 Rule 144. The Company covenants that it shall (a) file any
reports required to be filed by it under the Exchange Act and (b) take such
further action as each Designated Holder of Registrable Securities may
reasonably request (including providing any information necessary to comply
with Rule 144 under the Securities Act), all to the extent re-
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quired from time to time to enable such Designated Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, or Regulation S under the Securities Act
or (ii) any similar rules or regulations hereafter adopted by the Commission.
The Company shall, upon the request of any Designated Holder of Registrable
Securities, deliver to such Designated Holder a written statement as to whether
it has complied with such requirements.
8.2 Xxxxxxxxxxx and Blackstone Priority of Sale. Notwithstanding
anything to the contrary set forth in this Agreement, in the event of any
offering of Common Stock, whether pursuant to a public offering, private
placement or other exempt sale in which Blackstone Holders and/or Xxxxxxxxxxx
Holders, on the one hand, and any other stockholder of the Company (including,
without limitation, any Xxxxxx Stockholder and any Xxxx Stockholder), on the
other hand, desire or intend to sell Common Stock, Blackstone Holders and
Xxxxxxxxxxx Holders, pro rata based on the number of shares of Common Stock
then owned by each, shall have an absolute right to sell prior to the right of
any other such holder.
ARTICLE IX
MISCELLANEOUS
9.1 Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of common stock of the
Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to assume this Agreement with the Designated Holders on
terms substantially the same as this Agreement as a condition of any such
transaction.
9.2 No Inconsistent Agreements; Timing of Demand Notices. (a) The
Company represents and warrants that it has not granted to any Person, other
than the Blackstone Holders and the Xxxxxxxxxxx Holders, the right to request
or require the Company to register any securities issued by the Company, other
than the rights granted to the Designated Holders herein. The Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Designated Holders in this Agreement.
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(b) Each of the parties hereto agrees that in the event of an
exercise by more than one party of a right to a "demand" registration whether
pursuant to Section 3.1 of this Agreement or pursuant to any other registration
rights agreement to which the Company may be a party from time to time, the
registration rights agreement (including, without limitation, this Agreement)
under which the first request shall have been made for "demand" registration
rights shall determine whether the provisions of Article III or Article IV of
this Agreement shall govern the applicable rights of the parties.
9.3 Remedies. The Designated Holders, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive in any action for specific performance the defense
that a remedy at law would be adequate.
9.4 Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be made by
telecopier, courier service or personal delivery:
(a) if to the Company:
Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq., General Counsel
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
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(b) if to the Xxxxxx Stockholders:
Xxxxxx Ventures LLC
0000 X. 00 Xxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. XxXxxxxxx, Esq.
with a copy to:
Xxxxx Xxxx PLC
000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: D. Xxxxx Xxxxxxxx, Esq.
(c) if to any Xxxx Stockholders:
c/o Xxxx Fabrics Corporation
100 Vesper Executive Park
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx XxXxxxxx, CEO
Facsimile No.: (000) 000-0000
with a copy to:
Goulston & Storrs, A Professional Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; the next
Business Day after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 9.4 designate another address or
Person for receipt of notices hereunder, and the Company shall update its
record books accordingly.
9.5 Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties
-24-
hereto as hereinafter provided. The Demand Registration rights and related
rights contained in Article III hereof shall be, with respect to any
Registrable Security that is transferred to a Direct Permitted Transferee of a
Xxxxxx Stockholder or a Xxxx Stockholder, automatically transferred to such
transferee who agrees in writing to be bound hereby, but only if transferred in
compliance with the Stockholders Agreement. The incidental or "piggy-back"
registration rights of the Designated Holders contained in Article IV hereof
and the other rights of each of the Designated Holders with respect thereto
shall be, with respect to any Registrable Security, automatically transferred
to any Person who is the transferee of such Registrable Security, but only if
transferred in compliance with the Stockholders Agreement. All of the
obligations of the Company hereunder shall survive any such transfer. Any
assignment in violation of this Agreement shall be null and void. Except as
provided in Article VII, no Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.
9.6 Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless consented to in writing by (i) the Company, (ii) a Majority of the
Xxxxxx Stockholders and (iii) a Majority of the Xxxx Stockholders; provided,
however, that consent of the Xxxxxx Stockholders or the Xxxx Stockholders need
not be obtained in the case of any amendment, modification, supplement, waiver
or consent that is not adverse to the Xxxxxx Stockholders or the Xxxx
Stockholders, as the case may be. Any such written consent (or amendment,
modification, supplement, consent or waiver for which written consent of a
party is not required in accordance with this Section 9.6) shall be binding
upon the Company and all of the Designated Holders who receive notice of it in
accordance with the provisions of this Agreement, which notice shall specify
the effect of such consent, amendment, modification, supplement or waiver, as
the case may be.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.8 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
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9.10 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof.
9.11 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.12 Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
9.13 Further Assurances. Each of the parties shall, and shall cause
their respective Affiliates to, execute such documents and perform such further
acts as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement.
9.14 Other Agreements. Nothing contained in this Agreement shall be
deemed to be a waiver of, or release from, any obligations any party hereto may
have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement including, but
not limited to, the Merger Agreement or the Stockholders Agreement.
[Remainder of page intentionally left blank]
S-1
IN WITNESS WHEREOF, the undersigned have executed, or have caused to
be executed this Agreement on the date first written above.
XXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Counsel
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XxXXXXXXX
/s/ Xxxxxxx X. XxXxxxxxx
------------------------
JENS HOHNEL
/s/ Jens Hohnel
---------------
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XXXX FABRICS CORPORATION
By: /s/ Xxxxx XxXxxxxx
------------------
Name: Xxxxx XxXxxxxx
Title: Chairman of the Board; Chief
Executive Officer
JFC HOLDINGS TRUST
By: /s/ Xxxxx XxXxxxxx
------------------
Xxxxx XxXxxxxx, as Trustee and not
individually
XXXXX XXXXXXXX, a Xxxx Investor
/s/ Xxxxx XxXxxxxx
------------------
XXXXX XXXXXXXX, a Xxxx Investor
/s/ Xxxxx Xxxxxxxx
------------------
