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Exhibit 10.1
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Agreement, dated as of May 30, 1997, is among New England Audio Co.,
Inc., a Massachusetts corporation (the "COMPANY"), Weston Presidio Offshore
Capital C.V. and the other Investors listed in SCHEDULE A (collectively, and
together with their permitted successors and assigns, the "INVESTORS") and the
other stockholders and stock optionholders of the Company listed in SCHEDULE B.
The parties agree as follows:
I. DEFINITIONS.
1.1. "BRIDGE WARRANTS" means the Warrants issued on or prior to the date
hereof pursuant to Section 2 of the Warrant and Debenture Commitment as listed
on Schedule A hereto.
1.2. "COMMON STOCK" means the common stock, no par value, of the Company.
1.3. "COMPANY" is defined in the preamble.
1.4. "EXCHANGE ACT" means the Securities and Exchange Act of 1934, or any
successor federal statute, and the rules and regulations thereunder, all as from
time to time amended and in effect.
1.5. "FORM S-2", "FORM S-3, "FORM S-4" and "FORM S-8 " mean such respective
forms under the Securities Act as in effect on the date hereof or any successor
registration forms under the Securities Act subsequently adopted by the SEC.
1.6. "HOLDER" means any person owning or having the right to acquire
Registrable Securities.
1.7. "INVESTORS" is defined in the preamble.
1.8. "NON-INVESTOR STOCKHOLDERS" means the stockholders of the Company
listed as Non-Investor Stockholders on Schedule B, together with their permitted
transferees, successors, heirs and assigns.
1.9. "ORIGINAL VENTURE INVESTORS" means the Investors listed on Schedule A,
with respect to their ownership of Preferred Stock, Warrants, Bridge Warrants,
and Common Stock issuable upon the exercise or conversion of the foregoing, but
not with respect to Subordinated Debt Warrants or Common Stock issuable upon the
exercise or conversion of Subordinated Debt Warrants.
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1.10. "PREFERRED STOCK" means, collectively, the Series A Redeemable
Convertible Preferred Stock, no par value, of the Company and the Series B
Redeemable Convertible Preferred Stock, no par value, of the Company, or either
of such series.
1.11. "PURCHASE AGREEMENT" means the Amended and Restated Series A and
Series B Purchase Agreement dated May __, 1997 among the Company and the
Investors.
1.12. "REGISTER", "REGISTERED" and "REGISTRATION" refers to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act.
1.13. "REGISTRABLE SECURITIES" means (a) the Common Stock issued or
issuable upon conversion, exchange or exercise of the Preferred Stock, Warrants,
Bridge Warrants and Subordinated Debt Warrants, (b) any Common Stock issued (or
issuable upon the conversion, exchange or exercise of any warrant, right or
other security which is issued) as a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Preferred Stock, Warrants,
Bridge Warrants and Subordinated Debt Warrants, and (c) any Common Stock
previously issued or issued in the future to the Non-Investor Stockholders,
either directly or pursuant to options, warrants and other rights under employee
plans permitted by section 5.17 of the Purchase Agreement or hereafter issued or
issuable as a dividend or other distribution with respect thereto or in
conversion or exchange therefor or replacement thereof; PROVIDED, HOWEVER, that
any shares previously sold to the public pursuant to a registered public
offering or pursuant to Rule 144 under the Securities Act shall cease to be
Registrable Securities.
1.14. "REGISTRABLE SECURITIES THEN OUTSTANDING" means the sum of (a) the
number of shares of Common Stock outstanding which are Registrable Securities
plus (b) the number of shares of Common Stock issuable pursuant to then
exercisable, exchangeable or convertible securities, options or warrants which
upon issuance would be Registrable Securities.
1.15. "REGISTRATION PERIOD" is defined in Section 4.1.
1.16. "REQUIRED INVESTORS" means, with respect to any registration
requested under Section 2, Investors who own at least two thirds of the
Registrable Securities then outstanding owned by all Investors within the
Investor Group (as defined in Section 2.1) which has made such request.
1.17. "SEC" means the Securities and Exchange Commission or any successor
agency.
1.18. "SECURITIES ACT" means the Securities Act of 1933, as from time to
time in effect, or any successor statute and the rules and regulations
thereunder, all as from time to time amended and in effect.
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1.19 "SUBORDINATED DEBT WARRANTS" means, collectively, the Warrants issued
pursuant to the Warrant Purchase Agreement dated as of May 30, 1997 among the
Company and the Subordinated Debt Warrant Holders, as described on Schedule A
hereto.
1.20 "SUBORDINATED DEBT WARRANT HOLDERS" means PNC Capital Corp, Seacoast
Capital Partners, L.P. and Exeter Venture Lenders, L.P., with respect to their
ownership of Subordinated Debt Warrants or Common Stock issuable upon the
exercise or conversion of Subordinated Debt Warrants, as set forth on Schedule
A.
1.21. "VIOLATION" is defined in Section 8.1.
1.22. "WARRANT AND DEBENTURE COMMITMENT" means that certain Warrant and
Debenture Commitment dated as of March 7, 1997 among the Company, WPC, Advent,
Global and the other holders of Series A Preferred Stock and Common Stock of the
Company party thereto.
1.23. "WARRANTS" means the Warrants to purchase Common Stock issued
pursuant to the Purchase Agreement.
2. REQUEST FOR REGISTRATION.
2.1. INVESTORS' REQUEST RIGHTS. If the Company shall receive:
(a) at any time after the earlier of (1) October 30, 1998 or (2) the date
six months after the effective date of the first registration
statement for a public offering of securities of the Company, a
written request from the Original Venture Investors owning at least
25% of the Registrable Securities then outstanding and owned by the
Original Venture Investors that the Company effect the registration
under the Securities Act of at least 25% of the Registrable Securities
then outstanding and owned by the Original Venture Investors; or
(b) at any time after the date which is six months after the effective
date of the first registration statement for a public offering of
securities from the Company, a written request from the Subordinated
Debt Warrant Holders owning at least 51% of the Registrable Securities
then outstanding and owned by the Subordinated Debt Warrant Holders
that the Company effect the registration under the Securities Act of
at least 25% of the Registrable Securities then outstanding and owned
by the Subordinated Debt Warrant Holders;
then in each such case the Company shall, within five days after the receipt
thereof, give written notice of such request to all Holders. Subject to the
limitations of this Section 2,
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the Company shall use its best efforts to effect such a registration in an
underwritten public offering as soon as practicable, and in any event file
within 90 days after the receipt of such request a registration statement under
the Securities Act covering all the Registrable Securities which the Holders
shall request in writing within 20 days after receipt of such notice and any
shares that the Company may wish to include, subject to any limitation imposed
by the managing underwriters as set forth in Section 2.2. The Company shall use
its best efforts to cause such registration statement to become effective. The
Company shall not be obligated to effect a registration under this Section 2
unless the registered underwritten offering would constitute a "Qualified Public
Offering" as defined in the Company's Amended and Restated Certificate of Vote
establishing Series A Redeemable Convertible Preferred Stock and Series B
Redeemable Convertible Preferred Stock.
The specific Registration Group (as defined below) requesting a
registration as aforesaid is sometimes referred to in this Section 2 as the
"Requesting Registration Group" and the other Registration Group which is not
the Requesting Registration Group with respect to such registration is sometimes
referred to herein as the "Non-Requesting Registration Group."
As used above, the term "Registration Group" means either of (1) the
Original Venture Investors and the Non-Investor Stockholders, as a group and (2)
the Subordinated Debt Warrant Investors, as a group.
2.2. UNDERWRITTEN OFFERING. The managing underwriter for the proposed
offering to be registered under this Section 2 shall be selected by the Company
with the approval of the Required Investors, which approval shall not be
unreasonably withheld. The right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting. All Holders proposing to sell
Registrable Securities in such offering shall (together with the Company as
provided in Section 4.5) enter into an underwriting agreement in customary form
with the managing underwriter for such underwriting, and the Company shall have
the right to require that any proposed offering to be registered under this
Section 2 be an underwritten offering. Notwithstanding any other provision of
this Section 2, if the managing underwriter for the offering advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of Registrable Securities that may be included in the underwriting
shall be allocated as follows:
(a) First, to the Requesting Registration Group, up to the number of
shares which is the lesser of (1) 50% of the Registrable Securities
then outstanding and owned on the date hereof by such Requesting
Registration Group in the aggregate, with such allocation to be made
pro rata on the basis of the number of Registrable Securities sought
to be registered by the
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members of the Requesting Registration Group, or (2) 100% of the
Registrable Securities sought to be so registered by the Requesting
Registration Group;
(b) Second, to the Non-Requesting Registration Group, up to the number of
shares which is the lesser of (1) 50% of the Registrable Securities
then outstanding and owned on the date hereof by such Non-Requesting
Registration Group in the aggregate, with such allocation to be made
pro rata on the basis of the number of Registrable Securities sought
to be registered by the members of the Non-Requesting Registration
Group, or (2) 100% of the Registrable Securities sought to be so
registered by the Non-Requesting Registration Group;
(c) Third, to the Requesting Registration Group and the Non-Requesting
Registration Group together, with such allocation to be made pro rata
on the basis of the number of Registrable Securities sought to be
registered by the members of the Non-Requesting Registration Group and
the Non-Requesting Registration Group together; and
(d) Fourth, to the Company for the shares requested to be sold by it in
such offering.
2.3. NUMBER OF REQUESTS. Subject to the further provisions of this Section
2.3, the Company is obligated to effect only two registrations requested by the
Original Venture Investors under Section 2.1(a), and two registrations by the
Subordinated Debt Warrant Holders under Section 2.1(b) (for a total of four such
registrations) pursuant to this Section 2, and only one such registration in any
12-month period.
2.4. DEFERRAL OF REGISTRATION. Notwithstanding the foregoing provisions of
this Section 2, the Company shall not be obligated to effect the filing of a
registration statement pursuant to this Section 2 at the request of a
Registration Group (a) during the period starting with the date 30 days prior to
the Company's good faith estimate of the date of filing of a registration
statement pertaining to the underwritten public offering of securities for the
account of the Company or upon the request of the other Registration Group
pursuant to this Section 2, and ending on the date which is the later of (i) 180
days following the effective date of such registration statement, provided the
Company is at all times during such period diligently pursuing such
registration, and (ii) 90 days following the expiration of any "lock-up" period
required by the underwriters for such offering, or (b) if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
2 a certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would not be in the
best interests of the Company and its stockholders generally for such
registration statement to be filed. Under clause (b) the Company shall have the
right to defer such filing for a period of not more than 90 days after receipt
of the request for a registration under this Section 2; PROVIDED, HOWEVER, that
the Company may not utilize the right set forth in
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clause (b) more than once in any 12-month period; and PROVIDED, FURTHER, that,
notwithstanding the previous proviso, if the Company has entered into a binding
agreement with an unaffiliated third party during such 90-day period providing
for the sale of substantially all the Company's assets or capital stock, or the
sale of the Company through a merger or consolidation, such 90-day period shall
be extended to permit the Company to consummate such transaction.
3. INCIDENTAL ("PIGGY-BACK") REGISTRATION. If the Company proposes to register
any of its capital stock or other securities under the Securities Act in
connection with the public offering of such securities solely for cash (other
than a registration on Form S-8 relating solely to the sale of securities to
participants in a Company stock plan or a registration on Form S-4 relating to
an acquisition), the Company shall not later than 30 days before filing the
registration statement with respect thereto give each Holder written notice of
such registration. Upon the written request of any Holder given within 15 days
after such notice, the Company shall use its best efforts to cause a
registration statement covering all of the Registrable Securities that each such
Holder has requested to be registered to become effective under the Securities
Act. The Company shall be under no obligation to complete any offering of its
securities it proposes to make under this Section 3 and shall incur no liability
to any Holder for its failure to do so. Notwithstanding any other provisions of
this Section 3, if the managing underwriter for the offering advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten or holders thereof, then the Company shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated as follows:
(a) First to the Company for shares requested to be sold by it in such
offering.
(b) Second to the Holders requesting registration in such offering and the
holder of the HiFi Warrant (as defined in the Purchase Agreement) pro
rata in accordance with (i) the number of Registrable Securities
requested by the Holders to be included in such offering and (ii) the
number of shares subject to such HiFi Warrant requested to be included
in such offering.
4. OBLIGATIONS OF THE COMPANY. Whenever required under Sections 2 or 3 to use
its best efforts to effect the registration of any Registrable Securities, the
Company shall take the following actions, as expeditiously as reasonably
possible:
4.1. EFFECTIVENESS OF REGISTRATION. In cooperation with the selling Holders
as contemplated by Section 5.2, the Company shall prepare and file with the SEC
a registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective. Upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, the Company shall keep
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such registration statement effective (a) in the case of an underwritten
offering, for such period as is required by the underwriter for such offering or
(b) in the case of an offering not underwritten, until the Holders have informed
the Company in writing that the distribution of their securities has been
completed, but in no event longer than nine months (as the case may be, the
"REGISTRATION PERIOD").
4.2. AMENDMENTS. During the Registration Period, the Company shall prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement, and use its best efforts to cause each such amendment to become
effective, as may be necessary to comply with the Securities Act with respect to
the disposition of all securities covered by such registration statement.
4.3. COPIES OF REGISTRATION STATEMENT. During the Registration Period, the
Company shall furnish to each Holder such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as such Holder may reasonably
request in order to facilitate the disposition of its Registrable Securities
covered by such registration statement.
4.4. STATE QUALIFICATIONS. During the Registration Period, the Company
shall use its best efforts to register or qualify such Registrable Securities
under the securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and do all other acts which may be reasonably necessary or
advisable in connection with such registration or qualification; PROVIDED,
HOWEVER, that the Company shall not be required to qualify as a foreign
corporation in any state where it is not then required to qualify.
4.5. UNDERWRITING AGREEMENT. The Company shall enter into and perform its
obligations under an underwriting agreement, in customary form not inconsistent
with this Agreement, with the managing underwriter of such offering.
4.6. CHANGES IN PROSPECTUS. The Company shall notify each Holder of
Registrable Securities covered by such registration statement, at any time when
a prospectus relating thereto covered by such registration statement is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing. The
Company shall promptly file such amendments and supplements which may be
required pursuant to Section 4.2 on account of such event and use its best
efforts to cause each such amendment and supplement to become effective.
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4.7. OPINIONS AND COMFORT LETTERS. The Company shall furnish, at the
reasonable request of any Holder requesting registration of Registrable
Securities pursuant to this Agreement, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement (a) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given by issuer's counsel to the underwriters in
an underwritten public offering, addressed to the underwriters and to the
Holders requesting registration of Registrable Securities and (b) a letter dated
such date, from the independent certified public accountants of the Company, in
form and substance as is customarily given by the issuer's independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters and to the Holders requesting registration of Registrable
Securities.
4.8. TRANSFER AGENT. The Company shall provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such registration statement.
4.9. LISTING SHARES. The Company shall apply for listing and use its best
efforts to list the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities has been
previously or is being listed. If the Company does not have a class of equity
securities listed on a national securities exchange, the Company shall apply for
qualification and use its best efforts to qualify the Registrable Securities
being registered for inclusion on the automated quotation system of the National
Association of Securities Dealers, Inc. or an exchange.
5. PREPARATION OF REGISTRATION STATEMENT.
5.1. INFORMATION BY SELLING HOLDERS. The selling Holders shall furnish to
the Company such information regarding themselves, the Registrable Securities
held by them, and the intended method of disposition of such securities as shall
be required to effect the registration of their Registrable Securities.
5.2. PARTICIPATION IN PREPARATION OF REGISTRATION STATEMENT. In connection
with the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act, the Company will give the
selling Holders, the managing underwriter and one counsel selected by the
selling Holders and approved in writing by the Required Investors, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such selling
Holders and such underwriter, to conduct a reasonable investigation within the
meaning of the Securities Act to protect themselves from liability thereunder.
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5.3. UNDERWRITING AGREEMENT. Each selling Holder shall enter into and
perform its obligations under an underwriting agreement with the managing
underwriter for such offering in customary form not inconsistent with this
Agreement, including furnishing any opinion of counsel and agreeing to
indemnification obligations reasonably requested by the managing underwriter,
but in no event will any holder be liable for indemnification obligations in
excess of the net offering proceeds received by such Holder (except for matters
described in clauses (i) and (ii) of Section 8. 1).
6. EXPENSES OF REGISTRATION. All expenses other than underwriting discounts
and commissions relating to Registrable Securities incurred in connection with
each of the registrations, filings or qualifications pursuant to Sections 2 or 3
including (without limitation) all registration, filing and qualification fees,
all fees and expenses in connection with compliance with state securities or
blue sky laws, printing and delivery expenses, fees and disbursements of counsel
and independent public accountants for the Company, and the reasonable fees and
disbursements of one law firm acting as counsel for the selling Holders shall be
paid by the Company; PROVIDED, HOWEVER, that the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section
2 if the registration request is subsequently withdrawn at any time at the
request of the Holders (in which case all participating Holders shall bear such
expenses), unless the Required Investors agree to forfeit their right to one
demand registration pursuant to Section 2; PROVIDED FURTHER, HOWEVER, that if at
the time of such withdrawal, the Holders have learned of a material adverse
change in the financial condition, business or prospects of the Company from
that known to the Requesting Registration Group at the time of their request (or
of which they were informed in a written notice from the Company to the
Requesting Registration Group within 10 days after such request) that makes the
proposed offering unreasonable in the good faith judgment of the Requesting
Registration Group, and such registration request is so withdrawn as aforesaid,
then the Holders shall not be required to pay any of such expenses and such
registration request shall not be counted as the exercise of one of the
registration requests by such Requesting Registration Group under Section 2.3.
Underwriting discounts and commissions relating to Registrable Securities will
be paid ratably by the Holders of such Registrable Securities.
7. INDEMNIFICATION.
7.1. COMPANY INDEMNIFICATION. To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, the officers, directors, partners,
agents and employees of each Holder, any underwriter (as defined in the
Securities Act) for such Holder, and each person, if any, who controls such
Holder or underwriter, within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities (joint or several) to
which any of them may become subject under the Securities Act. the Exchange Act,
other federal or state law or otherwise, and to reimburse them for any legal or
any other expenses reasonably incurred by them in connection with investigating
any claim, or defending any action or proceeding, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
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arise out of or are based upon any of the following statements, omissions or
violations (a "VIOLATION"): (a) any untrue statement or alleged untrue statement
of a material fact contained or incorporated by reference in any registration
statement under which Registrable Securities were registered, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (b) the omission or alleged omission to state therein 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, or (c) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law. The indemnity provisions in this Section 7.1 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable to a Holder in
any case for any such loss, claim, damage, liability or action (i) to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by or on behalf of such Holder, underwriter or
controlling person or (ii) in the case of a sale directly by a Holder of
Registrable Securities (including a sale of such Registrable Securities through
any underwriter in a distribution solely on behalf of such Holder) such untrue
statement or alleged untrue statement or omission or alleged omission was
contained in a preliminary prospectus and corrected in a final or amended
prospectus, and such Holder failed to deliver a copy of the final or amended
prospectus at or prior to the confirmation of the sale of the Registrable
Securities, as the case may be, to the person asserting any such loss, claim,
damage or liability in any case where such delivery is required by the
Securities Act and such loss, claim, damage, liability or action would not have
occurred but for such failure.
7.2. HOLDER INDEMNIFICATION. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its officers,
directors, partners, agents, employees, each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, and any
underwriter for the Company, and any other Holder selling securities in such
registration statement or any of its directors, officers, partners, agents or
employees or any person who controls such Holder or any underwriter, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, partner, agent, employee or controlling person,
or underwriter, or other such Holder or director, partner, agent, employee,
officer or controlling person or underwriter may become subject, under the
Securities Act, the Exchange Act or other federal or state law or otherwise, and
to reimburse them for any legal or any other expenses reasonably incurred by
them in connection with investigating any claim, or defending any action or
proceeding, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by or on behalf of
such Holder expressly for use in connection with such registration; PROVIDED,
HOWEVER, that (a) the liability of any Holder hereunder shall be limited to the
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amount of proceeds received by such Holder in the offering giving rise to the
Violation or if the offering is terminated, the amount such Holder would have
received; and (b) the indemnity provisions in this Section 7.2 shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder (which
consent shall not be unreasonably withheld), nor shall the Holder be liable to
the Company in any such case in which such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus, and the Company
failed to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the securities to the person asserting any such
loss, claim, damage or liability in any case where such delivery is required by
the Securities Act and such loss, claim, damage, liability or action would not
have occurred but for such failure.
7.3. NOTICE DEFENSE AND COUNSEL. Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
7, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume and control the defense thereof
with counsel selected by the Company with the approval (not to be unreasonably
withheld), of the other parties; provided, however, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate under
customary practice due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 7 only to the extent the indemnifying party is actually prejudiced in
its ability to defend such action, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section 7.
7.4. CONTRIBUTION IN LIEU OF INDEMNIFICATION. If the indemnification
provided for in Sections 7.1 or 7.2 is unavailable to a person that would have
been an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
person that would have been an indemnifying party thereunder shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and such
indemnified party on the other in connection with the untrue or alleged untrue
statements of a material fact or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault shall be determined by reference to, among other
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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 such indemnified party and the parties
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this Section 7.4 shall include amounts
arising from any such action or claim (which shall be limited as provided in
Section 7.3 if the indemnifying party has assumed the defense of any such action
in accordance with the provisions thereof). 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.
7.5. SURVIVAL OF RIGHTS AND OBLIGATIONS. The obligations of the Company and
the Holders under this Section 7 shall survive the completion of any offering of
Registrable Securities in a registration statement whether under this Agreement
or otherwise.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the Holders
the benefits of Rule 144 under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration, and with a view to making it
possible for the Company to register the Registrable Securities pursuant to a
registration on Form S-3, the Company agrees to:
8.1. PUBLIC INFORMATION. Make and keep public information available, as
those terms are understood and defined in Rule 144, at all times after 90 days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public.
8.2. TIMELY FILING. File with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act.
8.3. COMPLIANCE; INFORMATION. Furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (a) a written statement
by the Company that it has complied with the reporting requirements of Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold in a secondary offering
pursuant to Form S-3 (at any time after it so qualifies), (b) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (c) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
-12-
13
9. LOCK-UP AGREEMENTS. If requested by the managing underwriter in connection
with an offering of Company securities, the Holders shall enter into lock-up
agreements pursuant to which they will not, for a period of seven days prior to,
and 90 days following, the effective date of a registration statement for the
offering of the Company's securities, or any other period reasonably requested
by the managing underwriter, offer or sell any of the Registrable Securities
without the prior consent of the managing underwriter, provided that the
officers and directors of the Company enter into lock-up agreements with terms
at least as restrictive.
10. LIMITATIONS ON OTHER REGISTRATION RIGHTS. The Company shall not, without
the prior written consent of (a) the Original Venture Investors owning at least
a majority of the Registrable Securities then outstanding owned by all Original
Venture Investors and (b) the Subordinated Debt Warrant Holders owning at least
a majority of the Registrable Securities then outstanding owned by all
Subordinated Debt Warrant Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to (a) require the Company to effect a
registration, or (b) include any securities in any registration filed under
Sections 2 or 3, unless in each case such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of such securities will not reduce the amount of Registrable
Securities to be included by the Original Venture Investors or the Subordinated
Debt Warrant Holders.
11. GENERAL.
11.1. NOTICES. All notices or other communications required or permitted to
be delivered hereunder shall be in writing and shall be deemed to be delivered
to each of the parties at their respective addresses as set forth in Schedules A
or B if either (a) actually delivered at said address, (b) in the case of a
letter, seven business days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified, return receipt requested, or two business days shall have elapsed
after the same shall have been deposited with an overnight courier (for
overnight delivers of national recognition, (c) in the case of a telecopy within
the United States, upon confirmation of receipt of such telecopy (which
confirmation may consist of a telecopy machine printout showing successful
transmission), if such telecopy is followed by a copy of the same being
deposited within one business day of such telecopy with an overnight courier
(for overnight delivery) of national recognition or (d) transmitted to any
address outside of the United States, by telecopy and confirmed by overnight or
two-day courier.
11.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous understandings, whether written or oral.
11.3 AMENDMENTS, WAIVERS AND CONSENTS. Any provision in this Agreement to
the contrary notwithstanding, changes in or additions to this Agreement may be
made,
-13-
14
and compliance with any covenant or provision herein set forth may be omitted or
waived, if the Company (a) shall obtain prior written consent thereof from (1)
the Original Venture Investors owning at least a majority of the Registrable
Securities then outstanding owned by all Original Venture Investors (2) the
Subordinated Debt Warrant Holders owning at least a majority of the Registrable
Securities then outstanding owned by all Subordinated Debt Warrant Holders, and
(3) Holders other than Investors holding an aggregate of at least a majority of
the Registrable Securities then outstanding owned by such Holders and (b) shall,
in each such case, deliver copies of such consent in writing to any Holders who
did not execute the same.
11.4. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the respective heirs, executors, legal representatives,
successors and assigns of the respective parties hereto. The Company shall not
have the right to assign, except as part of a Qualified Sale or other
transaction permitted by the Purchase Agreement, its rights or obligations
hereunder or any interest herein without obtaining the prior written consent of
(a) the Investors holding a majority of the Registrable Securities then
outstanding owned by the Investors and (b) Holders other than Investors holding
an aggregate of at least a majority of the Registrable Securities then
outstanding owned by such Holders. The Holders may assign or transfer their
rights under this Agreement to the extent (i) permitted by the other agreements
between the respective Holders and the Company and (ii) in the case of Holders
who are Investors, to the extent that such assignee or transferee owns or
obtains Registrable Securities having a fair value of at least $100,000.
11.5 SEVERABILITY. If any provision of this Agreement shall be found by any
court of competent jurisdiction to be invalid or unenforceable, the parties
waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable and, as modified, shall be
enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
11.6. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
11.7. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. This Agreement shall be governed by and construed in accordance
with the laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts.
11.8 TERMINATION OF PRIOR AGREEMENT. This Agreement amends and restates in
its entirety that certain Registration Rights Agreement, dated as of November
28, 1995, and as amended from time to time, among the Company and certain of the
Investors and Non-Investor Stockholders.
-14-
15
The undersigned have executed this Amendment under seal as of the date
first above written.
NEW ENGLAND AUDIO CO., INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
WESTON PRESIDIO OFFSHORE CAPITAL C.V.
By: WESTON PRESIDIO CAPITAL
MANAGEMENT, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
General Partner
NATIO VIE DEVELOPPEMENT II, FCPR
By: /s/ Xxxxxxxxx Xxxxxxxxx
-------------------------------------
Title: Fund Manager
BNP VENTURE HOLDING CORP.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Title: Directeur de Participations
-15-
16
ADVENT DIRECT INVESTMENT PROGRAM
LIMITED PARTNERSHIP
By: ADVENT INTERNATIONAL LIMITED
PARTNERSHIP, its General Partner
By: ADVENT INTERNATIONAL CORPORATION,
its General Partner
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Vice President/President
GLOBAL PRIVATE EQUITY II LIMITED
PARTNERSHIP
By: ADVENT INTERNATIONAL LIMITED
PARTNERSHIP, its General Partner
By: ADVENT INTERNATIONAL CORPORATION,
its General Partner
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Vice President/President
EXETER VENTURE LENDERS, L.P.
By: EXETER VENTURE ADVISORS, INC., its
General Partner
By: /s/ Xxxxx X. Xxx
---------------------------------
Title
BANCBOSTON INVESTMENTS INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Title Vice President
-16-
17
PNC CAPITAL CORP
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Title Vice President
SEACOAST CAPITAL PARTNERS, L.P.
By: SEACOAST CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxxx
---------------------------------
Title: Vice President
Xxxxxxx X. Xxxxxxxxx, Xxxxxxxx Xxxxxx and Xxxxxxx
X. Xxxxxxxxx, Trustees of the Xxxxxx X. Xxxxxxxxx
1995 Irrevocable Trust, dated as of October 26,
1995 f/b/o Xxxxxx Xxxxxxxxx:
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, as Trustee
/s/ Xxxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx Xxxxxx, as Trustee
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, as Trustee
-17-
18
Xxxxxxx X. Xxxxxxxxx, Xxxxxxxx Xxxxxx and Xxxxxxx
X. Xxxxxxxxx, Trustees of the Xxxxxx X. Xxxxxxxxx
1995 Irrevocable Trust, dated as of October 26,
1995 f/b/o Xxxxxxx Xxxxxxxxx:
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, as Trustee
/s/ Xxxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx Xxxxxx, as Trustee
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx, as Trustee
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxx
-18-
19
SCHEDULE A
SCHEDULE A TO
REGISTRATION RIGHTS AGREEMENT
No. of Shares of Preferred
Stock/Warrants
Investors and Address As of December 29, 1997
--------------------- --------------------------
Weston Presidio + 826,060 Series A
Offshore Capital C.V. + 141,509 Series B
One Federal Street + Bridge Warrants Covering 18,036
Xxxxxx, XX 00000 Shares of Common Stock
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Natio Vie Developpement II, FCR + 236,020 Series A
BNP/1 Xx Xxxxxxxxx + Bridge Warrants Covering 5,156 Shares
00000 Xxxxx of Common Stock
FRANCE
Telephone: 000-00-0-000-0-0000
Telecopy: 011-33-1-401-4-6960
BNP Venture Holding Corp. + 236,020 Series A
Banexi/12 Rue Chauchat + 195,408 Series B
00000 Xxxxx XXXXXX + Bridge Warrants Covering 5,156 Shares
Telephone: 000-00-0-000-0-0000 of Common Stock
Telecopy: 011-33-1-401-4-6960
Natio Nouveaux Marches Europe + 37,736 Series B
BNP/1 Xx Xxxxxxxxx
00000 Xxxxx
XXXXXX
Telephone: 000-00-0-000-0-0000
Telecopy: 011-33-1-401-4-6960
Advent Direct Investment Program + 322,870 Series A
Limited Partnership + 38,720 Series B
000 Xxxxxxx Xxxxxx + Bridge Warrants Covering 7,052 Shares
Xxxxxx, XX 00000 of Common Stock
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-8-
20
Global Private Equity II Limited - 857,210 Series A
Partnership - 102,789 Series B
000 Xxxxxxx Xxxxxx - Xxxxxx Xxxxxxxx Covering 18,720
Xxxxxx, XX 00000 Shares of Common Stock
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exeter Venture Lenders, L.P. - 94,340 Series B
000 Xxxx 00xx Xxxxxx - Subordinated Debt Warrants Covering
New York, NY 159,950 Shares of Common Stock
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exeter Equity Partners, L.P. - 94,340 Series B
10 East 53rd Street - Subordinated Debt Warrants Covering
New York,NY 159,950 Shares of Common Stock
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BancBoston Investments Inc. - 188,680 Series B
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
PNC Capital Corp - 377,359 Series B
000 Xxxxx Xxxxxx - 19th Floor - Subordinated Debt Warrants Covering
One PNC Plaza 319,900 Shares of Common Stock
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Seacoast Capital Partners, L.P. - Subordinated Debt Warrants Covering
00 Xxxxxxxxx Xxxx 319,900 Shares of Common Stock
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Xxxxxxx Xxxxxxxxx - 42,470 Series A
000 Xxxxxxxx Xxxx - 41,605 Series X
Xxxxxxxx Xxxx, XX 00000 - Bridge Warrants Covering 928 Shares
of Common Stock
-5-
00
Xxxxxxx Xxxxxxxxx - Xxxxxx Xxxxxxxx Covering 476 Shares
Xxx Xxxxx Xxxxxx xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx - 21,670 Series A
000X Xxxxxxxxx Xxxx, Xxxx 0X - Xxxxxx Xxxxxxxx Covering 476 Shares
Xxxxxxxx Xxxx, XX 00000 of Common Stock
Xxxxxxx Xxxxxxxx - 6,000 Series A
c/o Perfumes Xxxxxxx - 821 Series B
00 Xxxx 00xx Xxxxxx - Xxxxxx Xxxxxxxx Covering 128 Shares
0xx Xxxxx xx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Carolina Bloomberg - 21,670 Series A
000 Xxxxxx Xxxxxx - 4,485 Series B
Xxxxxxxxx, XX 00000 - Bridge Warrants Covering 476 Shares
of Common Stock
Carolina B. Bloomberg, - 5,417 Series A
Xxxxxxxx Xxxxxx and - 741 Series B
Xxxxxxx X. Xxxxxxxxx, as
Trustees of the Xxxxxx
X. Xxxxxxxxx 1995 Irrevocable
Trust, dated as of October 26, 1995
f/b/o Xxxxxx Xxxxxxxxx
Carolina B. Bloomberg, - 5,417 Series A
Xxxxxxxx Xxxxxx and - 741 Series B
Xxxxxxx X. Xxxxxxxxx, as
Trustees of the Xxxxxx
X. Xxxxxxxxx 1995 Irrevocable
Trust, dated as of October 26, 1995
f/b/o Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Bloomberg - 5,418 Series A
and Xxxxxxx X. Xxxxxxx, - 741 Series B
Trustees of the
Xxxxxxx X. Xxxxxxxxx 1996
Irrevocable Trust, dated as of
August 12, 1996, f/b/o Xxxxxxxx
Xxxxxx Luntz
22
Xxxxxxx Xxxxxx Bloomberg * 5.418 Series A
and Xxxxxxx X. Xxxxxxx, Trustees * 740 Series B
of the Xxxxxxx X. Xxxxxxxxx 1996
Irrevocable Trust, dated as of
August 12, 1996, f/b/o Xxxxxxx
Xxxxxx Luntz
Note: Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxxx may also be
Non-Investor Stockholders, as described in Schedule B hereto.
-11-
23
SCHEDULE B
SCHEDULE B TO REGISTRATION RIGHTS AGREEMENT
NO. OF SHARES OF
NON-INVESTOR STOCKHOLDER COMMON STOCK
1. Xxxxxxx X. Xxxxxxxxx* 257,600
2. Xxxxxxx Xxxxx 275,000
3. Carolina Bloomberg** 11,130
4. Xxxxxx X. Xxxxxxxxx 960,000
5. Carolina B. Bloomberg, Xxxxxxxx Xxxxxx and 31,120
Xxxxxxx X. Xxxxxxxxx, Trustees of the Xxxxxx
X. Xxxxxxxxx 1995 Irrevocable Trust, dated as
of October 26, 1995 f/b/o Xxxxxx Xxxxxxxxx
6. Carolina B. Bloomberg, Xxxxxxxx Xxxxxx and 31,120
Xxxxxxx X. Xxxxxxxxx, Trustees of the Xxxxxx
X. Xxxxxxxxx 1995 Irrevocable Trust, dated as
of October 26, 1995 f/b/o Xxxxxxx Xxxxxxxxx
7. Xxxxxxx Xxxxxxxx*** Option Holder
8. Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx, as 20,000
Trustees of the Stone Family 1998 Irrevocable
Trust f/b/o Xxxxxx X. Xxxxx u/d/t dated
January 2, 1998
9. Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx, as 20,000
Trustees of the Stone Family 1998 Irrevocable
Trust f/b/o Xxxxxxx X. Xxxxx u/d/t dated
January 2, 1998
10. Xxxxxxx Xxxxxx Bloomberg and Xxxxxxx X. 2,100
Shutzer, Trustees of the Xxxxxxx X. Xxxxxxxxx
1996 Irrevocable Trust dated as August 12,
1996 f/b/o Xxxxxxxx Xxxxxx Luntz
11. Xxxxxxx Xxxxxx Bloomberg and Xxxxxxx X. 2,100
Shutzer, Trustees of the Xxxxxxx X. Xxxxxxxxx
1996 Irrevocable Trust dated as August 12,
1996 f/b/o Xxxxxxx Xxxxxx Luntz
Notes on Following Page
24
* Xx. Xxxxxxxxx is a Covered Stockholder with respect to such 257,600 shares.
** Xx. Xxxxxxxxx is a Covered Stockholder with respect to such 11,130 shares.
*** Xx. Xxxxxxxx will constitute a Covered Stockholder to the extent he
acquires shares of Common Stock pursuant to certain options granted to him
as described in Exhibit 4.1.1 to the Disclosure Schedule affixed to the
Purchase Agreement.
