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Exhibit 10.19
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
June 30, 1999 by and among Xxxxxxx Electronics, Inc., a Delaware corporation
(the "Company"), Key Acquisition, L.L.C., a Delaware limited liability company
(the "Investor"), the members of management listed on the signature page
attached hereto (together with all other executives of the Company who execute
and deliver a counterpart of this Agreement on or after the date hereof,
"Management"), and the members of the "Existing Holder Group" listed on the
attached Exhibit A and Xxxxxx Xxxxxxx Senior Funding Inc., Chase Securities
Inc., The Chase Manhattan Bank and their respective successors and assigns as
Purchasers pursuant to a Note Purchase Agreement dated as of the date hereof
with respect to Senior Subordinated Increasing Rate Notes due June 30, 2000 (the
"Warrantholders"). The Investor, Management, the Existing Holder Group and the
Warrantholders are referred to herein collectively as the "Stockholders," and
each individually as a "Stockholder."
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Definitions. As used herein, the following terms shall have the
following meanings.
"Common Stock" means, collectively, (i) the Company's Class A Common
Stock, par value $.001 per share, (ii) the Company's Class B Common Stock, par
value $.001 per share, (iii) any other class of common stock of the Company, and
(iv) any capital stock of the Company issued or issuable with respect to the
securities referred to in clauses (i), (ii) or (iii) by way of stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.
"Company Registrable Securities" has the meaning set forth in
Section 5(b).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Holder Registrable Securities" means (i) any shares of
Common Stock held by, issued or issuable to or otherwise acquired by the
Existing Holder Group on or after the date hereof and (ii) any shares of capital
stock of the Company issued or issuable with respect to the securities referred
to in clause (i) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. For purposes of this Agreement, a Person will be deemed
to be a holder of Existing Holder Registrable Securities whenever such Person
has the right to acquire directly or indirectly such Existing Holder Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or
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otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected.
"Investor Registrable Securities" means (i) any shares of Common
Stock issued or issuable to or otherwise acquired by the Investor on or after
the date hereof and (ii) any shares of capital stock of the Company issued or
issuable with respect to the securities referred to in clause (i) above by way
of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. For
purposes of this Agreement, a Person will be deemed to be a holder of Investor
Registrable Securities whenever such Person has the right to acquire directly or
indirectly such Investor Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
"Management Registrable Securities" means (i) any shares of Common
Stock issued or issuable to or otherwise acquired by Management on or after the
date hereof and (ii) any shares of capital stock of the Company issued or
issuable with respect to the securities referred to in clause (i) above by way
of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization, and
which in each case are Vested Stock as defined in the Executive Stock Purchase
Agreements between the Company and Management dated the date hereof. For
purposes of this Agreement, a Person will be deemed to be a holder of Management
Registrable Securities whenever such Person has the right to acquire directly or
indirectly such Management Registrable Securities (upon conversion or exercise
in connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected, but in the case of Registrable
Securities subject to vesting, only to the extent that such Person's right to
acquire such Registrable Securities has vested.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Registrable Securities" means, collectively, the Management
Registrable Securities, the Investor Registrable Securities, the Existing Holder
Registrable Securities and the Warrantholder Registrable Securities.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and all independent
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certified public accountants, underwriters (excluding discounts and commissions)
and other Persons retained by the Company.
"Rule 144" means Rule 144 under the Securities Act (or any similar
rule then in force).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Warrantholder Registrable Securities" means (i) any shares of
Common Stock issued or issuable to or otherwise acquired by the Warrantholders
on or after the date hereof and (ii) any shares of capital stock of the Company
issued or issuable with respect to the securities referred to in clause (i)
above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. For purposes of this Agreement, a Person will be deemed to be a
holder of Warrantholder Registrable Securities whenever such Person has the
right to acquire directly or indirectly such Warrantholder Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.
2. Demand Registrations.
(a) Requests for Registration. Subject to Section 2(b) and 2(c)
below, (i) at any time and from time to time, the holders of a majority of the
Investor Registrable Securities, and (ii) at any time after the date that is six
months after an underwritten initial public offering registered under the
Securities Act of shares of Common Stock (an "IPO"), the holders of a majority
of the Existing Holder Registrable Securities and the holders of a majority of
the Warrantholder Registrable Securities, may request registration, whether
underwritten or otherwise, under the Securities Act of all or part of their
Registrable Securities on Form S-l or any similar long-form registration
statement ("Long-Form Registrations") or on Form S-2 or S-3 or any similar
short-form registration statement ("Short-Form Registrations"), if available. In
addition, subject to Section 2(g) below, the holders of a majority of the
Investor Registrable Securities may request that the Company file with the SEC a
registration statement under the Securities Act on any applicable form pursuant
to Rule 415 under the Securities Act (a "415 Registration"). Each request for a
Long-Form Registration or Short-Form Registration shall specify the approximate
number of Registrable Securities requested to be registered and the anticipated
per share price range for such offering. Within ten days after receipt of any
such request for a Long-Form Registration or Short-Form Registration, the
Company will give written notice of such requested registration to all other
holders of Registrable Securities and will include (subject to the provisions of
this Agreement) in such registration, all Registrable Securities with respect to
which the Company has received written requests for inclusion therein
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within 20 days after the receipt of the Company's notice. All registrations
initially requested pursuant to this Section 2(a) are referred to herein as
"Demand Registrations".
(b) Long-Form Registrations. The holders of a majority of the
Investor Registrable Securities will be entitled to request up to 5 Long-Form
Registrations in which the Company will pay all Registration Expenses. A
registration will not count as the permitted Long-Form Registration until it has
become effective and unless the holders of Registrable Securities are able to
register and sell at least 90% of the Registrable Securities requested to be
included in such registration.
(c) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 2(b), (i) the holders of a majority
of the Investor Registrable Securities will be entitled to request an unlimited
number of, and (ii) the holders of a majority of the Existing Holder Registrable
Securities and the holders of a majority of the Warrantholder Registrable
Securities will each be entitled to request one, Short-Form Registration(s) in
which the Company will pay all Registration Expenses. Demand Registrations
(other than 415 Registrations) will be Short-Form Registrations whenever the
Company is permitted to use any applicable short form. After the Company has
become subject to the reporting requirements of the Exchange Act, the Company
will use its best efforts to make Short-Form Registrations available for the
sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company will not include
in any Long-Form Registration or Short-Form Registration any securities (other
than Company Registrable Securities) which are not Registrable Securities
without the prior written consent of the holders of at least a majority of the
Registrable Securities included in such registration. If a Long-Form
Registration or a Short-Form Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their opinion the
number of Registrable Securities (and, if permitted hereunder, other securities
requested to be included in such offering) exceeds the number of Registrable
Securities and other securities, if any, which can be sold therein without
adversely affecting the marketability of the offering, the Company will include
in such registration (i) first, (x) if no Company Registrable Securities are
requested to be included in such registration, the number of Investor
Registrable Securities requested to be included in such registration pro rata,
if necessary, among the holders of Investor Registrable Securities based on the
number of shares of Investor Registrable Securities owned by each such holder,
and (y) if Company Registrable Securities are requested to be included in such
registration (and permitted to be included pursuant to the terms hereof), the
number of Investor Registrable Securities and Company Registrable Securities
requested to be included in such registration pro rata, if necessary, among the
Company Registrable Securities and the holders of Investor Registrable
Securities based on the number of shares of Investor Registrable Securities and
Company Registrable Securities requested to be included therein, and (ii)
second, any other Registrable Securities requested to be included in such
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registration pro rata, if necessary, on the basis of the number of shares of
such other Registrable Securities owned by each such holder.
(e) Restrictions on Demand Registrations. The Company will not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration.
(f) Selection of Underwriters. In the case of a Demand Registration
for an underwritten offering, the holders of a majority of the Registrable
Securities to be included in such Demand Registration will have the right to
select the investment banker(s) and manager(s) to administer the offering, which
investment banker(s) and manager(s) will be nationally recognized, subject to
the Investor's approval.
(g) 415 Registrations.
(i) The holders of a majority of the Investor Registrable
Securities will be entitled to request one 415 Registration in which the Company
will pay all Registration Expenses. Subject to the availability of required
financial information, within 45 days after the Company receives written notice
of a request for a 415 Registration, the Company shall file with the SEC a
registration statement under the Securities Act for the 415 Registration. The
Company shall use its best efforts to cause the 415 Registration to be declared
effective under the Securities Act as soon as practical after filing and, once
effective, the Company shall (subject to the provisions of clause (ii) below)
cause such 415 Registration to remain effective for such time period as is
specified in such request, but for no time period longer than the period ending
on the earlier of (i) the third anniversary of the date of filing of the 415
Registration, (ii) the date on which all Investor Registrable Securities have
been sold pursuant to the 415 Registration, or (iii) the date as of which there
are no longer any Investor Registrable Securities in existence.
(ii) If the holders of a majority of the Investor Registrable
Securities notify the Company in writing that they intend to effect the sale of
all or substantially all of the Investor Registrable Securities held by such
holders pursuant to a single integrated offering pursuant to a then effective
registration statement for a 415 Registration (a "Takedown"), the Company and
each holder of Registrable Securities shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for its equity securities, during the 90-day period
beginning on the date such notice of a Takedown is received.
(iii) If in connection with any Takedown, the managing
underwriters (selected in accordance with clause (iv) below) advise the Company
that, in their opinion, the inclusion of any securities in the Takedown would
adversely affect the marketability of the offering, then no such securities
shall be permitted to be included. Additionally, if in connection with such an
offering, the number of Investor Registrable Securities and other securities (if
any) requested to
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be included in such Takedown exceeds the number of Investor Registrable
Securities and other securities which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such Takedown (i) first, the Investor Registrable Securities requested to be
included in such Takedown, pro rata among the holders of such Registrable
Securities on the basis of the number of Investor Registrable Securities owned
by each such holder, and (ii) second, other securities requested to be included
in such Takedown to the extent permitted hereunder.
(iv) The holders of a majority of the Investor Registrable
Securities requested to be included in the Takedown shall have the right to
retain and select an investment banker and manager to administer the 415
Registration and any Takedown pursuant thereto, subject to the Company's
approval which will not be unreasonably withheld.
(v) In addition to the provisions in Section 6 below, all
expenses incurred in connection with the management of the 415 Registration
(whether incurred by the Company or the holders of the Investor Registrable
Securities) shall be borne by the Company (including out-of-pocket fees and
expenses other than underwriting discounts and commissions).
(h) Other Registration Rights. Except as provided in this Agreement,
the Company will not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of a majority of the Investor Registrable Securities.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
any of its Common Stock under the Securities Act (other than pursuant to a
Demand Registration (which shall be governed by Section 2(a)), a registration
statement on Form S-8 or S-4 or any similar form, or in connection with a
registration the primary purpose of which is to register debt securities (i.e.,
in connection with a so-called "equity kicker")), including pursuant to a
Takedown, and the registration form to be used may be used for the registration
of Registrable Securities (a "Piggyback Registration"), the Company will give
prompt written notice to all holders of Registrable Securities of its intention
to effect such a registration and will include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Company's
notice. Notwithstanding the foregoing, in connection only with an IPO, no
Registrable Securities shall be included in such registration without the prior
written consent of the holders of a majority of Registrable Securities.
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations.
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(c) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, the Company
will include in such registration all securities requested to be included in
such registration; provided, that if the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Investor Registrable Securities and Existing
Holder Registrable Securities requested to be included in such registration pro
rata among the holders of such Investor Registrable Securities and Existing
Holder Registrable Securities on the basis of the number of shares of Investor
Registrable Securities and Existing Holder Registrable Securities owned by each
such holder, (iii) third, the other Registrable Securities requested to be
included in such registration pro rata among the holders of such other
Registrable Securities on the basis of the number of shares of other Registrable
Securities owned by each such holder and (iv) fourth, other securities, if any,
requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities (which registration was consented to pursuant to Section 2(h) above),
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company will include in such
registration (i) first, the securities requested to be included therein by the
holders requesting such registration, (ii) second, the number of Investor
Registrable Securities and Existing Holder Registrable Securities requested to
be included in such registration pro rata, if necessary, among the holders of
Investor Registrable Securities and Existing Holder Registrable Securities based
on the number of shares of Investor Registrable Securities and Existing Holder
Registrable Securities owned by each such holder, (iii) third, the number of
other Registrable Securities requested to be included in such registration, pro
rata among the holders of such other Registrable Securities on the basis of the
number of shares of other Registrable Securities owned by each such holder, and
(iv) fourth, other securities requested to be included in such registration not
covered by clause (i) above.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the investment banker(s) and manager(s) for the offering
will be selected by the Company.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to this
Section 3, and if such previous registration has not been withdrawn or
abandoned, the Company will not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Forms S-4 or S-8 or any successor forms), whether on its own
behalf or at the request of any holder or holders of such
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securities, until a period of at least six months has elapsed from the effective
date of such previous registration.
4. Holdback Agreements.
(a) Each holder of Registrable Securities hereby agrees not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 120-day period beginning on the effective date of any Demand
Registration (other than a 415 Registration) or Piggyback Registration for a
public offering to be underwritten on a firm commitment basis in which
Registrable Securities are included (except as part of such underwritten
registration), unless the underwriters managing the registered public offering
otherwise agree; provided, that neither the Existing Holder Group nor Management
shall receive less favorable treatment than the Investor.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180-day period beginning on the effective date of any
underwritten Demand Registration (other than a 415 Registration) or Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor forms), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to cause each holder of Registrable Securities and each other holder of at least
5% (on a fully diluted basis) of Common Stock, or any securities convertible
into or exchangeable or exercisable for Common Stock, purchased from the Company
at any time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
5. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
(a) 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 (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to the counsel selected by the holders of a majority of
the Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed);
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(b) if requested by the holders of a majority of the Investor
Registrable Securities in connection with any Demand Registration, use its best
efforts to cause to be included in such registration statement shares of the
Company's Common Stock having an aggregate value (based on the midpoint of the
proposed offering price range specified in the registration statement used to
offer such securities) of up to $20 million ("Company Registrable Securities")
to be offered in a primary offering of the Company's securities
contemporaneously with such offering of Registrable Securities;
(c) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period of
not less than six months 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;
(d) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(e) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process (i.e., service of
process which is not limited solely to securities law violations) in any such
jurisdiction);
(f) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto 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 contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will
promptly prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
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(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the Nasdaq National Market System
("Nasdaq Market") and, if listed on the Nasdaq Market, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a Nasdaq "National Market System security" within the
meaning of Rule 11Aa2-1 of the SEC or, failing that, to secure Nasdaq Market
authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the National
Association of Securities Dealers;
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(k) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earning statement covering the period of at
least twelve months beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration statement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;
(1) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;
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(m) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(n) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and
(o) obtain a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as the holders of a majority of
the Registrable Securities being sold reasonably request.
(p) obtain an opinion from the Company's outside counsel in
customary form and covering such matters of the type customarily covered by such
opinions, which opinion shall be addressed to the underwriters and the holders
of such Registrable Securities.
If any such registration statement or comparable statement refers to any holder
by name or otherwise as the holder of any securities of the Company and if, in
its sole and exclusive judgment, such holder is or might be deemed to be a
controlling person of the Company, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such holder and presented to the Company in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
will assist in meeting any future financial requirements of the Company, or
(ii) in the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such holder; provided, that with respect to this
clause (ii) such holder shall furnish to the Company an opinion of counsel to
such effect, which opinion and counsel shall be reasonably satisfactory to the
Company.
6. Registration Expenses.
(a) All Registration Expenses will be borne by the Company.
(b) In connection with each Demand Registration, each Piggyback
Registration and each 415 Registration, the Company will reimburse the holders
of Registrable Securities covered by such registration for the reasonable fees
and disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities initially requesting such registration.
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7. Indemnification and Contribution.
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors, and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse such holder, director, officer or
controlling person for any legal or other expenses reasonably incurred by such
holder, director, officer or controlling person in connection with the
investigation or defense of such loss, claim, damage, liability or expense,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly for use therein or
by such holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and certificates as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder; provided, that the obligation to indemnify
will be individual to each holder and will be limited to the net amount of
proceeds received by such holder from the sale of Registrable Securities
pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification; provided, that the failure to notify the
indemnifying party shall not relieve it from any liability to the indemnified
party hereunder except to the extent the indemnified party is actually
prejudiced thereby, and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit
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such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in Section 7(a) or 7(b) above in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions which resulted in such losses,
claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or parties on the one hand or the
indemnified party on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 7(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this Section 7(d). 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. Notwithstanding the
foregoing, the obligation to make any contributions hereunder shall be
individual to each holder and shall be limited to the net amount of proceeds
received by such holder from the sale of Registrable Securities pursuant to such
registration statement.
(e) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
8. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons
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entitled hereunder to approve such arrangements and (b) completes and executes
all customary questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements; provided, that no holder of Registrable Securities
included in any underwritten registration shall be required to make any
representations or warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's intended
method of distribution.
9. Rule 144 Reporting. With a view to making available to the
holders of Registrable Securities the benefits of certain rules and regulations
of the SEC which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to use its best efforts to:
(a) make and keep current public information available, within the
meaning of Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after it has become subject to the reporting
requirements of the Exchange Act;
(b) file with the SEC, in a timely manner, all reports and other
documents required of the Company under the Securities Act and Exchange Act
(after it has become subject to such reporting requirements); and
(c) so long as any party hereto owns any Registrable Securities,
furnish to such Person forthwith upon request, a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time commencing 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public), the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements); a copy of the most recent
annual or quarterly report of the Company; and such other reports and documents
as such Person may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities without
registration.
10. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally,
mailed by certified or registered mail, return receipt requested and postage
prepaid, or sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient. Such notices, demands and other communications will
be sent to the address indicated below:
14
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EXECUTION COPY
Notices to the Company:
Knowles Electronics, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn.: Chief Executive Officer
with copies (which shall not constitute notice) to:
Key Acquisition, L.L.C.
c/x Xxxxxxx Xxxxxx & Company, Ltd.
Times Place
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Fax: 000-00-000-000-0000
Attn.: Xxx Xxxxx
and (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Attn: Xxxxxx xxx Xxxxx
To the Investor:
Key Acquisition, L.L.C.
c/x Xxxxxxx Xxxxxx & Company, Ltd.
Times Place
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Fax: 000-00-000-000-0000
Attn.: Xxx Xxxxx
with copies (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
15
16
EXECUTION COPY
Xxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Xxx: Xxxxxx xxx Xxxxx
To any member of the Existing Holder Group:
Xxxx X. Xxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: 000-000-0000
with copies (which shall not constitute notice) to:
Xxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxxxxxx
To any member of Management:
Knowles Electronics, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn.: [Executive]
with copies (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Xxx: Xxxxxxx X. Xxxxx
To any Warrantholder:
Xxxxxx Senior Funding Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
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EXECUTION COPY
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not enter into any
agreement which is inconsistent with or violates the rights granted to the
holders of Registrable Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities; provided, that no amendment that would adversely affect a holder's
registration rights hereunder vis-a-vis those of another holder may be affected
without the written consent of the affected holder.
(d) Waiver of Jury Trial. The parties to this Agreement each hereby
waives, to the fullest extent permitted by law, any right to trial by jury of
any claim, demand, action, or cause of action (i) arising under this Agreement
or (ii) in any way connected with or related or incidental to the dealings of
the parties hereto in respect of this Agreement or any of the transactions
related hereto, in each case whether now existing or hereafter arising, and
whether in contract, tort, equity, or otherwise. The parties to this Agreement
each hereby agrees and consents that any such claim, demand, action, or cause of
action shall be decided by court trial without a jury and that the parties to
this Agreement may file an original counterpart of a copy of this Agreement with
any court as written evidence of the consent of the parties hereto to the waiver
of their right to trial by jury.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
17
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EXECUTION COPY
(f) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. The corporate law of Delaware will govern all
issues concerning the relative rights of the Company and its stockholders. All
other issues concerning this Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of Illinois.
* * * * *
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19
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
XXXXXXX ELECTRONICS, INC.
By: /s/ Reg Garratt
-------------------------------------
Its: CHM/CEO
KEY ACQUISITION, L.L.C.
By: /s/ Xxx Xxxxx
-------------------------------------
Its:
EXISTING HOLDER GROUP
By: /s/ Xxxx X. Xxxx
-------------------------------------
Its: Xxxx X. Xxxx, Seller's
Representative
MANAGEMENT:
By: /s/ Reg Garratt
-------------------------------------
REG GARRATT
By: /s/ Xxxx Xxxxxxx
-------------------------------------
XXXX XXXXXXX
By: /s/ Xxx Xxxxxxxx
-------------------------------------
XXX XXXXXXXX
By: /s/ Xxxxx Xxxx
-------------------------------------
XXXXX XXXX
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
XXXXXXX XXXXXX
20
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
XXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXXX
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
By: /s/ Xxxxxxxxxxx X. Xxxxx
-------------------------------------
XXXXXXXXXXX X. XXXXX
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
XXXXXX X. XXXXXXX
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
XXXXXX XXXXXXX
By: /s/ Xxx X. Xxxxxxx
-------------------------------------
XXX X. XXXXXXX
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
XXXX X. XXXXXXX
21
EXHIBIT A
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Marital Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxx X. Xxxxxxx Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxx X. Xxxxxxx Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxxxxx Xxxxxxx Xxxxxx Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxxxxx Xxxxxxx Xxxxxx Sub-Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxxxxxx Xxxxxxx Strasburg Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees for the
Xxxxxxxxx Xxxxxxx Strasburg Sub-Trust under the Xxxx X. Xxxxxxx Trust dtd.
8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. Xxxx and Continental Bank N.A., as Trustees of the
Xxxxx X. Xxxxxxx Trust under the Xxxx X. Xxxxxxx Trust dtd. 8/22/74
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee under Xxxxx X. Xxxxxxx d/o/t dated 12/18/96
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx, as Trustee f/b/o Xxxxxxxx Xxxxxxx Xxxxxx u/t/a dtd.
10/27/72
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxxx Xxxxxxx Strasburg Separate
Property Revocable Trust UTA dtd. 12/3/88
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee of The Xxxxx X. Xxxxxxx d/o/t dated 4/18/90
--------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx Xxxxx and Xxxxxxx X.X. Xxxxx, as Tenants in Common
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, as Trustee f/b/o Xxxxxxxx Xxxxxxx Xxxxxx u/t/a dtd.
12/24/79
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx, as Trustee f/b/o Xxxxx Xxxx Xxxxxxxxx u/t/a dtd.
12/30/78
--------------------------------------------------------------------------------
Xxxx X. Xxxxxxxxx, as Custodian for Xxxxxxx Xxxxxx Xxxxxxxxx under the NY
Uniform Gifts to Minors Act
--------------------------------------------------------------------------------
Xxxx X. Xxxxxxxxx, as Custodian for Xxxxxxx Xxxxxx Xxxxxxxxx under the CA
Uniform Transfers to Minors Act
--------------------------------------------------------------------------------
A-1
22
--------------------------------------------------------------------------------
Xxxx X. Xxxxxxxxx, as Trustee of the Xxxx X. Xxxxxxxxx Revocable Trust UTA dated
10/27/94
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx Xxxxx and Xxxxxxx X. X. Xxxxx, as Trustees Under the Xxxxx
Children Trust II dtd. 12/15/92
--------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx, as Successor Trustee of the Xxxxx Children 1997 Irrevocable
Trust dtd 12/31/97
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxxxx, Trustees of the Xxxxx X. Xxxxxxx 1998
Gift Trust for Xxxxx
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx, Trustees of the Xxxxx X. Xxxxxxx 1998
Gift Trust for Xxxxxxx
--------------------------------------------------------------------------------
Xxxxx X. Xxxxx and Xxxxxxx X. X. Xxxxx, Trustees of the Xxxxx X. Xxxxxxx 1998
Descendants Trust for Xxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx and Xxxxxx Xxxxxxxxxx as Trustees of the Xxxxx Xxxxxxx Xxxxx
1998 Family Trust
--------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx, as Trustee of the Xxxxxxx X. X. Xxxxx 1998 Family Trust
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxxx III, co-trustees of the Xxxxxxxxx
Xxxxxxx Strasburg Qualified annuity Trust for Xxxxx Xxxx Xxxxxxxxx, dtd 8/28/98
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Marsden X. Xxxxx III, co-trustees of the Xxxxxxxxx
Xxxxxxx Strasburg Qualified Annuity Trust for Xxxxxxx Xxxxxx Xxxxxxxxx, dtd
8/28/98
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Marsden X. Xxxxx III, co-trustees of the Xxxxxxxxx
Xxxxxxx Strasburg Irrevocable Trust for Xxxxx Xxxx Xxxxxxxxx, dtd 8/28/98
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Marsden X. Xxxxx III, co-trustees of the Xxxxxxxxx
Xxxxxxx Strasburg Irrevocable Trust for Xxxxxxx Xxxxxx Xxxxxxxxx, dtd 8/28/98
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Marsden X. Xxxxx III, co-trustees of the Xxxxx Xxxx
Xxxxxxxxx Irrevocable GST Trust, dtd 8/28/98
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxxx III, co-trustees of the Xxxxxxx
Xxxxxx Xxxxxxxxx Irrevocable GST Trust, dtd 8/28/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx 1998 Gift
Trust for Tad U/A/D 8/14/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg and Xxxx X. Xxxxxx, Trustees of the Xxxxxxxx Xxxxxxx
Xxxxxx 1998 Gift Trust for Xxxx U/A/D 8/14/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx Annuity 3
Trust U/A/D 9/3/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx Annuity 5
Trust U/A/D 9/3/98
--------------------------------------------------------------------------------
A-2
23
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx Annuity 7
Trust U/A/D 9/3/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx Annuity 12
Trust U/A/D 9/3/98
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxx Strasburg, Trustee of the Xxxxxxxx Xxxxxxx Xxxxxx 1998
Descendants Trust U/A/D 8/14/98
--------------------------------------------------------------------------------
A-3
