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EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
This Agreement, dated as of May 31, 1996 is among Accessories
Associates, Inc., a Rhode Island corporation (the "COMPANY"), Weston Presidio
Capital II, L.P. 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:
1. DEFINITIONS. Except as the context otherwise explicitly requires, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof and (d) the word
"including" shall be construed as "including without limitation". Accounting
terms used in this Agreement and not otherwise defined herein shall have the
meanings provided in GAAP. Certain capitalized terms are used in this Agreement
as specifically defined in this Section 1 as follows:
1.1. "COMMON STOCK" means the common stock, $0.01 par value, of the
Company.
1.2. "COMPANY" is defined in the preamble.
1.3. "EXCHANGE ACT" means the federal Securities and Exchange Act
of 1934.
1.4. "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.
1.5. "HOLDER" means any person owning or having the right to
acquire Registrable Securities.
1.6. "INVESTORS" is defined in the preamble.
1.7. "MANAGEMENT STOCKHOLDERS" means the stockholders of the
Company listed as Management Stockholders on Schedule B.
1.8. "PREFERRED STOCK" means the Series A Redeemable Convertible
Preferred Stock, par value $0.01 per share, of the Company.
1.9. "PURCHASE AGREEMENT" means the Securities Purchase Agreement
dated as of the date hereof among the Company and the Investors.
1.10. "REGISTER", "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act.
1.11. "REGISTRABLE SECURITIES" means (a) the Common Stock issued or
issuable upon conversion, exchange or exercise of the Preferred Stock and the
Warrants, (b) any Common
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Stock issued to the Investors pursuant to the Purchase Agreement, (c) 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 and Warrants, or the Common Stock or Preferred Stock issued or
issuable upon conversion, exchange or exercise of such Preferred Stock and
Warrants, or the Common Stock described in clause (b) above, and (d) any Common
Stock issued to the Management Stockholders, either directly or pursuant to
options, warrants and other rights under employee plans permitted by the
Purchase Agreement or hereafter issued or issuable as a dividend or other
distribution with respect thereto or in 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.
1.12. "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 which upon issuance
would be Registrable Securities.
1.13. "REQUIRED INVESTORS" means those Investors who own at least
two thirds of the Registrable Securities then outstanding owned by all
Investors.
1.14. "SEC" means the Securities and Exchange Commission or any
successor agency.
1.15. "SECURITIES ACT" means the federal Securities Act of 1933.
1.16. "VIOLATION" is defined in Section 8.1.
1.17. "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 at any
time after the earlier of (a) May 1, 2000 or (b) 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 Investors owning at least
25% of the Registrable Securities then outstanding and owned by the 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 Investors,
then 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, the Company shall use its best efforts to effect such a registration
as soon as practicable, and in any event to file within 150 days after the
receipt of such request or 90 days after approval of the selection of a managing
underwriter pursuant to Section 2.2, whichever is later, 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
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efforts to cause such registration statement to become effective. The Company
shall not be obligated to effect a registration under this Section 2 if the
Registrable Securities requested to be registered have an expected aggregate
public offering price of less than $10,000,000 as determined by the managing
underwriter or by any other reasonable method.
2.2. UNDERWRITTEN OFFERING. The managing underwriter for the
proposed offering to be registered under this Section 2 shall be selected by the
Company's Board of Directors , with the approval of the Directors elected by the
Investors pursuant to Section 5.2.1 of the Certificate of Designation for the
Preferred Stock. In addition, approval by a disinterested majority of the Board
of Directors is required if an affiliate of an Investor is selected as a
managing underwriter. 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. 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 so underwritten, then the Company shall so advise all
Holders of Registrable Securities which would otherwise be so underwritten, and
the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated as follows:
(a) for the initial public offering hereunder:
(i) First, to the Company for the shares requested to be
sold by it in such offering.
(ii) Second, to the Investors requesting registration in
such offering pro rata in accordance with the number of Registrable
Securities requested by the Investors to be included in such offering.
(iii) Third, to all other Holders pro rata in accordance
with the number of Registrable Securities requested by such Holders to
be included in such offering.
(b) for any subsequent public offering hereunder:
(i) First, to the Investors requesting registration in
such offering pro rata in accordance with the number of Registrable
Securities requested by the Investors to be included in such offering;
(ii) Second, to all other Holders pro rata in accordance
with the number of Registrable Securities requested by such Holders to
be included in such offering;
(iii) Third, 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 on Form
S-1 pursuant to this Section 2, and only one such registration in any 12-month
period. For purposes of this Section 2.3, a registered
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offering on Form S-1 made pursuant to this Section 2 will not count as a
registration described above in the event that (a) less than 25% of the stock
sold in such offering are Registrable Securities owned by Investors after the
Investors requested that such Registrable Securities constitute at least 25% of
the stock to be included in such offering or (b) the Holders selling in such
offering pay all the expenses of such offering otherwise payable by the Company
under Section 7.
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 (a) during the
period starting with the date 30 days prior to the Company's good faith estimate
of the date of filing of, and ending on the date 180 days following the
effective date of, a registration statement pertaining to the underwritten
public offering of securities for the account of the Company, provided the
Company is at all times during such period diligently pursuing such
registration, 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 180 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 clause (b) more than once in any 12-month period.
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 promptly give each Holder written notice of
such registration. Upon the written request of any Holder given within 30 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, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be so underwritten, 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 pro rata in accordance with the number of Registrable
Securities requested by the Holders to be included in such offering.
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The Holders' rights under this Section 3 shall terminate on the second
anniversary of the closing of an underwritten public offering of the Company's
stock registered under the Securities Act that results in net proceeds of at
least $20,000,000.
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 such registration statement
effective for up to nine months or until the Holders have informed the Company
in writing that the distribution of their securities has been completed.
4.2. AMENDMENTS. 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. 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. 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 necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; 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
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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.
4.7. OPINIONS AND COMFORT LETTERS. The Company shall furnish 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
are 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, their underwriters 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
Holder and such underwriters or
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their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act to protect themselves from liability thereunder.
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.
6. FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder a written request that the Company effect a registration on Form S-3 and
any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
6.1. NOTICE TO HOLDERS. Promptly give written notice of the
proposed registration, and any related qualification or compliance, to all other
Holders.
6.2. SHORT-FORM REGISTRATION. Use its best efforts to effect, as
soon as practicable, such registration, qualification or compliance as may be so
requested and as would permit or facilitate the sale and distribution of all of
such Holder's Registrable Securities as are specified in such request, together
with all of the Registrable Securities of any other Holders joining in such
request as are specified in a written request given within 30 days after mailing
of such written notice by the Company; PROVIDED, HOWEVER, that the Company shall
not be obligated to effect any such registration, qualification or compliance
pursuant to this Section 6 if: (a) Form S-3 is not available for such offering
by the Holders; (b) the aggregate offering price, minus underwriting discounts
and commissions, of the Registrable Securities specified in such request is not
at least $1,000,000; (c) the Company shall furnish to the Holders 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 for such Form S-3 registration to be
effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 registration for a period of not more than 180 days
after receipt of the request of the Holder or Holders under this Section 6;
PROVIDED, HOWEVER, that the Company shall not utilize this right more than once
in any 12-month period and (d) the Company shall not be required to keep such
registration statement effective for more than 180 days.
7. 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, 3 or 6 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
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withdrawn at any time at the request of the Investors (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 Investors at the time of
their request that makes the proposed offering unreasonable in the good faith
judgment of the Investors, then the Holders shall not be required to pay any of
such expenses. Underwriting discounts and commissions relating to Registrable
Securities will be paid ratably by the Holders of such Registrable Securities.
8. INDEMNIFICATION.
8.1. 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)
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 8.1 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 such 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 retained by such Holder to engage 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.
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8.2. HOLDER INDEMNIFICATION. To the extent permitted by law, each
selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, each agent 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 underwriter, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling person,
agent, or underwriter or controlling person, or other such Holder or director,
officer or controlling person 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
the liability of any Holder hereunder shall be limited to the 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
PROVIDED, FURTHER, that the indemnity provisions in this Section 8.2 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.
8.3. NOTICE, DEFENSE AND COUNSEL. Promptly after receipt by an
indemnified party under this Section 8 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 8, 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 mutually reasonably satisfactory to the 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 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 8 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 8.
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8.4. CONTRIBUTION IN LIEU OF INDEMNIFICATION. If the
indemnification provided for in Sections 8.1 or 8.2 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 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 8.4 shall include any such action or
claim (which shall be limited as provided in Section 8.3 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.
8.5. SURVIVAL OF RIGHTS AND OBLIGATIONS. The obligations of the
Company, the Holders under this Section 8 shall survive the completion of any
offering of Registrable Securities in a registration statement whether under
this Agreement or otherwise.
9. REPORTS UNDER EXCHANGE ACT. In order to provide 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 in order to make it possible for
Holders to register the Registrable Securities pursuant to a registration on
Form S-3, the Company agrees to:
9.1. 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.
9.2. EXCHANGE ACT REGISTRATION. Take such action, including the
voluntary registration of its Common Stock under section 12 of the Exchange Act,
as is necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable (but not
later than 90 days) after the end of the fiscal year in which the first
registration statement filed by the Company for the offering of its securities
to the general public is declared effective.
9.3. 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.
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9.4. 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.
10. LOCK-UP AGREEMENTS. If requested by the managing underwriter in
connection with an underwritten offering hereunder, the Holders shall enter into
lock-up agreements pursuant to which they will not, for a period of seven days
prior to, and 180 days (90 days for offerings subsequent to the initial public
offering hereunder) 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, publicly offer or sell any of the
Registrable Securities without the prior consent of the managing underwriter,
provided that (a) the officers and directors of the Company enter into lock-up
agreements with terms at least as restrictive and (b) the Holders shall be able
to offer publicly and sell Registrable Securities free from the lock-up
provisions contemplated by this Section 10 for at least 90 consecutive days in
each period of 360 consecutive days.
11. LIMITATIONS ON OTHER REGISTRATION RIGHTS. The Company shall not,
without the prior written consent of the Investors owning at least two thirds of
the Registrable Securities then outstanding owned by all Investors, 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, under the terms of such
agreement, 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 Holders or
the Company.
12. TERMINATION OF REGISTRATION RIGHTS. In addition to the termination
provisions set forth in Section 3, the registration rights contained in Section
2, 3 and 6 shall terminate on the date when (a) the Investors own less than 25%
of the Registrable Securities owned by them on the date hereof AND (b) the
Investors may sell all their then Registrable Securities under Rule 144.
13. GENERAL.
13.1. NOTICES. All notices or other communications required or
permitted to be delivered hereunder shall be in writing and shall be delivered
to each of the parties at their respective addresses as set forth in Schedules A
or B. Any party to this Agreement may at any time change the address to which
notice to such party shall be delivered by giving notice of such change to the
other parties to this Agreement and such notice shall be deemed given when
received by the other
11
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parties hereto. Notices shall be deemed effectively given when personally
delivered or sent to the recipient at the address set forth above by telex or a
facsimile transmission, one business day after having been delivered to a
receipted, nationally recognized courier, properly addressed or five business
days after having been deposited into the United States mail, postage prepaid,
PROVIDED, that any notice to any party outside of the United States shall be
sent by telecopy and confirmed by overnight or two-day courier.
13.2. AMENDMENTS, WAIVERS AND CONSENTS. Any provision in this
Agreement to the contrary notwithstanding, changes in or additions to this
Agreement may be made, and compliance with any covenant or provision herein set
forth may be omitted or waived, if the Company (a) shall obtain consent thereto
in writing from Investors holding an aggregate of at least two thirds of the
Registrable Securities then outstanding owned by the Investors and (b) shall, in
each such case, deliver copies of such consent in writing to any Holders who did
not execute the same; PROVIDED, HOWEVER, that any such amendment or waiver
adversely affecting the Management Stockholders in a manner distinct from the
effect of such amendment or waiver on the other Holders shall require the
written consent of the Management Stockholders holding a majority of the
Registrable Securities then outstanding owned by all Management Stockholders.
13.3. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the personal representatives, successors and
assigns of the respective parties hereto. The Company shall not have the right
to assign its rights or obligations hereunder or any interest herein without
obtaining the prior written consent of the Investors holding a majority of the
Registrable Securities then outstanding owned by the Investors. The Holders may
assign or transfer their rights under this Agreement to the extent (a) permitted
by the other agreements between the respective Holders and the Company and (b)
to the extent that such assignee or transferee owns or obtains Registrable
Securities having a fair value of at least $100,000.
13.4. 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.
13.5. 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.
13.6. 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.
13.7. COUNTERPARTS. This Agreement may be executed in counterparts,
all of which together shall constitute one and the same instrument.
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13.8. CHOICE OF LAW. 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.
The parties have caused this Agreement to be duly executed under seal
as of the date first above written.
ACCESSORIES ASSOCIATES, INC.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: Chairman
INVESTORS:
WESTON PRESIDIO CAPITAL II, L.P.
By: WESTON PRESIDIO CAPITAL
MANAGEMENT II, L.P.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------
General Partner
BANCBOSTON VENTURES, INC.
By /s/ Xxxxxxx Xxxxx
------------------------------------
Title: Vice President
ST. XXXX FIRE AND MARINE
INSURANCE COMPANY
By /s/ Xxxxxxx X. Xxx
------------------------------------
Title: Authorized Representative
NATIONAL CITY CAPITAL CORPORATION
By /s/ Xxxx X. Xxxxxxxxxxx
------------------------------------
Title: Managing Director
13
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MANAGEMENT STOCKHOLDERS
-----------------------------------
Name:
-----------------------------------
Name:
-----------------------------------
Name:
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SCHEDULE A TO REGISTRATION
RIGHTS AGREEMENT
INVESTORS
Number Number
Name and Address Preferred Shares of Common Shares
---------------- ---------------- ----------------
Weston Presidio Capital II, L.P. 17,100 19,000
00 Xxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BancBoston Ventures, Inc.
000 Xxxxxxx Xxxxxx - 00xx Xxxxx 6,840 7,600
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
St. Xxxx Fire and Marine Insurance 6,840 7,600
Company
c/o St. Xxxx Venture Capital, Inc.
0000 Xxxxxxxxxx Xxxx Xxxx.
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
National City Capital Corporation 3,420 3,800
0000 X. 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
------ ------
Total: 34,200 38,000
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SCHEDULE B TO REGISTRATION
RIGHTS AGREEMENT
Management Stockholders
Number of Common Stock
Stockholders and Address Shares Held at Closing
------------------------ ----------------------
Xxxx X. Xxxxx, Xx. 28,500 shares
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxxx, Xx. 171,000 shares
0 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx 28,500 shares
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxx 342,000 shares
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
17
EXHIBIT 10.5
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement made and entered
into as of this 11th day of December, 1996 by and between Accessories
Associates, Inc., a Rhode Island corporation (the "Company"), Weston Presidio
Capital II, L.P. and the other Investors executing this First Amendment
(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.
RECITALS
On May 31, 1996, the Company and Weston Presidio Capital Management II
L.P., BancBoston Ventures, Inc., St. Xxxx Fire and Marine Insurance Company and
National City Corporation (the "Initial Investors")together with the persons
listed in Schedule B attached hereto entered into a Registration Rights
Agreement (the "Agreement") granting to the Initial Investors certain
registration and other rights. The Initial Investors have authorized the
issuance of ninety-five hundred (9,500) additional shares of the Company's
Series A Redeemable Convertible Preferred Stock, par value $0.01 per share (the
"Shares"). The Company proposes to issue the ninety-five hundred (9,500) Shares
in the amounts indicated to the persons listed hereto on Schedule C hereto
(collectively referred to as the "Subsequent Investors"). As consideration in
part for their purchase of the Shares, the Subsequent Investors have requested
to become parties to the Registration Rights Agreement. The Company, the Initial
Investors and the persons listed on Schedule B are willing to do so.
NOW THEREFORE, in consideration of the promises and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, it is agreed as follows:
1. Effective upon the execution of this Agreement, each
Subsequent Investor shall become, and shall be, a party to the Agreement and the
term "Investors" wherever set forth in the Agreement shall be deemed to include
each of the Initial Investors and the Subsequent Investors.
2. Except as modified herein, the Agreement is hereby ratified,
confirmed and approved.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and date first above written.
ACCESSORIES ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Chairman
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INITIAL INVESTORS:
WESTON PRESIDIO CAPITAL II, L.P.
By: WESTON PRESIDIO CAPITAL
MANAGEMENT II, L.P.
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
BANCBOSTON VENTURES, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
ST. XXXX FIRE AND MARINE
INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxx
-----------------------------------
NATIONAL CITY CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxxx
-----------------------------------
SUBSEQUENT INVESTORS:
XXXXXX CAPITAL, L.P.
By: XXXXXX HOLDINGS, INC.,
General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
2
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FIRST GLOBAL INVESTMENTS LIMITED
By: /s/ Xxxxxxxxx XxXxxxxxxx
-----------------------------------
IONIC HOLDINGS L.D.C.
By: /s/ Xxxxxxxxx XxXxxxxxxx
-----------------------------------
NEW XXXXXX OVERSEAS INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
ORACLE INVESTMENTS AND HOLDINGS, LIMITED
By: /s/ Xxxxxxxxx XxXxxxxxxx
-----------------------------------
BRAHMAN PARTNERS II, L.P.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
B.Y. PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
QUASAR INTERNATIONAL PARTNERS CV
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
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BRAHMAN PARTNERS II OVERSHORE LTD.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
SCHEDULE B PERSONS
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx, Xx.
---------------------------------------
Xxxx X. Xxxxx, Xx.
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Poccaro
---------------------------------------
Xxxxx X. Poccaro
/s/ Xxxxxxx Xxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxx X. XxXxxxx
---------------------------------------
Xxxxx X. XxXxxxx
/s/ Xxxxxx X. XxXxxxxx
---------------------------------------
Xxxxxx X. XxXxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxxx
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