XXXXXXXX CONVERTIBLES, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made by and
between Xxxxxxxx Convertibles, Inc., a Delaware corporation (the "Company"), and
Klaussner Furniture Industries, Inc. (the "Investor").
RECITALS
A. The Investor desires to purchase from the Company, and the
Company desires to issue and sell to the Investor 10,000
shares of Series A Preferred Stock, par value $0.01 per share,
of the Company (the "Shares").
B. As further inducement for the Investor to purchase the Shares
from the Company, the Company desires to undertake to register
under the Securities Act, the shares of common stock, par
value $0.01 per share, of the Company (the "Common Stock"),
underlying the Shares, in accordance with the terms hereof.
AGREEMENTS
The Company and the Investor covenant and agree as follows:
1. DEFINITIONS. For the purposes of this Agreement:
(a) The term "Investor" includes (i) the Investor (as defined
above) and (ii) each person who is a permitted transferee or assignee of the
Registrable Securities pursuant to Section 8 of this Agreement.
(b) The term "Prospectus" means the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted form a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A promulgated under
the Securities Act of 1933, as amended), as amended or supplemented by any
prospectus supplement, including post-effective amendments, and all material
incorporated by reference deemed to be incorporated by reference in such
prospectus.
(c) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or statements or similar documents in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement or document by the Securities and Exchange Commission (the "SEC").
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(d) The term "Registrable Securities" means (i) any shares of
Common Stock issued or issuable upon conversion of the Shares or acquired upon
exercise of the Investor's right of first refusal set forth in Section 3 of the
Stock Purchase Agreement, dated as of even date herewith (or underlying
Equivalents, as defined in such Stock Purchase Agreement, acquired upon exercise
of such right) and (ii) shares of Common Stock issued or issuable upon the
conversion or exercise of any convertible security, 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 the shares of Common Stock issued, issuable
or held pursuant to clause (i) above, excluding in all cases, however, any
Registrable Securities sold by an Investor in a transaction in which its
registration rights under this Agreement are not assigned pursuant to Section 8
of this Agreement.
(e) The term "Registration Statement" means any registration
statement of the Company which covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments or
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
2. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to the terms of this
Agreement, if the Company receives from holders of Registrable Securities, a
written request that the Company effect any registration for an offering of
Registrable Securities, then the Company will promptly give written notice of
the proposed registration to all the holders of Registrable Securities and will,
as soon as practicable, subject to Section 2(c) (ii) use its best efforts to
effect registration of the Registrable Securities specified in such request,
together with all or such portion of the Registrable Securities of any holder
joining in such request as are specified in a written request delivered to the
Company within twenty (20) days after written notice from the Company of the
proposed registration. If such request is made at a time when the Company is
eligible to register securities for a secondary offering by its stockholders on
Form S-3 (or any successor form to Form S-3, regardless of its designation),
then the Company shall use Form S-3 and, if the Company is not so eligible, the
Company shall use any registration form for which it is then eligible.
Notwithstanding the foregoing, in no event shall the Company be required to
effect more than three registrations (the "Initial Demands") at its expense and
two additional registrations (the "Additional Demands"), at the expense of the
Investor, pursuant to this Section 2(a); provided, further, that the Company
shall not be required to effect more than one registration at its expense of an
offering managed by an underwriter (an "Underwritten Registration").
(b) NOTICE OF INTENT TO DISTRIBUTE. Each holder of Registrable
Securities agrees to give written notice to the Company at least three business
days (but no more than 30 business days) prior to any intended distribution of
Registrable Securities pursuant to an effective Registration Statement, which
notice shall specify the date on which such holder intends to begin such
distribution and such information with respect to such holder and the intended
distribution of Registrable Securities by such holder as may be required to
amend the Registration Statement
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or supplement the related Prospectus with respect to such intended distribution
of Registrable Securities.
(c) As soon as practicable after the date notice is provided
to the Company pursuant to Section 2(a) or (b) above, the Company shall either:
(i) (A) If necessary, prepare and file a post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and (B) provide to each holder of Registrable Securities who has
given notice of intention to distribute such holder's Registrable Securities in
accordance with Section 2(b) hereof copies of any documents filed pursuant to
this Section 2(c); or
(ii) Furnish to all the holders of Registrable Securities who
joined in the request for registration pursuant to Section 2(a) above or who
informed the Company of an intent to distribute pursuant to Section 2(b) above,
a certificate signed by an authorized executive officer of the Company stating
that, in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company for any registration to be
effected as requested under Section 2(a) or for any distribution to be made as
described in Section 2(b), in which case the Company shall have the right to
defer such filing of a Registration Statement or such distributions for a period
of not more than ninety (90) days; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.
(d) REGISTRATION OF OTHER SECURITIES IN DEMAND REGISTRATION.
Any registration statement filed under this Section 2 may, include securities of
the Company other than Registrable Securities to the extent required by
agreements in effect as of the date hereof.
(e) NOTICE OF UNDERWRITING. If a holder of Registrable
Securities intends to distribute the Registrable Securities covered by the
holder's request by means of an underwriting, the holder shall so advise the
Company as a part of the request made pursuant to this Section 2, and the
Company shall include such information in the written notice referred to in
Section 2(c).
(f) SELECTION OF UNDERWRITER IN DEMAND REGISTRATION. The
Company shall (together with all holders proposing to distribute their
securities through such underwriting) enter into and perform its obligations
under an underwriting agreement in usual and customary form with the
representative of the underwriter or underwriters (the "Underwriter's
Representative") selected for such underwriting by the Investor and consented to
by the Company (which consent shall not be unreasonably withheld).
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3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Registrable Securities pursuant to this Agreement, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on Form S-3 (or such other form as the Company is then
eligible for) with respect to all Registrable Securities included therein, and
use its best efforts to cause the Registration Statement to become effective as
soon as reasonably possible, subject to Section 2(c)(ii), after such filing and,
to keep the Registration Statement effective pursuant to Rule 415 under the
Securities Act for a period of at least 90 days (in the case of a Registration
Statement on a Form other than Form S-3) and 180 days (in the case of a
Registration Statement on Form S-3) (the "Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and any
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective for the Period.
(c) Furnish promptly to each Investor whose Registrable
Securities are included in the Registration Statement such number of copies of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto, and of such other documents as such Investor may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by such Investor.
(d) Use its reasonable efforts to register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdiction as shall be reasonably
requested by the Investor and prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements and to take
such other actions as may be necessary to maintain such registration and
qualification in effect at all times for the Period and to take all other
actions necessary or advisable to enable the disposition of such securities in
such jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (i) qualify to do business,
file a general consent to service of process or subject itself to general
taxation in any such states or jurisdictions or (ii) provide any undertaking or
make any change in its Certificate of Incorporation or bylaws.
(e) Notify the Investor who holds Registrable Securities being
sold (or in the event of an underwritten offering, the Underwriter's
Representative), at any time when a Prospectus is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
Prospectus included in the 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
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or necessary to make the statements therein not misleading in light of the
circumstances then existing. Subject to Section 2(c), the Company shall use its
best efforts promptly to amend or supplement the Registration Statement to
correct any such untrue statement or omission.
(f) Notify the Investor who holds Registrable Securities being
sold (or in the event of an underwritten offering, the Underwriter's
Representative) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(g) Make generally available to its security holders as soon
as practicable, but not later than forty five (45) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
(h) If the Common Stock is then listed on a national
securities exchange, use its best efforts to cause the Registrable Securities to
be listed on such exchange if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or if the Common Stock is not then
listed on a national securities exchange, use its best efforts to facilitate the
quotation of the Common Stock on NASDAQ, and use its best efforts to cause
continued listing of the Common Stock so long as the Registration Statement is
in effect under the Securities Act.
(i) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement.
(j) Take all actions reasonably necessary to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities sold pursuant to the
Registration Statement and to enable such certificates to be in such
denominations and registered in such names as the Investor or any underwriters
may reasonably request.
(k) Notwithstanding anything contained in this Section 3 to
the contrary, the Company shall have no obligation pursuant to Section 2 for the
registration of Registrable Securities held by any Investor where such Investor
would then be entitled to sell under Rule 144 within any three-month period (or
such other unitary period prescribed under Rule 144 as may be provided by
amendment thereof) all of the Registrable Securities then held by such Investor.
(l) If the Registration Statement relates to an underwritten
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the Underwriter's
Representative.
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(m) At the request of the Investor, furnish to the
underwriters, if any, on the date that Registrable Securities are delivered to
the underwriters for sale in connection with a registration pursuant to this
Agreement (i) 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 to underwriters in an underwritten public offering, addressed
to the underwriters, and (ii) a letter, dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters.
(n) Make available for inspection by any underwriters
participating in the offering and the counsel, accountants or other agents
retained by such underwriter, all pertinent financial and other records,
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by such underwriters in connection with the Registration Statement.
4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of
the Registrable Securities pursuant to this Agreement, the Investor shall have
the following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement with respect to the
Investor that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended
methods of disposition of such securities as shall be reasonably required to
effect the registration of the Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request. At least thirty (30) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify the Investor of the
information the Company requires from the Investor (the "Requested Information")
if it elects to have any of its Registrable Securities included in the
Registration Statement. If within seven (7) business days of the filing date the
Company has not received the Requested Information from the Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor.
(b) The Investor by its acceptance of the Registrable
Securities agrees to cooperate with the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless the
Investor has notified the Company in writing of the Investor's election to
exclude all of its Registrable Securities from the Registration Statement.
(c) The Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(e),
the Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement until the Investor's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(e)
and, if so desired by the Company, the Investor shall deliver to the Company (at
the expense of the Company) or destroy (and deliver to the Company a certificate
of such destruction) all copies, other than the permanent file copies then in
such Investor's possession, of the Prospectus current at the time of receipt of
such notice.
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(d) In the event the Investor selects an underwriter for the
offering, the Investor agrees to enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations and market
stand-off obligations, with the managing underwriter of such offering and to
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities.
5. EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registration, filings or
qualifications pursuant to Section 2, including, without limitation, all
registration, listing, filing and qualification fees, printers and accounting
fees, the fees and disbursements of counsel for the Company shall be borne by
the Company as to the Initial Demands (provided that the Company shall not be
required to bear the expenses of more than one Underwritten Registration) and
all expenses relating to any registration thereafter pursuant to Additional
Demands (or to more than one Underwritten Registration) shall be borne by the
Investor.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Investor, the directors, if any, of the Investor, the
officers, if any, of the Investor who sign the Registration Statement, each
person, if any, who controls the Investor, any underwriter (as defined in the
Securities Act) for the Investor and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against any losses, claims,
damages, expenses 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, insofar as such losses, claims, damages, expenses or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof, arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including any Prospectus, (ii) 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 in which they were made,
not misleading, or (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law. Subject to the restrictions set forth in Section 6(c) with
respect to the number of legal counsel, the Company will reimburse the Investor
and each such underwriter or controlling person, promptly as such expenses are
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding. Notwithstanding anything contained in this
Agreement to the contrary, the indemnity agreement contained above in this
Section 6(a): (I) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld, (II) shall not apply
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to any such case for any such loss, claim, damage, liability or action arising
out of or 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 the Investor or any such underwriter or controlling person, as
the case may be, and (III) with respect to any preliminary prospectus, shall not
inure to the benefit of any person from whom the person asserting any such claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained the preliminary prospectus was corrected in
the Prospectus, as then amended or supplemented. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Investor or any such underwriter or controlling person and shall survive the
transfer of the Registrable Securities by an Investor pursuant to Section 8.
(b) To the extent permitted by law, each Investor, severally
and not jointly, will indemnify and hold harmless, to the same extent and in the
same manner set forth in Section 6(a), 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 or the
Exchange Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such holder or underwriter, 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, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) 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 such Investor
expressly for use in connection with such registration; and such Investor will
reimburse any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Investor shall be liable under
this Section 6(b) for only that amount of losses, claims, damages and
liabilities as does not exceed the proceeds to such Investor as a result of the
sale of Registrable Securities pursuant to such registration. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such indemnified party and shall survive the transfer of the
Registrable Securities by the Investor pursuant to Section 8. The Company shall
be entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
about such persons so furnished in writing by such persons expressly for
inclusion in the Registration Statement
(c) Promptly after receipt by an indemnified party under this
Section 6 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 6, 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 control of the defense thereof with counsel
satisfactory to the indemnifying party; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
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to be paid by the indemnifying party, if, in the reasonable opinion of counsel
for the indemnifying party, 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 Company shall pay for
only one legal counsel for the Investor. Such legal counsel shall be selected by
the Investor. 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 6 only to the extent prejudicial to 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 section 6. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, promptly as such expense, loss, damage or liability is
incurred and is due and payable.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 6 to the extent permitted by law; provided, however,
that (i) no contribution shall be made under circumstances where the maker would
not have been liable for indemnification under the fault standards set forth in
this Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act) shall
be entitled to contribution from any seller of Registrable Securities who was
not guilty of such fraudulent misrepresentation, and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.
7. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Investor the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit the Investor to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144, at all times after ninety (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.
(b) 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.
(c) Furnish to each Investor, so long as such Investor owns
any Registrable Securities, forthwith upon request (i) 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), (ii) 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 (iii) such other information as may
be reasonably requested in availing the
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Investor of any rule or regulation of the SEC which permits the selling of any
such securities without registration.
8. ASSIGNMENTS OF REGISTRATION RIGHTS. The rights to have the Company
register securities pursuant to this Agreement may be assigned by the Investor
to transferees or assignees of such securities provided that (i) the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned, (ii) such
assignment is in accordance with and permitted by all other agreements between
the Company and the transferor or assignor, and (iii) such assignments shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act. The term "Investor" as used in this Agreement shall include permitted
assignees.
9. MISCELLANEOUS.
(a) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested, addressed (i) if
to the Company, 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
President, and (ii) if to an Investor, at the address set forth under its
signature herein, or at such other address as each such party furnishes by
notice given in accordance with this Section 9(a).
(b) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, will not operate as a waiver thereof. No waiver will be effective unless
and until it is in writing and signed by the party giving the waiver.
(c) This Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of New York (without
regard to conflicts of law principles) as such laws are applied by New York
courts to agreements entered into and to be performed in New York by and between
residents of New York. This Agreement shall be binding upon each Investor and
its heirs, estate, legal representatives, successors and permitted assignees and
shall inure to the benefit of the Company and its successors and assigns. In the
event that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(d) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof. Any provision of
this Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by a writing executed by the Company and the Investor.
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Any amendment or waiver effected in accordance with this Section 9(d) shall be
binding upon the Investor and the Company.
(e) Any such person is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, then the Company shall be entitled to act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities.
(f) Subject to execution and delivery of an appropriate
confidentiality agreement, Investor shall be entitled to participate, at its own
expense, in the preparation of any Registration Statement filed hereunder and to
receive information from the Company relevant in connection therewith.
Dated this 11th day of December, 1997.
XXXXXXXX CONVERTIBLES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
KLAUSSNER FURNITURE INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxx, Senior Vice President
000 Xxxxxxxx Xxxxxx
Xxxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
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