REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of December 17, 1996, between
Xxxxxxx International Group Inc., a Delaware corporation (the "Company"), and
Hay Island Holding Corporation, a Delaware corporation ("Hay").
WHEREAS, as of the date of this Agreement, Hay owns 28,100,000 shares
of the Company's Class B Common Stock, par value $0.01 per share (the "Class B
Common Stock");
WHEREAS, the Company is consummating on the date hereof underwritten
public offerings (the "Offerings") of 6,000,000 shares of the Company's Class A
Common Stock, par value $0.01 per share (the "Class A Common Stock" and together
with the Company's Class B Common Stock, the "Common Stock"); and
WHEREAS, the Board of Directors of the Company has adopted the Xxxxxxx
International Group Inc. 1996 Stock Plan; and
WHEREAS, the Board of Directors of the Company has authorized the
officers of the Company to execute and deliver this Agreement in the name and on
behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties to this Agreement hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Holder" means Hay and any other person that owns Registrable
Securities, including their respective successors and assigns who acquire
Registrable Securities, directly or indirectly, from Hay or such other person.
For purposes of this Agreement, the Company may deem and treat the registered
holder of a Registrable Security as the Holder and absolute owner thereof, and
the Company shall not be affected by any notice to the contrary.
"Registrable Securities" means (a) the Class A Common Stock issuable
upon the conversion of the Class B Common Stock owned by Hay following the
completion of the Offerings, (b) any unregistered Class A Common Stock acquired
by way of the exercise of any stock option(s) granted pursuant to the Xxxxxxx
International Group Inc. 1996 Stock Plan, (c) any Class A Common Stock acquired
by Hay in the open market at a time when Hay is deemed to be an Affiliate (as
such term is defined under Rule 144 under the Securities Act) of the Company so
long as (i) such Common Stock has not been transferred by Hay to a person that
is not a Permitted Transferee (as such term is defined in the Certificate of
Incorporation of the Company) and (ii) Hay or such Permitted Transferee
continues to be deemed an Affiliate of the Company, and (d) any securities
issued or issuable in respect of the Class A Common Stock or Class B Common
Stock referred to in clauses (a), (b) and (c) above, by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, reclassification, merger or consolidation, and any
other securities issued pursuant to any other pro rata distribution with respect
to such Common Stock. For purposes of this Agreement, a Registrable Security
ceases to be a Registrable Security when (x) it has been effectively registered
under the Securities Act and sold or distributed to the public in accordance
with an effective registration statement covering it (and has not been
reacquired in the manner described in clause (c) above), or (y) it is sold or
distributed to the public pursuant to Rule 144 (or any successor or similar
provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
2. Demand Registration. (a) Subject to Section 5 hereof, if at any time
any Holder shall request the Company in writing to register under the Securities
Act all or a part of the Registrable Securities held by such Holder (a "Demand
Registration"), the Company shall use all reasonable efforts to cause to be
filed and declared effective as soon as reasonably practicable (but in no event
later than the 45th day after such Holder's request is made) a registration
statement, on such appropriate form as the Company in its discretion shall
determine, providing for the sale of all such Registrable Securities by such
Holder. The Company agrees to use its reasonable efforts to keep any such
registration statement continuously effective and usable for resale of
Registrable Securities for so long as the Holder whose Registrable Securities
are included therein shall request. The Company shall be obligated to file
registration statements pursuant to this Section 2(a) until all Registrable
Securities have ceased to be Registrable Securities. Each registration statement
filed pursuant to this Section 2(a) is hereinafter referred to as a "Demand
Registration Statement."
(b) The Company agrees(i), unless it obtains the prior written
consent of Hay, not to effect any public or private sale, distribution or
purchase of any of its securities which are the same as or similar to the
Registrable Securities, including a sale pursuant to Regulation D under the
Securities Act, during the 15-day period prior to, and during the 45-day period
beginning on, the closing date of each underwritten offering under any Demand
Registration Statement, and (ii) to use reasonable efforts to cause each holder
of its securities purchased from the Company, at any time on or after the date
of this Agreement (other than in a registered public offering) to agree not to
effect any public sale or distribution of any such securities during such
period, including a sale pursuant to Rule 144 under the Securities Act.
(c) The Company may postpone for a reasonable period of time,
not to exceed 60 days, the filing or the effectiveness of any Demand
Registration Statement if the Board of Directors of the Company in good faith
determines that (A) such registration might have a material adverse effect on
any plan or proposal by the Company with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction, or (B) the
Company is in possession of material non-public information that, if publicly
disclosed, could result in a material disruption of a major corporate
development or transaction then pending or in progress or in other material
adverse consequences to the Company.
(d) If at any time any Holder of Registrable Securities to be
covered by a Demand Registration Statement desires to sell Registrable
Securities in an underwritten offering, such Holder shall have the right to
select any nationally recognized investment banking firm(s) to administer the
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld, and the Company shall enter into underwriting agreements
with the underwriter(s) of such offering, which agreements shall contain such
representations and warranties by the Company, and such other terms, conditions
and indemnities as are at the time customarily contained in underwriting
agreements for similar offerings.
3. Incidental Registration. Subject to Section 5 hereof and the other
terms and conditions set forth in this Section 3, if the Company proposes at any
time to register any shares of Class A Common Stock (the "Initially Proposed
Shares") under the Securities Act for sale, whether or not for its own account,
pursuant to an underwritten offering, the Company will promptly give written
notice to the Holders of its intention to effect such registration (such notice
to specify, among other things, the proposed offering price, the kind and number
of securities proposed to be registered and the distribution arrangements,
including identification of the underwriter(s)), and the Holders shall be
entitled to include in such registration statement, as a part of such
underwritten offering, such number of shares (the "Holder Shares") to be sold
for the account of the Holders (on the same terms and conditions as the
Initially Proposed Shares) as shall be specified in a request in writing
delivered to the Company within 15 days after the date upon which the Company
gave the aforementioned notice.
The Company's obligations to include Holder Shares in a registration
statement pursuant to this Section 3 is subject to each of the following
limitations, conditions and qualifications:
(a) If, at any time after giving written notice of its
intention to effect a registration of any of its shares of Common Stock and
prior to the effective date of any registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register all of such shares, the Company may, at its election, give written
notice of such determination to the Holders and thereupon it shall be relieved
of its obligation to use any efforts to register any Holder Shares in connection
with such aborted registration.
(b) If, in the opinion of the managing underwriter(s) of such
offering, the distribution of all or a specified portion of the Holder Shares
would materially interfere with the registration and sale, in accordance with
the intended method thereof, of the Initially Proposed Shares, then the number
of Holder Shares to be included in such registration statement shall be reduced
to such number, if any, that, in the opinion of such managing underwriter(s),
can be included without such interference. If, as a result of the cutback
provisions of the preceding sentence, the Holders are not entitled to include
all of the Holder
Shares in such registration, such Holders may elect to withdraw their request to
include Holder Shares in such registration (a "Withdrawal Election").
If the Company shall so request in writing, each Holder agrees (i) not
to effect any public or private sale or distribution of any Registrable
Securities (other than the Holder Shares) during the 15-day period prior to and
during the 45-day period beginning on, the closing date of any underwritten
public offering of shares of Common Stock made for the Company's own account and
(ii) to waive any Demand Registration right until 60 days after the
above-mentioned closing date.
4. Registration Procedures. (a) Whenever the Company is required to use
all reasonable efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to the terms and conditions of Section 2(a) or
3 (such Registrable Securities being hereinafter referred to as "Subject
Shares"), the Company will use all reasonable efforts to effect the registration
and sale of the Subject Shares in accordance with the intended method of
disposition thereof. Without limiting the generality of the foregoing, the
Company will as soon as practicable:
i) prepare and file with the SEC a registration
statement with respect to the Subject Shares in form and substance satisfactory
to the Holders of the Subject Shares, and use all reasonable efforts to cause
such registration statement to become effective as soon as possible;
ii) 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 the applicable period and to comply with the provisions of the
Securities Act with respect to the disposition of all Subject Shares and other
securities covered by such registration statement;
iii) furnish the Holders covered by such
registration statement, without charge, 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),
such documents incorporated by reference in such registration statement or
prospectus, and such other documents, as such Holders may reasonably request;
iv) use all reasonable efforts to register or
qualify the Subject Shares covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the managing underwriter(s)
shall reasonably recommend, and do any and all other acts and things which may
be reasonably necessary or advisable to enable the Holders to consummate the
disposition in such jurisdictions of the Subject Shares covered by such
registration statement, except that the Company shall not for any such purpose
be required to (A) qualify generally to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified, (B) subject itself to taxation
in any jurisdiction wherein it is not so subject, or (C) consent to general
service of process in any such jurisdiction or otherwise take any action
that would subject it to the general jurisdiction of the courts of any
jurisdiction in which it is not so subject;
v) otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the SEC;
vi) furnish, at the Company's expense, unlegended
certificates representing ownership of the securities being sold in such
denominations as shall be requested and instruct the transfer agent to release
any stop transfer orders with respect to the Subject Shares being sold;
vii) notify each Holder at any time when a prospectus
relating to the Subject Shares 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 any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein (in
the case of the prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading, and the Company will,
as promptly as practicable thereafter, prepare and file with the SEC and furnish
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of Subject Shares such prospectus will 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 not misleading;
viii) enter into customary agreements (including an
underwriting agreement in customary form in the case of an underwritten
offering) and make such representations and warranties to the sellers and
underwriter(s) as in form and substance and scope are customarily made by
issuers to underwriters in underwritten offerings and take such other actions as
the Holders or the managing underwriter(s) or agent, if any, reasonably require
to expedite or facilitate the disposition of such Subject Shares;
ix) make available for inspection by the Holders, any
underwriter or agent participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other similar
professional advisor retained by any such holders or underwriter (collectively
the "Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records"),
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement. The Holders agree that Records and other
information which the Company determines, in good faith, to be confidential and
of which determination the Inspectors are so notified shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in the registration statement, (ii) the
release of such Records is ordered pursuant to a subpoena, court order or
regulatory or agency request or (iii) the information in such Records has been
generally disseminated to the public. Each Holder agrees that it will, upon
learning that disclosure of such Record is sought in a court of competent
jurisdiction or by any governmental agency, give notice to the Company and allow
the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
x) obtain for delivery to the Company, the
underwriter(s) or their agent, with copies to the Holders, 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 or the managing underwriter(s) reasonably request;
xi) obtain for delivery to the Holders and the
underwriter(s) or their agent an opinion or opinions from counsel for the
Company in customary form and reasonably satisfactory to the Holder,
underwriters or agents and their counsel;
xii) make available to its security holders earnings
statements, which need not be audited, satisfying the provisions of Section
11(a) of the Securities Act no later than 90 days after the end of the 12-month
period beginning with the first month of the Company's first quarter commencing
after the effective date of the registration statement, which earnings
statements shall cover said 12-month period;
xiii) make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the registration
statement or of any order preventing or suspending the effectiveness of such
registration statement at the earliest possible moment;
xiv) cause the Subject Shares to be registered with
or approved by such other governmental agencies or authorities within the United
States as may be necessary to enable the sellers thereof or the underwriters(s),
if any, to consummate the disposition of such Subject Shares;
xv) cooperate with the Holders and the managing
underwriter(s), if any, or any other interested party (including any interested
broker-dealer) in making any filings or submission required to be made, and the
furnishing of all appropriate information in connection therewith, with the
National Association of Securities Dealers, Inc. ("NASD");
xvi) cause its subsidiaries to take action necessary
to effect the registration of the Subject Shares contemplated hereby, including
filing any required financial information;
xvii) effect the listing of the Subject Shares on the
New York Stock Exchange or such other national securities exchange or
over-the-counter market on which shares of the Class A Common Stock shall then
be listed; and
xviii) take all other steps necessary to effect the
registration of the Subject Shares contemplated hereby.
(b) The Holders shall provide (in writing and signed by the
Holders and stated to be specifically for use in the related registration
statement, preliminary prospectus, prospectus or other document incident
thereto) all such information and materials and take all such action as may be
required to permit the Company to comply with all applicable requirements of the
SEC and any applicable state securities laws and to obtain any desired
acceleration of the effective date of any registration statement prepared and
filed by the Company pursuant to this Agreement.
(c) The Holders shall, if requested by the Company or the
managing underwriter(s) in connection with any proposed registration and
distribution pursuant to this Agreement, (i) agree to sell the Subject Shares on
the basis provided in any underwriting arrangements entered into in connection
therewith and (ii) complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents customary in similar
offerings.
(d) Upon receipt of any notice from the Company that the
Company has become aware that the prospectus (including any preliminary
prospectus) included in any registration statement filed pursuant to Section
2(a) or 3, as then in effect, contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, the Holders shall forthwith
discontinue disposition of Subject Shares pursuant to the registration statement
covering the same until the Holders" receipt of copies of a supplemented or
amended prospectus and, if so directed by the Company, deliver to the Company
(at the Company's expense) all copies other than permanent file copies then in
the Holder's possession, of the prospectus covering the Subject Shares that was
in effect prior to such amendment or supplement.
(e) The Company shall pay all out-of-pocket expenses incurred
in connection with any registration statement filed pursuant to Section 2(a) or
Section 3 of this Agreement, including, without limitation, all SEC and blue sky
registration and filing fees (including NASD fees), printing expenses, transfer
agents and registrars' fees, fees and disbursements of the Company's counsel and
accountants and fees and disbursements of experts used by the Company in
connection with such registration statement. Notwithstanding the foregoing, the
Holders shall pay all underwriting discounts, commissions and expenses
attributable to the Subject Shares sold pursuant to any such registration
statement.
(f) In connection with any sale of Subject Shares that are
registered pursuant to this Agreement, the Company and the Holders shall enter
into an agreement providing for indemnification of the Holders by the Company,
and indemnification of the Company by the Holders, on terms customary for such
agreements at that time (it being understood that any disputes arising as to
what is customary shall be resolved by counsel to the underwriter(s)).
5. Condition to Company's Obligations. Notwithstanding any other
provision in this Agreement to the contrary, the Company shall have no
obligation to effect any registration of Registrable Securities pursuant to this
Agreement within 180 days of the date of the prospectus
for the Offerings, unless Xxxxxxx Xxxxx & Co. shall have given its prior written
consent to such filing.
6. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or delivery by telex (with correct answerback received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the third business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications
shall be:
If to the Company, to:
Xxxxxxx International Group Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: President
Telecopy: (000) 000-0000
If to Hay, to:
Hay Island Holding Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx, III
Telecopy: (000) 000-0000
and
Hay Island Holding Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
If to any other Holder, to such name at such address as such
Holder shall have indicated in a written notice delivered to the other parties
to this Agreement.
Any party hereto may from time to time change its address for notices under this
Section 6 by giving at least 10 days' notice of such changes to the other
parties hereto.
7. Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement hereof shall be deemed to be a continuing
waiver in the future thereof or a waiver of any other provision, condition or
requirement hereof; nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter.
8. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
9. Successors and Assigns; Amendments. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns,
including without limitation and without the need for an express assignment each
subsequent Holder of any Registrable Securities. Except as provided in this
Section 9, neither the Company nor any Holder shall assign this Agreement or any
rights hereunder without the prior written consent of the other parties hereto.
The assignment by a party of this Agreement or any rights hereunder shall not
affect the obligations of such party hereunder. This Agreement may not be
amended except by a written instrument executed by the parties hereto.
10. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
without regard to the principles of conflicts of laws.
The parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.
XXXXXXX INTERNATIONAL GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Operating Officer
HAY ISLAND HOLDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxx, III
--------------------------
Name: Xxxxxxx Xxxxxxx, III
Title: Chief Executive Officer