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REGISTRATION RIGHTS AGREEMENT
DATED AS OF
FEBRUARY 14, 1994
BY AND AMONG
AEROSOL SERVICES HOLDING CORPORATION
AND
THE INVESTORS
THAT ARE PARTIES HERETO
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of February
14,1994 and is by and among Aerosol Services Holding Corporation, a
Delaware corporation (the "Company"), London Pacific Life & Annuity
Company, a North Carolina joint stock life insurer, ASC Investment
Partners, L.P., a Delaware limited partnership, Chase Manhattan Capital
Corporation, a New York corporation, Xxxxxxx Venture Partners IV - Direct
Fund L.P., a Delaware limited partnership, Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx,
Xxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxx X. Xxx, Xxxxxx X. Xxx, Xxxxxxx Xxxxxxxx,
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, and Xxxxx Xx (each an "Investor" and,
together, the "Investors").
1. BACKGROUND. Each Investor is the holder of shares of the Company's
Common Stock or Warrants to purchase shares of the Company's Common Stock.
Each Investor and any Transferee of Common Stock or Warrants held by an
Investor shall be referred to herein as a "Holder." The term "Holder" as
used herein includes both the singular and the plural.
2. REGISTRATION
2.1 Incidental Registration.
(a) If at any time the Company proposes to register any of
its securities under the Securities Act of 1933, as amended (the
"Securities Act"), whether or not for sale for its own account, on a form
and in a manner which would permit registration of shares of Common Stock
for sale to the public under the Securities Act, it will each such time
give prompt written notice to each Holder of its intention to do so,
describing such securities and specifying the form and manner and the other
relevant facts involved in such proposed registration, and upon the written
request of a Holder (a "Participating Holder") delivered to the Company
within 30 days after the giving of any such notice (which request shall
specify the shares of Common Stock intended to be disposed of by such
Participating Holder and the intended method of disposition thereof), the
Company will effect the registration under the Securities Act of all shares
of Common Stock which the Company has been so requested to register by
Participating Holders to the extent required to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the shares of
Common Stock so to be registered, PROVIDED THAT:
(i) if, at any time after giving such written notice of
its intention to register any of its Securities and prior to the effective
date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register
such securities, the Company may, at its election, give written notice of
such determination to the Participating Holders and thereupon shall be
relieved of its obligation to register any shares of Common Stock in
connection with such registration (but not from its obligation to pay the
Registration Expenses already incurred in connection therewith as provided
in subdivision (b) of this Section 2. 1);
(ii) the Company shall not be obligated to effect any
registration of shares of Common Stock under this Section 2.l incidental to
the registration of any of its securities in connection with mergers,
acquisitions, exchange offers, dividend reinvestment plans, employee stock
ownership plans or stock option plans, thrift plans pension plans or other
employee benefit plans; and
(iii) the Company shall not be obligated to effect
any registration of shares of Common Stock to the extent such shares are
validly excluded from an underwritten distribution pursuant to Sections
2.2(b) and 2.2(c) of this Agreement.
(b) The Company will pay all Registration Expenses in
connection with each registration of shares of Common Stock requested by
Participating Holders pursuant to this Section 2.1. The term "Registration
Expenses" shall mean all expenses incident to the Company's performance of
or compliance with this Section 2 including, without limitation, all
registration and filing fees; all costs incurred in connection with listing
the Common Stock on any stock exchanges or with any market systems; all
fees and expenses of complying with securities or blue sky laws; all
printing expenses; the fees and disbursements of counsel for the Company,
its independent public accountants, the underwriters (exclusive of
underwriting discounts and commissions) and any other persons retained by
the Company including the expenses of any special audits required by or
incident to such performance and compliance; the reasonable fees and
disbursements of one counsel for the Holders as a group, which counsel
shall be chosen by the Participating Holders holding a majority of the
shares of Common Stock (other than shares being sold for the Company's own
account) to be sold in connection with the registration; and any allocation
of Company personnel or other general overhead expenses of the Company or
other expenses for the preparation of financial statements or other data
prepared by the Company. Registration Expenses shall not include
underwriting discounts and commissions and applicable transfer taxes, if
any, payable pro rata with respect to all shares included in the
distribution; each Holder shall bear its pro rata portion of such
discounts, commissions and taxes.
2.2 Registration Procedures
(a) When the Company is required to effect the registration
of any shares of Common Stock under the Securities Act as provided in
Section 2.1, the Company will as expeditiously as possible:
(i) prepare and (in any event within 60 days after the
end of the period within which requests for registration may be delivered
to the Company) file with the Securities and Exchange Commission (the
"Commission") a registration statement on the appropriate form with respect
to such shares of Common Stock and use its best efforts to cause such
registration statement to become effective as promptly as practicable;
(ii) prepare and file with the Commission 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 and to comply with the provisions of the Securities Act
with respect to the disposition of all shares of Common Stock covered by
such registration statement until the earlier of: (a) such time as all of
such shares of Common Stock have been disposed of in accordance with the
intended methods of disposition by the Participating Holders set forth in
such registration statement; or (b) the expiration of nine months after
such registration statement becomes effective;
(iii) furnish to all Participating Holders 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 any Participating Holder may
reasonably request;
(iv) use its best efforts to register or qualify all
shares of Common Stock covered by such registration statement under such
other securities or blue sky laws of such jurisdictions within the United
States and its territories as any Participating Holder shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable the Participating Holders to consummate the disposition
in such jurisdictions of their shares of Common Stock covered by such
registration statement, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction;
(v) furnish to each Participating Holder a signed
counterpart, addressed to such Participating Holder, of (A) an opinion of
counsel for the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting agreement),
and (B) a "cold comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included
in such registration statement, covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and its accountants'
letters delivered to underwriters in underwritten public offerings of
securities and, in the case of the accountants' letter, such other
financial matters, as any Participating Holder may reasonably request;
(vi) immediately notify the Participating Holders, at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an 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 in the light of the circumstances then
existing, and at the request of any Participating Holder prepare and
furnish to such Participating Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such shares of Common
Stock, such prospectus shall not include 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 not misleading in the light of the
circumstances then existing; and
(vii) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make available
to its securities holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first month of the first fiscal quarter
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act.
The Company may require any Participating Holder, when any registration is
being effected, to furnish the Company such information regarding such
Participating Holder and the distribution of the securities as the Company
may from time to time request in writing for inclusion in the applicable
registration statement as required by law or by the Commission in
connection therewith.
(b) If the Company at any time proposes to register any of
its securities under the Securities Act as contemplated by Section 2.1, and
such securities are to be distributed by or through one or more
underwriters, the Company shall, if requested by any Participating Holder
or Holders, arrange for such underwriters to include the shares of Common
Stock held by such Participating Holder or Holders among those securities
to be distributed by or through such underwriters; provided, however, that
if the underwriters shall determine as provided in Section 2.3(c) that the
inclusion of all or a specified portion of such shares would adversely
affect such offering, the Participating Holders shall have its or their
shares (or the specified portion thereof) excluded from such underwritten
offering. The Participating Holders on whose behalf such shares are to be
distributed by such underwriters shall be parties to any such underwriting
agreement and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of such
Participating Holders.
(c) If a Participating Holder has requested inclusion of
shares of Common Stock in an underwritten offering, such shares may be
excluded only if all of the following conditions are met:
(i) the managing underwriter shall have determined (and
shall have advised the Participating Holders in writing) that, in its
opinion, the registration and distribution of all or a specified portion of
the Common Stock as part of the proposed distribution of securities by the
underwriters will materially and adversely affect the distribution of such
securities (such opinion to state the reasons therefor); and
(ii) the Company and the underwriters shall exclude from
the proposed offering on a pro-rata basis any securities offered by
officers, directors or other shareholders of the Company (determined in
proportion to the number of shares sought to be included by each such
person in the offering).
(d) If any registration pursuant to Section 2.1 shall be in
connection with an underwritten public offering, the Holders agree, if so
timely required in writing by the managing underwriters and if all other
officers, directors, 10% shareholders (determined as provided in Commission
Rule 16a-2) and other persons selling shares in the offering also agree to
be so bound, not to effect any public sale or distribution of shares of
Common Stock (other than as part of such underwritten public offering)
within the period commencing seven days prior to the effective date of such
registration statement and ending the earlier of (i) 120 days after the
effective date of such registration statement and (ii) the date on which
all securities under such registration statement are sold.
2.3 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering shares of
Common Stock under the Securities Act, the Company will give each
Participating Holder and its underwriter, if any, and its counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, 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 any Participating Holder and such underwriters
or their respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
2.4 Indemnification
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to Section 2. l, the Company
will, and hereby does, indemnify and hold harmless each Participating
Holder, its directors and officers, and each other person, if any, who
controls such Participating Holder within the meaning of the Securities
Act, against any losses, claims, damages, liabilities and expenses
(including reasonable legal fees and expenses and costs of investigation),
joint or several, to which such Participating Holder or any such director
or officer or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus included therein, or any
amendment or supplement thereto, or any document incorporated by reference
therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such
Participating Holder, and each such director, officer, and controlling
person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided that the Company shall not be liable to such
an indemnified person in any such case to the extent (but only to the
extent) that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement
or any documents incorporated by reference in any of the above in reliance
upon and in conformity with written information furnished by such
indemnified person to the Company which written information specifically
states that it is for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of such Participating Holder or any such director, officer, or
controlling person and shall survive the transfer of such securities by the
Participating Holder.
(b) The Company may require as a condition to including any
shares of Common Stock in any registration statement filed pursuant to
subdivision 2.2(a)(i), that the Company shall have received an undertaking
satisfactory to it from a Participating Holder, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in
subdivision (a) of this Section 2.4) the Company, each director of the
Company, each officer of the Company who shall sign such registration
statement and each other person, if any, who controls the Company within
the meaning of the Securities Act, with respect to any statement in or
omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus included therein, or any amendment
or supplement thereto or any documents incorporated by reference in any of
the above, if such statement or omission was made solely in reliance upon
and in conformity with written information furnished to the Company by such
Participating Holder which written information specifically states that it
is for use in the preparation of such registration statement, or any
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer of
such securities by such Participating Holder; provided, however, that to
the extent permitted by law, a Participating Holder's liability hereunder
shall not exceed the aggregate net offering proceeds received by such
Participating Holder from the sale of such shares.
(c) If the indemnification provided for in this Section 2.4
is unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities, expenses or action in
respect thereof referred to herein, then the indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities, expenses or actions in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand, and the indemnified party on the other,
in connection with the statement or omissions which resulted in such
losses, claims, damages, liabilities, expenses or actions as well as any
other relevant equitable considerations, including the failure to give the
notice required hereunder. The relative fault of the indemnifying party and
the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Participating Holders agree that it would not
be just and equitable if contributions pursuant to this Section were
determined by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to
above. The amount paid or payable to an indemnified party as a result of
the losses, claims, damages, liabilities or action in respect thereof,
referred to above, shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
contribution provisions of this Section, in no event shall the amount
contributed by any Participating Holder of shares exceed the aggregate net
offering proceeds received by such Participating Holder from the sale of
such shares. No person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Securities Act) shall be entitled (i) to
contribution from any person who is not guilty of such fraudulent
misrepresentation, or (ii) to the benefits of the preceding sentence.
(d) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred
to in the preceding subdivisions of this Section 2.4, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement
of such action, provided that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 2.4. In case
any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection
with the defense thereof; provided, however, that if the indemnified party
or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party
or parties in conducting the defense of such action or proceeding or that
there may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying party
or parties, then counsel for the indemnified party or parties shall be
entitled to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interests of the indemnified party
or parties (and the indemnifying party or parties shall bear the reasonable
legal and other expenses incurred in connection therewith). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a full and
final release from all liability in respect to such claim or litigation.
(e) Indemnification similar to that specified in the
preceding subdivisions of this Section 2.4 (with appropriate modifications)
shall be given by the Company and each Participating Holder with respect to
any required registration or other qualification of such shares of Common
Stock under any federal or state law or regulation of governmental
authority other than the Securities Act.
3. GENERAL
3.1 Rule 144 and 144A. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or a
registration statement pursuant to the requirements of the Securities Act,
the Company will file the reports required to be filed by it under the
Securities Act and the Exchange Act (or, if the Company is not required to
file such reports, will, upon the request of the Holder, make publicly
available other information necessary to comply with Rule l44(c)and Rule
144A, as applicable), and will take such further action as the Holder may
reasonably request, all to the extent required from time to time to enable
the Holder to sell shares of Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of the Holder, the Company will deliver to the
Holder (i) a verified, written statement of the President or Chief
Financial Officer as to whether it has complied with such requirements;
(ii) if applicable, a copy of the most recent annual or quarterly report of
the Company; and (iii) such other reports and documents as the Holder may
reasonably request to avail itself of Rule 144, 144A or any other rule or
regulation of the Commission allowing the Holder to sell Common Stock
without registration.
3.2 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Holders
of seventy-five percent (75%) of the Common Stock (assuming exercise of all
Warrants) entitled to registration rights under this Agreement; provided,
however, that no such amendment or waiver may adversely and disparately
affect a Holder unless such Holder has consented to such amendment or
waiver.
3.3 Notices. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing
and shall be delivered, or mailed by first-class mail, postage prepaid,
addressed, if to the Holder in the manner set forth in the stock records of
the Company, or at such other address as the Holder shall have furnished to
the Company in writing, or, if to the Company, to the attention of its
Secretary, or at such other address, or to the attention of such other
officer, as the Company shall have furnished to the Holder.
3.4 Adjustments. This Agreement shall apply to any shares of
capital stock or Warrants of the Company or any other entity issued to the
Holder with respect to, upon exercise or conversion of, or in exchange for,
any shares of Common Stock or any Warrants held by the Holder, by way of a
stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other organization or
otherwise, except for shares of capital stock which have been distributed
by the Holder to the public pursuant to a registration statement or Rule
144 (or any successor provision) under the Securities Act. Nothing in this
Agreement shall entitle any Holder to register Warrants or to require the
Company to do so.
3.5 Miscellaneous. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, whether so expressed or not. This Agreement
embodies the entire agreement and understanding between the Holder and the
Company and supersedes all prior agreements and understandings relating to
the subject matter hereof. This Agreement shall terminate on the tenth
anniversary of the date hereof. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
California. The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof. This
Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed on the date first written above.
ASC INVESTMENT PARTNERS, L.P.
a Delaware limited Partnership
By Its General Partner, The Xxxxxx
+ Xxxxxx Group
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President
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CHASE MANHATTAN CAPITAL CORPORATION
a New York Corporation
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
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Title: Vice President
XXXXXXX VENTURE PARTNERS IV - DIRECT FUND L.P.,
a Delaware limited Partnership
By: /s/ Xxxxxx Xxxxxxxxx
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Title: Authorized Officer
LONDON PACIFIC LIFE & ANNUITY COMPANY,
a North Carolina joint stock life insurer
By: /s/ Xxxxx X. Xxxxxxx
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Title: Vice President and Treasurer
AEROSOL SERVICES HOLDING CORPORATION
a Delaware corporation
By: /s/ Xxxxxx X. Xxx
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Title: Chief Financial Officer
/s/ Xxxxx Xxxxxxxx
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