Exhibit 10.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as
of November 10, 1994, by and between Chase Brass Industries, Inc., a Delaware
corporation (the "Company"), Citicorp Venture Capital Ltd. ("CVC"), and Xxxxxx
X. XXxxxx ("Xxxxxx") (collectively, the "Stockholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has agreed to grant certain registration rights to
the Stockholders with respect to the 1,504,752 shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), currently held by the
Stockholders and the 4,100,079 shares of Common Stock issuable pursuant to
4,100,079 shares of the Company's nonvoting common stock, par value $.01 per
share (the "Nonvoting Common Stock"), currently held by CVC.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
"COMMISSION" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"DEMAND REGISTRATION" means the registration of a Registrable Security
pursuant to the terms and provisions of Section 2(a) hereunder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"HOLDER" means CVC, Xxxxxx, and, subject to Section 10(f), any assignee
or transferee of a Registrable Security initially held by CVC or Xxxxxx, which
assignee or transferee expressly is granted rights as a Holder under this
Agreement by CVC and/or Xxxxxx at the time of such transfer.
"INDEMNIFIED PARTY" means a party who is to be indemnified pursuant to
Section 7 hereof.
"INDEMNIFYING PARTY" means a party who shall indemnify an Indemnified Party
pursuant to Section 7 hereunder.
"INSPECTORS" has the meaning set forth in Section 5(h) hereof.
"PIGGY-BACK REGISTRATION" means the registration of a Registrable Security
pursuant to the terms and provisions of Section 3 hereunder.
"PRO RATA BASIS" means a pro rata allocation based on the number of shares
of Common Stock requested to be included in a registered offering pursuant to
this Agreement.
"RECORDS" has the meaning set forth in Section 5(h) hereof.
"REGISTRABLE SECURITIES" means the shares of Common Stock currently held by
CVC and Xxxxxx and the shares of Common Stock issuable pursuant to the shares of
Nonvoting Common Stock held by CVC, and any and all securities of the Company
issued or issuable with respect to such shares by way of a dividend,
reclassification, stock split, or other distribution or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. Any Registrable Security will cease to be a
Registrable Security when (i) a registration statement covering such Registrable
Security has been declared effective by the Commission and the Registrable
Security has been disposed of pursuant to such effective registration statement,
(ii) the Registrable Security is sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met or (iii) the Registrable Security has been
otherwise transferred, the Company has delivered a new certificate or other
evidence of ownership for it not bearing a legend restricting further transfer,
and it may be resold without subsequent registration under the Securities Act.
"REGISTRATION EXPENSES" means those expenses associated with any
registration statement filed hereunder, as described in Section 6.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"SHELF REGISTRATION" means the registration of a Registrable Security
pursuant to the terms and provisions of Section 2(c) hereunder.
"TERM" means that period of time as set forth in subsection 10(b).
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"UNDERWRITER" means a securities dealer which purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
2. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. At any time after 180 days after the
date hereof, CVC and/or Xxxxxx may make a written request ("DEMAND NOTICE") for
registration under the Securities Act (a "DEMAND REGISTRATION") of all or part
of their respective Registrable Securities. Each Demand Notice will specify the
number of shares of Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. Within ten days after
receipt of each Demand Notice, the Company will give written notice of the
Company's receipt of such Demand Notice to all other Holders of Registrable
Securities who have rights under this Agreement, and such Holders will be given
the opportunity to participate in such Demand Registration. Subject to Section
2(d) hereof, the Company will include in such Demand Registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within ten days after the delivery to the
applicable Holders of the Company's notice. Each such Holder's request also will
specify the number of Registrable Securities to be registered and the intended
method of disposition thereof; PROVIDED, HOWEVER, that the Majority Demanding
Holder (as hereinafter defined) shall determine the type of offering with
respect to Registrable Securities included in that Demand Registration. In
addition, Demand Registrations shall be on such appropriate registration form of
the Commission as the Company shall determine.
(b) LIMITATION ON DEMAND REGISTRATION. The Company shall not be
obligated to effect any more than two Demand Registrations on behalf of CVC or
one Demand Registration on behalf of Xxxxxx at any time during the Term when the
Company is not eligible to use a Form S-3 or Form S-2 registration statement
(or, in each case, any successor forms promulgated under the Securities Act) and
there shall be no limitation on the number of times that a Demand Registration
may be requested pursuant to this Section 2 at any time during the Term when the
Company is eligible to use a Form S-3 or Form S-2 registration statement (or, in
each case, any successor forms promulgated under the Securities Act).
Notwithstanding any provision of this Agreement to the contrary, the Company
shall not be obligated to honor any Demand Notice requesting a Demand
Registration, or otherwise cause a Demand Registration to become effective,
hereunder if:
(i) the Demand Notice is delivered to the Company during the
period beginning 90 days before the effective date of a Demand Registration
(other than a Shelf Registration) that is being effected pursuant to a
previously delivered Demand Notice and in which such requesting Holders were
entitled to participate with respect to all Registrable Securities requested to
be included therein and ending (A) if such Demand Registration is an
underwritten offering, 180 days after the closing date of any such offering and
(B) if such
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Demand Registration is not an underwritten offering, 90 days after the closing
date of any such offering; or
(ii) the Demand Notice is delivered to the Company during the
period commencing 90 days before the effective date of a registration statement
pursuant to which the Company is offering shares of any class of equity
securities of the Company in an underwritten offering and ending 120 days after
the closing date of any such offering.
Notwithstanding the provisions of Section 2(a), no Holder (including CVC
and Xxxxxx) may request a Shelf Registration unless the total number of
securities to be included in the Shelf Registration shall constitute at least
(i) in the case of a request by Xxxxxx, or any assignee of Xxxxxx, 2% of the
outstanding Common Stock or (ii) in the case of CVC, or any assignee of CVC, 5%
of the outstanding Common Stock, in each case after giving effect to the full
conversion of all shares of Nonvoting Common Stock.
(c) EFFECTIVE REGISTRATION AND EXPENSES. Upon receipt of a written request
for a Demand Registration, the Company will (i) take appropriate action, on a
reasonable, timely basis, to prepare and file a registration statement covering
the Shares requested to be included in such Demand Registration (subject to
Section 2(c) below) and (ii) use its best efforts to cause each Demand
Registration to become effective under the Securities Act and thereafter to keep
it effective under the Securities Act for a period of 120 days (subject to
extension pursuant to Section 5 hereof); PROVIDED, HOWEVER, that no Demand
Registration may become effective under the Securities Act until 180 days after
the date of this Agreement. A registration will not count as a Demand
Registration (i) unless a registration statement with respect thereto has become
effective (unless CVC and/or Xxxxxx withdraw the Registrable Securities, in
which case such demand will count as a Demand Registration unless CVC and/or
Xxxxxx agree to pay all Registration Expenses (as hereinafter defined)), (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to CVC or Xxxxxx
and has not thereafter become effective, or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of CVC and/or Xxxxxx. Except as set forth above, the Company will
pay all Registration Expenses in connection with any Demand Registration as set
forth in Section 6, whether or not it becomes effective.
If any Demand Registration is requested to be a "shelf" registration
pursuant to Rule 415 (or any successor thereto) under the Securities Act ("SHELF
REGISTRATION") by the Majority Demanding Holder, the Company shall keep the
Registration Statement filed in respect thereof effective for a period of up to
270 days from the date on which the SEC declares such Registration Statement
effective (subject to extension pursuant to Section 5 hereof) or such shorter
period that will terminate when all Registrable Securities covered by such
Registration Statement have been sold pursuant to such Registration Statement.
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(d) NO PIGGYBACK ON DEMAND REGISTRATIONS. Neither the Company nor any of
its respective securityholders (other than the Holders of Registrable Securities
in such capacity pursuant to Section 3 hereof) may include securities of the
Company in any Demand Registration without the prior written consent of the
Demanding Holder (as hereinafter defined) or, if more than one Demanding Holder,
the Majority Demanding Holder (as hereinafter defined), and the Company shall
not enter into any agreement providing any such right to any of its
securityholders.
(e) PRIORITY ON DEMAND REGISTRATIONS. If the Holder(s) requesting a
Demand Registration ("DEMANDING HOLDER(S)") so requests (or if more than one
Demand Holder, if the Demanding Holders owning a majority of the Registrable
Securities requested to be included in the Demand Regulation by the Demanding
Holders so requests (the "MAJORITY DEMANDING HOLDERS")), the offering of
Registrable Securities pursuant to a Demand Registration shall be in the form of
an underwritten offering. Notwithstanding the foregoing, if the managing
Underwriter or Underwriters of such offering notify the Company that, in good
faith, they are able to proceed with the proposed offering only with respect to
a smaller number of shares of Registrable Securities proposed to be offered by
the Demanding Holder, then the Company will include in such registration the
total number of securities recommended by such managing Underwriter or
Underwriters, and such amount shall be allocated (i) first, subject to any
written agreement among the Demanding Holders, to and among the Demanding
Holders on a Pro Rata Basis and (ii) second, to and among the other Holders
requesting to participate in the Demand Registration pursuant to Section 3
hereof on a Pro Rata Basis.
(f) SELECTION OF UNDERWRITERS. If a Demand Registration is in the form
of an underwritten offering, the Majority Demanding Holders shall select the
managing Underwriter or Underwriters to be used in connection with the offering;
PROVIDED, HOWEVER, that such Underwriter or Underwriters must be reasonably
satisfactory to the Company.
3. PIGGY-BACK REGISTRATION.
(a) REQUEST FOR REGISTRATION. At any time after the date hereof, if the
Company proposes to file a registration statement under the Securities Act
(other than a registration statement on Form S-4 or S-8 (or any successor form
that may be adopted by the Commission) or a registration statement filed in
connection with an exchange offer or offering of securities or debt solely to
the Company's existing security or debt holders) with respect to an offering of
any class of equity securities by the Company for its own account or for the
account of any of its security holders, then the Company shall give written
notice of such proposed filing to each Holder as soon as practicable (but in no
event less than 20 days before the anticipated filing date). Such notice shall
offer each Holder the opportunity to have all or any of the Registrable
Securities held by such Holder included in the registration statement proposed
to be filed or, at the Company's option, in a separate registration statement to
be filed concurrently with such registration statement (the "Piggy-back
Registration"). Within 10 days
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after receiving such notice, each Holder may make a written request to the
Company that any or all of the Holder's Registrable Securities be included in
the Piggy-back Registration, which notice shall specify the number of shares to
be so included. Subject to Section 3(b) hereof, the Company shall include in
the Piggy-back Registration (or in a separate registration statement filed
concurrently therewith) all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within ten days
after the receipt by each Holder of the Company's notice. The Company may in
its discretion withdraw any registration statement filed pursuant to this
Section 3(a) subsequent to its filing without liability to the Holders except
with respect to expenses. Any Holder shall be permitted to withdraw all or part
of the Registrable Securities from a Piggy-back Registration at any time prior
to the effective date of such Piggy-back Registration.
(b) PRIORITY ON PIGGY-BACK REGISTRATION. If any Piggy-Back
Registration is to be an underwritten offering, the Company shall use its best
efforts to cause the managing Underwriter or Underwriters to permit the shares
of Registrable Securities requested by the Holders of Registrable Securities
("SELLING PIGGY-BACK HOLDERS") to be included in the Piggy-back Registration (on
the same terms and conditions as similar securities of the Company included
therein to the extent appropriate). Notwithstanding the foregoing, if the
managing Underwriter or Underwriters of such offering notify the Company that,
in good faith, they are able to proceed with the proposed offering only with
respect to a smaller number of shares of Registrable Securities proposed to be
offered by the Selling Piggy-back Holders, then (i) if such Piggy-back
Registration is incident to a primary registration on behalf of the Company,
then the amount of securities to be included in the Piggy-back Registration for
any persons (other than the Company and the Selling Piggy-back Holders) shall
first be reduced, and thereafter the Registrable Securities to be offered for
the account of the Selling Piggy-Back Holders shall be reduced or limited,
subject to any written agreement among the Selling Piggy-back Holders, on a Pro
Rata Basis so that the total number of securities to be included in the offering
shall be the total number of securities recommended by such managing Underwriter
or Underwriters and (ii) if such Piggy-back Registration is incident to a
secondary registration on behalf of holders of securities of the Company
(including pursuant to Section 2 hereof), the Company shall include in such
registration statement (A) first, the number of securities of such person(s) on
whose behalf the registration is being made (allocated among such persons as
they may so determine, subject to Section 2(e), if applicable), (B) second, the
number of Registrable Securities requested to be included in such registration
pursuant to this Section 3 in excess of the securities such persons on whose
behalf the registration is being made propose to sell that, in the opinion of
such managing Underwriters, can be sold without materially and adversely
affecting such offering, allocated among the Selling Piggy back Holders, subject
to any written agreement among the Selling Piggy-back Holders on a Pro Rata
Basis, and (C) third, the number of securities requested to be included in such
registration by the Company or by other persons pursuant to similar piggy-back
registration rights (allocated among the Company and such persons as they may so
determine).
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4. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE SECURITIES.
Upon inclusion by the Company of any Holder's Registrable Securities in a
registration statement filed pursuant to Sections 2 or 3 hereof, such Holder
agrees not to effect any public sale or distribution of the issue being
registered or a similar security of the Company or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during the 14 days
prior to, and during the 120 day period beginning on, the effective date of such
registration statement (except as part of such registration), if and to the
extent requested by the Company in the case of a non-underwritten public
offering or if and to the extent requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering.
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees
(i) that it shall not effect any public or private sale or distribution of
securities of the nature of the Registrable Securities, or any securities
convertible into or exchangeable or exercisable for securities of the nature of
the Registrable Securities (except pursuant to a registration statement on Form
S-4 or S-8 or any successor form that may be adopted by the Commission), during
the 14 days prior to, and during the 120 day period beginning on, the effective
date of any Demand Registration statement other than a Shelf Registration and
(ii) that any agreement entered into after the date hereof pursuant to which the
Company agrees to issue any securities, the issuance of which is not registered
under the Securities Act, shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the periods described in clause (i) above, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act; PROVIDED, HOWEVER,
that the provisions of this subsection (b) shall not prevent the grant of
options or similar rights to employees of the Company pursuant to the Company's
1994 Long-Term Incentive Plan.
5. REGISTRATION PROCEDURES.
Subject to the other provisions and limitations contained in this
Agreement, whenever any Holder has requested that any Registrable Securities be
registered pursuant to Sections 2 or 3 hereof, the Company will use its best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request, the Company will as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement on
any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the
sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use its
best efforts to cause such filed registration statement to become
effective under the Securities Act; PROVIDED, HOWEVER, that, (i) at
least five days before
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filing a registration statement or prospectus or as promptly as
practicable prior to filing any amendments or supplements thereto, the
Company will furnish to one counsel selected by the Holder or Holders of
the Registrable Securities covered by such registration statement copies
of all such documents proposed to be filed, which documents will be
subject to the review of such counsel, and (ii) after the filing of the
registration statement, the Company will promptly notify each such
Holder and such counsel of comments received from, or any stop order
issued or threatened by, the Commission and take all reasonable actions
required to respond to such comments or, as the case may be, prevent the
entry of such stop order or to remove it if it has been entered;
(b) 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 for the applicable period required by the terms
hereof, which will terminate when all Registrable Securities covered by
such registration statement have been sold or, in the case of Piggy-back
Registrations pursuant to Section 3, for such time period as the Company
shall determine in its sole discretion (but not before the expiration of
the 90-day period referred to in subsection 4(3) of the Securities Act
and Rule 174 thereunder, if applicable) and comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in accordance
with the intended methods of disposition as set forth in such
registration statement;
(c) furnish to each Holder of Registrable Securities covered by
such registration statement, prior to filing the registration statement,
if requested, copies of such registration statement as proposed to be
filed, and thereafter furnish to each such Holder such number of copies
of such registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto and documents incorporated
or deemed to be incorporated therein by reference), the prospectus
included in such registration statement (including each preliminary
prospectus), and such other documents as each such Holder may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by each such Holder;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as each Holder of Registrable Securities covered by such
registration statement reasonably (in light of each such Holder's
intended plan of distribution) requests and do any and all other acts
and things which may be reasonably necessary to enable each such Holder
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by each such Holder and keep each such registration or
qualification (or exemption therefrom) effective during the period such
registration statement is effective; PROVIDED, HOWEVER, that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it
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would not otherwise be required to qualify but for this subsection, (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction;
(e) use its best to cause such Registrable Securities to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations
of the Company to enable each Holder of Registrable Securities covered
by the registration statement to consummate the disposition of such
Registrable Securities; PROVIDED, HOWEVER, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subsection, (ii) subject itself to taxation in any such jurisdiction,
or (iii) consent to general service of process in any such jurisdiction;
(f) at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Securities Act, (i)
notify each Holder of Registrable Securities covered by the registration
statement of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus, (ii) prepare and file such
supplement, amendment or any other required document so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii)
promptly make available to each such Holder any such supplement,
amendment or other document;
(g) enter into and perform customary agreements (including an
underwriting agreement in customary form with the managing Underwriter
or Underwriters, if any), use its best efforts to obtain any necessary
consents in connection with any proposed registration and sale of
Registrable Securities, and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such
Registrable Securities;
(h) make available for inspection by each Holder of Registrable
Securities covered by the registration statement, any Underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant, or other professional retained
by any such Holder or such Underwriter (collectively, the "Inspectors"),
all 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
Inspectors in connection with such registration statement. Records
which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) in the reasonable
9
judgment of counsel to the Company the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Holder agrees that information obtained by him as a
result of such inspections shall be deemed confidential and shall not be
used by him as the basis for any market transactions in the securities
of the Company unless and until such is made generally available to the
public. Each Holder further agrees that he will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, 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;
(i) if such sale is pursuant to an underwritten offering, use its
best efforts to obtain a comfort letter or comfort letters from the
Company's independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters as any
Holder of Registrable Securities covered by the registration statement
or the managing Underwriter or Underwriters may reasonably request;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three months
after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of section (11)a of the
Securities Act; and
(k) if requested by the managing Underwriter or Underwriters, if
any, or any Holder of Registrable Securities covered by the registration
supplement in connection with an underwritten offering pursuant to
Sections 2 or 3 hereof, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
Underwriter or Underwriters, if any, and/or any such Holder reasonable
requests to be included therein, as may be required by applicable laws
and (ii) make all required filings of such prospectus supplement or such
post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; PROVIDED, HOWEVER,
that the Company shall not be required to take any actions pursuant to
Section 5(k) that are not, in the reasonable opinion of counsel for the
Company, in compliance with applicable law; and
(l) use its reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement filed
in connection herewith, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
possible moment;
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(m) cooperate with each Holder of Registrable Securities covered by
the registration statement and the managing Underwriters, if any, to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates
or notes shall not bear any restrictive legends and shall be in a form
eligible for deposit with the transfer agent for the Common Stock; and
enable such Registrable Securities to be in such denominations and
registered in such names as the managing Underwriters, if any, or
holders may request at least two business days prior to any sale of
Registrable Securities;
(n) take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities.
Notwithstanding the provisions of this Section 5, the Company shall be
entitled to postpone, for a reasonable period of time, the filing or
effectiveness of any registration statement under Sections 2 or 3 if (A) the
Company determines, in the good faith exercise of its reasonable business
judgment, that such registration and offering could materially interfere with
bona fide financing, acquisition, or other material business plans of the
Company (including a proposed primary offering by the Company of its own
securities) or would require disclosure of non-public information, the premature
disclosure of which could materially adversely affect the business, properties,
operations or financial results of the Company; PROVIDED, HOWEVER, that the
Company shall not be required to disclose to the Holders requesting registration
any such transaction, plan or non-public information or (B) at any time prior to
the effectiveness of any Demand Registration or Piggy-back Registration the
Company determines that it is unable to comply with the provisions of Article 3
or Article 11 of Regulation S-X under the Securities Act, to the extent then
applicable to the Company. If the Company postpones the filing of a registration
statement pursuant hereto, it shall promptly notify in writing the Holders of
Registrable Securities requesting such registration when the events or
circumstances permitting such postponement have ended and at such time shall
proceed with the filing of the registration statement as requested. If the
Company shall postpone the filing of a registration statement pursuant hereto,
then the Holders of Registrable Securities demanding such registration shall
have the right to withdraw their request for registration by giving written
notice to the Company at any time within five days after the date the Company
notifies such Holders of Registrable Securities of its willingness to proceed
with the filing of the registration statement and, if such registration was to
be made pursuant to a Demand Registration, upon such withdrawal the withdrawn
demand will not count as a Demand Registration.
The Company may require each Holder to promptly furnish in writing to
the Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.
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Each Holder requesting registration of Registrable Securities pursuant
to Sections 2 or 3 of this Agreement shall cooperate with the Company and, if
applicable, the Underwriter or Underwriters in providing such information and
executing and delivering such documents as the Company or the Underwriter or
Underwriters reasonably shall request in connection with any such registration,
and the Company shall not be obligated to include in any such registration any
Registrable Securities of any Holder who does not comply with this paragraph.
Each Holder of Registrable Securities covered by a registration
statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection 5(f) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subsection 5(f) hereof, and, if so directed by the Company, such
Holder will deliver to the Company all copies, other than permanent file copies
then in such Holder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. If the Company
shall give such notice, the Company shall extend the period during which such
registration statement shall be maintained effective (including the period
referred to in subsection 5(b) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to subsection 5(f)
hereof to the date when the Company shall make available to such Holder a
prospectus supplemented or amended to conform with the requirements of
subsection 5(f) hereof.
6. REGISTRATION EXPENSES.
In connection with any registration statement required to be filed
hereunder, the Company shall pay the following registration expenses (the
"Registration Expenses"): (i) all registration and filing fees; (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities); (iii) printing expenses (including expenses of
printing certificates for Registrable Securities); (iv) internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties); (v) any fees and expenses
incurred in connection with the listing of the Registrable Securities on the
national securities exchange or automated quotation system on which the Common
Stock is listed; (vi) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to subsection 5(i) hereof); (vii) the
reasonable fees and expenses of any special experts or other persons retained by
the Company in connection with such registration; (viii) reasonable fees and
expenses of one counsel (who shall be reasonably acceptable to the Company) for
the Holders incurred in connection with any registration hereunder, and (ix)
messenger, delivery and telephone expenses related to any registration
contemplated hereunder. The Company shall not have any obligation to pay any
underwriting
12
fees, discounts, or commissions attributable to the sale of Registrable
Securities, or any out-of-pocket expenses of any Holder (or the agents who
manage his accounts), which amounts shall be the responsibility of the selling
Holder or Holders.
7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless each Holder of Registrable Securities and, if applicable, its
directors and officers and each person who controls such Holder within the
meaning of either Sections 15 of the Securities Act or Section 20 of the
Exchange Act, covered by a registration statement filed pursuant to this
Agreement from and against any and all losses, claims, damages, liabilities and
expenses (including reasonable legal and other costs of investigation and
defense) (collectively, "Losses") arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any such
registration statement or prospectus relating to the Registrable Securities or
in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or based upon 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, except insofar as such Losses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such Holder or on such
Holder's behalf expressly for use therein; PROVIDED, HOWEVER, that with respect
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary or final prospectus, the indemnity agreement contained in
this subsection shall not apply to extent that any such Losses result from the
fact that a current copy of the prospectus was not sent or given to the person
asserting any such Losses at or prior to the written confirmation of the sale of
the Registrable Securities concerned to such person if it is determined that it
was the responsibility of such Holder to provide such person with a current copy
of the prospectus and such current copy of the prospectus would have cured the
defect giving rise to such Losses. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors, and
each person who controls such Underwriters within the meaning of either section
15 of the Securities Act or section 20 of the Exchange Act on substantially the
same basis as the indemnification of Holders provided in this subsection 7(a).
(b) INDEMNIFICATION BY HOLDERS. Each Holder agrees to indemnify and
hold harmless the Company, its directors and officers, and each person, if any,
who controls the Company within the meaning of either section 15 of the
Securities Act or section 20 of the Exchange Act (other than the Holder),
covered by a registration statement filed pursuant to this Agreement from and
against any and all Losses arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any such registration
statement or prospectus relating to the Registrable Securities or in any
amendment or supplement thereto or in any preliminary prospectus, or arising
out of or based upon 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, except insofar as such Losses arise out of, or are
based upon,
13
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such Holder or on such
Holder's behalf, in such Holder's capacity as a Holder and not in his capacity
as a director or officer of the Company, if applicable, expressly for use
therein; PROVIDED, HOWEVER, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary or
final prospectus, the indemnity agreement contained in this subsection shall not
apply to the extent that any such Losses result from the fact that a current
copy of the prospectus was not sent or given to the person asserting any such
Losses at or prior to the written confirmation of the sale of the Common Stock
concerned to such person if it is determined that it was the responsibility of
the Company or any other person or entity (other than the Holder) to provide
such person with a current copy of the prospectus and such current copy of the
prospectus would have cured the defect giving rise to such Losses. Each Holder
also agrees to indemnify and hold harmless underwriters of the Registrable
Securities, their officers and directors, and each person who controls such
underwriters within the meaning of either section 15 of the Securities Act or
section 20 of the Exchange Act on substantially the same basis as the
indemnification of the Company provided in this subsection 7(b).
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
any person entitled to indemnification under subsections (a) or (b) above (an
"Indemnified Party") in respect of which Indemnity may be sought from any party
who has agreed to provide such indemnification (and "Indemnifying Party"), the
Indemnified Party shall promptly notify the Indemnifying Party in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all expenses. The Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the Indemnifying Party has agreed
to pay such fees and expenses, (ii) the Indemnifying Party shall have failed to
promptly assume the defense of such action or proceeding and to employ counsel
reasonably satisfactory to the Indemnified Party, (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that there is a conflict of interest on the part of
counsel employed by the Indemnifying Party to represent such Indemnified Party,
or (iv) the Indemnified Party's counsel shall have advised the Indemnified Party
that there may be defenses available to the Indemnified Party that are different
from or in addition to those available to the Indemnifying Party and that the
Indemnifying Party is not able to assert on behalf of or in the name of the
Indemnified Party (in which case of either (iii) or (iv), if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnified Party); it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related
14
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for all such Indemnified Parties, which firm shall be designated in
writing by such Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any such action or proceeding effected without its
written consent, which consent shall not be unreasonably withheld, but if
settled with its written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 7 is unavailable to the Indemnified Parties in respect of any Losses
(other than by reason of exceptions provided in subsection 7(a) or 7(b)), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
fault of the Company, on the one hand, and Holders (together with any other
selling stockholders that may be obligated thereon pursuant to similar
indemnification or contribution provisions as contained herein), on the other
hand, with respect to the statements or omissions which resulted in such Losses,
or action in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and
Holders (together with any other selling stockholders that may be obligated
thereon pursuant to similar indemnification or contribution provisions as
contained herein), on the other hand, from the offering of the securities
covered by such registration statement. The relative fault of the Company on the
one hand and of Holders (together with any other selling stockholders that may
be obligated thereon pursuant to similar indemnification or contribution
provisions as contained herein) on the other 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 such party, and such party's relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The relative benefits received by the Company on the one
hand and Holders (together with any other selling stockholders that may be
obligated thereon pursuant to similar indemnification or contribution provisions
as contained herein) on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to the
total proceeds (net of underwriting discounts and commissions but before
deducting expenses) received by the Holders (together with any other selling
stockholders that may be obligated thereon pursuant to similar indemnification
or contribution provisions as contained herein).
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this subsection 7(d) were determined by
pro rata allocation (even if the
15
Underwriters are treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to in the immediately preceding subsection. Notwithstanding the
provisions of this subsection 7(d), no Holder shall be required to contribute
any amount in excess of the amount by which the total price at which the
securities of such Holder were offered to the public exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of subsection 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(e) SURVIVAL. The indemnity and contribution agreements contained in
this Section 7 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement or any underwriting agreement, (ii) any
investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company, and (iii) the consummation of the sale or successive resale of
the Registrable Securities.
8. Participation in Underwritten Registrations.
--------------------------------------------
No Holder may participate in any underwritten registration hereunder
unless such Holder (i) agrees to sell his securities on the basis provided in
any underwriting arrangements approved by the persons or entities entitled
hereunder to approve such arrangements and (ii) completes and executes
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement.
9. Rule 144.
---------
The Company covenants that it will file any reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and
regulations thereunder, and it will take such further action that any Holder may
reasonably request to enable such Holder to sell Registrable Securities, from
time to time, 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 any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such information and requirements.
10. Miscellaneous.
--------------
(a) REMEDIES. In addition to being entitled to exercise all rights
provided herein and granted by law, including recovery of damages, each Holder
will be entitled to specific performance of his rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it
16
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) TERM. The term of this Agreement shall terminate on the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
first date on which there are no longer any Registrable Securities (the "Term").
(c) NO INCONSISTENT AGREEMENTS. The Company will not on or
after the date of this Agreement enter into any agreement with respect to its
securities which is inconsistent with the rights granted to Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
previously entered into any agreement with respect to its securities which
grants any existing registration rights to any other person or entity.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified, or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Holders.
(e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to Xxxxxx, at the most current address given
to the Company in accordance with the provisions of this subsection,
which address initially is:
Xxxxxx X. Xxxxxx
Xxxxx Brass Industries, Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
(ii) if to CVC, at the most current address given to
the Company and thereafter at such other address as may be designated
from time to time by notice given in accordance with the provisions of
this section, which address initially is:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
00xx Xxxxx, Xxxx 0
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. XxXxxxxxxx
Telecopier: (000) 000-0000
17
(iii) If to the Company, at its most current address and
thereafter at such other address as may be designated from time to time by
notice given in accordance with the provisions of this section, which
address initially is:
Chase Brass Industries, Inc.
Xxxxx Xxxxx 00
Xxxxxxxxxx, Xxxx, 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
(iv) if to any other Holder, at such address set forth on the
Addendum to this Agreement executed and delivered by such Holder pursuant
to Section 10(f) hereof or at such other address as may be designated from
time to time by notice given in accordance with the provisions of this
section.
(f) SUCCESSORS AND ASSIGNS. The Company shall not assign its rights
or obligations hereunder without the prior written consent of the Holders.
Xxxxxx and CVC may assign their respective rights and obligations hereunder to
persons to whom they transfer or otherwise assign Registrable Securities;
PROVIDED, HOWEVER, that the Registrable Securities assigned to any person by CVC
must represent five percent or more of the Company's outstanding Common Stock at
the time of any such transfer or assignment, and the Registrable Securities
assigned to any person by Xxxxxx must represent two percent or more of the
Company's outstanding Common Stock at the time of any such transfer or
assignment. In the event of any such assignment, such assignees shall be
entitled to the rights of the assignor only to the extent such rights expressly
are assigned to such assignor. Any assignment of rights under this Agreement in
violation of the foregoing shall be null and void. Subject to the foregoing,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Company and each Holder; PROVIDED, HOWEVER, that any assignee
or transferee of Registrable Securities that is deemed a Holder under this
Agreement shall be entitled to the rights and benefits afforded such person by
this Agreement only upon such person's execution and delivery of an addendum to
this Agreement, in form and substance acceptable to the Company, agreeing to be
bound by the duties and obligations of a Holder under this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts and it shall not be necessary for the Company and each
Holder to execute each of such counterparts, but when both have executed and
delivered one or more of such counterparts, the several parts, when taken
together, shall be deemed to constitute one and the same instrument, enforceable
against each in accordance with its terms. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart
executed by the party against whom enforcement of this Agreement is sought.
18
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
(j) SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable.
(k) ENTIRE AGREEMENT. This Agreement is intended by the Company and
the Holders as a final expression of their agreement and is intended to be a
complete and exclusive statement of their agreement and understanding in
respect of the subject matter contained herein. This agreement supersedes all
prior agreements and understandings between the Company and the Holders with
respect to such subject matter.
(l) THIRD PARTY BENEFICIARIES. Subject to the terms of subsection
10(f) hereof, this Agreement is intended for the benefit of the Company and the
Holders and their respective successors and assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person or entity.
(m) ATTORNEYS' FEES. In any proceeding brought to enforce any
provision of this Agreement, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CHASE BRASS INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx,
----------------------------------------
Xxxxxx X. Xxxxxx,
Chairman of the Board and Chief Officer
CITICORP VENTURE CAPITAL LTD.
By: /s/ Xxxxxx X. XxXxxxxxxx
----------------------------------------
Xxxxxx X. XxXxxxxxxx
Managing Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
20
