EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
June __, 2003, by XXXXXX HOLDING CO. (PA), INC., a Pennsylvania corporation (the
"Company"), for the benefit of the Holders (as defined below).
R E C I T A L S
WHEREAS, the Company is a party to a Recapitalization Agreement (the
"Recapitalization Agreement") dated as of May 7, 2003, pursuant to which the
Company will effect a comprehensive recapitalization of the Company. Such
recapitalization will consist of an amendment and restatement of the Company's
Articles of Incorporation, reclassification of the pre-recapitalization common
shares into redeemable and nonredeemable shares, issuance and sale of
newly-authorized convertible preferred shares to a new investor, the closing of
a new credit facility and the redemption of all redeemable common shares, all as
set forth in the Recapitalization Agreement and related documents (the
"Recapitalization").
WHEREAS, this Agreement is being entered into pursuant to the
Recapitalization Agreement, and is intended to amend, restate and supersede the
Master Registration Rights Agreement, dated as of November 24, 1997 (the "1997
Agreement"), made by the Company in favor of the Holders (as defined therein).
WHEREAS, as a part of the Recapitalization, the Company has agreed to
grant the registration rights set forth below to the shareholders of the Company
as of immediately following the closing of the Recapitalization.
A G R E E M E N T
In consideration of the Recapitalization Agreement and other agreements
referred to therein, as inducement for the closing of the Recapitalization
Agreement and such other agreements and for other good and valuable
consideration and intending to be legally bound hereby, the Company hereby
agrees as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person will be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"Articles of Incorporation" means the Second Amended and
Restated Articles of Incorporation of the Company in effect as of immediately
following the closing of the Recapitalization and as such Articles may
thereafter from time to time be amended in accordance with applicable law and
such Articles.
"Commission" means the U.S. Securities and Exchange Commission
and any successor federal agency having similar powers.
"Conversion Shares" means the shares of Class F Common Stock
or any shares of common stock of the Company into which Class F Common Stock has
been converted pursuant to the Articles of Incorporation, issuable upon
conversion of the Series A Preferred Stock from time to time.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
or any successor law, as amended from time to time, including the various rules
and regulations issued pursuant to that Act or any successor law.
"GEI Investors," at any date of determination, means all of
the following who are then Holders: Green Equity Investors III, L.P. and its
Affiliates.
"Holders," as of any date of determination, means the holders
of record of Registrable Securities other than any Persons to whom Registrable
Securities have been transferred who are not Permitted Assignees under Section
3(b) hereof.
"Initial Public Offering" shall have the meaning ascribed to
that term in the Articles of Incorporation.
"Investcorp Investors," at any date of determination, means
all of the following who are then Holders: Investcorp Bank B.S.C. and its
Affiliates and any other investor with whom Investcorp Bank B.S.C. or any
Affiliate thereof has an administrative relationship.
"Person" means an individual, limited or general partnership,
joint venture, limited liability company, corporation, estate, trust,
unincorporated organization or other entity or a government or any department or
agency thereof.
"Registrable Securities," as of any date of determination,
means (a) the shares of Class A, Class B, Class C, Class D and Class E Common
Stock of the Company outstanding immediately following the closing of the
Recapitalization, (b) any additional shares of capital stock of the Company
acquired prior to the Initial Public Offering by an Investcorp Investor, a GEI
Investor or by any Person who as of immediately following the closing of the
Recapitalization was a holder of record of Class A or Class B Common Stock of
the Company, (c) shares of capital stock of the Company purchased pursuant to
the Company's 1997 Stock Loan Plan (and any shares issuable upon exercise of
stock options granted in lieu thereof), (d) any Conversion Shares and (e) any
shares of capital stock of the Company issued on account of any of the foregoing
in connection with any stock split or stock dividend effected after the closing
of the Recapitalization and equity securities of any other issuer issued in
exchange for any of the foregoing in connection with any merger, consolidation,
reorganization or recapitalization effected after the closing of the
Recapitalization. Notwithstanding the foregoing, any particular Registrable
Securities shall cease to be such when (i) a registration statement with respect
to the sale of such securities shall have become effective under the Securities
Act and such securities have been disposed of in accordance with such
registration statement, (ii) they shall have ceased to be outstanding, or (iii)
with respect to a particular Holder who holds less than one half of one percent
(1/2%) of the outstanding capital stock of the Company, all such
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securities beneficially held by such Holder and its Affiliates may be sold in
compliance with Rule 144(k) under the Securities Act.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with its obligations under Section 2
hereof including, without limitation, the reasonable and documented fees and
expenses of counsel for the Sellers (which such counsel shall be selected by
Holders of a majority of the Registrable Securities included in the applicable
registration), all Commission and any stock exchange registration, listing,
filing or NASD fees (including, if applicable, the fees and expenses of any
"qualified independent underwriter," and its counsel, as may be required by the
rules and regulations of the NASD), all fees and expenses of complying with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications), all
word processing, duplicating and printing expenses, internal expenses of the
Company (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), all messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
or "comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities and the reasonable fees and expenses of any special
experts retained in connection with the requested registration, but excluding
underwriting discounts and commissions, in-house counsel of the Company and
outside counsel employed by the Company for purposes of the registration.
"Securities Act" means the Securities Act of 1933, or any
successor law, as amended from time to time, including the various rules and
regulations issued pursuant to that Act or any successor law.
"Seller" means each Holder whose Registrable Securities are
included in a registration under Section 2 of this Agreement.
"Series A Preferred Stock" means the Series A Convertible
Preferred Stock.
Certain other terms are defined elsewhere in this Agreement.
SECTION 2. REGISTRATION RIGHTS.
(a) Demand Rights; IPO Participation.
(i) At any time following 90 days after the occurrence of
the Initial Public Offering, Holders who are Investcorp Investors shall have the
right, exercisable for up to a total of two (2) effective registration
statements, and GEI Investors shall have the right, exercisable for up to a
total of two (2) effective registration statements, to require the Company to
register under the Securities Act such number of Registrable Securities as such
Holders shall designate for sale in a written request to the Company (the
"Demand Registration"); provided, however, that (x) the aggregate number of
Registrable Securities designated for sale by all Demanding Investors (as
defined below) in any Demand Registration may not represent less than 2% of the
total number of shares of capital stock of the Company then outstanding and (y)
the Company may defer a Demand Registration for a single period not to exceed 90
days, if the Board of
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Directors of the Company determines in the exercise of its reasonable judgment
that due to a pending or contemplated acquisition, disposition or public
offering it would be inadvisable to effect a Demand Registration at such time.
Each of the Investcorp Investors or GEI Investors exercising its right to a
Demand Registration under this subdivision (i) is referred to herein as a
"Demanding Investor."
(ii) The Company will not, without the written consent of
a majority in interest of the Investcorp Investors exercising their right to a
Demand Registration and a majority in interest of the GEI Investors exercising
their right to a Demand Registration, include in any Demand Registration
securities for sale for the account of any Person (including the Company) other
than such Demanding Investors, except that the Company may include securities
held by other Holders having the contractual right to be so included pursuant to
this Agreement (subject to the applicable provisions of this Agreement).
(iii) In addition to the Demand Registration rights granted
to the Demanding Investors in this Section 2(a), the Demanding Investors shall,
to the extent that any selling shareholders are to be included in the Initial
Public Offering as determined in good faith by the Board of Directors of the
Company after consultation with the managing underwriter of the Initial Public
Offering, have the right to include in such Initial Public Offering (and the
registration statement relating thereto) up to 80% of the total selling
shareholder shares to be so included, such shares to be included by the
Investcorp Investors and the GEI Investors pro rata based on the number of
Registrable Securities such Demanding Investors then propose to register
pursuant to such Demand Registration, and Holders who are not Demanding
Investors shall have the right to include in such Initial Public Offering (and
the registration statement relating thereto) up to 20% of the total selling
shareholders shares to be so included.
(b) Piggyback Registration Rights. If at any time following the
Initial Public Offering the Company proposes to file a registration statement
with respect to equity securities of the Company (including without limitation
pursuant to a Demand Registration, but excluding any registration statement on
Form S-8 or S-4 or comparable successor forms or a registration statement
relating to a dividend reinvestment plan), which is available for use for
Registrable Securities, under the Securities Act, then the Company shall give
written notice of such proposed filing to each Holder at least 30 days before
the anticipated filing date of such registration statement, and such notice
shall offer each Holder the opportunity to include in such registration
statement the Registrable Securities then owned by such Holder, as such Holder
may request in writing within 15 days after receipt of the Company's notice
(which request shall specify the number of Registrable Securities to be included
in such registration statement and the intended method of disposition).
(c) Registration Procedures. If and whenever the Company is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 2(a) or (b) hereof, the Company will as
expeditiously as practicable:
(i) (A) prepare and file with the Commission a
registration statement on the appropriate form which includes such Registrable
Securities, (B) promptly respond to all comments received with respect to such
registration statement and make and file all amendments thereto deemed necessary
by the Company's legal counsel, and (C) thereafter use its reasonable
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best efforts to cause such registration statement to become effective at the
earliest practicable date, but not later than one hundred twenty (120) days
after filing of such registration statement;
(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
accurate and effective and to comply with the provisions of the Act with respect
to the disposition of all Registrable Securities and other securities covered by
such registration statement until the earlier of such time as all of such
Registrable Securities have been disposed of by the Sellers thereof set forth in
such registration statement or for the longer of (A) nine months plus a period
equal to (x) any period during which the Sellers are prohibited from making
sales because of any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court plus (y) any holdback
period pursuant to Section 2(e) that occurs while the registration statement is
effective or (B) if the Company is eligible to conduct a continuous secondary
offering pursuant to Rule 415 under the Act, two years (the "Demand Period");
and will furnish to each such Seller at least 2 business days prior to the
filing thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any such amendment or supplement to
which any such Seller shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Act or of the rules or regulations thereunder; provided,
that a registration will not count as a Demand Registration unless it is
declared effective by the Commission and remains effective until the earlier of
such time as all of the Registrable Securities included in such registration
have been sold or disposed of or withdrawn from sale by the Sellers and the
expiration of the Demand Period or, if the registration remains effective for a
shorter period, the Sellers have sold at least eighty percent (80%) of each
class or series of their respective Registrable Securities included in such
Demand Registration. In addition, a request for registration shall not be deemed
to constitute a Demand Registration if: (i) the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such Demand Registration are not satisfied other than by reason of some act
or omission by the Demanding Investors; (ii) the Company voluntarily takes any
action that would result in the Sellers not being able to sell such Registrable
Securities covered thereby during the Demand Period; (iii) after it has become
effective, such Demand Registration becomes subject to any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court and such order, injunction or requirement is not promptly
withdrawn or lifted, and such Demand Registration has not otherwise remained
effective for the Demand Period (including effective periods both before and
after the order, injunction or requirement is made or imposed); or (iv) such
Demand Registration does not involve an underwritten offering and the Demanding
Investors determine not to proceed following any delay imposed hereunder by the
Company; provided, however, that, prior to such delay, Demanding Investors have
not sold more than eighty percent (80%) of each class or series of their
respective Registrable Securities included in such Demand Registration.
(iii) furnish to each Seller of such Registrable
Securities, upon their request, one copy of such registration statement and of
each such amendment thereof 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 Act, such documents, if any,
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incorporated by reference in such registration statement or prospectus, and such
other documents as such Seller may reasonably request;
(iv) use its reasonable best efforts to register or
qualify all Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as each Seller
shall reasonably request, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and do any and all
other acts and things that may be necessary or advisable to enable such Seller
to consummate the disposition in such jurisdictions of its Registrable
Securities 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 would not but for the
requirements of this subdivision (iv) be obligated to be 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) if such registration statement relates to an
underwritten offering, obtain and furnish to each Seller a signed counterpart,
addressed to such Seller, of the legal opinions and accountants' comfort letters
which are to be delivered to the underwriters;
(vi) promptly notify each Seller whose Registrable
Securities are covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon 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 the
Company shall promptly prepare a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, 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;
(vii) otherwise use its reasonable 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 Act and Rule 158
thereunder;
(viii) if the Common Stock of the Company is listed on a
national securities exchange or quoted on NASDAQ, use its best efforts to comply
with the requirements of such exchange or NASDAQ to include shares of
Registrable Securities covered by such registration statement for listing on
each such securities exchange or for quotation on NASDAQ.
The Company may require each Seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such Seller and the distribution of such securities as the Company may from time
to time reasonably request in
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writing and as shall be required by law or by the Commission in connection with
such registration.
(d) Underwriting Agreement. If requested by the underwriters for
any underwritten offering which includes pursuant to a registration covered by
Section 2(a) or (b) hereof, the Company will enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
representations and warranties by the Company and other terms and provisions not
inconsistent with this Section 2 as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnities to the effect and to the extent provided in Section 2(g)
hereof, and the Company will cooperate with such Sellers to the end that the
conditions precedent to the obligations of such Sellers under such underwriting
agreement shall not include conditions that are not customary in underwriting
agreements with respect to secondary distributions and shall be otherwise
satisfactory to such Sellers. Sellers on whose behalf 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 Sellers. Such Sellers shall not be
required by the Company to make any representations or warranties to or
agreements with the Company or the underwriters other than reasonable
representations, warranties or agreements regarding such Sellers, such Sellers'
Registrable Securities and such Sellers' intended method or methods of
disposition and any other representation required by law.
(e) Lock-Up. The rights granted to each Holder pursuant to this
Agreement are subject to the following:
(i) If and to the extent requested by the managing
underwriter in connection with the Initial Public Offering, such Holder shall
agree in writing that such Holder will not, without the consent of the managing
underwriter and except for shares included in the Initial Public Offering, if
any: (x) effect any public sale or distribution of any equity securities of the
Company, or any securities convertible into, or exercisable or exchangeable for,
any such equity securities for a period of 180 days following effectiveness of
the registration statement relating to such Offering or (y) effect any other
transfer of any of the foregoing during such 180 day period unless the
transferee agrees in writing to be bound by the terms and conditions of this
Section 2(e); and
(ii) If and to the extent requested by the managing
underwriter in connection with any other underwritten offering of equity
securities of the Company (whether for the account of the Company, selling
shareholders or both) which occurs within three (3) years following the
effectiveness of the Initial Public Offering, such Holder shall agree in writing
that such Holder will not, without the consent of the managing underwriter
(except for shares included in the Initial Public Offering, if any): (x) effect
any public sale or distribution of any equity securities of the Company, or any
securities convertible into, or exercisable or exchangeable for, any such equity
securities for a period of up to 90 days following effectiveness of the
registration statement relating to such Offering or (y) effect any other
transfer of any of the foregoing during such 90 day period unless the transferee
agrees in writing to be bound by the terms and conditions of this Section 2(e).
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Failure by a Holder to satisfy any of the foregoing conditions set forth in this
Section 2(e), after receipt of such a request from the Company, shall cause a
forfeiture of all registration rights of such Holder contained in this Agreement
with respect to the offering as to which such lock-up agreement was requested
and subsequent offerings.
(f) Registration Expenses. The Company agrees to pay, in
connection with each registration of Registrable Securities covered by Section
2(a) or 2(b) hereof, all Registration Expenses.
(g) Indemnification and Contribution.
(i) Indemnification by Company. The Company agrees to
indemnify, to the full extent permitted by law, each Seller, and any of their
officers, directors, employees and partners, and each Person who controls such
Seller within the meaning of Section 15 of the Securities Act and Section 20(a)
of the Exchange Act (each a "Shareholder Indemnified Party") against any and all
losses, claims, damages, liabilities or expenses, joint or several
(collectively, "Damages") to which they or any of them may become subject: (i)
under the Securities Act, the Exchange Act, or otherwise, insofar as such
Damages (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus, preliminary prospectus or any amendment to
any of the foregoing, or arise out of or are 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; or (ii) as a result of
or in connection with any violation of applicable federal, state or foreign laws
or regulations (collectively, "Laws") by the Company (other than as a result of
any act committed by or omission of a Shareholder Indemnified Party without the
Company's approval) or any of the Company's employees, officers or directors in
connection with any such registration; provided, however, that the Company will
not be liable if any such Damages arise out of or are based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of such Shareholder Indemnified Party in a signed
document stating that such information is specifically for use therein;
provided, further, that the foregoing indemnity is subject to the condition
that, insofar as it related to any untrue statement, alleged untrue statement,
omission or alleged omission made in a preliminary prospectus but eliminated or
remedied in the final prospectus (filed pursuant to Rule 424(b) under the
Securities Act), such indemnity shall not inure to the benefit of the Sellers
from whom the Person asserting any Damages purchased the Registrable Securities
which are the subject thereof, if copies of such final prospectus were delivered
to such Seller on a timely basis and such Seller did not deliver to such Person
the final prospectus with or prior to the written confirmation for the sale of
such Registrable Securities to such Person. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof to the same extent
as provided above with respect to the indemnification of Shareholder Indemnified
Parties and use its reasonable best efforts to obtain a reciprocal and mutual
indemnity from the underwriters. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Shareholder
Indemnified Party and shall survive any transfer by the same of the Registrable
Securities of the Sellers.
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(ii) Indemnification by Sellers. Each Seller will furnish
to the Company in writing such information and affidavits with respect to such
Seller as the Company reasonably requests for use in connection with any
registration statement or prospectus to be filed or used under this Agreement
and each of them, upon executing and delivering an underwriting agreement or
otherwise upon registration of the Registrable Securities pursuant to the terms
of this Agreement, shall agree to indemnify and hold harmless to the fullest
extent permitted by law, the Company, each person who signed the registration
statement, any underwriter, and each Person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
(each, a "Company Indemnified Party" and, collectively with Shareholder
Indemnified Parties, the "Indemnified Parties") against joint or several Damages
to which they or any of them may become subject: (i) under the Securities Act,
the Exchange Act or otherwise, insofar as such Damages (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any registration statement, prospectus,
preliminary prospectus or any amendment thereof or supplement thereto, or arise
out of or are 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, in each case to the extent, but only to the extent, that
any Damages arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with information furnished in writing by such Seller or on
such Seller's behalf to the Company in a signed document stating that such
information is specifically for use therein; or (ii) as a result of or in
connection with any violation of applicable Laws by such Seller or any general
or limited partners, employees, officers or directors of such Seller in
connection with any such registration; provided that, as to any underwriter or
any person controlling any underwriter, the foregoing indemnity does not apply
to any Damages based upon any untrue statement, alleged untrue statement,
omission or alleged omission made in a preliminary prospectus but eliminated or
remedied in the final prospectus (filed pursuant to Rule 424(b) under the
Securities Act) if a copy of the final prospectus was not sent to or given by or
on behalf of any underwriter to such person asserting such Damages at or prior
to the written confirmation of the sale of the Registrable Securities as
required by the Securities Act. This indemnity will be in addition to any
liability which a Seller may otherwise have, including any under this Agreement.
Notwithstanding the foregoing, the obligation to indemnify will be several and
not joint and in no event shall the liability of any Seller of Registrable
Securities hereunder be greater than the proceeds realized by such Seller of
Registrable Securities sold as contemplated herein.
(iii) Conduct of Indemnification Proceedings. Promptly
after receipt by an Indemnified Party under subsection (a) or (b) above of
notice of the commencement of any action, such Indemnified Party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing at the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which such party may
have under this Section 2(g) except to the extent that the indemnifying party
has been prejudiced in any material respect by such failure or from any
liability which such party may have otherwise). In case any such action is
brought against any Indemnified Party, and the Indemnified Party notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party, if any, so notified, with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the
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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 other than reasonable costs of
investigation. Notwithstanding the foregoing, the Indemnified Party shall have
the right to employ its counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action, (ii) the
indemnifying party shall not have employed counsel to take charge of the defense
of such action within a reasonable time after notice of the commencement of the
action, or (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 has been advised in good faith by counsel that
there is a conflict of interest on the part of counsel employed by the
indemnifying party to represent such Indemnified Party (in which case, 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 will 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 will not, in connection with any one such action or
proceeding or separate but substantially similar or related 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). Anything in this subsection to the contrary
notwithstanding: (A) an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent; and (B)
no indemnifying party shall, without the consent of the Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation.
(iv) Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in this Section 2(g) is
for any reason held to be unavailable or is insufficient to hold harmless an
Indemnified Party, then the indemnifying party and the Indemnified Party shall
contribute to the aggregate Damages of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting from Damages
suffered by the Indemnified Party any contribution received by the Indemnified
Party from Persons, other than the indemnifying party, who may also be liable
for contribution, including Persons who control the indemnifying party within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to which the indemnifying party, on the one hand, and the Indemnified
Party, on the other hand, may be subject, in such proportions as are appropriate
to reflect the relative fault of the indemnifying party, on the one hand, and
the Indemnified Party, on the other hand, in connection with the statements or
omissions which resulted in Damages, as well as any other relevant equitable
considerations.
The relative fault of the parties shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by a party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
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omission. The parties agree that it would not be just and equitable if
contribution pursuant to this Section 2(g)(iv) was determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the foregoing,
(i) any underwriting agreement entered into pursuant hereto may provide that in
no case shall any underwriter (except as may be provided in any agreement among
underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Registrable Securities purchased by such
underwriters, and (ii) no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 2(g)(iv), notify such party or parties from
which contribution may be sought of any obligation it or they may have under
this Section 2(g)(iv) or otherwise. No party shall be liable for contribution
with respect to any action or claim settled without its consent, which consent
may not be unreasonably withheld or delayed. Notwithstanding the foregoing, the
liability of a Seller, except for any liability resulting from the willful
misconduct or intentional action of such Seller, shall not exceed an amount
equal to the proceeds realized by such Seller of the Registrable Securities sold
as contemplated herein.
(h) Rule 144 Sales.
(i) Compliance. The Company covenants that, to the extent
that it is subject to the reporting requirements of the Exchange Act, it will
use its reasonable best efforts to file the reports required to be filed by it
under the Exchange Act so as to enable any Holder to sell Registrable Securities
without registration pursuant to Rule 144 under the Securities Act.
(ii) Cooperation with Holders. In connection with any
sale, transfer or other disposition by any Holder of any Registrable Securities
pursuant to Rule 144 under the Securities Act, the Company shall, to the extent
permissible under applicable law, cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend, and enable
certificates for such Registrable Securities to be issued at least two business
days prior to any sale of such Registrable Securities for such number of shares
and registered in such names as the Holder may reasonably request upon ten (10)
business days prior notice. The Company's obligation set forth in the previous
sentence shall be subject to the delivery, if reasonably requested by the
Company or its transfer agent, by counsel to such Holder (which counsel shall be
reasonably acceptable to the Company and its transfer agent), in form and
substance reasonably satisfactory to the Company and its transfer agent, of an
opinion that such Securities Act legend need not appear on such certificate.
(i) Selection of Managing Underwriter. In the event that a Demand
Registration is proposed to be effected through an underwritten offering, a
majority in interest of the Holders participating therein who are Demanding
Investors shall have the right to select the managing underwriter or
underwriters. With respect to any other registration statement covered by
Section 2(a) or (b) hereof, the Company shall select the managing underwriter or
underwriters subject to
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the consent of a majority in interest of the Sellers, which consent will not be
unreasonably withheld.
(j) Underwriter Cutbacks. Notwithstanding anything in this
Agreement to the contrary and in addition to any other limitations on rights to
participate in a registration statement hereunder:
(i) In the event that a registration statement covered by
Section 2(a) or (b) relates to an underwritten public offering, the number of
shares which may otherwise be includable therein for the account of members of
management of the Company (as such individuals are identified in good faith by
the Board of Directors of the Company) shall be limited in the aggregate to the
number which the managing underwriter advises the Board of Directors will not
adversely affect the marketing of the other shares included in such offering;
and
(ii) In the event that a registration statement covered by
Section 2(a) or (b) hereof relates to an underwritten offering (other than the
Initial Public Offering as to which Section 2(a)(iii) shall apply) and the
managing underwriter of such offering advises the Company in writing that the
total number of shares which are proposed to be included therein for the account
of selling shareholders is sufficiently large to affect adversely the marketing
of the shares in such offering, and as a result thereof the number of shares
proposed to be so included needs to be limited to a specified number of shares
(the "Maximum Number") then the following provisions shall apply to reduce the
number of such shares to the Maximum Number: first, shares as to which the
holder thereof does not have the contractual registration right to have such
shares so included pursuant to this Agreement shall be excluded from such
registration statement; second, to the extent necessary, additional shares held
by appropriate Holders shall be excluded so that (A) in the case of the first
underwritten offering completed subsequent to the Initial Public Offering, the
aggregate number of shares to be included in such registration and offering for
the account of Holders who are Investcorp Investors or GEI Investors shall
represent the lesser of (1) the shares requested to be included by the
Investcorp Investors and GEI Investors and (2) 80% of the Maximum Number, such
shares to be included by the Investcorp Investors and the GEI Investors pro rata
based on the number of Registrable Securities the Investcorp Investors and the
GEI Investors requested to be included in such registration, and shares of
Sellers who are not Investcorp Investors or GEI Investors shall be included in
such registration and offering with respect to the remaining percentage of the
Maximum Number to the extent requested by such Sellers to be included in such
underwritten offering, and (B) in the case of subsequent underwritten offerings,
the number of Registrable Securities to be included in such registration and
offering for the account of Holders shall be pro rata, up to the Maximum Number,
based on the number of Registrable Securities requested to be included in such
registration and offering by each such Holder desiring to participate therein;
provided, however, that at and after such time as the Investcorp Investors and
the GEI Investors, in the aggregate, have reduced their investment in the
Company such that such Investors hold, in the aggregate, less than 50% of the
equity securities of the Company held by them in the aggregate immediately after
the Recapitalization, the provisions of Section 2(j)(ii)(A) shall no longer
apply and all Holders shall be entitled to pro rata participation up to the
Maximum Number. Notwithstanding the foregoing, if any such market "cutback"
occurs with respect to a Demand Registration and all such Demanding Investors
that made the Demand are not able to sell at least eighty percent
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(80%) of each class of the Registrable Securities that such Demanding Investors
proposed to sell pursuant to such Demand Registration, then such request for
registration will not count against the number of Demands to which the Demanding
Investor that made the Demand are entitled pursuant to Section 2(a).
SECTION 3. MISCELLANEOUS.
(a) Notices. All notices, instructions and other communications in
connection with this Agreement shall be in writing and may be given by (i)
personal delivery, (ii) sent by certified mail, return receipt requested,
postage prepaid, or (iii) delivery by a nationally recognized overnight courier
as follows: if to the Company at, 00 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000, attention: Xxxx X. Xxxxxx, General Counsel, with a copy to Xxxxxx, Xxxx &
Xxxxxxxx LLP, 000 Xxxx Xxxxxx, XX, XX 00000, attention: E. Xxxxxxx Xxxxxxx; if
to a Holder at the address of such Holder on the shareholder records of the
Company. Notices shall be deemed to have been given (A) when actually delivered
personally, (B) on the fifth day after mailing by certified mail, and (C) the
next business day if sent by overnight courier (with proof of delivery).
(b) Assignability. This Agreement may not be assigned by any
Holder under any circumstances except to a Permitted Assignee. As used herein,
"Permitted Assignee" means a Person to whom record ownership of Registrable
Securities is transferred by a Holder without violation or breach of the
Articles of Incorporation or any agreement restricting such transfer provided
that the transferring Holder shall give at least 10 days advance notice of such
transfer to the Company and provided further that, after giving effect to such
transfer, such Permitted Transferee holds no less than 100 shares of Class A,
Class B, Class C, Class D or Class E Common Stock, Series A Preferred Stock or
Conversion Shares of the Company (as such amount may be adjusted to reflect any
stock split, stock dividend or similar transaction) and all the shares so held
are subject to the terms and provisions of this Agreement. This Agreement shall
be binding upon the Company and its successors and upon the successors and
Permitted Assignees of the Holders.
(c) Amendment and Waiver. The rights of the Holders and the
obligations the Company hereunder are subject to amendment upon, and any
non-compliance by the Company may be waived by, the written consent of the
Company and a majority in interest of the Holders of Registrable Securities who
are Investcorp Investors and a majority in interest of the Holders of
Registrable Securities who are GEI Investors; provided, that no such amendment
or waiver which materially and adversely affects Holders who are not Investcorp
Investors or GEI Investors shall be effective unless a majority in interest of
the Holders who are not Investcorp Investors or GEI Investors shall also give
their consent thereto. Any amendment satisfying the foregoing requirements, as
applicable, shall be binding upon all Holders.
(d) Governing Law. This Agreement shall be construed both as to
validity and performance in accordance with, and governed by, the laws of the
Commonwealth of Pennsylvania applicable to agreements to be performed in
Pennsylvania, without regard to principles of conflict of laws of such
jurisdiction or any other jurisdiction.
(e) Headings; Sections. All headings and captions in this
Agreement are for purposes of reference only and shall not be construed to limit
or affect the substance of this Agreement.
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All references to Section in this Agreement refer to Sections of this Agreement,
unless the context otherwise expressly provides.
(f) Entire Agreement. This Agreement contains, and is intended as,
a complete statement of all the terms of the arrangements provided for herein,
and supersedes any previous agreements and understandings with respect to such
arrangements.
(g) Severability. The invalidity, illegality or unenforceability
of one or more of the provisions of this Agreement in any jurisdiction shall not
affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction.
(h) Specific Performance. The Company acknowledges and agrees that
in the event of any breach of this Agreement by the Company, the Holders would
be irreparably harmed and could not be made whole by monetary damages.
Accordingly, the Company hereby agrees that in addition to any other remedy to
which the Holders may be entitled at law or in equity, the Holders shall be
entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having subject
matter jurisdiction for such action.
(i) Termination of 1997 Agreement. The 1997 Agreement is hereby
amended and restated in its entirety and shall no longer be of any force or
effect. This Agreement supersedes and replaces the 1997 Agreement in all
respects.
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Agreed to as of the date first above written.
XXXXXX HOLDING CO. (PA), INC., a
Pennsylvania corporation
By: _____________________________
Name:
Title:
