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EXHIBIT 10.21
PACKAGED ICE, INC.
REGISTRATION RIGHTS AGREEMENT
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THIS AGREEMENT is made as of September 20, 1995, by and among PACKAGED
ICE, INC., a Texas corporation (the "Company"), and the persons and entities
listed on the signature pages hereof (the "Stockholders").
WHEREAS, in accordance with that certain Stock Purchase Agreement
among the Company and certain Investors, the parties are desirous of entering
into this Registration Rights Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Holders agree as follows:
Section 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
(b) "Common Stock" shall mean the Common Stock, $.01 par
value, of the Company, and any stock into which such common shares may
hereafter be changed, and shall also include stock of the Company of any other
class which is not preferred as to dividends or as to distributions of assets
on liquidation, dissolution or winding up of the Company over any other class
of stock of the Company, and which is not subject to redemption.
(c) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar federal statute and the rules and
regulations thereunder, all as the same shall be in effect at the time.
(d) "Fully-Diluted Shares" shall mean all shares of
issued and outstanding Common Stock of the Company, plus all outstanding
subscriptions, warrants, options, rights, calls, or other commitments entitling
any person to purchase or acquire any shares of Common Stock, plus any
obligations or securities convertible into or exchangeable or exercisable for
shares of Common Stock, to the extent not previously converted, exercised or
exchanged.
(e) "Holder" shall mean any holder of outstanding
Registrable Securities or anyone who holds outstanding Registrable Securities
to whom the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement.
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(f) "Initiating Holder" shall mean only a Holder or
Holders of at least 51% of the Registrable Securities then outstanding.
(g) "Register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement, and compliance
with applicable state securities laws of such states in which Holders notify
the Company of their intention to offer Registrable Securities.
(h) "Registrable Securities" shall mean all of the
following to the extent the same have not been sold to the public (i) any and
all shares of Common Stock of the Company issued to or held by the
Stockholders, including without limitation the Common Stock of the Company sold
to the Stockholders on the date hereof and the Common Stock of the Company
issued or issuable upon conversion of shares of the Company's Series A
Convertible Preferred Stock; or (ii) stock issued in respect of stock referred
to in (i) above in any reorganization, merger, consolidation or sale of all or
substantially all of the Company's assets; or (iii) stock issued in respect of
the stock referred to in (i) or (ii) as a result of a stock split, stock
dividend, recapitalization or combination. Notwithstanding the foregoing,
Registrable Securities shall not include otherwise Registrable Securities (i)
following a sale by a person in a transaction in which his rights under this
Agreement are not properly assigned; or (ii) (A) following a sale to or through
a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) following a sale in a transaction exempt from
the registration and prospectus delivery requirements of the Securities Act
under Section 4(1) thereof so that all transfer restrictions, and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale or (C) if the registration rights associated with such securities have
been terminated pursuant to Section 16 of this Agreement.
(i) "Rule 144" shall mean Rule 144 under the Securities
Act or any successor or similar rule as may be enacted by the Commission from
time to time, but shall not include Rule 144A.
(j) "Rule 144A" shall mean Rule 144A under the Securities
Act or any successor or similar rule as may be enacted by the Commission from
time to time, but shall not include Rule 144.
(k) "Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
Section 2. Restrictions on Transferability. The Registrable
Securities (as defined herein) shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act. Each Holder will cause any proposed purchaser, assignee,
transferee, or pledgee of the Registrable Securities held by a Holder to agree
to take and hold such securities subject to the provisions and upon the
conditions specified in this Agreement.
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Section 3. Restrictive Legend. Each certificate representing
Registrable Securities shall be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state securities laws or otherwise):
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAW AND THEY MAY NOT BE OFFERED FOR SALE OR SOLD IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT THEREUNDER
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. COPIES OF THE
AGREEMENTS COVERING THE PURCHASE OF THESE SHARES AND RIGHTS TO
REGISTER THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS INSTRUMENT TO THE SECRETARY OF THE COMPANY AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
Each Holder consents to the Company making a notation on its records
and giving instructions to any transfer agent of the Registrable Securities in
order to implement the restrictions on transfer established in this Agreement.
Upon the written request of a Holder of the Registrable Securities,
the Company shall remove the foregoing legend from the certificates evidencing
such Registrable Securities and issue to such Holder new certificates therefor,
free of any transfer legend if, with such request, the Company shall have
received an opinion of counsel selected by the Holder, such opinion to be
reasonably satisfactory to the Company, to the effect that any transfers by
said Holder of such Registrable Securities may be made to the public without
compliance with either Section 5 of the Securities Act or Rule 144 thereunder
and applicable state securities laws. In no event will such legend be removed
if such opinion is based upon the "private offering" exemption of Section 4(2)
of the Securities Act.
Section 4. Restrictions. Notwithstanding the provisions of
Section 3, no registration statement or opinion of counsel shall be necessary
for a transfer by a Holder which is a partnership to a partner of such
partnership (or to a partner or shareholder of a partner of such partnership)
or a retired partner of such partnership who retires after the date hereof, or
to the estate of any such partner or retired partner or the transfer by gift,
will, or intestate succession of any partner to his spouse or siblings, lineal
descendants or ancestors of such partner or spouse, provided, that such
transferee agrees in writing to be subject to all of the terms hereof to the
same extent as if he were an original Holder hereunder.
Section 5. Requested Registration.
(a) If the Company shall receive from Initiating Holder a
written request that the Company effect any registration with respect to all or
at least one-half (1/2) of the issued and outstanding Registrable Securities
held by the Initiating Holder, the Company shall:
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i) promptly give written notice of the proposed
registration to all other Holders; and
ii) as soon as practicable use its best efforts
to register (including, without limitation, the execution of an
undertaking to file post-effective amendments and any other
governmental requirements) all Registrable Securities which the
Initiating Holder requests to be registered and all Registrable
Securities which any other Holder requests to be registered within
twenty (20) days after receipt of such written notice from the
Company; provided, that the Company shall not be obligated to file a
registration statement pursuant to this Section 5:
(A) prior to five (5) years or after
eight (8) years from the date hereof;
(B) in any particular state in which the
Company would be required to execute a general consent to
service of process in effecting such registration;
(C) within 120 days following the
effective date of any registered offering of the Company's
securities to the general public in which the Holders of
Registrable Securities shall have been able effectively to
register all Registrable Securities as to which registration
shall have been requested;
(D) in any registration having an
aggregate offering price (before deduction of underwriting
discounts and expenses of sale) of less than $4,500,000;
(E) after the Company has effected one
such registration pursuant to this Section 5 and such
registration has been declared or ordered effective;
(F) with the underwriter being other
than a nationally recognized investment banking firm.
Subject to the foregoing clauses (A) through (F), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders and shall use
reasonable best efforts to have such registration statement promptly declared
effective by the Commission whether or not all Registrable Securities requested
to be registered can be included; provided, however, that if the Company shall
furnish to such Holders a certificate signed by the President of the Company
stating that in the good-faith judgment of the Board of Directors it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed within such ninety-day (90-day) period and it is
therefore essential to defer the filing of such registration statement, the
Company shall have an additional period of not more than ninety (90) days after
the expiration of the initial ninety-day (90- day) period within which to file
such registration statement; provided, that during such time the Company may
not file a registration statement for securities to be issued and sold for its
own account or the account of any other of its shareholders.
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(b) If the Initiating Holder intends to distribute the
Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request. In such event or if an
underwriting is required by subsection 5(c), the Company shall include such
information in the written notice referred to in subsection 5(a)(i). In either
such event, if so requested in writing by the Company, the Initiating Holders
shall negotiate with an underwriter selected by the Company with regard to the
underwriting of such requested registration; provided, however, that if a
majority in interest of the Initiating Holders have not agreed with such
underwriter as to the terms and conditions of such underwriting within twenty
(20) days following commencement of such negotiations, a majority in interest
of the Initiating Holders may select an underwriter of their choice. The right
of any Holder to registration pursuant to Section 5 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. The Company shall (together with all Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other
provision of this Section 5, if the managing underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, the Company shall so advise all Holders, and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities requested to be registered by such Holders; provided, however, that
securities to be included in such registration statement as a result of
piggyback registration rights as well as any securities to be offered by the
Company, its officers and employees shall be excluded from the registration
statement prior to the exclusion of any Registrable Securities requested to be
registered by the Holders. If any Holder disapproves of the terms of the
underwriting, he may elect to withdraw therefrom by written notice to the
Company, the managing underwriter and the Initiating Holders. If, by the
withdrawal of such Registrable Securities, a greater number of Registrable
Securities held by other Holders may be included in such registration (up to
the limit imposed by the underwriters) the Company shall offer to all Holders
who have included Registrable Securities in the registration the right to
include additional Registrable Securities in proportion to the respective
amounts of Registrable Securities held by such Holders used in determining the
limitation as set forth above. Any Registrable Securities which are excluded
from the underwriting by reason of the underwriter's marketing limitation or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) If the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act as a result of the
registration of shares of its Common Stock under the Exchange Act, any
registration pursuant to this Section 5 must be firmly underwritten if the
registration exceeds two percent (2%) of the Company's outstanding fully
diluted shares.
(d) If, at the time any written request for registration
is received by the Company pursuant to this Section 5, the Company has
determined to proceed with the actual preparation and filing of a registration
statement under the Securities Act in connection with the proposed offer and
sale for cash of any of its securities by it or any of its securityholders, or
in the event that Section 7 hereof is applicable, then such written request
shall be deemed to have been given pursuant to
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Section 6 hereof or 7 hereof, as the case may be, rather than this Section 5,
and the rights of the Holders covered by such written request shall be governed
by such Section 6 or 7.
Section 6. Piggyback Registration.
(a) If at any time or from time to time, the Company
shall determine to register any of its securities, for its own account or the
account of any of its shareholders, other than a registration relating solely
to employee benefit plans, or a registration relating solely to a transaction
under Rule 145 of the Securities Act, a transaction relating solely to the sale
of debt or convertible debt instruments or a registration on any form (other
than Form X-0, X-0 or S-3, or their successor forms) which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the Company
will:
i) give to each Holder written notice thereof as
soon as practicable prior to filing the registration statement; and
ii) include in such registration and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within ten (10) days
after receipt of such written notice from the Company, by any Holder
or Holders, except as set forth in subsection (b) below.
(b) If the registration is for a registered public
offering involving an underwriting, the Company shall so advise the Holders as
a part of the written notice given pursuant to subsection 6(a)(i). In such
event, the right of any Holder to registration pursuant to Section 6 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other
holders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 6, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting, or may exclude
Registrable Securities entirely from such registration if the registration is
the first registered offering for the sale of the Company's securities to the
general public (provided that no shares held by officers and directors of the
Company, other than Registrable Securities that may be owned by officers and
directors, are included in the registration and underwriting). The Company
shall so advise all Holders and the other shareholders of the Company
distributing their securities through such underwriting pursuant to piggyback
registration rights similar to this Section 6, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among all Holders and other
holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders and other securities held by other
holders at the time of filing the registration statement. If any Holder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. If,
by the withdrawal of such Registrable Securities, a greater number of
Registrable Securities held by other
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Holders may be included in such registration (up to the limit imposed by the
underwriters), the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities. Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(c) In the event that the Company grants to any person
piggyback registration rights which are more favorable than the piggyback
registration rights granted to the Holders hereunder, the provisions of this
Section 6 shall automatically be amended to incorporate the more favorable
piggyback registration rights granted to such person.
Section 7. Form S-3. The Company shall use its best efforts to
qualify for registration on Form S-3 or its successor form. After the Company
has qualified for the use of Form S-3, the Initiating Holder shall have the
right at any time after five years after the date hereof to request a
registration on Form S-3 (such request shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such Holder), subject only to the following:
(a) The Company shall not be required to file a
registration statement pursuant to this Section 7 within ninety (90) days of
the effective date of any registration referred to in Sections 5 and 6 above.
(b) The Company shall not be required to file a
registration statement pursuant to this Section 7 unless the Holder requesting
registration proposes to dispose of shares of Registrable Securities having an
aggregate disposition price (before deduction of underwriting discounts and
expenses of sale) of at least $1,000,000.
(c) The Company shall not be required to file more than
one registration statement pursuant to this Section 7 in any 12-month period.
The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this
Section 7 and shall provide a reasonable opportunity for other Holders to
participate in the registration; provided, that if the registration is for an
underwritten offering, the following terms shall apply to all participants in
such offering: The right of any Holder to registration pursuant to Section 7
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other Holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of this Section 7, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting. The Company
shall so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and
underwriting shall be allocated among the Holders in proportion, as
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nearly as practicable, to the respective amounts of securities requested by
such Holders to be included in such registration. If any Holder disapproves of
the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. If, by the withdrawal of
such Registrable Securities, a greater number of Registrable Securities held by
other Holders may be included in such registration (up to the limit imposed by
the underwriters), the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the proportion held by such Holders. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration. Subject to the foregoing, the Company will use its best
efforts to effect promptly the registration of all shares of Registrable
Securities on Form S-3 to the extent requested by the Holder or Holders thereof
for purposes of disposition.
Section 8. Expenses of Registration. In addition to the fees
and expenses contemplated by Section 9 hereof, all expenses incurred in
connection with one registration pursuant to Section 5 hereof and all
registrations pursuant to Sections 6 and 7 hereof, including without limitation
all registration, federal and state filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and underwriters
(if the Company or the Holders are required to bear such fees and disbursements
of counsel for the underwriters) and expenses of any special audits of the
Company's financial statements incidental to or required by such registration,
shall be borne by the Company, except that the Company shall not be required to
pay underwriters' fees, discounts or commissions relating to Registrable
Securities or fees of a separate legal counsel of a Holder.
Section 9. Registration Procedures. In the case of each
registration effected by the Company pursuant to this Agreement, the Company
will keep each Holder participating therein advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense the Company will:
(a) prepare and file the appropriate registration
statement and keep such registration pursuant to Sections 5, 6 and 7
continuously effective for a period of nine (9) months, or, in each case, such
reasonable period necessary to permit the Holder or Holders to complete the
distribution described in the registration statement relating thereto,
whichever first occurs;
(b) promptly 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 comply with the provisions
of the Securities Act, and to keep such registration statement effective for
that period of time specified in Section 9(a) above;
(c) furnish such number of prospectuses and other
documents incident thereto as a Holder or the underwriters of such offering
from time to time may reasonably request;
(d) use reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;
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(e) subject to Section 5(a)(ii)(B), register or qualify
such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions as any Holder or underwriter reasonably requires,
and keep such registration or qualification effective during the period set
forth in Section 9(a) above;
(f) cause all Registrable Securities covered by such
registrations to be listed on each securities exchange, including NASDAQ, on
which similar securities issued by the Company are then listed or, if no such
listing exists, use reasonable best efforts to list all Registrable Securities
on one of the New York Stock Exchanges, the American Stock Exchange or NASDAQ;
and
(g) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
(h) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
and
(i) at the request of any Holder of Registrable
Securities, furnish on the date that Registrable Securities are delivered to
the underwriters for sale or otherwise made available for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters
and to such Holder, stating that such registration statement has become
effective under the Securities Act and that (A) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement, the
related prospectus and each amendment or supplement thereof comply as to form
in all material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial statements or
other financial data contained therein) and (C) to such other effects as
reasonably may be requested by counsel for the underwriters or by such Holder
or its counsel and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters and to such
seller, stating that they are independent public accountants within the meaning
of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five
business days prior to the date of such letter) with respect to such
registration as such underwriters reasonably may request; and
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(j) notify each Holder, at any time a prospectus covered
by such registration statement is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge 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 a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing and
prepare and file any amendment or supplement to such registration statement as
may be necessary to correct any such statement or omission; and
(l) take such other actions as shall be reasonably
requested by any Holder.
Section 10. Indemnification.
(a) In the event of a registration of any of the
Registrable Securities under the Securities Act pursuant to Sections 5, 6 or 7,
the Company will indemnify and hold harmless each Holder of such Registrable
Securities thereunder and its officers, directors and partners, each
underwriter of such Registrable Securities thereunder and each other person, if
any, who controls such Holder or underwriter within the meaning of the
Securities Act, against any losses, claims, expenses, damages or liabilities,
joint or several, to which such Holder or its officers, directors or partners,
underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, expenses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the 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 any violation by the Company of any rule or regulation
promulgated under the Securities Act or any state securities law applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, and will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such
underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, provided that the Company will not be liable in
any such case to the extent that any such claim, expense, loss, damage or
liability arises out of or is based on any untrue statement or alleged untrue
statement or omission or alleged omission in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by
or issuable to such Holder are included in the securities as to which such
registration is being effected, indemnify and hold harmless the Company, each
of its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company and each underwriter within the meaning of the Securities Act, and
each other such Holder, each of its officers, directors and partners and each
person controlling such Holder, against all claims, losses, expenses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration
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statement, prospectus, or amendment or supplement thereof or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company, such Holders, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, prospectus, or
amendment or supplement thereof in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder specifically for use therein; provided, however, the total amount for
which any Holder, its officers, directors and partners, and any person
controlling such Holder, shall be liable under this Section 10(b) shall not in
any event exceed the aggregate proceeds received by such Holder from the sale
of Registrable Securities sold by such Holder in such registration.
(c) Each party entitled to indemnification under this
Section 10 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claims as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, (provided that if there shall exist a conflict
of interest between the Indemnified Party and the Indemnifying Party, then
Indemnified Party's counsel shall be paid for by the Indemnifying Party) and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
hereunder, unless such failure resulted in actual detriment to the Indemnifying
Party. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification contained in the underwriting agreements entered
into among the selling Holders, the Company and the underwriters in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall be controlling
as to the Registrable Securities included in the public offering; provided,
however, that if, as a result of this Section 10(d), any Holder, its officers,
directors, and partners and any person controlling such Holder is held liable
for an amount which exceeds the aggregate proceeds received by such Holder from
the sale of Registrable Securities included in a registration, as provided in
Section 10(b) above, pursuant to such underwriting agreement (the "Excess
Liability"), the Company shall reimburse any such Holder for such Excess
Liability.
(e) If the indemnification provided for in this Section
10 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying
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such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, claim,
damage or expense in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified party on
the other hand in connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relevant fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the foregoing, the amount any
Holder shall be obligated to contribute pursuant to this Section 10(e) shall be
limited to an amount equal to the proceeds to such Holder of the Registrable
Securities sold pursuant to the registration statement which gives rise to such
obligation to contribute (less the aggregate amount of any damages which the
Holder has otherwise been required to pay in respect of such loss, claim,
damage, liability or action or any substantially similar loss, claim, damage,
liability or action arising from the sale of such Registrable Securities).
(f) The indemnification provided by this Section 10 shall
be a continuing right to indemnification and shall survive the registration and
sale of any securities by any Person entitled to indemnification hereunder and
the expiration or termination of this Agreement.
Section 11. Lockup Agreement. In consideration for the Company
agreeing to its obligations under this Agreement, each Holder agrees in
connection with any registration of the Company's securities (whether or not
such Holder is participating in such registration) upon the request of the
Company and the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such
period of time (not to exceed one hundred twenty (120) days) from the effective
date of such registration as the Company and the underwriters may specify, so
long as all Holders or stockholders holding more than one percent (1%) of the
outstanding Common Stock and all officers and directors of the Company are
bound by a comparable obligation provided, however, that nothing herein shall
prevent any Holder that is a partnership or corporation from making a
distribution of Registrable Securities to the partners or shareholders thereof
that is otherwise in compliance with applicable securities laws, so long as
such distributees agree to be so bound.
Section 12. Information by Holder. The Holder or Holders of
Registrable Securities included in any registration shall promptly furnish to
the Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request in
writing and as shall be required in connection with any registration referred
to herein.
Section 13. Rule 144 and 144A Reporting. With a view to making
available to Holders of Registrable Securities the benefits of certain rules
and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees at all
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times after ninety (90) days after the effective date of the first registration
filed by the Company for an offering of its securities to the general public
to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 and Rule 144A;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Exchange Act.
For purposes of facilitating sales pursuant to Rule 144A, so long as
the Company is not subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, each Holder and any prospective purchaser of such Holder's
securities shall have the right to obtain from the Company, upon request of the
Holder prior to the time of sale, a brief statement of the nature of the
business of the Company and the products and services it offers; and the
Company's most recent balance sheet and profit and loss and retained earnings
statements, and similar financial statements for the two preceding fiscal years
(the financial statements should be audited to the extent reasonably
available).
Section 14. Transfer of Registration Rights. The rights to cause
the Company to register Registrable Securities of a Holder and keep information
available granted to a Holder by the Company under Sections 5, 6 and 7 may be
assigned by a Holder to any partner or shareholder of such Holder, to any other
Holder, or to a transferee or assignee who receives at least the lesser of such
Holder's entire holding of Registrable Securities or 100,000 shares of
Registrable Securities (as adjusted for stock splits and the like; it being
understood that for purposes of this Section the Company's Series A Preferred
Stock shall constitute Registrable Securities on an as-converted basis);
provided, that the Company is given written notice by the Holder at the time of
or within a reasonable time after said transfer, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned.
Section 15. Limitations on Subsequent Registration Rights. From
and after the date these registration rights are granted, the Company shall
not, without the prior written consent of the Holders of not less than fifty
percent (50%) of the Registrable Securities then held by Holders, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder to include such
securities in any registration filed under Sections 5, 6 or 7 hereof other than
rights identical or subordinate to the rights of any Holder hereunder.
Section 16. Termination of Rights.
(a) The rights of any particular Holder to cause the
Company to register securities under Sections 5, 6 and 7 shall terminate with
respect to such Holder at such time, following a bona fide, firmly underwritten
public offering of shares of the Company's Common Stock registered under the
Securities Act (provided that the aggregate gross offering price equals or
exceeds $7,500,000), as such Holder is able to dispose of all of his
Registrable Securities in one three-month period
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pursuant to the provisions of Rule 144, provided that such Holder holds not
more than one percent (1%) of the outstanding voting stock of the Company.
(b) Notwithstanding the provisions of paragraph (a) of
this section 16, the rights of any particular Holder to cause the Company to
register securities under Section 5 shall terminate eight (8) years after the
date of this Agreement.
Section 17. Put Option. In the event that a majority in
interest of the Holders have not effected a registration of Registrable
Securities under Section 5 of this Agreement by the time their registration
rights hereunder have terminated pursuant to Section 16(b), each of the Holders
shall have a "put" option to sell to the Company all or part of their
Registrable Securities for the Fair Market Value thereof (as defined below).
This option must be exercised by written notice to the Company within two (2)
years after the eight year anniversary of this Agreement. This option shall be
contingent upon the Company's ability to finance the purchase of such
Registrable Securities with senior bank indebtedness on terms and conditions
which are reasonable to the Company as determined by the Board of Directors in
its discretion; provided that the Company will be required to use its best
efforts to obtain such financing. If the Company is a reporting company under
the Exchange Act and the Common Stock is publicly traded, "Fair Market Value"
shall be defined as the average of the daily closing prices per share of Common
Stock for thirty (30) consecutive trading days ending no more than one (1)
business day before the date that the Company received the option notice (as
adjusted for any stock dividend, split, combination or reclassification that
took effect during such 30 consecutive trading day period). The closing price
for each day shall be the last reported sale price regular way or, in case no
such reported sale takes place on such day, the average of the last closing bid
and asked prices regular way, in either case as reported by NASDAQ or any
comparable system or, if the Common Stock is not listed on NASDAQ or any
comparable system, the average of the closing bid and asked prices as furnished
by two members of the National Association of Securities Dealers, Inc. selected
from time to time by the Seller for that purpose. If the Common Stock is not
publicly traded, Fair Market Value shall be determined by agreement among the
Holders and the Company, or if the parties are unable to agree within thirty
days after the date of the option notice, by a nationally recognized investment
banking, accounting or appraisal firm selected by the Company and a majority in
interest of the Holders. This Section 17 shall be of no force or effect (i)
upon a termination of registration rights as provided in Section 16 (a) of this
Agreement, (ii) in the event that the Holders shall have effected a
registration of at least 75% of the Registrable Securities under Sections 5, 6
or 7 of this Agreement, or (iii) in the event of a firmly underwritten public
offering of Common Stock (provided that the aggregate gross offering price
equals or exceeds $7,500,000.)
Section 18. Representations and Warranties of the Company. The
Company represents and warrants to the Holders as follows:
(a) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, the Articles of Incorporation or Bylaws of the
Company or any provision of any indenture, agreement or other instrument to
which it or any or its properties or assets is bound, conflict with, result in
a breach of or constitute (with due notice or
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lapse of time or both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.
(b) This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting enforcement of creditors'
rights generally and (ii) the availability of equitable remedies as such
remedies may be limited by equitable principles of general applicability
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
Section 19. Miscellaneous.
(a) Amendments. This Agreement may be amended only by a
writing signed by the Company and by the Holders of more than fifty percent
(50%) of the Registrable Securities, as constituted from time to time. The
Holders hereby consent to future amendments to this Agreement that permit
future investors, other than employees, officers or directors of the Company,
to be made parties hereto and to become Holders of Registrable Securities;
provided, however, that no such future amendment may materially impair the
rights of the Holders hereunder without obtaining the requisite consent of the
Holders, as set forth above. For purposes of this Section, Registrable
Securities held by the Company or beneficially owned by any officer or employee
of the Company shall be disregarded and deemed not to be outstanding.
(b) Counterparts. This Agreement may be executed in any
number of counterparts, all of which shall constitute a single instrument.
(c) Notices, Etc. All notices and other communications
required or permitted hereunder shall be in writing and may be sent initially
by facsimile transmission and shall be mailed by registered or certified mail,
postage prepaid, or otherwise delivered by hand or by messenger, addressed (a)
if to a Holder, at such Holder's address set forth on the books of the Company,
or at such other address as such Holder shall have furnished to the Company in
writing, or (b) if to any other holder of any Registrable Securities, at such
address as such holder shall have furnished the Company in writing, or, until
any such holder so furnishes an address to the Company, then to and at the
address of the last holder of such securities who has so furnished an address
to the Company, or (c) if to the Company, to the Company's current address at
0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, or at such other address as
the Company shall have furnished to the Holders. Each such notice or other
communication shall for all purposes of this Agreement be treated as effective
or having been given when delivered if delivered personally, or, if sent by
first class, postage prepaid mail, at the earlier of its receipt or seventy-two
(72) hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.
(d) Nonpublic Information. Any other provisions of this
agreement to the contrary notwithstanding, the Company's obligation to file a
registration statement, or cause such
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registration statement to become and remain effective, shall be suspended for a
period not to exceed 30 days (and for periods not exceeding, in the aggregate,
60 days in any 24-month period) if there exists at the time material non-public
information relating to the Company which, in the reasonable opinion of the
Company, should not be disclosed.
(e) Severability. If any provision of this Agreement
shall be held to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any
such illegal, invalid or unenforceable provision were not contained herein.
(f) Dilution. If, and as often as, there is any change
in the Common Stock or the Convertible Preferred Stock by way of a stock split,
stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Convertible Preferred Stock as so changed.
(g) Governing Law. This Agreement shall be governed by
and construed under the laws of the State of Texas without regard to principles
of conflict of law.
(SIGNATURE PAGE FOLLOWS)
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COMPANY: PACKAGED ICE, INC.
By:
---------------------------------
XXXXX X. XXXXXX, PRESIDENT
STOCKHOLDERS: THE FOOD FUND II LIMITED PARTNERSHIP
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
NORWEST EQUITY PARTNERS V, A
MINNESOTA LIMITED PARTNERSHIP
By: ITASCA PARTNERS V, L.L.P.,
ITS GENERAL PARTNER
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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