EXHIBIT 10.8
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
by and between
DIVERSIFIED FOOD GROUP, L.L.C.
and
XXXXXXXXX LLC
Dated as of October 23, 1997
TABLE OF CONTENTS
Section Page
1. DEFINITIONS............................................................. 1
2. REGISTRATION UNDER THE SECURITIES ACT................................... 6
2.1 DEMAND REGISTRATION................................................ 6
2.2 INCIDENTAL REGISTRATION............................................ 10
2.3 SHELF REGISTRATION................................................. 12
2.4 EXPENSES........................................................... 12
2.5 UNDERWRITTEN OFFERINGS............................................. 12
2.6 CONVERSIONS; EXERCISES............................................. 13
3. HOLDBACK--ARRANGEMENTS.................................................. 13
3.1 RESTRICTIONS ON SALE BY HOLDERS OF REGISTRABLE SECURITIES.......... 13
3.2 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS..................... 14
4. REGISTRATION PROCEDURES................................................. 14
4.1 OBLIGATIONS OF THE COMPANY......................................... 14
4.2 SELLER INFORMATION................................................. 19
4.3 NOTICE TO DISCONTINUE.............................................. 19
5. INDEMNIFICATION; CONTRIBUTION........................................... 20
5.1 INDEMNIFICATION BY THE COMPANY..................................... 20
5.2 INDEMNIFICATION BY HOLDERS......................................... 21
5.3 CONDUCT OF INDEMNTFICATION PROCEEDINGS............................. 21
5.4 CONTRIBUTION....................................................... 22
5.5 OTHER INDEMNIFICATION.............................................. 23
5.6 INDEMNIFICATION PAYMENTS........................................... 23
6. GENERAL................................................................. 23
6.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES....................... 23
6.2 REGISTRATION RIGHTS TO OTHERS...................................... 23
6.3 AVAILABILITY OF INFORMATION; RULE 144; RULE 144A; OTHER EXEMPTIONS. 24
6.4 AMENDMENTS AND WAIVERS............................................. 25
6.5 NOTICES............................................................ 25
6.6 SUCCESSORS AND ASSIGNS............................................. 26
6.7 COUNTERPARTS....................................................... 27
6.8 DESCRIPTIVE HEADINGS, ETC.......................................... 27
6.9 SEVERABILITY....................................................... 27
6.10 GOVERNING LAW...................................................... 27
6.11 REMEDIES; SPECIFIC PERFORMANCE..................................... 27
6.12 ENTIRE AGREEMENT................................................... 28
6.13 NOMINEES FOR BENEFICIAL OWNERS..................................... 28
6.14 CONSENT TO JURISDICTION; WAIVER OF JURY............................ 28
6.15 FURTHER ASSURANCES................................................. 29
6.16 NO INCONSISTENT AGREEMENTS......................................... 29
6.17 CONSTRUCTION....................................................... 29
REGISTRATION RIGHTS AGREEMENT (this or the "Agreement"), dated as of
October 23, 1997, by and between Diversified Food Group, L.L.C., a Delaware
limited liability company (the "Company"), and Xxxxxxxxx LLC, a New York limited
liability company (the "Initial Holder").
W I T N E S S E T H :
WHEREAS, simultaneously herewith, the Company, Classic Confectionery,
L.L.C., a Delaware limited liability company, Restauranic, Inc., an Illinois
corporation, Great American Ice Cream Company, LLC, a Delaware limited liability
company, and Xxxxx'x Kosher Food, L.L.C. a Delaware limited liability company
and the Initial Holder are entering into a Term Loan Agreement, dated the date
hereof (as amended or otherwise modified from time to time, the "Term Loan
Agreement"), pursuant to which the Initial Holder is making a term loan to the
Company subject to the terms of the Term Loan Agreement;
WHEREAS, pursuant to the terms of the Term Loan Agreement, the Initial
Holder is receiving warrants to purchase Interests as set forth in the Warrant
Agreement, dated the date hereof, from the Company to the Initial Holder; and
WHEREAS, in order to induce the Initial Holder to enter into the Term
Loan Agreement, the Company has agreed to provide certain registration rights on
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" shall mean (i) with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Company" shall have the meaning set forth in the preamble.
"Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement of
the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference (or deemed to be incorporated by reference)
therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Exempt Offerings" shall mean a sale, issuance or other conveyance by
the Company of Interests, or securities convertible into, exercisable for, or
exchangeable for, Interests (i) in connection with the acquisition by the
Company of the outstanding capital stock or assets of an entity or business,
(ii) in connection with the merger of the Company with or into another entity,
(iii) upon the exercise of the Warrants, or (iv) upon an initial public offering
by the Company.
"Term Loan Agreement" shall have the meaning set forth in the
preamble.
"Holders" shall mean the Initial Holder for so long as it owns any
Registrable Securities and such of its respective heirs, successors and
permitted assigns (including any permitted transferees of Registrable
Securities) who acquire or are otherwise the transferee of Registrable
Securities, directly or indirectly, from such Initial Holder (or any subsequent
Holder), for so long as such heirs, successors and permitted assigns own any
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a Holder whenever such Person holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities,
whether or not such purchase, conversion, exercise or exchange has actually been
effected and disregarding any legal restrictions upon the exercise of such
rights. Registrable Securities issuable upon exercise of an option or upon
conversion, exchange or exercise of another security shall be deemed outstanding
for the purposes of this Agreement.
"Holders' Counsel" shall mean one firm of counsel (per registration)
to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of a Demand Registration, by the
Initiating Holders holding a majority of the Registrable Securities for which
registration was requested in the Request, and (ii) in all other cases, by the
Majority Holders of the Registration.
"Incidental Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"Incidental Registration Notice" shall mean the notice delivered by
the Company pursuant to Section 2.2 (a).
"Incidental Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.2 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the
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Prospectus contained therein, all exhibits thereto and all material incorporated
by reference (or deemed to be incorporated by reference) therein.
"Initial Holder" shall mean the Person specified as such in the
preamble.
"Initial Public Offering" shall mean the first public offering of any
class of securities of the Company pursuant to a registration statement filed
with and declared effective by the SEC.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Inspectors" shall have the meaning set forth in Section 4.1(g).
"Interests" shall mean membership interests in the Company.
"Majority Holders" shall mean one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders of Registrable Securities who would
hold a majority of the Registrable Securities to be included in such
registration.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in each
case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" shall mean (i) the Warrants, (ii) any Warrant
Interests issued or issuable upon exercise of the Warrants, (iii) any Interests
otherwise or hereafter purchased or acquired by the Holders or any of their
Affiliates and (iv) any other securities of the Company (or any successor or
assign of the Company, whether by merger, consolidation, sale of assets or
otherwise) which may be issued or issuable with respect to, in exchange for, or
in substitution of, Registrable Securities referenced in
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clauses (ii) and (iii) above by reason of any dividend or stock split,
combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, (B) such securities are sold pursuant to Rule 144 (or
any similar provisions then in force) under the Securities Act or, if the
Company has completed an initial public offering of its Interests, when such
securities are eligible for sale pursuant to Rule 144 (or any similar provisions
then in force) under the Securities Act, (C) such securities have been otherwise
transferred, a new certificate or other evidence of ownership for them not
bearing the legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act, or (D) such securities shall have ceased
to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement by the Company and its
subsidiaries, including, without limitation (i) all SEC, stock exchange, NASD
and other registration, listing and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
and compliance with the rules of any stock exchange (including fees and
disbursements of counsel in connection with such compliance and the preparation
of a blue sky memorandum and legal investment survey), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing,
distributing, mailing and delivering any Registration Statement, any Prospectus,
any underwriting agreements, transmittal letters, securities sales agreements,
securities certificates and other documents relating to the performance of or
compliance with this Agreement, (iv) the fees and disbursements of counsel for
the Company, (v) the fees and disbursements of Holders' Counsel, (vi) the fees
and disbursements of all independent public accountants (including the expenses
of any audit and/or "cold comfort" letters) and the fees and expenses of other
Persons, including experts, retained by the Company, (vii) the expenses incurred
in connection with making road show presentations and holding meetings with
potential investors to facilitate the distribution and sale of Registrable
Securities which are customarily borne by the issuer, (viii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, (ix) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered, and (x) all internal expenses of the Company (including all
salaries and expenses of officers and employees performing legal or accounting
duties); provided, however, Registration Expenses shall not include discounts
and commissions payable to underwriters, selling brokers, dealer managers or
other similar Persons engaged in the distribution of any of the Registrable
Securities; and provided further, that in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include salaries of
Company personnel or general overhead expenses of the Company, auditing fees,
premiums or other expenses relating to liability insurance required by
underwriters of the Company or other expenses for the preparation of financial
statements or other data normally prepared by the Company in
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the ordinary course of its business or which the Company would have incurred in
any event; and provided further, that in the event the Company shall, in
accordance with Section 2.2 hereof, not register any securities with respect to
which it had given written notice of its intention to register to Holders,
notwithstanding anything to the contrary in the foregoing, all of the costs
incurred by the Holders in connection with such registration shall be deemed to
be Registration Expenses.
"Registration Statement" shall mean any registration statement of the
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any similar or
successor statute.
"Shelf Registration" shall have the meaning set forth in Section 2.1
(a).
"Underwriters" shall mean the underwriters, if any, of the offering
being registered under the Securities Act.
"Underwritten Offering" shall mean a sale of securities of the Company
to an Underwriter or Underwriters for reoffering to the public.
"Warrant Interests" shall mean the Interests or other equity
securities issued or issuable upon the exercise of the Warrants.
"Warrants" shall mean the warrants issued to the Initial Holder
pursuant to the Term Loan Agreement, together with any additional warrants
issued in accordance with the terms thereof.
"Withdrawn Demand Registration" shall have the meaning set forth in
Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 Demand Registration.
(a) Right to Demand Registration. Subject to Section 2.1(c), at any
time or from time to time the Majority Holders shall have the right to request
in writing
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that the Company register all or a part of such Holders' Registrable Securities
(a "Request") (which Request shall specify the amount of Registrable Securities
intended to be disposed of by such Holders and the intended method of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the Company shall give written notice of such requested registration to all
Holders of Registrable Securities. Subject to Section 2.1(b), the Company shall
include in a Demand Registration (i) the Registrable Securities intended to be
disposed of by the Initiating Holders and (ii) the Registrable Securities
intended to be disposed of by any other Holder which shall have made a written
request (which request shall specify the amount of Registrable Securities to be
registered and the intended method of disposition thereof) to the Company for
inclusion thereof in such registration within 20 days after the receipt of such
written notice from the Company. The Company shall, as expeditiously as possible
following a Request, use its best efforts to cause to be filed with the SEC a
Demand Registration Statement providing for the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by all such Holders, to the extent necessary to permit the
disposition of such Registrable Securities so to be registered in accordance
with the intended methods of disposition thereof specified in such Request or
further requests (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act (a "Shelf
Registration") if so requested and if the Company is then eligible to use such a
registration). The Company shall use its best efforts to have such Demand
Registration Statement declared effective by the SEC as soon as practicable
thereafter and to keep such Demand Registration Statement continuously effective
for the period specified in Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a "Withdrawn
Request") and a Demand Registration Statement may be withdrawn prior to the
effectiveness thereof by the Majority Holders of the Registration (a "Withdrawn
Demand Registration"), and such withdrawals shall be treated as a Demand
Registration which shall have been effected pursuant to this Section 2.1, unless
the Holders of Registrable Securities to be included in such Registration
Statement reimburse the Company for its reasonable out-of-pocket expenses
relating to the preparation and filing of such Demand Registration Statement (to
the extent actually incurred); provided, however, that if a Withdrawn Request or
Withdrawn Registration Statement is made (A) because of a material adverse
change in the business, financial condition or prospects of the Company, or
(B) because the sole or lead managing Underwriter advises that the amount of
Registrable Securities to be sold in such offering be reduced pursuant to
Section 2.1(b) by more than 50% of the Registrable Securities to be included in
such Registration Statement, then such withdrawal shall not be treated as a
Demand Registration effected pursuant to this Section 2.1 (and shall not be
counted toward the number of Demand Registrations), and the Company shall pay
all Registration Expenses in connection therewith. Any Holder requesting
inclusion in a Demand Registration may, at any time prior to the effective date
of the Demand Registration Statement (and for any reason),
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revoke such request by delivering written notice to the Company revoking such
requested inclusion.
The registration rights granted pursuant to the provisions of
this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereto.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering within
a price range acceptable to the Majority Holders of the Registration (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), the Company
shall include in such Demand Registration, to the extent of the number which the
Company is so advised may be included in such offering, (A) first, the
securities that the Company Proposes to register for its own account (but solely
to the extent that the proceeds thereof shall not be used to purchase Capital
Stock of the Company) and (B) second, the Registrable Securities requested to be
included in the Demand Registration by the Holders allocated pro rata in
proportion to the number of Registrable Securities requested to be included in
such Demand Registration by each of them; provided, however, that if the Holders
are unable to include in such Demand Registration at least 80% of the
Registrable Securities of the Holders initially proposed to be included in such
Demand Registration, such Underwritten Offering shall not constitute a Demand
Registration. In the event the Company shall not, by virtue of this Section
2.1(b), include in any Demand Registration all of the Registrable Securities of
any Holder requesting to be included in such Demand Registration, such Holder
may, upon written notice to the Company given within five days of the time such
Holder first is notified of such matter, reduce the amount of Registrable
Securities it desires to have included in such Demand Registration, whereupon
only the Registrable Securities, if any, it desires to have included will be so
included and the Holders not so reducing shall be entitled to a corresponding
increase in the amount of Registrable Securities to be included in such Demand
Registration.
(c) Limitations on Registrations. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: (i) in no event shall the
Company be required to effect a Demand Registration until after the earlier of
(A) twelve months after the Company consummates an Initial Public Offering, and
(B) the fourth anniversary of this Agreement, (ii) that in no event shall the
Company be required to pay Registration Expenses of more than two Demand
Registrations per year, as long as the second Demand Registration is at least
twelve months after the first Demand Registration; provided, however, that such
number shall be increased to the extent the Company (x) does not include in what
would
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otherwise be the final registration for which the Company is required to pay
Registration Expenses the number of Registrable Securities requested to be
registered by the Holders by reason of Section 2.1(b) or (y) terminates a Shelf
Registration pursuant to Section 2.3 prior to the time that all Registrable
Securities covered by such Shelf Registration have been sold; provided, further,
that after either (a) the consummation of the first Demand Registration, or (b)
the first anniversary of the date on which the Company consummates an Initial
Public Offering and in either case if the Company is a registrant entitled to
use Form S-3 or any successor form thereto to register the Registrable
Securities, then each of the aforementioned Demand Registrations shall be on
such Form S-3; and provided, further' that the Registration Expenses in
connection with each other Demand Registration shall be allocated pro rata among
all Persons on whose behalf securities of the Company are included in such
registration, on the basis of the respective amounts of the securities then
being registered on their behalf, and (iii) that no Request may be made after
the receipt by the Holders of an Incidental Registration Notice; provided,
however, that the Incidental Registration Statement related to such Incidental
Registration Notice is declared effective within 90 days of the Holders receipt
of such Incidental Registration Notice.
(d) Underwriting; Selection of Underwriters. Notwithstanding anything
to the contrary contained in Section 2.1(a), if the Initiating Holders holding a
majority of the Registrable Securities for which registration was requested in
the Request so elect, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of a firm commitment
Underwritten Offering; and such Initiating Holders may require that all Persons
(including other Holders) participating in such registration sell their
Registrable Securities to the Underwriters at the same price and on the same
terms of underwriting applicable to the Initiating Holders. If any Demand
Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration must be reputable and nationally recognized
and shall be selected by the Company, provided that such Underwriter must be
capable of consummating the Underwritten Offering; otherwise the Underwriter
shall be selected by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request,
subject to the approval of the Company (such approval not to be unreasonably
withheld). If the Company maintains a contractual relationship with an
Underwriter at the time of the aforesaid selection (the "Existing Underwriter"),
and the Existing Underwriter is capable of consummating the Underwritten
Offering, the Underwriter for the Underwritten Offering shall be the Existing
Underwriter unless the Initiating Holders agree to reimburse the Company for all
liabilities and obligations owed by the Company to the Existing Underwriter
arising pursuant to contract out of the Company's failure to use the Existing
Underwriter as the Underwriter for such Underwritten Offering.
(e) Registration of Other securities. Whenever the Company shall
effect a Demand Registration, no securities other than the Registrable
Securities shall be
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covered by such registration unless the Majority Holders of the Registration
shall have consented in writing to the inclusion of such other securities.
(f) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b); provided, however, that sale of
Registrable Securities in connection with a Shelf Registration may be suspended
pursuant to a stop order issued by the SEC for no more than 60 days in any 360
day period, (ii) if the offering of any Registrable Securities pursuant to such
Demand Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court; provided, however, that sale of Registrable Securities in connection with
a Shelf Registration may be suspended pursuant to a stop order issued by the SEC
for no more than 60 days in any 360 day period, or (iii) if, in the case of an
Underwritten Offering, the conditions to closing specified in an underwriting
agreement to which the Company is a party are not satisfied other than by the
sole reason of any breach or failure by the Holders of Registrable Securities or
are not otherwise waived by the Holders of a majority of the Registrable
Security subject to such Underwritten Offering.
(g) Other Registrations. During the period (i) beginning on the date
of a Request and (ii) ending on the date that is 90 days after the date that a
Demand Registration Statement filed pursuant to such Request has been declared
effective by the SEC or, if the Holders shall withdraw such Request or such
Demand Registration Statement, on the date of such Withdrawn Request or such
Withdrawn Registration Statement, the Company shall not, without the consent of
the Majority Holders of the Registration, file a registration statement
pertaining to any other securities of the Company of the same class of
securities.
(h) Registration Statement Form. Registrations under this Section 2.1
shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Request (unless, pursuant
to Section 2.1(c), the Registration Statement must be filed on Form S-3), and
(ii) which shall be available for the sale of Registrable Securities in
accordance with the intended method or methods of disposition specified in the
requests for registration. The Company agrees to include in any such
Registration Statement all information which any selling Holder, upon advice of
counsel, shall reasonably request.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at any
time or from time to time proposes to register any of its securities under the
Securities
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Act (other than in a registration on Form S-4 or S-8 or any successor form to
such forms and other than pursuant to Section 2.1 or 2.3) whether or not
pursuant to registration rights granted to other holders of its securities and
whether or not for sale for its own account, the Company shall deliver prompt
written notice (which notice shall be given at least 30 days prior to such
proposed registration) to all Holders of Registrable Securities of its intention
to undertake such registration (an "Incidental Registration Notice"), describing
in reasonable detail the proposed registration and distribution (including the
anticipated range of the proposed offering price, the class and number of
securities proposed to be registered and the distribution arrangements to the
extent known to the Company) and of such Holders' right to participate in such
registration under this Section 2.2 as hereinafter provided. Subject to the
other provisions of this paragraph (a) and Section 2.2(b), upon the written
request of any Holder made within 20 days after the receipt of such written
notice (which request shall specify the amount of Registrable Securities to be
registered and the intended method of disposition thereof), the Company shall
effect the registration under the Securities Act of all Registrable Securities
requested by Holders to be so registered (an "Incidental Registration"), to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the Registration Statement which
covers the securities which the Company proposes to register and shall cause
such Registration Statement to become and remain effective with respect to such
Registrable Securities in accordance with the registration procedures set forth
in Section 4. If an Incidental Registration involves an Underwritten Offering,
immediately upon notification to the Company from the Underwriter of the price
at which such securities are to be sold, the Company shall so advise each
participating Holder. The Holders requesting inclusion in an Incidental
Registration may, at any time prior to the effective date of the Incidental
Registration Statement (and for any reason), revoke such request by delivering
written notice to the Company revoking such requested inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
Holders to cause such registration to be effected as a registration under
Section 2.1, and (B) in the case of a determination to delay such registration,
the Company shall be permitted to delay the registration of such Registrable
Securities for the same period as the delay in registering such other
securities; provided, however, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable Securities
in such Incidental Registration, then the Company shall again give all Holders
the opportunity to participate therein and shall follow the notification
procedures set forth in the preceding
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paragraph. There is no limitation on the number of such Incidental Registrations
pursuant to this Section 2.2 which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.2 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company to the date then scheduled for
such offering that, in its opinion, the amount of securities (including
Registrable Securities) requested to be included in such registration exceeds
the amount which can be sold in such offering without materially interfering
with the successful marketing of the securities being offered, the Company shall
include in such registration, to the extent of the number which the Company is
so advised may be included in such offering without such effect, (i) in the case
of a registration initiated by the Company, (A) first, the securities that the
Company proposes to register for its own account (but solely to the extent that
the proceeds thereof shall not be used to purchase Common Shares or other
securities of the Company), (B) second, the Registrable Securities requested to
be included in such registration by the Holders, allocated pro rata in
proportion to the number of Registrable Securities requested to be included in
such registration by each of them, and (C) third, other securities of the
Company to be registered on behalf of any other Person, and (ii) in the case of
a registration initiated by a Person other than the Company, (A) first, the
securities requested to be included in such registration by any Persons
initiating such registration, (B) second, securities that the Company proposes
to register for its own account, and (C) third, Registrable Securities requested
to be included in such registration by Holders and by all other Persons,
allocated pro rata in proportion to the number of securities requested to be
included in such registration by each of them; provided, however, that in any
event the Holders shall be entitled to include in such Incidental Registration
the number of Registrable Securities equal to the highest of (1) the Holders'
pro rata proportion set forth in the immediately preceding clause (C), (2) the
number of Registrable Securities included in the Incidental Registration by Xxxx
(as defined in the Term Loan Agreement) and (3) the number of Registrable
Securities included in the Incidental Registration by Xxxxx (as defined in the
Term Loan Agreement); provided, further, that in the event the Company will not,
by virtue of this Section 2.2(b), include in any such registration all of the
Registrable Securities of any Holder requested to be included in such
registration, such Holder may, upon written notice to the Company given within
three days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such registration.
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2.3 Shelf Registration. If a request made pursuant to Section 2.1 is for a
Shelf Registration, the Company shall use its best efforts to keep the Shelf
Registration continuously effective through the date on which all of the
Registrable Securities covered by such Shelf Registration may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor provision having
similar effect); provided, however, that prior to the termination of such Shelf
Registration, the Company shall first furnish to each Holder of Registrable
Securities participating in such Shelf Registration (i) an opinion, in form and
substance satisfactory to the Majority Holders of the Registration, of counsel
for the Company satisfactory to the Majority Holders of the Registration stating
that such Registrable Securities are freely salable pursuant to Rule 144(k)
under the Securities Act (or any successor provision having similar effect) or
(ii) a "No-Action Letter" from the staff of the SEC stating that the SEC would
not recommend enforcement action if the Registrable Securities included in such
Shelf Registration were sold in a public sale other than pursuant to an
effective registration statement.
2.4 Expenses. The Company shall pay all reasonable Registration Expenses
in connection with any Demand Registration, Incidental Registration (except for
expenses incurred by Holders) or Shelf Registration, whether or not such
registration shall become effective and whether or not all Registrable
Securities originally requested to be included in such registration are
withdrawn or otherwise ultimately not included in such registration, except as
otherwise provided with respect to a Withdrawn Request and a Withdrawn Demand
Registration in Section 2.1(a). Each Holder shall pay all discounts and
commissions payable to underwriters, selling brokers, managers or other similar
Persons engaged in the distribution of such Holder's Registrable Securities
pursuant to any registration pursuant to this Section 2.
2.5 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole or lead
managing Underwriter for any Underwritten Offering effected pursuant to a Demand
Registration, the Company shall enter into a customary underwriting agreement
with the Underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to each Holder of Registrable Securities
participating in such offering and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of that type, including, without limitation, indemnification and
contribution to the effect and to the extent provided in Section 5.
(b) Holders of Registrable Securities to be Parties to Underwriting
Agreement. The Holders of Registrable Securities to be distributed by
Underwriters in an Underwritten Offering contemplated by this Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of 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 Holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such Underwriters under such
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underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities; provided, however, that the Company shall not
be required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition.
(c) Participation in Underwritten Registration. Notwithstanding
anything herein to the contrary, no Person may participate in any underwritten
registration hereunder unless such Person (i) agrees to sell its securities on
the same terms and conditions provided in any underwritten arrangements approved
by the Persons entitled hereunder to approve such arrangement and (ii)
accurately completes and executes in a timely manner all questionnaires, powers
of attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
2.6 Conversions; Exercises. Notwithstanding anything to the contrary
herein, in order for any Registrable Securities that are issuable upon the
exercise of conversion rights, options or warrants to be included in any
registration pursuant to Section 2 hereof, the exercise of such conversion
rights, options or warrants must be effected no later than immediately prior to
the closing of any sales under the Registration Statement pursuant to which such
Registrable Securities are to be sold.
3. HOLDBACK ARRANGEMENTS.
3.1 Restrictions on Sale by Holders of Registrable Securities. Each Holder
of Registrable Securities agrees, by acquisition of such Registrable Securities,
if requested in writing by the sole or lead managing Underwriter in an
Underwritten Offering of any Registrable Securities, not to make any short sale
of, loan, grant any option for the purchase of or effect any public sale or
distribution, including a sale pursuant to Rule 144 (or any successor provision
having similar effect) under the Securities Act of any Registrable Securities or
any other equity security of the Company (or any security convertible into or
exchangeable or exercisable for any equity security of the Company) (except as
part of such underwritten registration), during the thirty business days (as
such term is used in Rule 10b-6 under the Exchange Act) prior to, and during the
time period reasonably requested by the sole or lead managing Underwriter not to
exceed 180 days, beginning on the effective date of the applicable Registration
Statement.
3.2 Restrictions on Sale by the Company and Others. The Company agrees
that (i) if requested in writing by the sole or lead managing Underwriter in an
Underwritten Offering of any Registrable Securities, not to make any short sale
of, loan, grant any option for the purchase of or effect any public sale or
distribution of any of the Company's securities (or any security convertible
into or exchangeable or exercisable for
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any of the Company's securities) during the thirty business days (as such term
is used in Rule 10b-6 under the Exchange Act) prior to, and during the time
period reasonably requested by the sole or lead managing Underwriter not to
exceed 180 days, beginning on the effective date of the applicable Registration
Statement (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such forms), and (ii)
it will use its best efforts to cause each holder of securities (or any security
convertible into or exchangeable or exercisable for any of its securities) of
the Company purchased from the Company at any time after the date of this
Agreement (other than in a registered public offering) to so agree.
4. REGISTRATION PROCEDURES.
4.1 Obligations of the Company. Whenever the Company is required to effect
the registration of Registrable Securities under the Securities Act pursuant to
Section 2 of this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC (promptly, and in any event within
60 days after receipt of a request to register Registrable Securities) the
requisite Registration Statement to effect such registration, which Registration
Statement shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith, and the Company shall use its good faith efforts to cause
such Registration Statement to become effective (provided, that the Company may
discontinue any registration of its securities that are not Registrable
Securities, and, under the circumstances specified in Section 2.2, its
securities that are Registrable Securities); provided, however, that before
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall (i) provide Holders' Counsel and any other
Inspector with an adequate and appropriate opportunity to participate in the
preparation of such Registration Statement and each Prospectus included therein
(and each amendment or supplement thereto or comparable statement) to be filed
with the SEC, which documents shall be subject to the review and comment of
Holders' Counsel, and (ii) not file any such Registration Statement or
Prospectus (or amendment or supplement thereto or comparable statement) with the
SEC to which Holder's Counsel, any selling Holder or any other Inspector shall
have reasonably objected on the grounds that such filing does not comply in all
material respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary (i) to keep such Registration Statement effective, and (ii) to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such Registration Statement, in each
case until such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller(s) thereof
set forth in such Registration Statement;
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provided, that except with respect to any Shelf Registration, such period need
not extend beyond nine months after the effective date of the Registration
Statement; and provided further, that with respect to any Shelf Registration,
such period need not extend beyond the time period provided in Section 2.3, and
which periods, in any event, shall terminate when all Registrable Securities
covered by such Registration Statement have been sold (but not before the
expiration of the 90 day period referred to in Section 4(3) of the Securities
Act and Rule 174 thereunder, if applicable);
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement (including
each preliminary Prospectus) in conformity with the requirements of the
Securities Act, and other documents, as such selling Holder and Underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such selling Holder (the Company hereby
consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of Registrable Securities and the Underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities, use its
good faith efforts to register or qualify all Registrable Securities and other
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as any selling Holder of Registrable
Securities covered by such Registration Statement or the sole or lead managing
Underwriter, if any, may reasonably request to enable such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder and to continue such registration or qualification
in effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals), and
do any and all other acts and things which may be necessary or advisable to
enable any such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such selling Holder;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 4.1(d), (ii) subject itself to taxation
in any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(e) use its good faith efforts to obtain all other approvals,
consents, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the selling Holders of such
Registrable Securities to consummate the disposition of such Registrable
Securities;
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(f) promptly notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or post-
effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contemplated by Section 2.5(b) cease to be
true and correct in all material respects, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exists circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to an event described in any of the clauses (ii) through (vii) of this
Section 4.1(f), the Company shall promptly prepare a supplement or post-
effective amendment to such Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document
so that (1) such Registration Statement shall not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (2) as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, 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 in the light of the circumstances under which
they were made not misleading (and shall furnish to each such Holder and each
Underwriter, if any, a reasonable number of copies of such Prospectus so
supplemented or amended); and if the notification relates to an event described
in clause (iii) of this Section 4.1(f), the Company shall take all reasonable
action required to prevent the entry of such stop order or to remove it if
entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and,
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collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company and any subsidiaries thereof
as may be in existence at such time (collectively, the "Records") as shall be
necessary, in the opinion of such Holders' and such Underwriters' respective
counsel, to enable them to exercise their due diligence responsibility and to
conduct a reasonable investigation within the meaning of the Securities Act, and
cause the Company's and any subsidiaries' officers, directors and employees, and
the independent public accountants of the Company, to supply all information
reasonably requested by any such Inspectors in connection with such Registration
Statement, provided that the Company shall not be required to provide
information in a manner that would violate the Company's attorney-client
privilege except with respect to such information that the Underwriter
reasonably determines is necessary to consummate the Underwritten Offering;
(h) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants who have certified the
Company's financial statements included or incorporated by reference in such
Registration Statement, in each case dated the effective date of such
Registration Statement (and if such registration involves an Underwritten
Offering, dated the date of the closing under the underwriting agreement), in
customary form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably satisfactory to
the sole or lead managing Underwriter, if any, and to the Majority Holders of
the Registration, and furnish to each Holder participating in the offering and
to each Underwriter, if any, a copy of such opinion and letter addressed to such
Holder (in the case of the opinion) and Underwriter (in the case of the opinion
and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and provide
and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and any other governmental agency or authority
having jurisdiction over the offering, and make available to its security
holders, as soon as reasonably practicable but no later than 90 days after the
end of any 12-month period, an earnings statement (i) commencing at the end of
any month in which Registrable Securities are sold to Underwriters in an
Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such 12-
month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the Registration, use
its best efforts to cause all such Registrable Securities to be listed (i) on
each national
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securities exchange on which the Company's securities are then listed or (ii) if
securities of the Company are not at the time listed on any national securities
exchange (or if the listing of Registrable Securities is not permitted under the
rules of each national securities exchange on which the Company's securities are
then listed), on a national securities exchange designated by the Majority
Holders of the Registration;
(l) keep each selling Holder of Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 2
hereunder;
(m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(n) cooperate with each selling Holder of Registrable Securities and
each Underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the NASD and make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the Underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any Underwritten
Offering;
(o) furnish to each Holder participating in the offering and the sole
or lead managing Underwriter, if any, without charge, at least one manually-
signed copy of the Registration Statement and any post-effective amendments
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(p) cooperate with the selling Holders of Registrable Securities and
the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause-such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the Underwriters or, if not an Underwritten Offering, in
accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(q) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information concerning such Holder
of Registrable Securities, the Underwriters or the intended method of
distribution as the sole or lead managing Underwriter or the selling Holder of
Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten
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Offering of the Registrable Securities to be sold in such offering; make all
required filings of such Prospectus supplement or post-effective amendment
promptly after notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; and supplement or make amendments to any
Registration Statement if requested by the sole or lead managing Underwriter of
such Registrable Securities; and
(r) use its good faith efforts to take all other steps necessary to
expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
4.2 Seller Information. The Company may require each selling Holder of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of disposition as the Company may
from time to time reasonably request in writing; provided that such information
shall be used only in connection with such registration.
If any Registration Statement or comparable statement under "blue sky"
laws refers to any Holder by name or otherwise as the Holder of any securities
of the Company, then such Holder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to such Holder
and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, and (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by its counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder, if so requested by the Holder.
4.3 Notice to Discontinue. Each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
4.1(f)(ii) through (vii), such Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4.1(f) and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities which
is current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 4.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies
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of the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
5.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each Holder of
Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of legal counsel) in respect
thereof (collectively, "Claims"), insofar as such Claims arise out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein. The Company shall also indemnify any
Underwriters of the Registrable Securities, their Agents and each Person who
controls any such Underwriter (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the Holders
of Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Person who may be
entitled to indemnification pursuant to this Section 5 and shall survive the
transfer of securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable Securities
held by it are included in the securities as to which a registration is being
effected, agrees to, severally and not jointly, indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its directors and officers,
each other Person who participates as an Underwriter in the offering or sale of
such Securities and its Agents and each Person who controls the Company or any
such Underwriter (within the meaning of the Securities Act) and its Agents
against any and all Claims, insofar as such Claims arise out of or are based
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upon any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to such
registration, 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, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein; provided, however, that the aggregate amount
which any such Holder shall be required to pay pursuant to this Section 5.2
shall in no event be greater than the amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such Claims less all amounts previously
paid by such Holder with respect to any such Claims. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such indemnified party and shall survive the transfer of such securities by such
Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Section 5, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Section 5, (i) notify the indemnifying party in writing of the Claim
or the commencement of such action or proceeding; provided, that the failure of
any indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under this Section 5, except to the extent the
indemnifying party is materially and actually prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 5, and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any indemnified
party shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (A) the indemnifying party has agreed
in writing to pay such fees and expenses, (B) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such indemnified party within 10 days after receiving notice
from such indemnified party that the indemnified party believes it has failed to
do so, (C) in the reasonable judgment of any such indemnified party, based upon
advice of counsel, a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claims (in which case, if
the indemnified party notifies the indemnifying party in writing that it elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such indemnified party) or (D) such indemnified party is a
defendant in an action or proceeding which is also brought against the
indemnifying party and reasonably shall have concluded that there may be one or
more legal defenses available to such indemnified party which are not available
to the indemnifying party; provided that in no event will the Company be
required to pay the
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legal costs, fees and expenses of more than one law firm acting as independent
counsel for the Holders. No indemnifying party shall be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (1) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by the indemnifying party.
5.4 Contribution. If the indemnification provided for in Section 5.1 or
5.2 from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless, an
indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by a party as a result of any Claim referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in Section 5.3, any legal or other fees, costs or expenses
reasonably incurred by such party in connection with any investigation or
proceeding. Notwithstanding anything in this Section 5.4 to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 5.4 to contribute any amount in excess of the net proceeds received by
such
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indemnifying party from the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such Claims, less all amounts previously
paid by such indemnifying party with respect to such Claims. 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.
5.5 Other Indemnification. Indemnification similar to that specified in
the preceding Sections 5.1 and 5.2 (with appropriate modifications) shall be
given by the Company and each selling Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other
than the Securities Act. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
5.6 Indemnification Payments. The indemnification and contribution
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
6. GENERAL.
6.1 Adjustments Affecting Registrable Securities. The Company agrees that
it shall not effect or permit to occur any combination or subdivision of
interests which would adversely affect the ability of the Holder of any
Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
6.2 Registration Rights to Others. The Company has not previously entered
into an agreement with respect to its securities granting any registration
rights to any Person, except to certain of its members pursuant to the Company's
Operating Agreement, dated March 25, 1996, as amended. If the Company shall at
any time hereafter provide to any holder of any securities of the Company rights
with respect to the registration of such securities under the Securities Act,
(i) such rights shall not be in conflict with or adversely affect any of the
rights provided in this Agreement to the Holders and (ii) if such rights are
provided on terms or conditions more favorable to such holder than the terms and
conditions provided in this Agreement, the Company shall provide (by way of
amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.3 Availability of Information: Rule 144; Rule 144A; Other Exemptions.
So long as the Company shall not have filed a registration statement pursuant to
Section 12 of the Exchange Act or a registration statement pursuant to the
requirements of the Securities Act, the Company shall, at any time and from time
to time, upon the request of any Holder of Registrable Securities and upon the
request of any Person designated by such Holder as a prospective purchaser of
any Registrable Securities, furnish in writing to
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such Holder or such prospective purchaser, as the case may be, a statement as of
a date not earlier than 12 months prior to the date of such request of the
nature of the business of the Company and the products and services it offers
and copies of the Company's most recent balance sheet and profit and loss and
retained earnings statements, together with similar financial statements for
such part of the two preceding fiscal years as the Company shall have been in
operation, all such financial statements to be audited to the extent audited
statements are available, provided that, in any event the most recent financial
statements so furnished shall include a balance sheet as of a date less than 16
months prior to the date of such request, statements of profit and loss and
retained earnings for the 12 months preceding the date of such balance sheet,
and, if such balance sheet is not as of a date less than 6 months prior to the
date of such request, additional statements of profit and loss and retained
earnings for the period from the date of such balance sheet to a date less than
6 months prior to the date of such request; and provided, further, that any
prospective purchaser that is to receive the aforementioned information shall
first sign a confidentiality agreement with confidentiality provisions
reasonably acceptable to the Company. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company covenants that it shall timely file any reports
required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144 under the Securities
Act), and that it shall take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 and Rule 144A under the Securities Act, as such rules may be amended from
time to time, or (ii) any other rule or regulation now existing or hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Securities,
the Company shall deliver to such Holder a written statement as to whether it
has complied with such requirements.
6.4 Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Holders of not less than 50% of the Registrable
Securities then outstanding; provided, however, that no such amendment,
modification, supplement, termination, waiver or consent shall reduce the
aforesaid percentage of Registrable Securities without the written consent of
all of the Holders of Registrable Securities; and provided further, that nothing
herein shall prohibit any amendment, modification, supplement, termination,
waiver or consent to departure the effect of which is limited only to those
Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.5 Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, telecopier, any courier
guaranteeing overnight delivery or first class registered or certified mail,
return receipt requested,
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postage prepaid, addressed to the applicable party at the address set forth
below or such other address as may hereafter be designated in writing by such
party to the other parties in accordance with the provisions of this Section:
(i) If to the Company, to:
Diversified Food Group, L.L.C.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx,XX 00000
Attention: Xxxxxx Xxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx,XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) If to the Initial Holder, to:
Xxxxxxxxx LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Neporent
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(iii) If to any subsequent Holder, to the address
of such Person set forth in the records of the
Company.
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
6.6 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors
and permitted assigns (including any permitted transferee of Registrable
Securities). Any Holder may assign to any permitted transferee of its
Registrable Securities (other than a transferee that acquires such Registrable
Securities in a registered public offering or pursuant to a sale under Rule 144
of the Securities Act (or any successor rule)), its rights and obligations under
this Agreement; provided, however, if any permitted transferee shall take and
hold Registrable Securities, such transferee shall promptly notify the Company
and by taking and holding such Registrable Securities such permitted transferee
shall automatically be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement as if it were a party hereto (and shall, for all
purposes, be deemed a Holder under this Agreement). If the Company shall so
request, any heir, successor or permitted assign (including any permitted
transferee) shall agree in writing to acquire and hold the Registrable
Securities subject to all of the terms hereof. For purposes of this Agreement,
"successor" for any entity other than a natural person shall mean a successor to
such entity as a result of such entity's merger, consolidation, liquidation,
dissolution, sale of substantially all of its assets, or similar transaction.
Except as provided above or otherwise permitted by this Agreement, neither this
Agreement nor any right, remedy, obligation or liability arising hereunder or by
reason hereof shall be assignable by any Holder or by the Company without the
consent of the other parties hereto.
6.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.8 Descriptive Headings. Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
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6.9 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof).
6.11 Remedies; Specific Performance. The parties hereto acknowledge that
money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided
by law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or constitute
a waiver of or acquiescence in any such breach. No remedy shall be exclusive of
any other remedy. All available remedies shall be cumulative.
6.12 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the Company and the
other parties to this Agreement with respect to such subject matter.
6.13 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
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6.14 Consent to Jurisdiction: Waiver of Jury. The Company hereby
irrevocably and unconditionally agrees that any legal action, suit or proceeding
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in any federal court of the Southern District
of New York or any state court located in New York County, State of New York,
and hereby irrevocably and unconditionally expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and hereby
irrevocably and unconditionally waives any claim (by way of motion, as a defense
or otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or that
this Agreement or the subject matter may not be enforced in or by such court.
The Company hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or provided for in Section 6.5 of this
Agreement (with copies of such process also being sent to the Company's counsel
referred to in such section), such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the right of
the Initial Holder to serve process in any manner permitted by law or commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. THE COMPANY HEREBY IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT LAW OR EQUITY, BROUGHT IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.15 Further Assurances. Each party hereto shall do and perform or cause to
be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
6.16 No Inconsistent Agreements. The Company will not hereafter enter into
any agreement which is inconsistent with the rights granted to the Holders in
this Agreement.
6.17 Construction. The Company and the Initial Holder acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the Company and the
Holders.
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