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EXHIBIT 10.4
EXECUTION
REGISTRATION RIGHTS AGREEMENT
among
KIRKLAND HOLDINGS L.L.C.,
XXXXXXXX'X, INC.,
AFFILIATES OF XXXXXXXX,s INC.,
CAPITAL RESOURCE LENDERS II, L.P.,
ALLIED CAPITAL CORPORATION,
ALLIED CAPITAL CORPORATION II,
THE MARLBOROUGH CAPITAL INVESTMENT FUND, L.P.,
CAPITAL TRUST INVESTMENTS, LTD.,
XXXX XXXXXXXX,
XXXXXX XXXXXXXX,
XXXXX XXXXX,
AND
XXXXXX XXXXXXXX
June 12, 1996
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
as of this 12th day of June, 1996, by and among
- KIRKLAND HOLDINGS L.L.C., a Delaware limited
liability company ("Holdings"),
- XXXXXXXX'X INC., a corporation incorporated under
Tennessee law ("Kirkland's" or the
"Representative"),
- the other corporations listed on the signature pages
hereto (such other corporations, together with
Kirkland's, being herein referred to individually as
a "Company" and collectively as the "Company" or the
"Companies" as the context requires),
- Capital Resource Lenders 11, L.P., a Delaware
limited partnership ("CRL"),
- Allied Capital Corporation and Allied Capital
Corporation II (collectively, "Allied"),
- The Marlborough Capital Investment Fund, L.P.
("Marlborough"),
- Capital Trust Investments, Ltd. ("CT" and together
with CRL, Allied and Marlborough, the "Mezzanine
Warrant Holders"),
- XXXX XXXXXXXX,
- XXXXXX XXXXXXXX,
- XXXXX XXXXX and
- XXXXXX XXXXXXXX (Xxxx Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxx Xxxxx and Xxxxxx Xxxxxxxx being herein referred
to collectively as the "Individual Investors").
WHEREAS, on April 26, 1996, Holdings, the Companies and the
Individual Investors executed a Recapitalization Agreement (the
"Recapitalization Agreement"). Capitalized terms used but not defined herein
have the meanings set forth in the Recapitalization Agreement;
WHEREAS, pursuant to the Recapitalization Agreement, the
Companies have filed amendments to their charters in Preparation for the
Preliminary Recapitalization and the Recapitalization. The amended charter of
each Company provides
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for the authorized capital of such Company as described in the Shareholders
Agreement.
WHEREAS, in connection with the Company's execution of the
Senior Subordinated Note and Warrant Purchase Agreement dated on or about the
date hereof (the "Mezzanine Purchase Agreement"), pursuant to which the
Mezzanine Warrant Holders have loaned a total of $20,000,000 in subordinated
debt to the Companies, the Mezzanine Warrant Holders have received (i) warrants
to purchase up to 11904.8 shares of Common Stock, subject to adjustment in
accordance with the terms of such warrants ("Mezzanine Warrants" and the shares
subject to the Mezzanine Warrants, the "Warrant Shares") and (ii) warrants to
purchase up to an additional 4335.1 shares of Common Stock, subject to
adjustment in accordance with the terms of such warrants, the exercisability of
which-is contingent upon the timing of certain events and the valuation of the
Companies as evidenced by such event (the "Mezzanine Contingent Warrants" and
the shares subject to the Mezzanine Contingent Warrants, the "Contingent Warrant
Shares"); and
WHEREAS, options to purchase 7,143 shares of Common Stock,
subject to adjustment in accordance with the terms of the option Agreements
governing such options, (the "Option Agreements"), have been granted to the
Management Investors, each having the option under the Option Agreements to
purchase one third of such shares (the "Option Shares"); and
WHEREAS, as an inducement to completion of the transactions
contemplated by the Recapitalization Agreement and the Mezzanine Purchase
Agreement, the Companies have agreed to provide certain registration rights
pursuant to the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
terms and provisions hereof, the parties hereto hereby agree as follows:
1. Definitions. For purposes of this Agreement, the
following terms shall have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the commission thereunder, all as the same shall be in effect
from time to time.
(b) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time administering the
Act.
(c) "Common Stock" shall mean (i) the common stock,
par value $.Ol of each of the Companies and/or any
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successor Company, and (ii) any other capital stock of any class or classes
(however designated) of the Company, authorized on or after the date hereof, the
holders of which shall have the right, without limitation as to amount per
share, either to all or to a share of the balance of current dividends and
liquidating distributions after the payment of dividends and distributions on
any shares entitled to preference in the Payment thereof, and the holders of
which shall ordinarily, in the absence of contingencies, be entitled to vote for
the election of a majority of directors of the Company (even though the right so
to vote has been suspended by the happening of such a contingency), and (iii)
any other securities into which or for which any of the securities described in
(i) or (ii) above may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(d) "Company" shall mean the Companies, and
subsequently created affiliated companies, or any successor by merger or similar
corporate consolidation thereto, and shall include any subsidiaries thereof.
(e) "Counterpart" shall mean a counterpart to this
Agreement in the form of Exhibit A hereto, pursuant to the execution of which a
Person shall become bound by all of the terms and conditions to this Agreement.
(f) "Demand Piggybacker" shall have the meaning set
forth in Section 2(c) hereof.
(g) "Demand Registration" shall mean a Non-Mezzanine
Demand Registration or a Mezzanine Demand Registration.
(h) "Holder" shall mean each of the Shareholders if
such Shareholder holds Registrable Securities and any other person holding
Registrable Securities or such other securities to whom these registration
rights have been transferred pursuant to Section 12 of this Agreement; provided,
however, that any person who acquires any of the Registrable Securities in a
distribution pursuant to a registration statement filed by the Company under the
Act or pursuant to a sale under Rule 144 under the Act shall not be considered a
Holder.
(i) "Management Investors" shall mean Xxxx Xxxxxxxx,
Xxxxx Xxxxx and Xxxxxx Xxxxxxxx.
(j) "Mezzanine Demand Registration" shall have the
meaning set forth in Section 2(a) hereof.
(k) "Mezzanine Warrant Stock" shall mean, as of the
applicable date of determination, shares of Common Stock then issued or issuable
to the Mezzanine Warrant Holders upon exercise of the Mezzanine Warrants or
Contingent Mezzanine Warrants,
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assuming the maximum potential exercise of the Mezzanine Warrants or Contingent
Mezzanine Warrants as of such date of determination.
(l) "Non-Mezzanine Demand Registration" shall have
the meaning set forth in Section 2(b) hereof.
(m) "Person" shall mean an individual, partnership,
corporation, limited liability company, limited liability partnership, trust,
joint venture, unincorporated association, or other entity or association.
(n) "Piggyback Registration" shall have the meaning
set forth in Section 3.
(o) "Preferred Stock" shall mean shares of the Class
A Preferred Stock and Class B Preferred Stock of the Companies from time to time
outstanding.
(p) "Public Offering" shall mean an underwritten
public offering of Common Stock registered pursuant to the Act resulting in
gross proceeds to the Companies of at least Thirty Million Dollars
($30,000,000).
(q) The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act and the declaration or
ordering of effectiveness of such registration statement by the Commission.
(r) "Registered Holder" shall mean, with respect to a
registration statement, each Holder of Registrable Securities covered by such
registration statement.
(s) "Registered Securities" shall mean, with respect
to a registration statement, the Registrable Securities covered by such
registration statement.
(t) "Registrable Securities" shall mean (i) shares of
Common Stock held by the Shareholders from time to time and shall include shares
of Mezzanine Warrant Stock, provided the Mezzanine Warrants are converted or
exercised no later than the effective date of any registration with respect to
which the Holder of such Mezzanine Warrants demanded a Demand Registration, is a
Demand Piggybacker, or requested a Piggyback Registration as to the Common Stock
issuable upon conversion or exercise of such Mezzanine Warrants, (ii) shares of
Common Stock acquired by any Shareholder other than pursuant to a registration,
either from any other shareholder of the Company in compliance with the terms of
the Shareholders Agreement, or directly from the Company, and (iii) securities
issued or received in respect of, or in exchange or in substitution for any of
the foregoing, including, but not
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limited to, those arising from a stock dividend, stock split, reclassification,
reorganization, merger, consolidation/ sale of assets or other exchange of
securities.
(u) "Shareholder" shall mean any Person who holds,
from time to time, any Common Stock, Preferred Stock or Mezzanine Warrants or
Mezzanine Contingent Warrants, and who is or who becomes a party to this
Agreement pursuant to the terms hereof.
(v) "Shareholders Agreement" shall mean that certain
Shareholders Agreement dated the date hereof and among the parties hereto, as
amended from time to time.
(w) "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
2. Demand Registrations. The Holders may make a demand for registration
of Common Stock as provided in this Section 2 at any time after the earlier to
occur of (x) June 12, 1998 or (y) any time the Company becomes subject to
Section 13 or 15(d) of the 1934 Act.
(a) Mezzanine Demand. If the Company shall receive a
written request from Mezzanine Warrant Holders holding more than sixty-six and
two-thirds percent (66.67%) of the Mezzanine Warrant Stock (determined without
taking into account any shares of Common Stock previously sold to the public in
a public offering) that the Company file a registration statement under the Act
covering the registration for the offer and sale of all or part of the Mezzanine
Warrant Stock (determined without taking into account any shares of Common Stock
previously sold to the public in a public offering) (a "Mezzanine Demand
Registration"), then the Company shall promptly notify in writing all other
Holders of Registrable Securities (including other Mezzanine Warrant Holders) (a
"Company Mezzanine Demand Notice").
(b) Other Demand. If the Company shall receive a
written request from Holders of more than fifty percent (50%) of the Registrable
Securities other than the Mezzanine Warrant Stock, that the Company file a
registration statement under the Act covering the registration for the offer and
sale of all or part of such Holders' Registrable Securities (a "Non-Mezzanine
Demand Registration"), then the Company shall promptly notify in writing all
other Holders of Registrable Securities (including the Mezzanine Warrant
Holders) of such request (the "Company Non-Mezzanine Demand Notice"). Upon
receipt of the Company Non-Mezzanine Demand Notice, the Mezzanine Warrant
Holders holding more than sixty-six and two-thirds percent (66.67 %) of the
Mezzanine Warrant Stock (determined without taking into account
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any shares of Common Stock previously sold to the public in a public offering)
shall be entitled to render such demand for a Non-Mezzanine Demand Registration
ineffective, null and void by making a demand for registration under subsection
(a) of this Section 2 for a Mezzanine Demand Registration within thirty (30)
days after the Company Non-Mezzanine Demand Notice is given. In such event, (i)
the preempted Non-Mezzanine Demand Registration shall be treated for all
purposes, including for purposes of Section 2(d) hereof, as if it had never been
made, (ii) the Company shall give a Company Mezzanine Demand Notice to other
Holders contemplated by Section 2(a) (with all notices previously given by other
Holders in connection with such Non-Mezzanine Demand Registration pursuant to
Section 2(c) being void), and (iii) Holders other than the Mezzanine Warrant
Holders shall not be entitled to make a demand under this Section 2(b) until the
Mezzanine Demand Registration shall have been completed or abandoned and all
waiting periods required by this Agreement shall have been complied with.
(c) Procedure. Each request for a Mezzanine Demand
Registration or a Non-Mezzanine Demand Registration shall specify the number of
shares of Registrable Securities requested to be sold. Within thirty (30)
calendar days after a Company Mezzanine Demand Notice or Company Non-Mezzanine
Demand Notice has been given, any other Holder (a "Demand Piggybacker") may give
written notice to the Company of its intent to include its Registrable
Securities in the registration (including without limitation any Holder whose
demand is preempted under Section 2(b) above). As soon as practicable after the
expiration of such thirty (30) day period, the Company shall cause all
Registrable Securities that Holders have requested be registered to be
registered under the Act, subject to the limitations contained in this
Agreement.
(d) Number of Demands. Subject to the provisions of
Section 8 below, demand not be made unless the reasonably anticipated price to
the public of such public offering would exceed Five Million Dollars
($5,000,000), (ii) may be made under Section 2(a) hereof a total of one (1) time
and (iii) may be made under Section 2(b) hereof a total of two (2) times. An
effective Demand Registration will not count as a Demand Registration for
purposes of the preceding sentence if (a) the Holders whose Registrable
Securities are to be included in such registration have not registered for sale
at least seventy percent (70%) of the Registrable Securities requested to be
registered in the registration statement for such registration by such Holders,
or (b) the Holders have withdrawn their request for Demand Registration and have
paid all fees and expenses as provided in Section 8 hereof.
(e) Delay of Registration. If at the time of any
request to register Registrable Securities pursuant to Section
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2(a) or (b) the Company is preparing or within thirty (30) days thereafter
commences to prepare a registration statement for a public offering (other than
a registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 of the Commission is applicable) which in fact is
filed and becomes effective within (90) days after the request, or is engaged in
any activity which, in the good faith determination of the Company's board of
directors, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct
that such request be delayed for a period not in excess of four (4) months from
the date of such request to register Registrable Securities, such right to delay
a request to be exercised by the Company not more than once in any one (1) year
period. Nothing in this Section 2(e) shall preclude a holder of Registrable
Securities from enjoying registration rights which it might otherwise possess
under Section 3 hereof.
3. Piggyback Registration. Subject to Section 9, if
at any time the company proposes to register any of its equity securities under
the Act, either for its own account or for the account of others (unless already
covered by Section 2 hereof) or pursuant to a request under Section 4 hereof, in
connection with the public offering of such equity securities solely for cash,
on a registration form that would also permit the registration of Registrable
Securities (other than registration statement on Form S-8 or any successor form,
or a registration in connection with any stock option, stock purchase or other
benefit plan or for the purpose of offering such securities to another business
entity or the shareholders of such entity in connection with the acquisition of
assets or shares of capital stock, respectively, of such entity), the Company
shall, each such time, promptly give each Holder written notice of such proposal
(a "Piggyback Registration Notice"). Within thirty (30) days after the piggyback
Registration Notice is given, the Holders shall give notice as to the number of
shares of Registrable Securities, if any, which such Holders request be
registered simultaneously with such registration by the Company ("Piggyback
Registration"). The Company shall use its best efforts to include any
Registrable Securities in such registration statement (or in a separate
registration statement concurrently filed) which the Holders thereof request to
be so included and to cause such registration statement to become effective with
respect to such Registrable Securities in accordance with the registration
procedures set forth in Section 5 hereof. Notwithstanding the foregoing, if at
any time after giving written notice of its intention to register equity
securities and before the effectiveness of the registration statement filed in
connection with such registration, the Company determines for any reason either
not to effect such registration or to delay such registration, the Company may,
at its election, by delivery of prior written notice to each Holder, (i) in the
case of a determination not to effect
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registration, relieve itself of its obligation to register the Registrable
Securities in connection with such registration or (ii) in the case of a
determination to delay registration, delay the registration of such Registrable
Securities for the same period as the delay in the registration of such other
equity securities. Each Holder requesting inclusion in a registration pursuant
to this Section 3 may, at any time before the effective date of the registration
statement relating to such registration, revoke such request by delivering
written notice of such revocation to the Company (which notice shall be
effective only upon receipt by the Company, notwithstanding the provisions of
Section 17 hereof); provided, however, that if the Company, in consultation with
its financial and legal advisors, determines that such revocation would require
a recirculation of the prospectus contained in the registration statement, then
such Holder shall have no right to revoke its request.
4. Registrations on Forms S-2 and S-3. After the conclusion by the
Company of an initial public offering of its Common Stock (which for purposes
hereof shall include any Registrable Securities sold pursuant to Section 2
above) pursuant to a registration under the Act, at such time as the Company
shall have qualified for the use of Forms S-2 and/or S-3 (as the case may be),
or any similar form or forms promulgated by the Commission, the Holders of
Registrable Securities shall each have the right to request an unlimited number
of registrations on Form S-2 and/or Form S-3 (as the case may be). Any such
request shall be in writing, shall specify the Registrable Securities intended
to be sold or disposed of by the Holders thereof, shall state the intended
method of disposition of such Registrable Securities by the Holder(s) requesting
such registration and shall relate to Registrable Securities (i) in an amount
exceeding two percent (2%) of all shares of Common Stock then outstanding, or
(ii) having proposed gross cash offering proceeds (prior to deduction of
underwriters commissions and expenses, if any) of Two Million Dollars
($2,000,000) or more for all Registrable Securities to be included, on the basis
of a reasonable (in light of the current market price) proposed per share
offering price. The Company shall be obligated to effect such registration or
registrations on Form S-2 or Form S-3 (as the case may be) as soon as
practicable after receipt of such a request; provided, however, that the Company
shall not be obligated to effect the filing of a registration pursuant to this
Section 4 (i) during the period starting with the date ninety (90) days prior to
the Company's estimated date of filing of, and ending on a date one hundred
eighty (180) days following the effective date of, a registration statement
pertaining to a public offering of Common Stock for the account of the Company,
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective and that, in
the good faith judgment of the Company's underwriter for an underwritten
offering or of the Company's Board of Directors for any other
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offering, an offering pursuant to such a registration statement would interfere
in any material respect with the successful marketing (including pricing) of the
Common Stock to be included in the Company's proposed registration statement, or
(ii) if the Company's Board of Directors shall determine in good faith that such
filing will interfere in any material respect with a pending or contemplated
financing, merger, sale or assets, recapitalization or other similar corporate
action of the Company. In the event the Company's obligations are abated
pursuant to the foregoing proviso, and if any of the Holders on whose behalf the
requested registration statement would be filed and who were unable to have all
of the Registrable Securities included in the Company's registration statement
pursuant to Section 3 then want such registration statement to be filed, the
Company shall file such registration statement as promptly as practicable
following (x) one hundred eighty (180) days after the effective date of the
registration statement with respect to the offering referred to in clause (i)
above, or (y) the date on which the transactions referred to in clause (ii)
above shall have been completed or abandoned as the case may be); provided
further, however, that the Company shall not be obligated to file and cause to
become effective (a) more than two (2) registrations on Forms S-2 and/or S-3 in
any one twelve (12) month period or (b) any registration on Form S-2 and/or S-3
within six (6) months after the effective date of any previous registration
statement filed under Section 2 or Section 3, with respect to which all Holders
who had requested the inclusion of any such shares in a registration statement
were entitled to include in such registration statement all Registrable
Securities requested to be included therein. No registration pursuant to this
Section 4 shall count as a Demand Registration pursuant to Section 2.
5. Obligation of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration statement
covering such Registrable Securities and use its best efforts to cause such
registration statement to be declared effective by the Commission and to keep
such registration effective until the earlier of (i) the date when all
Registrable Securities covered by the registration statement have been sold or
(ii) in the case of a registration under Section 2 or 3 hereof, nine (9) months
after the effective date of the registration statement or prospectus or any
amendments or supplements thereto, or (iii) in the case of a shelf registration,
the applicable period permitted under the Act. The Company will furnish to each
Holder of Registrable Securities covered by such registration statement and the
underwriters, if any, copies of all such documents proposed to be filed
(excluding exhibits, unless any such person shall specifically request
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exhibits), which documents will be subject to the review (for a reasonable
Period of time in light of all facts and circumstances) of each Holder and the
underwriters, and the Company will not file such registration statement or any
amendment thereto or any prospectus or any Supplement thereto including any
documents incorporated by reference therein) with the Commission if (i) the
Holders of a majority of the Registrable Securities covered by such registration
statement or the underwriters, if any, shall reasonably object to such filing or
(ii) information in such registration statement or prospectus concerning a
particular Registered Holder is inaccurate.
(b) Prepare and file with the Commission such amendments and
post-effective amendments to such registration statement as may be necessary to
keep such registration statement effective until the earlier of the dates
referred to in clauses (i) and (ii) of Section 5(a) hereof and to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement, and cause the prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed with the commission pursuant to Rule 424 under the Act.
(c) Furnish to the Registered Holders such number of copies of such
registration statement, each amendment thereto, the prospectus included in such
registration statement (including each preliminary prospectus), each supplement
thereto and such other documents, as they may reasonably request in order to
facilitate the disposition of Registered Securities owned by them.
(d) Use its best efforts to register and qualify the Registered
Securities under such other securities laws of such jurisdictions as shall be
reasonably requested by any Registered Holder and do any and all other acts and
things which may be reasonably necessary or advisable to enable each Registered
Holder to consummate the disposition of the Registered Securities owned by such
Holder in such jurisdictions; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify generally to transact
business in any such states or jurisdictions; and provided further that
(anything in this Agreement to the contrary notwithstanding with respect to the
bearing of expenses) if any jurisdiction in which the Registered Securities
shall be qualified shall require that expenses incurred in connection with the
qualification of the Registered Securities in that jurisdiction be borne by
selling shareholders, then such expenses shall be payable by the Registered
Holders pro rata, to the extent required by such jurisdiction.
(e) Promptly notify each Registered Holder at any time when a
prospectus is required to be delivered under the Act
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relating to the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading and, at the request of any such Holder, the Company will promptly
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registered Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading.
(f) Make available for inspection by any Registered Holder, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
Registered Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company to supply all
information reasonably requested by any such Registered Holder, underwriter,
attorney, accountant or agent in connection with such registration statement,
which information shall be subject to reasonable restrictions concerning
confidentiality and non-disclosure.
(g) Promptly notify the Registered Holders and the underwriters, if
any, of the following events and (if requested by any such person) confirm such
notification in writing and provide copies of any relevant documents relating
to: (1) the filing of the prospectus or any prospectus supplement and the
registration statement and any amendment or Post-effective amendment thereto
and, with respect to the registration statement and any amendment or
post-effective amendment thereto, the declaration of the effectiveness of such
documents, (2) any comment letters from or requests by the Commission for
amendments or supplements to the registration statement or the prospectus or for
additional information, (3) the issuance or threat of issuance by the Commission
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose and (4) the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registered Securities for sale in any jurisdiction or the initiation or
threat of initiation of any proceeding for such purpose.
(h) Make every reasonable effort to prevent the entry of any order
suspending the effectiveness of the registration statement and obtain the
withdrawal of any such order, if entered.
(i) If reasonably requested by any underwriter or a Registered
Holder in connection with any underwritten offering,
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incorporate in a prospectus supplement or post-effective amendment such
information as the underwriters and the Holders of a majority of the Registered
Securities agree should be included therein relating to the sale of the
Registered Securities, including, without limitation, information with respect
to the number of Registered Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and any other terms of
the underwritten offering of the Registered Securities to be sold in such
offering, and make all required filings of such Prospectus Supplement or
Post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment.
(j) Cooperate with the Registered Holders and the underwriters, if
any, to facilitate the timely preparation and delivery of certificates
evidencing Registered Securities and not bearing any restrictive legends, and
enable such Registered securities to be in such lots and registered in such
names as the underwriters may request at least two (2) business days prior to
any delivery of Registered Securities to the underwriters.
(k) Provide a transfer agent, registrar and CUSIP number for all
Registrable Securities not later than the effective date of the registration
statement.
(l) Prior to the effectiveness of the registration statement and any
post-effective amendment thereto and at each closing of any underwritten
offering, (i) make such representations and warranties to the Registered Holders
and the underwriters, if any, with respect to the Registered Securities and the
registration statement as are customarily made by issuers to underwriters in
primary underwritten offerings; (ii) obtain opinions of counsel to the Company
and updates thereof (which opinions shall be reasonably satisfactory to the
underwriters, if any, and to the Holders of a majority of the Registered
Securities) addressed to each Registered Holder and the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Holders
and underwriters or their counsel; (iii) obtain "cold comfort" letters and
updates thereof from the Company,s independent certified public accountants
addressed to the Registered Holders and the underwriters, if any, such letters
to be in customary form and covering matters of the type customarily covered in
*cold comfort" letters by underwriters in connection with primary underwritten
offerings; and (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registered Securities being sold
and by the underwriters, if any, to evidence compliance with clause (i) above
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company.
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(m) Enter into such agreements and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of such Registered Securities and in such connection, in the case of
an underwritten offering, enter into an underwriting agreement or other similar
agreement in form, scope and substance as is customary in underwritten offerings
which underwriting agreement shall set forth in full the indemnification
provisions and procedures of Section 13 hereof with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each closing
under such underwriting or similar agreement or as and to the extent required
thereunder.
(n) Use its best efforts to cause all Registered Securities included
in such registration statement to be listed, by the date of first sale of
Registered Securities pursuant to such registration statement, on each
securities exchange on which shares of Common Stock are then listed or proposed
by the Company to be listed, if any.
(o) Provide such reasonable assistance in the marketing of the
Registered Securities as is customary of issuers in public offerings (including
participation by its senior management in "road shows"), subject to reasonable
time and expense constraints.
(p) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders earnings statements satisfying the provisions of Section 11(a)
of the Act, no later than forty-five (45) days after the end of any twelve (12)
month period (i) commencing at the end of any fiscal quarter in which Registered
Securities are sold to underwriters in a firm or best efforts underwritten
offering, or (ii) if not sold to underwriters in such an offering, beginning
with the first day of the first fiscal quarter of the Company commencing after
the effective date of the registration statement.
6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding them, the
Registrable Securities held by them, and the intended method of disposition of
such Registrable Securities as the Company shall reasonably request and as shall
be required in connection with the action to be taken by the Company.
7. Suspension of Disposition of Registrable Securities. Each Registered
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 5(e) or 5(g)(3) or (4) hereof,
such Registered Holder will forthwith discontinue disposition of
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15
Registered Securities until such Registered Holder's receipt of copies of a
supplemented or amended prospectus contemplated by Section 5(e) hereof, or until
it is advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, and,
if so directed by the Company, such Registered Holder will deliver to the
Company (at the expense of the company) all copies, other than permanent file
copies then in such Registered Holder's possession, of the prospectus covering
such Registered Securities at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period mentioned in Section
5(a) hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(e) or
5(g)(3) or (4) hereof to and including the date when each Registered Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 5(e) hereof or the Advice.
8. Expenses of Registration.
(a) Except as provided in Section 8(b) through 8(d)
hereof, all expenses incurred in connection with a registration pursuant to
Sections 2, 3 or 4 (excluding underwriters' discounts and commissions),
including, without limitation all registration and qualification fees, fees and
disbursements of counsel for the Company, and, the reasonable fees and
disbursements of one (1) counsel chosen by the Registered Holders owning a
majority of the Registered Securities (or by the Registered Holders owning a
majority of the Mezzanine Warrant Stock constituting Registered Securities in
the case of a Mezzanine Demand Registration) shall be borne by the Company.
(b) If a registration proceeding is begun under
Section 2 but subsequently withdrawn at the request of the Registered Holders
owning a majority of the Registered Securities (or at the request of Registered
Holders owning a majority of the Mezzanine Warrant Stock constituting Registered
Securities in the case of a Mezzanine Demand Registration) such Registered
Holders shall have the option (exercisable by Registered Holders owning a
majority of the Registered Securities, or a majority of the Mezzanine Warrant
Stock constituting Registered Securities in the case of a Mezzanine Demand
Registration) of either (i) reserving their right to such Demand Registration
pursuant to Section 2, in which case the Registered Holders will pay all
expenses of such registration proceeding, or (ii) waiving their right to one (1)
Demand Registration under Section 2 (Section 2(a) if the registration proceeding
originated with a demand under Section 2(a) hereof), in which case the Company
will pay the expenses of such registration proceeding.
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16
(c) Registered Holders may withdraw a request made
within forty-five (45) days after the end of the fiscal year if the audited
financial statements of the Company for such year and at such year-end
materially and adversely differ from the financial information furnished to such
Holders by the Company at the time of their request, in which event such
Registered Holders shall not be required to pay any of the expenses of such
withdrawn registration and such withdrawn registration shall be treated for all
purposes of this Agreement, including without limitation Section 2(d) hereof, as
if it had never occurred.
(d) All expenses incurred in connection with a
registration which are, under this Section 8. to be borne by Registered Holders
shall be borne pro rata by the Registered Holders on the basis of the number of
such Holder's Registered Securities (or Registrable Securities proposed to be
registered, as the case may be); Provided, however, that if any such cost or
expense is attributable solely to one Registered Holder and does not constitute
a normal cost or expense of such a registration, such cost or expense shall be
allocated to and borne by that Registered Holder.
9. Underwriting Requirements: Priorities.
(a) (i) With respect to a Mezzanine Demand
Registration pursuant to Section 2(a), the Registered Holders owning a majority
of the Mezzanine Warrant Stock included in the registration shall have the right
to select the investment banker(s) and manager(s), if any, to administer such
registration, subject to the approval of the Company, which will not be
unreasonably withheld. With respect to a Non-Mezzanine Demand Registration
pursuant to Section 2(b), the Registered Holders owning a majority of the
Registered Securities shall have the right to select the investment banker(s)
and manager(s) to administer such registration, subject to the approval of the
Company, which will not be unreasonably withheld.
(ii) The Registered Holders owning a majority of the
Registered Securities included in any registration under Section 4 shall have
the right to select the investment banker(s) and manager(s), if any, to
administer the offering, if any, subject to the approval of the Company, which
will not be unreasonably withheld.
(iii) The Company will have the right to select the
investment banker(s) and manager(s), if any, to administer any offering to which
Section 3 hereof is applicable.
(b) (i) if a registration under Section 2(a) hereof
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities requested to
be registered by the
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Mezzanine Warrant Holders and Demand Piggybackers exceeds the number of shares
which can be sold at the desired price in such offering, the Company will
include in such registration (i) first, the Mezzanine Warrant Stock demanded to
be registered under Section 2 (a) and the Mezzanine Warrant Stock held by Demand
piggybackers (pro rata among the Holders thereof based on the number of shares
of Mezzanine Warrant Stock such Holders have requested to be registered), (ii)
second, Registrable Securities other than Mezzanine Warrant Stock owned by
Demand Piggybackers (Pro rata among the Holders thereof on the basis of the
number of Registrable Securities such Holders have requested to be registered);
provided that, such aggregate Registered Securities shall not exceed the number
of Registrable Securities requested to be included which in the opinion of such
underwriters can be sold at the desired price.
(ii) If a registration under Section 2(b) hereof is
an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of shares of Common Stock requested to
be registered exceeds the number of shares which can be sold at the desired
price in such offering, then the Company will include in such registration
Registrable Securities owned by Holders requesting registration of Registrable
Securities with respect to such registration pro rata among such Holders on the
basis of the number of Registrable Securities such Holders have requested to be
registered; Provided that, such aggregate Registered Securities shall not exceed
the number of Registrable Securities requested to be included therein which in
the opinion of such underwriters can be sold at the desired price.
(iii) If a registration under Section 3 hereof is an
underwritten registration and the managing underwriters) advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold at the desired price
in such offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell; (ii) second, the Registrable Securities
held by the Holders (other than Management Investors) requesting to be included
in such registration pursuant to Section 3 hereof (pro rata among the respective
Holders thereof on the basis of the number of Registered Securities such Holders
have requested to be registered); and (iii) third, the Registrable Securities
held by the Management Investors requesting to be included in such registration
pursuant to Section 3 hereof (pro rata among such Management Investors on the
basis of the number of Registered Securities such Management Investors have
requested to be registered).
(iv) If a registration under Section 4 hereof is an
underwritten offering and the managing underwriters advise
-16-
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the Company in writing that in their opinion the number of Registrable
Securities requested to be registered exceeds the number of shares which can be
sold at the desired price in such offering, xxx.Xxxxxxx will include in such
registration the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold at the desired price.
Registrable Securities held by the Holders requesting to be included in such
registration shall be included Pro rata among the respective Holders thereof on
the basis of the number of Registrable Securities such Holders have requested to
be registered.
(c) Notwithstanding the priorities set forth in Section 9(b),
in the event Individual Investors request registration of Registrable Securities
under Sections 2(a) (as Demand Piggybackers), 2(b), 3 or 4 hereof, such
Management investors, or any one of them, shall be given priority over all other
holders of Registrable Securities (other than Mezzanine warrant Holders) to the
extent such priority is necessary to allow such Individual Investors to sell
enough Registrable Securities to qualify any redemption of other Company
securities from such Individual Investor occurring simultaneously with (or part
of a series of related transactions with) such offering for sale or exchange
treatment under Section 302(b)(2) of the Internal Revenue Code of 1986, as
amended; provided that the priority provided by this subparagraph (c) shall not
extend to Registrable Securities which constitute more than one and one-half
percent (1.5%) of the outstanding Common Stock of the Company at the time of
(and measured prior to) such redemption (the "Priority Inversion Percent"); and
provided further that the rights provided to Individual Investors pursuant to
this subparagraph (c) may be terminated by Holdings if Holdings shall, or shall
cause the Company to, purchase the Priority Inversion Percent from the
Individual Investor and thereby reduce the number of Individual Investors'
Registrable Securities requested to be registered.
(d) In the case of a non-underwritten Demand Registration, the
priorities provided in Section 9(b)(i) or (ii) shall apply in the event the
number of shares salable (in the opinion of the Board of Directors) is less than
the total number of Registrable Securities sought to be registered.
(e) No Holder may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
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(f) The Company shall not grant registration rights to any
person which impair in any way the priorities for inclusion in a registration
set forth in this Section 9, including, without limitation, by providing any
such person with higher priority than or equal priority to that provided to the
Parties herein with regard to any registration statement filed by be Company,
whether upon such person's demand or otherwise. In addition, in any demand
registration rights granted to any such person, the Company shall provide that
such demand registration rights shall be subject to a right of the Mezzanine
Warrant Holders to render such a demand thereunder ineffective by making demand
for registration under Section 2(a) of this Agreement in accordance with the
procedures set forth in Section 2(b) hereof. Notwithstanding anything to,the
contrary contained in this paragraph (f), nothing in this paragraph (f) shall
restrict the Company's ability to register on Form S-8 (or any successor form)
shares issuable upon exercise of options which may be granted pursuant to any
Stock Option Plan adopted by the Company after the date hereof, providing for
the issuance of shares of Common Stock to certain employees of the Company.
10. Rule 144.
(a) The Company shall not be obligated under Section
2, 3 or 4 hereof to register or include in any registration statement
Registrable Securities that any Holder has requested to be registered if the
Company shall furnish such Holder with a written opinion of counsel to the
Company, which opinion shall be reasonably satisfactory to such Holder, that all
Registrable Securities that such Holder holds may be publicly offered, sold and
distributed within a single ninety (90) day period without registration under
the Act pursuant to Rule 144 promulgated by the Commission under the Act;
provided, however, that the provisions of this Section 10(a) shall not apply if
such Holder requesting registration shall provide to the Company written advice
from a refutable investment banker reasonably satisfactory to such Holder and
the Company, that the per share price reasonably likely to be attainable in a
sale under Rule 144 (net of expenses of such sale) is not substantially as great
as the per share price reasonably likely to be attainable pursuant to a
Registration under the applicable section. The cost of obtaining a letter from
an investment banker containing such advice shall be borne by the Company.
(b) At such time as the Company becomes subject to
the reporting requirements of the 1934 Act, the Company will file the reports
required to be filed by it under the Act and the 1934 Act and the rules and
regulations adopted by the Commission thereunder, and will use its best efforts
to take such further action as any Holder of Registrable Securities may
reasonably deem to be necessary, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Act, as such Rule may be amended from time to time, or (ii) any similar rule or
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regulation hereafter adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
11. Lockup Agreement.
(a) All Holders agree that, upon the request of and
to the extent required by the underwriter(s) managing (i) an initial
underwritten public offering of Common Stock, or (ii) any other registration of
Common Stock at the time of which such Holder is a Restricted Holder (as defined
in this section 11(a)), such Holders will not sell, make any short sale of,
pledge, grant any option for the purchase of or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the Prior written consent o the Company or such underwriters), as the case may
be, during the seven (7) days prior to, and during the one hundred twenty (120)
day period beginning on, the effective date of such registration as the Company
or the underwriters) may specify. For purposes of this section 11(a),
"Restricted Holder shall mean any Holder who owns five Percent (5%) or more of
the then outstanding Common Stock ("5% Holder"), any director or officer of the
Company (without regard to his or her level of ownership of Common Stock), or
any Holder whose Registrable Securities are being included in the registration
(without regard to the amount of Registrable securities being registered): Any
lockup imposed on Holders pursuant to clause (i) of this Section 11(a) shall be
imposed on all Holders and any lockup imposed on Restricted Holders pursuant to
clause (ii) of this Section 11(a) shall be imposed on all Restricted Holders.
(b) The Company agrees (i) not to effect any public
sale or distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the seven (7)
days prior to and during the one hundred twenty (120) day period beginning on
the effective date of any registration statement related to an registered
underwritten public offering pursuant to which Registrable Securities are to be
sold (except as Part of such underwritten registration or pursuant to
registrations on Form S8 or any successor form), unless the underwriters)
managing the registered public offering otherwise agree, and (ii) to use its
best efforts to cause each holder of at least five percent (5%) (on a
fully-diluted basis) of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, in either case
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any sale or
distribution of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.
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12. Transfer of Registration Rights. Provided that the Company
is given written notice by the Holder at the time of such transfer stating the
name and address of the transferee and identifying the securities with respect
to Which the rights under this Agreement are being assigned, the registration
rights under this Agreement may be transferred in whole or in part in connection
with the transfer of Registrable Securities. Notwithstanding the foregoing, if
such transfer is subject to covenants, agreements or other undertakings
restricting transferability thereof the registration rights under this Agreement
shall not be transferred in connection with such transfer unless such transfer
complies with all such covenants, agreements and other undertakings. In all
cases, such registration rights shall not be transferred unless the transferee
thereof executes a Counterpart.
13. Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(a) To the full extent permitted by law, the Company will
and hereby does (i) indemnify and hold harmless each Holder, each director,
officer, partner, employee, or agent of or for such Holder, any underwriter (as
defined in the Act) for such Holder, and each person, if any, who controls such
Holder or underwriter within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Act and applicable state securities laws insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
on any untrue or alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein in light of the circumstances under which it was
made or necessary to make the statements therein not misleading, or arise out of
any violation by the company of any securities law, rule or regulation
applicable to the Company and relating to action or inaction required of the
company in connection with any such registration; and (ii) will reimburse each
such person or entity for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 13(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld or
delayed) nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or an alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary Prospectus, final prospectus, or amendments or supplements
-20-
22
thereto in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by or on behalf of any
such Holder, underwriter or controlling person.
(b) To the full extent permitted by law, each Holder
requesting or joining in a registration under this Agreement will and hereby
does (i) indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the registration statement, each person, if any,
who controls the Company within the meaning of the Act, and any Underwriter (as
defined in the Act) for the Company, each other holder and each person, if any,
who controls such other Holder within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company or any such director, officer, controlling person, other Holder or
underwriter may become subject, under the Act and applicable state securities
laws, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and (ii) reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, other
Holder, controlling person or underwriter attributable to investigating or
defending any loss, claim, damage, liability or action indemnified by such
Holder pursuant to clause (i); provided however, that the indemnity agreement
contained in this Section 13(b) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of such Holder (which consent shall not be unreasonably
withheld or delayed).
In no event shall the liability of any Registered Holder be
greater than the dollar amount of the proceeds received by such Registered
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Promptly after receipt by an indemnified party under
this Section 13 of notice of the commencement of any action or knowledge of a
claim that would, if asserted, give rise to a claim for indemnity hereunder,
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 13, notify the indemnifying
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party in writing of the commencement thereof or knowledge thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party
promptly of the commencement of any such action or of the knowledge of any such
claim, if prejudicial to any material extent to his ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 13 to the extent so prejudiced, but the
omission so to notify the indemnifying party will not relieve him of any
liability that he may have to any indemnified party otherwise than under this
Section 13.
(d) If the indemnification provided for in this Section 13
is for any reason, other than pursuant to the terms thereof, held to be
unavailable to an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the indemnifying and indemnified parties from the offering of Common Stock.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or otherwise results in a materially inequitable
result (as determined by the Board of Directors of the Company in its reasonable
discretion), then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
indemnifying and indemnified parties in connection with the statements) or
omissions) which resulted in such losses, claims, damages, liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by a party shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by such party bears to the total net proceeds from
the offering received by all parties. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the Company or a Holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Holders agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed
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24
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. No Person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Act shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
14. Remedies. In addition to being entitled to exercise all
rights provided in this Agreement as well as all rights granted by law,
including recovery of damages, each Holder of Registrable Securities will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees not to raise the defense in any action for specific performance
that a remedy at law would be adequate.
15. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of all of
the Holders; provided, however, that any such waiver or consent will be
effective against any Holder actually executing a written waiver or consent
whether or not other Holders of the outstanding Registrable Securities grant
such waiver or consent.
16. Filing Notices and Copies. The Company shall provide to
each Holder of Registrable Securities such number of copies of any registration
statement, amendment thereto (including post-effective amendments) or other
report, document or notice that is filed with the Securities and Exchange
Commission or other authority under the securities laws, as may be reasonably
requested by such Holder of Registrable Securities. in addition, the Company
shall provide prior notice to any Holder of Registrable Securities of any such
filing of a registration statement or amendment thereto, provided that the
foregoing notice provision shall not shorten any other advance notice provision
contained in this Agreement.
17. Notices. All notices and other communications hereunder
shall be in writing and shall be given to the person either personally or by
sending a copy thereof by first class or express mail, postage prepaid, or by
telegram (with messenger service specified), telex or TWX (with answerback
received) or courier services, charges prepaid, or by telecopier, to such
party's address (or to such party's telex, TWX, telecopier or telephone number).
If the notice is sent by mail, it shall be deemed to have been given to the
person entitled thereto five (5) business days after being deposited in the
United States mail, and if the notice is sent by telegraph or courier services,
it shall be deemed to have been given to the person entitled thereto one (1)
business day after deposited with a telegraph office or
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courier service for delivery to that person or, in the case of telex, TWX, or
telecopy when dispatched.
If to Holdings, to:
Kirkland Holdings L.L.C.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Management Investors or any Company (including the
Representative), to:
Xxxxxxxx'x, Inc.
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Baker, Donelson, Bearman & Xxxxxxxx
20th Floor
First Tennessee Building
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telecopy No.: (000)000-0000
If to Xxxxxx Xxxxxxxx, to:
CBK, Ltd.
000 Xxxx Xxxxxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
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With a copy to:
Xxxxx, Tarrant & xxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Esquire
Telecopy No.: (000) 000-0000
If to Mezzanine Warrant Holders, to:
Capital Resource Lenders II, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxxxx X. XxXxxxx
Telecopy No.: (000) 000-0000
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Allied Capital Corporation
and
Allied Capital Corporation II
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
The Marlborough Capital Investment Fund, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx Laroix
Telecopy No.: (000)000-0000
Capital Trust Investments, Ltd.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Esquire
Telecopy No.: (000) 000-0000
Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
18. Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
19. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
20. Governing Law. This Agreement shall be governed by and
construes in accordance with the laws of the State of Delaware.
21. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained imp herein shall not be affected or impaired thereby.
-26-
28
22. 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 matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights granted by
the Company with respect to the Registrable Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
23. Parties Benefitted. Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights, remedies,
obligations or liabilities.
24. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns including, without limitation,
subsequent Holders of Registrable Securities agreeing to be bound by all and the
terms and conditions of this Agreement.
[SPACE INTENTIONALLY LEFT BLANK]
-27-
29
IN WITNESS WHEREOF, the parties have executed this
Shareholders Agreement under seal on the date first above written.
CAPITAL RESOURCE LENDERS II, L.P., by
CAPITAL RESOURCE PARTNERS II, L.P., its
General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Title: General Partner
ALLIED CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Title: SVP
--------------------------------
ALLIED CAPITAL CORPORATION II
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Title: SVP
--------------------------------
THE MARLBOROUGH CAPITAL INVESTMENT FUND,
L.P., by MARLBOROUGH CAPITAL MANAGEMENT,
L.P., its general partner,
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxx, its authorized
partner
CAPITAL TRUST INVESTMENTS, LTD.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Attorney-in-fact
-------------------------------
KIRKLAND HOLDINGS L.L.C.
By:/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Title:
--------------------------------
ATTEST: XXXXXXXX'X, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
----------------------- -------------------------------------
Title: VP/Sec Title: President
-------------------------------
-28-
30
Corporate Name
--------------
101 Kirkland's of Carolina, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, Xxxxxxxx Mall, Inc.
103 Kirkland's of Tennessee, Inc.
104 K. C. Corp, Inc.
107 Kirkland's of Greensboro, Four Seasons Mall, Inc.
109 Kirkland's of Fayetteville, Cross Creek Mall, Inc.
110 Kirkland's of Wilmington, Independence Mall, Inc.
111 Kirkland's III, Xxxxxxx-Metro Center, Inc.
000 Xxxxxxxx'x xx Xxxxxxx, XX, Laurelwood Shopping Center, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, XX, Northpark Mall, Inc.
116 Kirkland's of Knoxville, East Towne Mall, Inc.
117 Kirkland's of Huntsville, Madison Square Mall, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx, Xxxxxxx Hollow Mall, Inc.
120 Kirkland's of Birmingham, Riverchase Galleria, Inc.
121 Kirkland's of Chattanooga, Eastgate Center Mall, Inc.
122 Kirkland's of Xxxxxxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx xx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx xx Xxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx Xxxx, Xxxxx, XX, Inc.
135 Kirkland's of Dayton Mall, Dayton, OH, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxxxx, Xxxxxx, XX, Inc.
139 Kirkland's of Chesterfield Towne Center, Richmond, VA, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxx, Xxxxxx Xxxx, XX, Inc.
141 Kirkland's of Montgomery Mall, Montgomery, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
146 Kirkland's of Hickory Ridge Mall, Memphis, TN, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx XxXxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
150 Kirkland's of River Ridge Mall, Lynchburg, VA, Inc.
151 Kirkland's of Bel Air Mall, Mobile, AL, Inc.
152 Kirkland's of The Mall at Xxxxxx Crossing, Tupelo, MS, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxx Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxx-Xxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
156 Kirkland's of Xxx Xxxx xx xxx Xxxxxxx, Xxxxxxxxxxxx, XX,
Inc.
157 Kirkland's of Xxxxxxxx Mall, Birmingham, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX, Inc.
-29-
31
# Corporate Name
- --------------
160 Kirkland's of Cary Village Mall, Raleigh, NC, Inc.
000 Xxxxxxxx'x xx XxxxXxxxxxx Xxxxxxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX, Inc.
163 Kirkland's of Saint Louis Galleria, St. Louis, MO, Inc.
164 Kirkland's of Wiregrass Commons Mall, Dothan, AL, Inc.
000 Xxxxxxxx'x xx Xxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
171 Kirkland's of Charleston Towne Center, Charleston, X.XX,
Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxxx, Xx. Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx'x Xxxxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxxx Xxxx, Xxxxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxx Xxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xx. Xxxxxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX, Inc.
186 Kirkland's of Xxx Xxxx xx Xxxxxxx Xxxx, Xxxxxxx Xxxx, XX,
Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xx. Xxxxx, IN, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX, Inc.
191 Kirkland's of Xxx Xxxx xx Xxxxxxxxx Xxxxxxx, Xxxxxx, XX,
Inc.
000 Xxxxxxxx'x xx Xx. Xxxxxxx Xxxxx Xxxxxx, Xxxxxxx, XX Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
195 Kirkland's of The Parks at Arlington, Ft. Worth, TX, Inc.
196 Kirkland's of Xxxxx Xxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xx. Xxxxx Xxxxxx, Xx. Xxxxx, XX, Inc.
198 Kirkland's of Turtle Creek Mall, Hattiesburg, MS, Inc.
000 Xxxxxxxx'x xx Xxx Xxxxxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx Xxxxxx, Xxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxx Xxxx Xxxx, Xxxx Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxx Xxxxxx Xxxx, Xxxx Xxxxx, XX, Inc.
209 Kirkland's of Xxx Valley Mall, Chicago, IL, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
-30-
32
# Corporate Name
--- --------------
000 Xxxxxxxx'x xx Xxxxxx Xxxxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxx, Xxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxx Xxxxxx Xxxxx, Xxxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX., Inc.
000 Xxxxxxxx'x xx Xxxxxxx Xxxx, Xxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxx Xxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxx Xxxx, Xxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX, Inc.
000 Xxxxxxxx'x xx Xxxxxxxxxx Xxxx, Xxxxx, XX, Inc.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Title: President
-------------------------------
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Title: VP/Sec
-------------------------------
-31-
33
/s/ Xxxx Xxxxxxxx
-----------------------
Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx
-----------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxx
-----------------------
Xxxxx Xxxxx
/s/ Xxxxxx Xxxxxxxx
-----------------------
Xxxxxx Xxxxxxxx
[END OF SIGNATURES]
-32-
34
Exhibit A
COUNTERPART
THIS INSTRUMENT forms part of the Registration Rights Agreement (the
"Agreement") made as of the 11th day of June, 1996, among Kirkland Holdings
L.L.C., Xxxxxxxx'x, Inc., affiliates of Xxxxxxxx'x, Inc., Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxxxx, Capital Resource Lenders II, L.P.,
Allied Capital Corporation, Allied Capital Corporation II, The Marlborough
Capital Investment Fund, L.P. and Capital Trust Investments, Ltd., and any
additional Shareholders of the Companies (as defined in the Agreement), from
time to time, which Agreement permits execution by counterpart. The undersigned
hereby acknowledges having received a copy of the said Agreement (which is
annexed hereto as Schedule I) and having read the said Agreement in its
entirety, and for good and valuable consideration, receipt and sufficiency of
which is hereby acknowledged, hereby agrees that the terms and conditions of
the said Agreement shall be binding upon the undersigned as a Shareholder and
such terms and conditions shall inure to the benefit of and be binding upon the
undersigned and its successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
___ day of _________, 199__.
-------------------------
(Signature of Shareholder)
-------------------------
(Name in block letters)
33
