EXHIBIT 10.9
WARRANTHOLDERS REGISTRATION RIGHTS AGREEMENT
WARRANTHOLDERS REGISTRATION RIGHTS AGREEMENT, dated as of August 20,
1997 (this "Agreement"), by and among XXXXX INDUSTRIES, INC., a California
corporation ("Company"), MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
("MMLIC"), MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED ("MMCVP"), MASSMUTUAL
HIGH YIELD PARTNERS LLC ("MMHYP"), PARIBAS NORTH AMERICA, INC. ("Paribas")
and XXXXXXX NATIONAL LIFE INSURANCE COMPANY ("Xxxxxxx National," and together
with MMLIC, MMCVP, MMHYP and Paribas, the "Holders"). WHEREAS, the Board of
Directors of Xxxxx has effected a recapitalization of Xxxxx pursuant to
which, among other things, JFL Merger Co., a wholly owned subsidiary of X.X.
Xxxxxx Equity Investors I, L.P. ("MergerCo") has merged with and into Xxxxx,
with Xxxxx surviving such merger (the "Merger"), pursuant to which Xxxxx
assumed the liabilities and obligations of MergerCo;
WHEREAS, substantially simultaneously with the Merger, MMLIC, MMCVP,
MMHYP and Xxxxxxx National have purchased an aggregate of 16,000 shares of
the Series A 11.5% Cumulative Redeemable Preferred Stock (the "Series A
Preferred Stock") of the Company and Paribas has purchased 2,000 Shares of
Series B 11.5% Cumulative Redeemable Preferred Stock ("Series B Preferred
Stock" and, together with the Series A Preferred Stock, the "Preferred
Stock") and warrants (the "Warrants") to purchase an aggregate of 964,000
shares of the common stock of the Company; and
WHEREAS, to induce the Holders to purchase the Preferred Stock and
Warrants, Xxxxx agreed to provide the registration rights set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, the following terms
shall have the following meanings below:
"COMMON STOCK" shall mean the common stock of the Company, no par
value, upon consummation of the Merger.
"OTHER HOLDERS" shall mean Persons who are holders of record of
equity securities of the Company who have valid contractual registration
rights under the Shareholders Registration Rights Agreement entered into
among certain shareholders of the Company and the Company.
"PERSON" shall mean an individual, corporation, unincorporated
association, partnership, group (as defined in Section 13(d)(3) of the
Securities Exchange Act of
1934), trust, joint stock company, joint venture, business trust or
unincorporated organization, any governmental entity or any other entity of
whatever nature.
"REGISTRABLE SHARES" shall mean any shares of Common Stock which may
be (i) issued upon exercise of the Warrants or (ii) issued or distributed in
respect of the Common Stock referred to in clause (i) above by way of stock
dividend or stock split or other distribution, recapitalization or
reclassification. As to any particular Registrable Share, such Registrable
Share shall cease to be a Registrable Share when (i) it shall have been sold,
transferred or otherwise disposed of or exchanged pursuant to a registration
statement under the Securities Act or (ii) it shall have been distributed to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act.
2. INCIDENTAL REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SHARES. After the completion of
the initial public offering by the Company of its Common Stock, each time the
Company shall determine to file a registration statement under the Securities
Act in connection with the proposed offer and sale for cash of Common Stock
(other than debt securities which are convertible into Common Stock and other
than registration statements on Form S-4 or S-8) either by it or by any
holders of its outstanding equity securities, the Company shall give prompt
written notice of its determination to each Holder and of such Holder's
rights under this Section 2, at least 20 days prior to the anticipated filing
date of such registration statement. Upon the written request of each Holder
made within 15 days after the receipt of any such notice from the Company,
(which request shall specify the Registrable Shares intended to be disposed
of by such Holder), the Company shall use its best efforts to effect the
registration under the Securities Act of all Registrable Shares which the
Company has been so requested to register by the Holders thereof, to the
extent required to permit the disposition of the Registrable Shares so to be
registered; PROVIDED, HOWEVER, that (i) if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to proceed with
the proposed registration of the securities to be sold by it, the Company
may, at its election, give written notice of such determination to each
Holder of Registrable Shares and thereupon shall be relieved of its
obligation to register any Registrable Shares in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith) and (ii) if such registration involves an underwritten
offering, all Holders of Registrable Shares requesting to be included in the
Company's registration must sell their Registrable Shares to the underwriters
on the same terms and conditions as apply to the Company, with such
differences, including any with respect to indemnification, as may be
customary or appropriate in combined primary and secondary offerings
(provided that no Holder shall be required to provide indemnification which
is more expansive than the indemnification provided in Section 9(b) hereof
and provided, further, that the representations and warranties provided by
any Holder shall be limited to such matters as the authority of such Holder
to sell its Registrable Shares, its title thereto and the absence of liens
thereon). If a registration requested pursuant to this Section 2(a) involves
an underwritten public offering, any Holder of Registrable Shares requesting
to be included in such registration may elect in writing prior to the
effective
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date of the registration statement filed in connection with such
registration, not to register such securities in connection with such
registration. No registration effected under this Section 2 shall relieve
the Company of its obligations to effect one registration upon request under
Section 4 hereof.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter in good faith advises the Company in writing that, in its
opinion, the number of securities which the Company, the Holders and any
other Persons intend to include in such registration exceeds the largest
number of securities which can be sold in such offering without having an
adverse effect on such offering (including the price at which such securities
can be sold), then the Company shall include in such registration: (i) FIRST,
100% of the securities the Company proposes to sell for its own account; and
(ii) SECOND, such number of Registrable Shares which the Holders have
requested to be included in such registration and such number of securities
which Other Holders have requested to be included in such registration which,
in the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, such number of Registrable Shares and
securities of Other Holders to be included on a pro rata basis among all
requesting Holders and Other Holders on the basis of the relative number of
shares of Common Stock beneficially owned (as such term is used in Rule 13d-3
of the Exchange Act) by such Holders and Other Holders, PROVIDED that if the
number of Registrable Shares requested to be included in such registration by
the Holders pursuant to Section 2(a) hereof and permitted to be included in
such registration by the Holders pursuant to this Section 2(b) exceeds the
number which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, the number of such
Registrable Shares to be included in such registration by the Holders shall
be allocated pro rata among such Holders on the basis of the relative number
of Registrable Shares each such Holder has requested to be included in such
registration; and (iii) THIRD, to the extent that the number of securities
which are to be included in such registration pursuant to clauses (i) and
(ii), in the aggregate, is less than the number of securities which the
Company has been advised can be sold in such offering without having the
adverse effect referred to above, such number of other securities requested
to be included in the offering for the account of any other Persons which, in
the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, such number to be allocated pro rata among
all holders of such other securities on the basis of the relative number of
such other securities each other person has requested to be included in such
registration.
3. HOLDBACK AGREEMENTS. If any registration of Registrable Shares
shall be effected in connection with an underwritten public offering, the
Holders agree not to effect any public sale or distribution without the
consent of the managing underwriter (except in connection with such public
offering), of any equity securities of the Company, or of any security
convertible into or exchangeable or exercisable for any equity security of
the Company (in each case, other than as part of such underwritten public
offering), during the 180-day period (or such lesser period as the managing
underwriter may permit) beginning on the effective date of such registration,
if, and to the extent, the managing underwriter of any such offering
determines such action is necessary or desirable to effect such offering and
if and to the extent that each director
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and executive officer of the Company so agrees; PROVIDED, HOWEVER, that each
Holder has received the written notice required by Section 2(a) hereof.
4. REGISTRATION ON DEMAND.
(a) DEMAND BY HOLDERS. At any time on or after the later of (i)
August 20, 2000 and (ii) the one hundred and eighty-first (181st) day
after completion of the initial public offering by the Company of its
Common Stock, upon the written request by Holders of at least 66 2/3% of
all Registrable Shares, that the Company effect the registration under
the Securities Act of all or part of the Registrable Shares of such
requesting party, and specifying the amount and intended method of
disposition thereof, the Company shall promptly give notice of such
requested registration to all other Holders and, as expeditiously as
possible, use its best efforts to effect the registration under the
Securities Act of: (i) the Registrable Shares which the Company has
been so requested to register; and (ii) all other Registrable Shares
which the Company has been requested to register by any other Holder by
written request received by the Company within 15 days after the giving
of such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Shares); PROVIDED,
HOWEVER, that the Company shall not be required to effect such
registration unless the Registrable Shares requested to be so registered
have an aggregate proposed offering price of not less than $5,000,000;
and PROVIDED, FURTHER, HOWEVER, that the Company shall not be required
to effect more than one registration pursuant to this Section 4(a)
unless (X) all of the Registrable Shares that the Holders initial
requesting registration pursuant to this Section 4(a) requested to be
registered are not included in such registration statement or (Y) the
Company is eligible to file on Form S-3, in which case the Holders shall
be entitled to request an unlimited number of registrations pursuant to
this Section 4(a) except that the Company shall not be required to
effect such registration pursuant to this clause (Y) unless the
Registrable Shares requested to be so registered have an aggregate
proposed offering price of not less than $5,000,000 and no other
registration statement on Form S-3 has been filed by the Company and
been declared effective within the previous twelve months. Promptly
after the expiration of the 15-day period referred to in clause (ii)
above, the Company shall notify all Holders to be included in the
registration of the other Holders participating in such registration and
the number of Registrable Shares requested to be included therein. The
Holders initially requesting a registration pursuant to this Section
4(a) may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by
providing a written notice to the Company revoking such request;
PROVIDED, HOWEVER, that if such revocation occurs after the date of the
filing of such registration statement, then the Registration Expenses
incurred by the Company in connection with the revoked request shall be
payable by the Holders participating in such demand registration.
(b) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 4 shall not be deemed to have been effected unless
it has become effective under the Securities Act and has remained effective
for 180 days or such shorter period as all the Registrable Shares included in
such registration have actually been sold thereunder.
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(c) PRIORITY IN DEMAND REGISTRATIONS. If a demand registration
pursuant to this Section 4 involves an underwritten offering and the managing
underwriter in good faith advises the Company in writing that, in its
opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Shares) exceeds the largest number of securities which can be sold in such
offering without having an adverse effect on such offering (including the
price, acceptable to the Holders requesting such registration, at which such
securities can be sold), then the Company will include in such registration
(i) FIRST, 100% of the Registrable Shares requested to be registered pursuant
to Section 4(a) (provided that if the number of Registrable Shares requested
to be registered pursuant to Section 4(a) exceeds the number which the
Company has been advised can be sold in such offering without having the
adverse effect referred to above, the number of such Registrable Shares to be
included in such registration by the Holders shall be allocated pro rata
among such Holders on the basis of the relative number of Registrable Shares
each Holder has requested to be included in such registration); and (ii)
SECOND, to the extent that the number of Registrable Shares requested to be
registered pursuant to Section 4(a) is less than the number of securities
which the Company has been advised can be sold in such offering without
having the adverse effect referred to above, such number of shares of equity
securities that, FIRST, the Company and, SECOND, Other Holders may request to
be included in such registration.
5. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required by the provisions of
Sections 2 or 4 hereof to use its best efforts to effect or cause the
registration of Registrable Shares, the Company shall as expeditiously as
possible:
(i) prepare and, in any event within 60 days after the end of
the period within which a request for registration may be given to the
Company, file with the Securities and Exchange Commission (the "SEC") a
registration statement with respect to such Registrable Shares and use its
best efforts to cause such registration statement to become effective;
(ii) 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 to keep such registration statement
effective for a period not in excess of 90 days and to comply with the
provisions of the Securities Act, the Exchange Act, and the rules and
regulations promulgated thereunder with respect to the disposition of all the
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holders thereof
set forth in such registration statement; provided, that the Company shall
notify each Holder of Registrable Shares covered by such registration
statement of any stop order issued or threatened by the SEC, any other order
suspending the use of any preliminary prospectus or of the suspension of the
qualification of the registration statement for offering or sale in any
jurisdiction, and take all reasonable actions required to prevent the entry
of such stop order, other order or suspension or to remove it if entered;
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(iii) furnish to each Holder and each underwriter, if
applicable, of Registrable Shares covered by such registration statement such
number of copies of the registration statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement (including
each preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as each Holder
of Registrable Shares covered by such registration statement may reasonably
request in order to facilitate the disposition of the Registrable Shares
owned by such Holder;
(iv) use its best efforts to register or qualify such
Registrable Shares covered by such registration statement under the state
securities or blue sky laws of such jurisdictions as each Holder of
Registrable Shares covered by such registration statement and, if applicable,
each underwriter, may reasonably request, and do any and all other acts and
things which may be reasonably necessary to consummate the disposition in
such jurisdictions of the Registrable Shares owned by such Holder; PROVIDED,
HOWEVER, that in connection therewith, the Company shall not be required to
(A) qualify as a foreign corporation to do business or to register as a
broker or dealer in any such jurisdiction where it would not otherwise be
required to qualify or register but for this clause (iv), (B) subject itself
to taxation in any jurisdiction or (C) file a general consent to service of
process in any such jurisdiction.
(v) use its best efforts to cause such Registrable Shares
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the Holders thereof to consummate the disposition of such Registrable Shares;
(vi) if at any time when a prospectus relating to the
Registrable Shares is required to be delivered under the Securities Act any
event shall have occurred as the result of which any such prospectus as then
in effect would include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, immediately give written notice
thereof to each Holder and the managing underwriter, if any, of such
Registrable Shares and prepare and furnish to each such Holder a reasonable
number of copies of an amended or supplemental prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such Registrable
Shares, such prospectus shall not include an untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vii) use its best efforts to cause such Registrable Shares
to be accepted for listing or quotation on any securities exchange or
automated quotation system on which similar securities of the Company are
then listed, and enter into customary agreements including a listing
application and indemnification agreement in customary form, provided that
the applicable listing requirements are satisfied, and provide a transfer
agent and registrar for such Registrable Shares covered by such registration
statement not later than the effective date of such registration statement;
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(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions as each
Holder of Registrable Shares being sold or the underwriter, if any,
reasonably requests in order to expedite or facilitate the disposition of
such Registrable Shares, including customary indemnification and opinions;
(ix) to the extent reasonably requested by the Holders of at
least 51% of the Registrable Shares being sold, or the underwriters, if any,
use its best efforts to obtain a "cold comfort" letter or letters from the
Company's independent public accountants in customary form and covering
matters of the type customarily covered by "cold comfort" letters;
(x) make available, at the Company's expense, for inspection
by representatives of any Holder of Registrable Shares covered by such
registration statement, by any underwriter participating in any disposition
to be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by such Holders or any such underwriter
(collectively, the "HOLDER REPRESENTATIVES"), all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries (excluding any such records and documents as are protected by
attorney-client privilege or which the Company is prohibited from disclosing
pursuant to the terms of any nondisclosure agreements to which the Company or
any of its subsidiaries is a party; PROVIDED that, to the extent permitted
under any such nondisclosure agreement, the Company shall disclose any
information subject to such nondisclosure agreement upon execution and
delivery by such Holder or Holder Representative of a confidentiality
agreement for the benefit of the parties to such nondisclosure agreement);
(xi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable after the effective date
of the registration statement, an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder; and
(xii) notify counsel for the Holders of Registrable Shares
included in such registration statement and the managing underwriter, if any,
immediately, and confirm the notice in writing, (A) when the registration
statement, or any post-effective amendment to the registration statement,
shall have become effective, or any supplement to the prospectus or any
amendment prospectus shall have been filed and (B) of any request of the SEC
to amend the registration statement or amend or supplement the prospectus or
for additional information.
(b) Each Holder of Registrable Shares hereby agrees that, upon
receipt of any notice from the Company of the happening of any event of the
type described in Section 5(a)(vi) hereof, such Holder shall forthwith
discontinue disposition of such Registrable Shares covered by such
registration statement or related prospectus until such Holder's receipt of
the copies of the supplemental or amended prospectus contemplated by Section
5(a)(vi) hereof. In the event the Company shall give any such notice, the
period mentioned in Section 5(a)(ii) hereof shall be extended by the number
of days during the period from and including the date of the
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giving of such notice pursuant to Section 5(a)(vi) hereof and including the
date when such Holder shall have received the copies of the supplemental or
amended prospectus contemplated by Section 5(a)(vi) hereof. If for any other
reason the effectiveness of any registration statement filed pursuant to
Section 4 hereof is suspended or interrupted prior to the expiration of the
time period regarding the maintenance of the effectiveness of such
Registration Statement required by Section 5(a)(ii) hereof so that
Registrable Shares may not be sold pursuant thereto, the applicable time
period shall be extended by the number of days equal to the number of days
during the period beginning with the date of such suspension or interruption
to and ending with the date when the sale of Registrable Shares pursuant to
such registration statement may be recommenced.
(c) Each Holder hereby agrees to provide the Company, upon
receipt of its request, with such information about such Holder to enable the
Company to comply with the requirements of the Securities Act and to execute
such certificates as the Company may reasonably request in connection with
such information and otherwise to satisfy any requirements of law. Each
Holder further agrees to furnish to the Company in writing such information
regarding the Holder and his, her or its proposed distribution of Registrable
Shares as the Company may from time to time reasonably request.
6. UNDERWRITTEN REGISTRATIONS. Subject to the provisions of
Sections 2, 3 and 4 hereof, any of the Registrable Shares covered by a
registration statement may be sold in an underwritten offering at the
discretion of the Holder thereof. In the case of an underwritten offering
pursuant to Section 2 hereof, the managing underwriter or underwriters that
will administer the offering shall be selected by the Company, PROVIDED that
such managing underwriter or underwriters is reasonably satisfactory to the
Holders of a majority of the Registrable Shares to be registered. In the
case of any underwritten offering pursuant to Section 4 hereof, the managing
underwriter or underwriters that will administer the offering shall be
selected by the Holders of a majority of the Registrable Shares to be
registered, PROVIDED that such underwriters are reasonably satisfactory to
the Company.
7. SUSPENSION OF REGISTRATION REQUIREMENT.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation to use its best efforts to cause a
registration statement and any filings with any state securities authorities
to become effective or to amend or supplement any such registration statement
or filings shall be suspended during such period as circumstances exist
(including, without limitation, pending negotiations relating to, or the
consummation of, any transaction) which (i) would require additional
disclosure of material information by the Company in such registration
statement or filing which the Company has a bona fide business purpose for
not disclosing in such registration statement or (ii) render the Company
unable to comply with SEC requirements (any such circumstances hereinafter
referred to as a "Suspension Event"); PROVIDED that any suspension as a
result of a Suspension Event shall occur on not more than one occasion during
any 365-day period and shall continue only for so long as such event or its
effect is continuing and in no event shall any such suspension continue for
more than 120 days. To the extent that any such suspension occurs during a
period in which a registration
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statement has been filed pursuant hereto and remains effective, the time
during which the Company shall be required to maintain the effectiveness of
such registration statement shall be extended for the number of days during
which such suspension continued.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company shall not be required to cause a registration
statement requested pursuant to Section 4(a) to become effective during the
period beginning 30 days prior to the Company's good faith estimate of the
date of filing of, and ending 180 days after the effective date of, a
Company-initiated registration, provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective.
(c) The Company shall give the holders written notice immediately
upon the occurrence of any Suspension Event instructing such holders to
suspend sales of Registrable Shares as a result of such Suspension Event.
The Holders agree that after receipt of such notice they will not effect any
sales of Registrable Shares pursuant to any registration statement filed
pursuant to this Agreement until such time as such Holders shall have
received further notice from the Company that such sales may be recommenced,
which notice shall be given by the Company not later than five days after the
conclusion of any such Suspension Event.
8. EXPENSES.
(a) The fees, costs and expenses of all registrations in
accordance with Sections 2 and 4 hereof shall be borne by the Company,
subject to the provisions of Section 8(b) hereof.
(b) The fees, costs and expenses of registration to be borne as
provided in Section 8(a) hereof shall include, without limitation, all
expenses incident to the Company's performance of or compliance with this
Agreement, including without limitation all SEC and stock exchange or NASD
registration and filing fees and expenses, fees and expenses of compliance
with securities or blue sky laws (including without limitation reasonable
fees and disbursements of counsel for the underwriters, if any, or for the
selling Holders in connection with blue sky qualifications of the Registrable
Shares), rating agency fees, printing expenses (including expenses of
printing certificates for Registrable Shares and prospectuses), the fees and
expenses incurred in connection with the listing of the securities to be
registered on each securities exchange or automated quotation system on which
similar securities issued by the Company are then listed, and fees and
disbursements of counsel for the Company and all independent certified public
accountants (including the expenses of any annual audit, special audit and
"cold comfort" letters required by or incident to such performance and
compliance) (but in any event not including any underwriting discounts or
commissions or transfer taxes, if any, attributable to the sale of
Registrable Shares by such Holders) (collectively, "Registration Expenses").
9. INDEMNIFICATION.
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(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act
pursuant to Sections 2 or 4 hereof, the Company shall, and it hereby does,
indemnify and hold harmless, to the extent permitted by law, each of the
Holders of any Registrable Shares covered by such registration statement,
each affiliate of such Holder and their respective directors and officers
(and the directors, officers, affiliates and controlling Persons thereof),
each other Person who participates as an underwriter in the offering or sale
of such securities and each other Person, if any, who controls such Holder or
any such underwriter within the meaning of the Securities Act (collectively,
the "Indemnified Parties"), against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including any amounts paid in
any settlement effected with the Company's consent, which consent shall not
be unreasonably withheld and including any expenses paid in connection with
the enforcement of the indemnification rights contained herein) to which any
Indemnified Party may become subject under the Securities Act, state
securities or blue sky laws, common law, any other applicable law, foreign or
domestic, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof, whether or not
such Indemnified Party is a party thereto) or expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final
or summary prospectus contained therein, or any amendment or supplement
thereto, (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating
to action required of or inaction by the Company in connection with any such
registration, and the Company shall reimburse such Indemnified Party for any
legal or any other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; PROVIDED that the Company shall not be liable to any Indemnified
Party in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out
of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or amendment
or supplement thereto or in any such preliminary, final or summary prospectus
in reliance upon and in conformity with written information with respect to
such Holder furnished to the Company by such Holder specifically for use
therein. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Holder or any Indemnified
Party and shall survive the transfer of such securities by such Holder.
(b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. The Company
may require, as a condition to including any Registrable Shares in any
registration statement filed in accordance with Sections 2 or 4 hereof, that
the Company shall have received an undertaking reasonably satisfactory to it
from the Holders of such Registrable Shares or any underwriter to, severally
and not jointly, indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 9(a) hereof) the Company with respect to
any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such statement or
alleged statement or omission or alleged omission was made in reliance upon
and in conformity with written information with respect to such Holder or
such underwriter furnished to
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the Company by such Holder or such underwriter specifically for use in such
registration statement, preliminary, final or summary prospectus or amendment
or supplement, or a document incorporated by reference into any of the
foregoing; PROVIDED that no such Holder shall be liable for any indemnity
claims in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Shares. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Company or any of the Holders, or any of their respective affiliates,
directors, officers or controlling Persons, and shall survive the transfer of
such securities by such Holder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 9, such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; PROVIDED that the
failure of the indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section 9,
except to the extent that the indemnifying party is actually materially
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be
entitled to participate in and to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation; PROVIDED that the indemnified party shall have the right to
employ counsel to represent the indemnified party and its respective
controlling persons, directors, officers, general or limited partners,
employees or agents who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the indemnified party against
such indemnifying party under this Section 9 PROVIDED that the employment of
such counsel shall be at the expense of the indemnified party, unless (i) the
indemnifying party shall have agreed in writing to pay the expenses of such
counsel, (ii) the indemnifying party shall not have promptly employed counsel
reasonably satisfactory to the indemnified party to assume the defense of
such action or counsel or (iii) any indemnified party shall have reasonably
concluded that there may be defenses available to such indemnified party or
its respective controlling persons, directors, officers, employees or agents
which are in conflict with or in addition to those available to the
indemnifying party, and in that event the reasonable fees and expenses of one
firm of separate counsel for the indemnified party (in addition to the
reasonable fees and expenses of one firm serving as local counsel) shall be
paid by the indemnifying party. No indemnifying party shall consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 9 shall for any reason be unavailable to any indemnified party under
Section 9(a) or 9(b) hereof or is insufficient to hold it harmless in respect
of any loss, claim, damage or liability, or any
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action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the indemnified party and indemnifying party or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of
the indemnified party and indemnifying party with respect to the statements
or omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. Notwithstanding any other provision of this Section 9(d), no
Holder of Registrable Shares shall be required to contribute an amount
greater than the dollar amount of the proceeds received by such Holder with
respect to the sale of any such Registrable Shares. 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.
(e) OTHER INDEMNIFICATION. Indemnification and contribution
similar to that specified in the preceding subdivisions of this Section 9
(with appropriate modifications) shall be given by the Company and each
Holder of Registrable Shares with respect to any required registration or
other qualification of securities under any federal or state law or
regulation or governmental authority other than the Securities Act.
(f) NON-EXCLUSIVITY. The obligations of the parties under this
Section 9 shall be in addition to any liability which any party may otherwise
have to any other party.
10. ASSIGNABILITY. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are
for the benefit of the parties hereto other than the Company shall also be
for the benefit of and enforceable by any subsequent Holder of any
Registrable Shares, subject to the provisions contained herein. The Company
may not assign any of its rights or delegate any of its duties under this
Agreement without the written consent of the Holders of 66 2/3% of the
Registrable Shares; PROVIDED, HOWEVER, that it is understood and agreed by
the parties hereto that MergerCo will be merged with and into Xxxxx (the
"Merger"), with Xxxxx as the surviving corporation, pursuant to the Agreement
and Plan of Merger, dated as of August 13, 1997, by and among MergerCo, Xxxxx
and the other parties thereto, and upon consummation of the Merger, this
Agreement and the rights and obligations hereunder will be assumed by Xxxxx
and the definition of "Registrable Shares" contained herein will refer to the
common stock of Xxxxx issuable upon exercise of the Warrants (which such
Warrants will become exercisable for shares of the common stock of Xxxxx by
operation of law upon consummation of the Merger).
11. NOTICES. Any and all notices, designations, consents, offers,
acceptances or any other communications shall be given in writing by either
(a) personal delivery to and receipted for by the addressee or by (b)
telecopy or registered or certified mail which shall be addressed, in the
case of the Company, to 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000,
facsimile (000) 000-0000, attention of Chief Executive Officer, with a copy
to X.X. Xxxxxx Equity Investors I, L.P., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, facsimile (000) 000-0000, attention of Xx. Xxxxxx Xxxxxxxx, and in the
case of Holders, to the address or
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addresses thereof appearing on the books of the Company or of the transfer
agent and registrar for the Registrable Shares.
All such notices and communications shall be deemed to have been
duly given and effective: when delivered by hand, if personally delivered;
five business days after being deposited in the mail, postage prepaid, if
mailed; and when receipt acknowledged, if telecopied.
12. ARBITRATION. Any controversy, dispute or claim arising out of,
in connection with or in relation to the interpretation, performance or
breach of this Agreement shall be determined, at the request of any party, by
arbitration in a city mutually agreeable to the parties to such controversy,
dispute or claim, or, failing such agreement, in New York, New York, before
and in accordance with the then-existing Rules for Commercial Arbitration of
the American Arbitration Association, and any judgment or award rendered by
the arbitrator will be final, binding and unappealable and judgment may be
entered by any state or Federal court having jurisdiction thereof. The
pre-trial discovery procedures of the Federal Rules of Civil Procedure shall
apply to any arbitration under this Section 12. Any controversy concerning
whether a dispute is an arbitrable dispute or as to the interpretation or
enforceability of this Section 12 shall be determined by the arbitrator. The
arbitrator shall be a retired or former United States District Judge or other
person acceptable to each of the parties, provided such individual has
substantial professional experience with regard to corporate or partnership
legal matters. The parties intend that this agreement to arbitrate be valid,
enforceable and irrevocable.
13. SEVERABILITY. If any provision of this Agreement or any portion
thereof is finally determined to be unlawful or unenforceable, such provision
or portion thereof shall be deemed to be severed from this Agreement. Every
other provision, and any portion of such an invalidated provision that is not
invalidated by such a determination, shall remain in full force and effect.
14. AMENDMENTS, WAIVERS. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to departures from the
provisions hereof may be given unless consented to in writing by the Company
and the Holders of at least 66 2/3% of the Registrable Shares.
15. ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties hereto with respect to the transactions contemplated herein
and understandings among the parties relating to the subject matter hereof.
Any and all previous agreements and understandings between or among the
parties hereto regarding the subject matter hereof are, whether written or
oral, superseded by this Agreement.
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17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
18. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
19. LIMITATION OF LIABILITY OF SHAREHOLDERS AND OFFICERS OF COMPANY.
ANY OBLIGATION OR LIABILITY WHATSOEVER OF THE COMPANY WHICH MAY ARISE AT ANY
TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY BE
INCURRED BY IT PURSUANT TO ANY INSTRUMENT, TRANSACTION OR UNDERTAKING
CONTEMPLATED HEREBY SHALL BE SATISFIED OUT OF THE COMPANY'S ASSETS ONLY. NO
SUCH OBLIGATION OR LIABILITY SHALL BE PERSONALLY BINDING UPON, NOR SHALL
RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE PROPERTY OF ANY OF THE
COMPANY'S SHAREHOLDERS (SOLELY AS A RESULT OF THEIR STATUS AS SHAREHOLDERS),
DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE.
NOTWITHSTANDING THE FOREGOING, THIS SECTION 19
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SHALL NOT IN ANY WAY AFFECT OR LIMIT ANY RIGHTS OR OBLIGATIONS OF THE
COMPANY OR ANY HOLDER UNDER THIS AGREEMENT.
20. GOVERNING LAW. This Agreement is made pursuant to and shall be
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective authorized officers as of the date aforesaid.
XXXXX INDUSTRIES, INC.
By: /s/ XXXXX XXXXX
-------------------------------
Name: Xxxxx Xxxxx,
Title: Assistant Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
MASSMUTUAL CORPORATE VALUE
PARTNERS LIMITED
By: Massachusetts Mutual Life
Insurance Company
Its: Investment Advisor
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
15
MASSMUTUAL HIGH YIELD PARTNERS
LLC
By: HYP Management, Inc.
Its: Managing Member
By: /s/ XXXXX X. XXXXXXXX
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PARIBAS NORTH AMERICA, INC.
By: /s/ XXXXX XXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxx
Title: CFO
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc.
Its: Agent
By: /s/ XXXXXX XXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
16
