Exhibit 10.8
REGISTRATION RIGHTS AGREEMENT
among
THE YANKEE CANDLE COMPANY, INC.
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP - V, L.P.,
and
FORSTMANN LITTLE & CO. SUBORDINATED DEBT
AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP - VI, L.P.
May 6, 1999
REGISTRATION RIGHTS AGREEMENT, dated as of May 6, 1999, among The
Yankee Candle Company, Inc., a Massachusetts corporation (the "Company"),
Forstmann Little & Co. Equity Partnership - V, L.P., a Delaware limited
partnership ("Equity-V"), and Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership - VI, L.P. a Delaware limited partnership
("MBO-VI") (Equity-V and MBO-VI are individually referred to as a "Forstmann
Little Partnership" and collectively referred to as the "Forstmann Little
Partnerships").
The Forstmann Little Partnerships currently own 170,000 shares of
Class A common stock of Yankee Candle Holdings Corp., a Delaware corporation
("Holdings"). In connection with the proposed public offering of Common Stock
(as defined below), Holdings will exchange its assets for new shares of the
Company. In connection with that exchange the Company hereby grants to the
Forstmann Little Partnerships certain registration and other rights with respect
to their shares of Common Stock as more fully set forth herein.
If either of the Forstmann Little Partnerships desires to sell
shares of Common Stock, it may be necessary to register such shares under the
Securities Act (as defined below).
Accordingly, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means any shares of common stock, par value $.01 per
share, of the Company, now or hereafter authorized to be issued, and any and all
securities of any kind whatsoever of the Company which may be exchanged for or
converted into Common Stock, any and all securities of any kind whatsoever of
the Company which may be issued on or after the date hereof in respect of, in
exchange for, or upon conversion of shares of Common Stock pursuant to a merger,
consolidation, stock split, stock dividend, recapitalization of the Company or
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"Other Investor" means each Person who, at the time of any
registration of Common Stock hereunder, has the right under a stockholder's
agreement or stock option agreement with the Company or any subsidiary thereof
to participate in any public offering in which all or a portion of the shares of
Common Stock owned by the Forstmann Little Partnerships are registered under the
Securities Act.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registrable Securities" means (i) any shares of Common Stock now or
hereafter owned by the Forstmann Little Partnerships, (ii) any shares of Common
Stock held pursuant to the terms of a stockholder's agreement or issuable upon
exercise of an option pursuant to the terms of a stock option agreement, as the
case may be, between any Other Investor and the Company or any subsidiary
thereof, which agreement gives such Other Investor the right to participate
proportionately with the Forstmann Little Partnerships in a public offering with
respect to such shares, and (iii) any Common Stock issued with respect to the
Common Stock referred to in clauses (i) or (ii) by way of a stock dividend,
stock split or reverse stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or otherwise. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities (a) when a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) when such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration of them under the Securities Act, or (c) when
such securities shall have been sold as permitted by, and in compliance with,
the Securities Act. Any certificate evidencing the Registrable Securities shall
bear a legend stating that the securities have not been registered under the
Securities Act and setting forth or referring to the restrictions on
transferability and sale of the securities.
"Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to Section 2
hereof, including, without limitation, all registration, filing and applicable
national securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
underwriters or the Forstmann Little Partnerships and the Other Investors in
connection with "blue sky" qualification of the Registrable Securities and
determination of their eligibility for investment under the laws of the various
jurisdictions), all word processing, duplicating and printing expenses, all
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of
"cold comfort" letters or any
-2-
special audits required by, or incident to, such registration, all fees and
disbursements of underwriters (other than underwriting discounts and
commissions), all transfer taxes, and the fees and expenses of counsel to the
Forstmann Little Partnerships and the Other Investors; PROVIDED, HOWEVER, that
Registration Expenses shall exclude, and the Forstmann Little Partnerships and
the Other Investors shall pay, underwriting discounts and commissions in respect
of the Registrable Securities being registered.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
2. REGISTRATION UNDER THE SECURITIES ACT, ETC.
2.1 REGISTRATION ON REQUEST.
(a) REQUEST. At any time or from time to time, the
Forstmann Little Partnerships, individually or jointly, shall have the right to
require the Company to effect the registration under the Securities Act of all
or part of the Registrable Securities, by delivering a written request therefor
to the Company specifying the number of shares of Registrable Securities and the
intended method of distribution. The Company shall, (i) as expeditiously as
possible (but in any event within 120 days of receipt of a written request), use
its best efforts to effect the registration under the Securities Act (including
by means of a shelf registration pursuant to Rule 415 under the Securities Act
if so requested in such request and if the Company is then eligible to use such
a registration) of the Registrable Securities which the Company has been so
requested to register by the Forstmann Little Partnerships, for distribution in
accordance with the intended method of distribution set forth in the written
request delivered by the Forstmann Little Partnerships, and (ii) if requested by
the Forstmann Little Partnerships, obtain acceleration of the effective date of
then registration statement relating to such registration.
(b) REGISTRATION OF OTHER SECURITIES. Whenever the
Company shall effect a registration pursuant to this Section 2.1 in connection
with an underwritten offering by any Forstmann Little Partnership and any Other
Investors of Registrable Securities, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the Forstmann Little Partnership or Partnerships so registering
Registrable Securities (the "Registering Forstmann Little Partnerships") shall
have consented in writing to the inclusion therein of such other securities,
which consent may be subject to terms and conditions determined by the
Registering Forstmann Little Partnerships in their sole discretion.
-3-
(c) REGISTRATION STATEMENT FORM. Registrations
under this Section 2.1 shall be on such appropriate registration form of the
Commission as shall be selected by the Company and as shall be reasonably
acceptable to the Registering Forstmann Little Partnerships. The Company agrees
to include in any such registration statement all information which, in the
opinion of counsel to the Registering Forstmann Little Partnerships and counsel
to the Company, is necessary or desirable to be included therein.
(d) EXPENSES. The Company shall pay all Registration
Expenses in connection with any registration requested pursuant to this Section
2.1.
(e) EFFECTIVE REGISTRATION STATEMENT. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been effected
(including for purposes of paragraph (h) of this Section 2.1) (i) unless a
registration statement with respect thereto has become effective and has been
kept continuously effective for a period of at least 120 days (or such shorter
period which shall terminate when all the Registrable Securities covered by such
registration statement have been sold pursuant thereto), (ii) if after it has
become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Registering Forstmann
Little Partnerships and has not thereafter become effective, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived.
(f) SELECTION OF UNDERWRITERS. The underwriters of each
underwritten offering of the Registrable Securities so to be registered shall be
selected by the Registering Forstmann Little Partnerships.
(g) RIGHT TO WITHDRAW. If the managing underwriter of any
underwritten offering shall advise the Registering Forstmann Little Partnerships
that the Registrable Securities covered by the registration statement cannot be
sold in such offering within a price range acceptable to the Registering
Forstmann Little Partnerships, then the Registering Forstmann Little
Partnerships shall have the right to notify the Company in writing that they
have determined that the registration statement be abandoned or withdrawn, in
which event the Company shall abandon or withdraw such registration statement.
In the event of such abandonment or withdrawal, such request shall not be
counted for purposes of the requests for registration to which the Forstmann
Little Partnerships are entitled pursuant to this Section 2.1.
(h) LIMITATIONS ON REGISTRATION ON REQUEST. The Forstmann
Little Partnerships shall be entitled to require the Company to effect, and the
Company shall be required to effect, six registrations in the aggregate pursuant
to this Section 2.1,
-4-
PROVIDED, HOWEVER, that the aggregate offering value of the shares to be
registered pursuant to any such registration shall be at least $15,000,000
unless the Forstmann Little Partnerships then own shares with an aggregate value
less than $15,000,000 (in which case such lesser number of shares may be
registered).
(i) POSTPONEMENT. The Company shall be entitled once in
any six-month period to postpone for a reasonable period of time (but not
exceeding 90 days) (the "Postponement Period") the filing of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if the Company determines, in its reasonable judgment, that such registration
and offering would materially interfere with any material financing, corporate
reorganization or other material transaction involving the Company or any
subsidiary, or would require premature disclosure thereof, and promptly gives
the Registering Forstmann Little Partnerships written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a registration statement, the Forstmann Little
Partnerships shall have the right to withdraw the request for registration by
giving written notice to the Company at any time and, in the event of such
withdrawal, such request shall not be counted for purposes of the requests for
registration to which the Forstmann Little Partnerships are entitled pursuant to
this Section 2.1.
2.2 INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the
Company at any time proposes to register any of its securities under the
Securities Act by registration on Form X-0, X-0 or S-3 or any successor or
similar form(s) (except registrations on any such Form or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger or consolidation), whether or not for
sale for its own account, it will each such time give prompt written notice to
each of the Forstmann Little Partnerships of its intention to do so and of the
Forstmann Little Partnerships' rights under this Section 2.2. Upon the written
request of any of the Forstmann Little Partnerships (which request shall specify
the maximum number of Registrable Securities intended to be disposed of by the
Forstmann Little Partnerships), made as promptly as practicable and in any event
within 30 days after the receipt of any such notice (15 days if the Company
states in such written notice or gives telephonic notice to the Forstmann Little
Partnerships, with written confirmation to follow promptly thereafter, stating
that (i) such registration will be on Form S-3 and (ii) such shorter period of
time is required because of a planned filing date), the Company shall use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Forstmann Little Partnerships; PROVIDED, HOWEVER, that if, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of
-5-
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such securities, the Company shall give written notice of such determination
and its reasons therefor to the Forstmann Little Partnerships and (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of the
Forstmann Little Partnerships to request that such registration be effected as a
registration under Section 2.1 and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities,
for the same period as the delay in registering such other securities. No
registration effected under this Section 2.2 shall relieve the Company of its
obligation to effect any registration upon request under Section 2.1. The
Company will pay all Registration Expenses in connection with any registration
of Registrable Securities requested pursuant to this Section 2.2.
(b) RIGHT TO WITHDRAW. The Forstmann Little Partnerships
shall have the right to withdraw their request for inclusion of its Registrable
Securities in any registration statement pursuant to this Section 2.2 at any
time prior to the execution of an underwriting agreement with respect thereto by
giving written notice to the Company of its request to withdraw.
(c) PRIORITY IN INCIDENTAL REGISTRATIONS. If the managing
underwriter of any underwritten offering shall inform the Company by letter of
its belief that the number of Registrable Securities requested to be included in
such registration, when added to the number of other securities to be offered in
such registration, would materially adversely affect such offering, then the
Company shall include in such registration, to the extent of the number and type
which the Company is so advised can be sold in (or during the time of) such
offering without so materially adversely affecting such offering (the "Section
2.2 Sale Amount"), (i) all of the securities proposed by the Company to be sold
for its own account; (ii) thereafter, to the extent the Section 2.2 Sale Amount
is not exceeded, the Registrable Securities requested by the Forstmann Little
Partnerships to be included in such registration pursuant to Section 2.2(a)
(including Registrable Securities held by Other Investors); and (iii)
thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, any other
securities of the Company requested to be included in such registration by any
holder thereof, including, in the case where such registration is to be effected
as a result of the exercise by a holder of the Company's securities of such
holder's right to cause such securities to be so registered, the securities of
such holder.
(d) PLAN OF DISTRIBUTION. Any participation by holders of
Registrable Securities in a registration by the Company shall be in accordance
with the
-6-
Company's plan of distribution, provided that the Registering Forstmann
Little Partnerships shall have the right to select the co-managing underwriter.
2.3 REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof,
the Company shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as
practicable the requisite registration statement to effect such registration
(and shall include all financial statements required by the Commission to be
filed therewith) and thereafter use its best efforts to cause such registration
statement to become effective; PROVIDED, HOWEVER, that before filing such
registration statement (including all exhibits) or any amendment or supplement
thereto or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall furnish such documents to the Registering
Forstmann Little Partnerships and each underwriter, if any, participating in the
offering of the Registrable Securities and their respective counsel, which
documents will be subject to the review and comments of the Registering
Forstmann Little Partnerships, each underwriter and their respective counsel;
and provided, further, however, that the Company may discontinue any
registration of its securities which are not Registrable Securities at any time
prior to the effective date of the registration statement relating thereto;
(b) notify the Registering Forstmann Little Partnerships
of the Commission's requests for amending or supplementing the registration
statement and the prospectus, and prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement for such period as shall be required for the disposition
of all of such Registrable Securities in accordance with the intended method of
distribution thereof; PROVIDED, that except with respect to any such
registration statement filed pursuant to Rule 415 under the Securities Act, such
period need not exceed 120 days;
(c) furnish, without charge, to the Registering Forstmann
Little Partnerships and each underwriter such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in
-7-
conformity with the requirements of the Securities Act, and such other
documents, as the Registering Forstmann Little Partnerships and such
underwriters may reasonably request;
(d) use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such securities or blue sky laws of such States of the United
States of America where an exemption is not available and as the Registering
Forstmann Little Partnerships or any managing underwriter shall reasonably
request, (ii) to keep such registration or qualification in effect for so long
as such registration statement remains in effect, and (iii) to take any other
action which may be reasonably necessary or advisable to enable the Registering
Forstmann Little Partnerships to consummate the disposition in such
jurisdictions of the securities to be sold by the Registering Forstmann Little
Partnerships, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subsection (d) be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(e) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to the
Registering Forstmann Little Partnerships to consummate the disposition of such
Registrable Securities;
(f) furnish to the Registering Forstmann Little
Partnerships and each underwriter, if any, participating in the offering of the
securities covered by such registration statement, a signed counterpart of (i)
an opinion of counsel for the Company, and (ii) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated) and, in the case of the legal
opinion, such other legal matters, and, in the case of the accountants' comfort
letter, such other financial matters, as the Registering Forstmann Little
Partnerships, or the underwriters, may reasonably request;
(g) promptly notify the Registering Forstmann Little
Partnerships and each managing underwriter, if any, participating in the
offering of the securities covered by such registration statement (i) when such
registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or
-8-
post-effective amendment to such registration statement has been filed, and,
with respect to such registration statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission for
amendments or supplements to such registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose; (v) at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this clause (v), at
the request of the Registering Forstmann Little Partnerships promptly prepare
and furnish to the Registering Forstmann Little Partnerships and each managing
underwriter, if any, participating in the offering of the Registrable
Securities, a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and (vi) at any time when
the representations and warranties of the Company contemplated by Section 2.4(a)
or (b) hereof cease to be true and correct;
(h) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and promptly furnish to the Registering Forstmann Little
Partnerships a copy of any amendment or supplement to such registration
statement or prospectus;
(i) provide and cause to be maintained a transfer agent
and registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration;
(j) (i) use its best efforts to cause all Registrable
Securities covered by such registration statement to be listed on the principal
securities exchange on
-9-
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed, use its best
efforts to (x) cause all such Registrable Securities to be listed on a national
securities exchange or (y) failing that, secure designation of all such
Registrable Securities as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 of the Commission or (z) failing that, to secure NASDAQ
authorization for such shares and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such shares with the National Association of Securities Dealers,
Inc.;
(k) deliver promptly to counsel to the Registering
Forstmann Little Partnerships and each underwriter, if any, participating in the
offering of the Registrable Securities, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to such
registration statement;
(l) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable
Securities, no later than the effective date of the registration statement; and
(n) make available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's business) in their marketing of Registrable
Securities.
The Company may require the Registering Forstmann Little
Partnerships to furnish the Company such information regarding the Registering
Forstmann Little Partnerships and the distribution of the Registrable Securities
as the Company may from time to time reasonably request in writing.
The Forstmann Little Partnerships agree that upon receipt of any
notice from the Company of the happening of any event of the kind described in
paragraph (g)(iii) or (v) of this Section 2.3, each of the Registering Forstmann
Little Partnerships will, to the extent appropriate, discontinue its disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until, in the case of paragraph (g)(v) of this
Section 2.3, its receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (g)(v) of this Section 2.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in its possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. If the disposition by the Registering Forstmann Little Partnerships of
their securities is
-10-
discontinued pursuant to the foregoing sentence, the Company shall extend the
period of effectiveness of the registration statement by the number of days
during the period from and including the date of the giving of notice to and
including the date when the Registering Forstmann Little Partnerships shall have
received copies of the supplemented or amended prospectus contemplated by
paragraph (g)(v) of this Section 2.3; and, if the Company shall not so extend
such period, the Registering Forstmann Little Partnerships' request pursuant to
which such registration statement was filed shall not be counted for purposes of
the requests for registration to which the Forstmann Little Partnerships are
entitled pursuant to Section 2.1 hereof.
2.4 UNDERWRITTEN OFFERINGS.
(a) REQUESTED UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offering by the Registering Forstmann Little
Partnerships (and any Other Investors) pursuant to a registration requested
under Section 2.1, the Company shall enter into a customary underwriting
agreement with a managing underwriter or underwriters selected by the
Registering Forstmann Little Partnerships. Such underwriting agreement shall be
satisfactory in form and substance to the Registering Forstmann Little
Partnerships and shall contain such representations and warranties by, and such
other agreements on the part of, the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
customary provisions relating to indemnification and contribution. The
Registering Forstmann Little Partnerships shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the Registering Forstmann Little Partnerships and that any or
all of the conditions precedent to the obligations of such underwriters under
such underwriting agreement be conditions precedent to the obligations of the
Registering Forstmann Little Partnerships. None of the Registering Forstmann
Little Partnerships shall be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Registering Forstmann
Little Partnership, its ownership of and title to the Registrable Securities,
and its intended method of distribution; and any liability of any Registering
Forstmann Little Partnership to any underwriter or other person under such
underwriting agreement shall be limited to liability arising from breach of its
representations and warranties and shall be limited to an amount equal to the
proceeds (net of expenses and underwriting discounts and commissions) that it
derives from such registration.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into any underwriting agreements in connection therewith,
all of the Registrable
-11-
Securities to be included in such registration shall be subject to such
underwriting agreements. The Registering Forstmann Little Partnerships may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of the Registering
Forstmann Little Partnerships and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of the Registering Forstmann Little
Partnerships. None of the Registering Forstmann Little Partnerships shall be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such Registering Forstmann Little Partnership, its ownership of and
title to the Registrable Securities, and its intended method of distribution;
and any liability of any Registering Forstmann Little Partnership to any
underwriter or other Person under such underwriting agreement shall be limited
to liability arising from breach of its representations and warranties and shall
be limited to an amount equal to the proceeds (net of expenses and underwriting
discounts and commissions) that it derives from such registration.
2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Registering Forstmann
Little Partnerships, their underwriters, if any, and their respective counsel,
accountants and other representatives and agents the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and
employees and the independent public accountants who have certified its
financial statements, and supply all other information reasonably requested by
each of them, as shall be necessary or appropriate, in the opinion of the
Registering Forstmann Little Partnerships and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees
that in the event of any registration of any securities of the Company under the
Securities Act, the Company shall, and hereby does, indemnify and hold harmless
each Forstmann Little Partnership, its respective directors, officers, partners,
agents and affiliates and 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 Forstmann Little Partnership or any such underwriter within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which such Forstmann Little Partnership or any
such director, officer, partner, agent or affiliate or underwriter or
controlling person may
-12-
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities, joint or several (or actions or proceedings,
whether commenced or threatened, in respect thereof), 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 prospectus, final
prospectus 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 in light of the circumstances in which they were made 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 Forstmann Little Partnership and each such
director, officer, partner, agent or affiliate, underwriter and controlling
Person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; PROVIDED that the Company shall not be liable in any such
case to the Forstmann Little Partnerships or any such director, officer,
partner, agent, affiliate, or controlling person 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 an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by or on behalf of
the Forstmann Little Partnerships, specifically stating that it is for use in
the preparation thereof; and PROVIDED, FURTHER, that the Company shall not be
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense (i) arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of such Person or (ii) arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force regardless of any investigation made by or on behalf
of any Forstmann Little Partnership or any such director, officer, partner,
agent, affiliate,
-13-
underwriter or controlling Person and shall survive the transfer of such
securities by such Forstmann Little Partnership.
(b) INDEMNIFICATION BY THE FORSTMANN LITTLE PARTNERSHIPS.
As a condition to including any Registrable Securities in any registration
statement, the Company shall have received an undertaking reasonably
satisfactory to it from each Registering Forstmann Little Partnership so
including any Registrable Securities to indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.6)
the Company, and each director of the Company, each officer of the Company and
each other Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, but only to the extent such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by such Registering Forstmann Little Partnership
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; PROVIDED, HOWEVER, that the liability of such
indemnifying party under this Section 2.6(b) shall be limited to the amount of
proceeds (net of expenses and underwriting discounts and commissions) received
by such indemnifying party in the offering giving rise to such liability. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by such Forstmann
Little Partnership.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subsections of this Section 2.6,
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 or proceeding; PROVIDED, HOWEVER, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the
-14-
defendants in any such action or proceeding include both the indemnified party
and the indemnifying party and if in the opinion of outside counsel to the
indemnified party there may be legal defenses available to such indemnified
party and/or other indemnified parties which are different from or in addition
to those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to defend such action or
proceeding on behalf of such indemnified party or parties, PROVIDED, HOWEVER,
that the indemnifying party shall be obligated to pay for only one counsel for
all indemnified parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation (unless the first proviso in the preceding sentence shall be
applicable). No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.
(d) CONTRIBUTION. If the indemnification provided for in
this Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in respect
thereof, 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, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the allocation
provided in this clause (ii) provides a greater amount to the indemnified party
than clause (i) above, in such proportion as shall be appropriate to reflect not
only the relative fault but also the relative benefits received by the
indemnifying party and the indemnified party from the offering of the securities
covered by such registration statement as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 2.6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the preceding sentence of
this Section 2.6(d). No Person guilty of fraudulent misrepresentation (within
the meaning
-15-
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The
Registering Forstmann Little Partnerships' obligations to contribute as provided
in this subsection (d) are several and not joint and shall be in proportion to
the relative value of their respective Registrable Securities covered by such
registration statement. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld. Notwithstanding anything in this subsection (d) to the contrary, no
indemnifying party (other than the Company) shall be required to contribute any
amount in excess of the proceeds (net of expenses and underwriting discounts and
commissions) received by such party from the sale of the Registrable Securities
in the offering to which the losses, claims, damages or liabilities of the
indemnified parties relate.
(e) OTHER INDEMNIFICATION. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 2.6 (with appropriate modifications) shall be given by the Company and
the Registering Forstmann Little Partnerships with respect to any required
registration or other qualification of securities under any federal, state or
blue sky law or regulation of any governmental authority other than the
Securities Act. The indemnification agreements contained in this Section 2.6
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the transfer of
any of the Registrable Securities by any of the Forstmann Little Partnerships.
(f) INDEMNIFICATION PAYMENTS. The indemnification and
contribution required by this Section 2.6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
2.7 UNLEGENDED CERTIFICATES. In connection with the offering of
any Registrable Securities registered pursuant to this Section 2, the Company
shall (i) facilitate the timely preparation and delivery to the Forstmann Little
Partnerships, the Other Investors and the underwriters, if any, participating in
such offering, of unlegended certificates representing ownership of such
Registrable Securities being sold in such denominations and registered in such
names as requested by the Forstmann Little Partnerships, the Other Investors or
such underwriters and (ii) instruct any transfer agent and registrar of such
Registrable Securities to release any stop transfer orders with respect to any
such Registrable Securities.
-16-
2.8 LIMITATION ON SALE OF SECURITIES. The Company hereby agrees
that if it shall previously have received a request for registration pursuant to
Section 2.1 or 2.2 hereof, and if such previous registration shall not have been
withdrawn or abandoned, (i) the Company shall not effect any public or private
offer, sale or distribution of its securities or effect any registration of any
of its equity securities under the Securities Act (other than a registration on
Form S-8 or any successor or similar form which is then in effect), whether or
not for sale for its own account, until a period of 90 days (or such shorter
period as the Registering Forstmann Little Partnerships shall be advised by
their managing underwriter) shall have elapsed from the effective date of such
previous registration, and the Company shall so provide in any registration
rights agreements hereafter entered into with respect to any of its securities;
and (ii) the Company shall use its best efforts to cause each holder of its
equity securities purchased from the Company at any time after the date of this
Agreement to agree not to effect any public sale or distribution of any such
securities during such period, including a sale pursuant to Rule 144 under the
Securities Act.
2.9 NO REQUIRED SALE. Nothing in this Agreement shall be deemed
to create an independent obligation on the part of any of the Forstmann Little
Partnerships to sell any Registrable Securities pursuant to any effective
registration statement.
3. RULE 144. The Company shall take all actions reasonably necessary
to enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, or (b) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of a Forstmann Little Partnership, the Company
will deliver to such holder a written statement as to whether it has complied
with such requirements.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified
or supplemented only by written agreement of the party against whom enforcement
of such amendment, modification or supplement is sought.
5. OTHER INVESTORS. The parties hereto acknowledge and agree that no
Other Investor has any right to request registration of the Common Stock held by
such Other Investor or to participate in any registration of securities by the
Company, other than in accordance with the terms of the stockholder's agreement
or option agreement, as the case may be, between such Other Investor and the
Company or any of its subsidiaries, pursuant to which such Other Investor
generally may have the right or obligation to participate in any public offering
in which all or a portion of the shares of Common Stock owned by the Forstmann
Little Partnerships are registered under the Securities Act.
-17-
6. ADJUSTMENTS. In the event of any change in the capitalization of
the Company as a result of any stock split, stock dividend, reverse split,
combination, recapitalization, merger, consolidation, or otherwise, the
provisions of this Agreement shall be appropriately adjusted. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Forstmann Little
Partnerships or the Other Investors to include any Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration. The Company agrees that it will
take all reasonable steps necessary to effect a combination or subdivision of
shares if in the reasonable judgment of the Forstmann Little Partnerships such
combination or subdivision would enhance the marketability of the Registrable
Securities.
7. NOTICE. All notices and other communications hereunder shall be
in writing and, unless otherwise provided herein, shall be deemed to have been
given when received by the party to whom such notice is to be given at its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:
(a) If to any of the Forstmann Little Partnerships, to it:
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
With a copy to:
Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
(b) If to the Company:
The Yankee Candle Company, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
8. ASSIGNMENT; THIRD PARTY BENEFICIARIES. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns; provided, however,
that the Other Investors
-18-
shall have no rights under this Agreement. This Agreement may not be assigned by
the Company, without the prior written consent of the Forstmann Little
Partnerships. Any Forstmann Little Partnership may, at its election, at any time
or from time to time, assign its rights under this Agreement, in whole or in
part, to any purchaser of shares of Common Stock held by it.
9. REMEDIES. The parties hereto agree that money damages or other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
In any action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
10. NO INCONSISTENT AGREEMENTS. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Forstmann Little
Partnerships in this Agreement or otherwise conflicts with the provisions
hereof. The Company has not previously entered into any agreement with respect
to its securities granting any registration rights to any Person. The rights
granted to the Forstmann Little Partnerships hereunder do not in any way
conflict with and are not inconsistent with any other agreements to which the
Company is a party or by which it is bound. The Company further agrees that if
any other registration rights agreement entered into after the date of this
Agreement with respect to any of its securities contains terms which are more
favorable to, or less restrictive on, the other party thereto than the terms and
conditions contained in this Agreement are (insofar as they are applicable) with
respect to the Forstmann Little Partnerships, then the terms and conditions of
this Agreement shall immediately be deemed to have been amended without further
action by the Company or the Forstmann Little Partnerships so that the Forstmann
Little Partnerships shall be entitled to the benefit of any such more favorable
or less restrictive terms or conditions.
11. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not control or otherwise affect the meaning hereof.
12. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be
governed by, the laws of the State of New York, without giving effect to the
conflicts of law principles thereof. Each of the parties hereto hereby
irrevocably and unconditionally consents to
-19-
submit to the exclusive jurisdiction of the courts of the State of New York and
the United States of America located in the County of New York for any action or
proceeding arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any action or proceeding
relating thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its respective
address set forth in Section 7 hereof shall be effective service of process for
any action or proceeding brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any action or proceeding arising out of this Agreement or
the transactions contemplated hereby in the courts of the State of New York or
the United States of America located in the County of New York, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
14. INVALIDITY OF PROVISION. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. If any restriction or provision of this
Agreement is held unreasonable, unlawful or unenforceable in any respect, such
restriction or provision shall be interpreted, revised or applied in a manner
that renders it lawful and enforceable to the fullest extent possible under law.
15. FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
16. ENTIRE AGREEMENT; EFFECTIVENESS. This Agreement constitutes the
entire agreement, and supersedes all prior agreements and understandings, oral
and written, between the parties hereto with respect to the subject matter
hereof.
-20-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized.
THE YANKEE CANDLE COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and
Chief Executive Officer
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP - V, L.P.
By: FLC XXX Partnership,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx,
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND
EQUITY MANAGEMENT BUYOUT PARTNERSHIP - VI,
L.P.
By: FLC XXIX Partnership,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx,
a general partner
-21-
