EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 29th day of
December, 1999, between MacDermid, Incorporated, a Connecticut corporation (the
"COMPANY"), and Citicorp Venture Capital, Ltd., a New York corporation ("CVC"),
on behalf of itself and as agent for each other Seller Stockholder (as defined
below).
WHEREAS, each Seller Stockholder has acquired shares of Common Stock,
or a warrant to purchase Common Stock, pursuant to the Merger Agreement (as
defined below);
WHEREAS, as a condition to the consummation of the transaction
contemplated by the Merger Agreement, the Company agreed to grant to the Seller
Stockholders certain rights to require the Company to register, for public
distribution, the Registrable Shares (as defined herein) as hereafter described;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and CVC agree as
follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, in addition to the
terms defined in the preamble, the following terms shall have the following
respective meanings:
"CCT" means CCT Partners I, L.P.
"CMP" means Citicorp Mezzanine Partners, L.P.
"COMMON STOCK" means the common stock of the Company, no par value
per share.
"COMMISSION" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"CONTROL PERSON" means a Person who is or reasonably could be
deemed to be a control Person of the Company within the meaning of
Section 15 of the Securities Act.
"EFFECTIVE TIME" means the Effective Time of the Merger under the
Merger Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any similar Federal statute successor thereto, and the
rules and regulations of the Commission issued under such Act, as they
each may be in effect from time to time.
"HOLDER" means (i) a Seller Stockholder and (ii) any subsequent
transferee of Registrable Shares who agrees to bound hereby pursuant to
transfer in accordance with Section 8 hereof effected on the books of
the Company.
"MERGER AGREEMENT" means that certain Plan and Agreement of
Merger, dated
February 18, 1999, as amended by the First Amendment thereto dated as
of July 27, 1999, the Second Amendment thereto dated as of
September 13, 1999, the Third Amendment thereto dated as of
October 29, 1999 and the Fourth Amendment thereto dated as of December
15, 1999 among the Company, MCD Acquisition Corp., PTI, Inc. and CVC.
"PERMITTED REGISTRATION" has the meaning set forth in Section 3.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political
subdivision thereof).
"POOLING PERIOD" means the period beginning on that date which is
thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement) and ending on that date on which the Company first files
with the Commission a report on Form 10-K, 10-Q, or 8-K which discloses
the results of at least thirty (30) days of Company operations after
the Effective Time.
"REGISTRABLE SHARES" means (i) any shares of Common Stock issued
to a Seller Stockholder pursuant to the Merger Agreement, including,
without limitation, shares of Common Stock that constitute Escrow
Shares as defined in the Merger Agreement and (ii) any shares of Common
Stock issued as (or issuable upon the conversion or exercise of any
right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of
the shares referenced in clause (i) of this sentence; PROVIDED,
HOWEVER, that shares of Common Stock which are Registrable Shares shall
cease to be Registrable Shares (x) upon any sale pursuant to a
Registration Statement or Rule 144 or Rule 145(d), or (y) upon any sale
in any manner to a Person not conducted in compliance with Sections 2
and 8 hereof, or (z) with respect to any Holder, if the Registrable
Shares then held by such Holder may be sold by the Holder to the public
immediately without registration, including shares of Common Stock
which may be sold within a period of ninety (90) days under Rule 144.
"REGISTRATION EXPENSES" mean all expenses incurred by the Company
complying with the terms hereof, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses,
accounting fees, fees and expenses for listing the securities to be
registered on each securities exchange on which similar securities
issued by the Company are then listed or, if applicable, on Nasdaq,
fees and disbursements of counsel for the Company, but excluding (x)
underwriting discounts and selling commissions relating to the
Registrable Shares and (y) the Company's out-of-pocket expenses
specified in Section 6.1(i), which expenses will be borne by the
selling Holders.
"REGISTRATION STATEMENT" means a registration statement filed by
the Company with the Commission for a public offering and sale of
securities of the Company (other than a registration statement on Form
S-8 or Form S-4, or any successor form, or any other form for a limited
purpose); or any registration statement covering only
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(i) securities to be issued solely pursuant to one or more employee
benefit plans of the Company or (ii) securities proposed to be issued
in exchange for securities or assets of another corporation.
"RULE 144" means Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the Commission.
"RULE 145(d) " means Rule 145(d) as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to
time, or any similar successor rule that may be promulgated by the
Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
any similar Federal statute successor thereto, and the rules and
regulations of the Commission issued under such Act, as they each may,
from time to time, be in effect.
"SELLER STOCKHOLDER" CVC, CCT, CMP and each other Person listed on
SCHEDULE 3.20 to the Merger Agreement that receives shares of Common
Stock pursuant to the Merger Agreement.
"SUSPENSE PERIOD" has the meaning set forth in Section 3(e).
"TRADING DAY" means each day that Common Stock has been traded on
the New York Stock Exchange, or such other primary exchange or
quotation system on which the Common Stock is then listed or quoted.
2. RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees, severally and not jointly, that it will
not effect any disposition of its Registrable Shares that would constitute a
sale within the meaning of the Securities Act except in compliance with the
Securities Act. Without limiting the scope of the immediately preceding
sentence, each Holder agrees not to make any disposition of all or any portion
of the Registrable Shares unless and until the transferee has agreed in writing
for the benefit of the Company to be bound by this Section 2, unless
(i) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition
is made in accordance with such Registration Statement; or
(ii) (A) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
reasonably detailed statement of the circumstances surrounding the
proposed disposition, and (B) if reasonably requested by the Company,
such Holder shall have furnished the Company with an opinion of
counsel, in form and substance reasonably satisfactory to the Company,
that such disposition will not require registration of such shares
under the Securities Act. It is agreed that the Company will not
require the items specified in either clause (A) or (B) of
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the immediately preceding sentence with respect to any transaction made
pursuant to Rule 144 or Rule 145, as applicable, except in unusual
circumstances.
Notwithstanding the provisions of paragraphs (i) and (ii) above, no such
Registration Statement or opinion of counsel shall be necessary for a transfer
by a Holder which is (A) a partnership to its partners or retired partners in
accordance with partnership interests, (B) a corporation to its shareholders in
accordance with their interest in the corporation, (C) a limited liability
company to its members or former members in accordance with their interest in
the limited liability company, or (D) to the Holder's family member or trust for
the benefit of an individual Holder, PROVIDED the transferee will be subject to
the terms of this Section 2 to the same extent as if such transferee were a
Seller Stockholder as defined herein.
(b) Each certificate representing Registrable Shares shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIF1CATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT (I)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), (II) IN
CONFORMITY WITH THE VOLUME AND OTHER LIMITATIONS OF RULE 145
OF THE ACT, EVIDENCED BY A LETTER OF REPRESENTATION IN A FORM
REASONABLY SATISFACTORY TO THE CORPORATION, OR (III) IN A
TRANSACTION WHICH, IN THE OPINION OF INDEPENDENT COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION OR AS DESCRIBED IN
A "NO ACTION" OR INTERPRETIVE LETTER FROM THE STAFF OF THE
SECURITIES AND EXCHANGE COMMISSION, IS NOT REQUIRED TO BE
REGISTERED UNDER THE ACT.
(c) Notwithstanding Section 2(b), unless a sale of Registrable
Shares has been registered under the Act or is made in conformity with the
provisions of Rule 145, the Company reserves the right to put the following
legend on the certificates issued to the transferee of such Registrable Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145
PROMULGATED UNDER THE SECURITIES ACT APPLIES. THE SHARES HAVE
BEEN ACQUIRED BY THE HOLDER NOT WITH A
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VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF SECURITIES ACT AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
(d) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder thereof if the Holder shall have
obtained an opinion of counsel at such Holder's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the Common Stock to be disposed of may lawfully be so disposed of without
registration, qualification or legend.
(e) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
Registrable Shares shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.
(f) Each Holder agrees, severally and not jointly, that until the
expiration of the Pooling Period, that such Holder will not sell, transfer or
otherwise dispose of, or reduce the risk of ownership with respect to, shares of
Common Stock.
3. DEMAND REGISTRATIONS. Subject to the limitations set forth in this
Agreement, CVC, on its behalf or as agent for one or more Holders, may request,
in writing, that the Company effect the registration under Section 5 of the
Securities Act of Registrable Shares in accordance with Section 3(a) or (b), as
applicable. The Company shall not be required to effect more than three (3)
registrations pursuant to this Section 3 (each a "PERMITTED REGISTRATION"). A
registration shall not count as one of the Permitted Registrations under this
Section 3 until it has become effective.
(a) If, at the time the Company receives a registration request,
the Company is not eligible to file a Registration Statement on Form S-3 (or any
successor form relating to secondary offerings), CVC may request, in writing,
that the Company effect the registration on Form S-l or Form S-2 (or any
successor form) of not less than twenty percent (20%) of the Registrable Shares
then outstanding; PROVIDED, HOWEVER, that the minimum aggregate offering price
of the Common Stock to be registered by such Holders equals $20,000,000 (prior
to deductions for underwriting discounts and commissions). Any such request
pursuant to Section 3(a) shall be in writing and shall state the number of
shares of Registrable Shares to be disposed of and the intended method of
disposition of such shares by the participating Holders. If CVC intends to
distribute the Registrable Shares by means of an underwriting, it shall so
advise the Company in its request. Thereupon, the Company shall use all
commercially reasonable efforts to effect the registration, as expeditiously as
possible, on Form S-1 or Form S-2 (or any successor form), of all Registrable
Shares which the Company has been requested so to register. The Company shall
not be required to effect any registration pursuant to this Section 3(a) within
six (6) months after the effective date of any other Registration Statement of
the Company for an underwritten offering of Common Stock.
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(b) If, at the time the Company receives a registration request,
the Company is eligible to file a Registration Statement on Form S-3 (or any
successor form relating to secondary offerings), CVC may request, in writing,
that the Company effect the registration on Form S-3 (or any successor form) of
not less than ten percent (10%) of the Registrable Shares then outstanding, with
any such request to be in writing and to state the number of shares of
Registrable Shares to be disposed of and the intended methods of disposition of
such shares by the participating Holders; provided, however, that the Company
shall not be obligated to effect any such registration if (i) the Holders
propose to sell Registrable Shares and such other securities (if any) on Form
S-3 at an aggregate price to the public of less than $10,000,000 (prior to
deductions for underwriting discounts and commissions), or (ii) in a given
twelve-month period, after the Company has effected two (2) Permitted
Registrations pursuant to Section 3 in any such period. If a Holder elects to
distribute its Registrable Shares by means of an underwriting, it shall so
advise the Company in its request. Thereupon, the Company shall use all
commercially reasonable efforts to effect the registration, as expeditiously as
possible, on Form S-3 (or any successor form), of all Registrable Shares which
the Company has been requested so to register .
(c) Upon receipt of any request to register Registrable Shares
pursuant to this Section 3, the Company shall promptly give written notice of
such proposed registration to all Holders. Each Holder shall have the right, by
giving written notice to the Company within fifteen (15) days after the Company
provides its notice, to elect to have included in such registration such of the
Holder's Registrable Shares as such Holder may request in such notice of
election. Thereupon, the Company shall use all commercially reasonable efforts
to effect the registration, as expeditiously as possible, of all Registrable
Shares which the Company has been requested to register.
(d) In connection with any registration pursuant to Section 3, the
Company shall keep such registration effective for a period of sixty (60) days
or until the Holders have completed the distribution described in the
Registration Statement relating thereto, whichever first occurs, subject in any
event to the provisions of Section 3(e).
(e) If the Company shall furnish to CVC a certificate signed by
the Chief Executive Officer, the Chief Financial Officer or the General Counsel
of the Company stating that (1) the Company is in possession of material
non-public information regarding the Company, (2) the Company has determined
(based on the advice of counsel) that the prospectus included or to be included
in a Registration Statement would have to disclose such material non-public
information in order for the prospectus not to be materially false or
misleading, and (3) the Company has determined in good faith that disclosure of
such material non-public information would not be in the best interests of the
Company, each Holder agrees that (X) it shall not sell any Registrable Shares
pursuant to such Registration Statement during such period and (Y) the Company
may delay filing a Registration Statement, or pre-effective amendment thereto,
or requesting the effectiveness of such Registration Statement, the period
during which such a delay occurs being referred to herein as the "SUSPENSE
PERIOD." For purposes of this Section 3(e), the Suspense Period shall commence
upon notice to CVC and shall end on the earlier of the date that the Company (i)
files a Registration Statement or a pre-effective amendment thereto or (ii)
files a request with the SEC requesting that the SEC declare the Registration
Statement effective. A Suspense Period may not continue for more than sixty (60)
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consecutive Trading Days; there must be not less than thirty (30) consecutive
Trading Days between the termination of one Suspense Period and the commencement
of the next; and there may not be more than three (3) Suspense Periods during
any consecutive twelve-month period. The Company shall notify CVC and each
selling Holder not later than two (2) Trading Days after the conclusion of any
Suspense Period. The sixty (60)-day time period referred to Section 3(d) during
which the Registration Statement must be kept current after its effective date
shall be extended for an additional number of Trading Days equal to the number
of Trading Days in the Suspense Period.
(f) If, within three (3) Trading Days after the Company receives a
registration request under Section 3(a) or (b), the Company shall furnish to CVC
a certificate signed by the Chief Executive Officer, the Chief Financial Officer
or the General Counsel of the Company stating that the Company is and was, as of
the date on which the Company received such request, engaged in plans to sell
shares of Common Stock in an underwritten offering schedule to commence within
sixty (60) days after the date on which the Company received such request, the
Company may delay, at its election, filing the requested registration statement
for a period of up to ninety (90) days after the date on which the Company
received such request; PROVIDED, HOWEVER, that the Company may not exercise its
right pursuant to this Section 3(f) to delay filing a registration statement
more than once in any twelve (12)-month period.
4. "PIGGYBACK" REGISTRATION - REGISTRATION INITIATED BY THE COMPANY.
(a) At any time the Company proposes to file a Registration
Statement at its own election, it will, prior to such filing, give written
notice to all Holders of its intention to do so and, upon the written request of
a Holder given within fifteen (15) days after the Company provides such notice
(which request shall state the intended method of disposition of such
Registrable Shares), the Company shall use all commercially reasonable efforts
to cause all (or the requested portion) of such Holder's Registrable Shares to
be registered under the Securities Act to the extent necessary to permit their
sale or other disposition in accordance with the intended methods of
distribution specified in the request of such Holder; PROVIDED, HOWEVER, that
the Company shall have the right to postpone or withdraw any registration
effected pursuant to this Section 4 without obligation to any Holder.
(b) In connection with any offering under this Section 4 involving
an underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the requesting Holder accepts the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it.
(c) If in the opinion of the managing underwriter the registration
of all, or part of, the Registrable Shares which the Holders have requested to
be included pursuant to this Section 4 would materially and adversely affect
such public offering, then notwithstanding subsection 4(a) hereof the Company
shall be required to include in the underwriting only that number of the
Holders' Registrable Shares, if any, which the managing underwriter believes may
be sold without causing such adverse effect. If the number of Registrable Shares
to be included in the underwriting in accordance with the foregoing is less than
the total number of shares that Holders of Registrable Shares have requested to
be included, then the Holders of Registrable Shares who have requested
registration, and any Other Stockholders who have made a similar
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request, shall participate in the underwriting PRO RATA based upon their total
ownership of the aggregate number of all Registrable Shares and Secondary Shares
requested to be included in such registration by the Holders and such Other
Stockholders (or in any other proportion as agreed upon by all Holders and Other
Stockholders entitled to such rights).
5. MARKET STAND-OFF.
(a) The Company shall not effect any public sale or distribution
of its Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock, during the seven (7) days prior to and during the
sixty (60)-day period beginning on the effective date of any underwritten
registration pursuant to Section 3 (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any
successor form or as part of any other issuance of Common Stock in exchange for
securities or assets of another corporation), unless the underwriters managing
such registered public offering otherwise agree; PROVIDED, HOWEVER, that the
restrictions pursuant to this Section 5(a) shall expire sixty (60) days from the
effective date of the second Permitted Registration.
(b) Other than pursuant to Section 4, CVC and CMP shall not effect
any public sale or distribution of its Registrable Shares, or any securities
convertible into or exchangeable or exercisable for Registrable Shares, during
the seven (7) days prior to and during the sixty (60)-day period beginning on
the effective date of any underwritten registration of Common Stock initiated by
the Company unless the underwriters managing such registered public offering
otherwise agree.
6. REGISTRATION PROCEDURES.
6.1 COMPANY OBLIGATIONS GENERALLY. If and whenever the company is
required by the provisions of Section 3 of this Agreement to use all
commercially reasonable efforts to effect the registration of any of the
Registrable Shares under the Securities Act, the Company shall as expeditiously
as possible:
(a) prepare and file with the Commission a Registration Statement
with respect to such Registrable Shares and use all commercially reasonable
efforts to cause that Registration Statement to become and remain effective
(PROVIDED that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the counsel
selected by CVC copies of all such documents proposed to be filed, which
documents shall be subject to the reasonable review and comment of such counsel)
and, in connection therewith, use all commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission;
(b) furnish to each selling Holder such reasonable number of
copies of the registration statement, each amendment and supplement thereto,
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the selling
Holder may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the selling Holder;
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(c) use all commercially reasonable efforts to register or qualify
the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Holders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Holders to consummate the public
sale or other disposition in such jurisdictions of the Registrable Shares owned
by the selling Holders; PROVIDED, HOWEVER, that the Company shall not be
required in connection with this paragraph (c) to qualify as a foreign
corporation, execute a general consent to service of process or subject itself
to taxation in any jurisdiction;
(d) notify each Holder of Registrable Shares of the effectiveness
of each Registration Statement filed hereunder;
(e) cause all Registrable Shares covered by the Registration
Statement to be listed on the New York Stock Exchange and each other securities
exchange, if any, on which the Common Stock is then listed or, if the Common
Stock is not listed on any such exchange, to be listed on the NASD automated
quotation system and, if listed on the NASD automated quotation system, use all
commercially reasonable efforts to secure designation of all such Registrable
Shares covered by such Registration Statement as a NASDAQ "national market
system security" within the meaning of Rule 11Aa2-1 of the Commission or,
failing that, to secure NASDAQ authorization for such Registrable 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 Registrable Shares with
the NASD;
(f) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such Registration
Statement;
(g) if the Registrable Shares are to be sold in an underwritten
offering, enter into an underwriting agreement containing customary
representations and warranties with respect to the business and operations of an
issuer of the securities being registered and customary covenants and agreements
to be performed by such issuer;
(h) make available for inspection by any underwriter participating
in any disposition pursuant to a Registration Statement under Section 3 and any
attorney, accountant or other agent retained by any such underwriter, or the
attorney representing CVC, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such party in connection with such Registration
Statement, subject in every case to the terms of such customary confidentiality
agreement as the Company may reasonably request considering the circumstances
under which, and the purposes for which, such information is requested;
(i) if the Registrable Shares are to be sold in an underwritten
offering pursuant to a Permitted Registration, cause such executive or
executives as the managing underwriter, or the holders of a majority of the
Registrable Shares being sold, may reasonably request (including, if so
requested, the Company's Chief Executive Officer) to attend any analyst and
investor presentations, including any "road show", PROVIDED, HOWEVER, that (i)
the Company's employees
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will not be required devote more than five (5) consecutive days to the efforts
specified in this Section 6.1(i) in connection with any single Permitted
Registration and the Company's employees will not be required devote more than
five (5) Trading Days during any twelve (12) month period to the efforts
specified in this Section 6.1(i) in connection with one or more Permitted
Registrations, and (ii) the Holders of the Registrable Shares proposed to be
included in such underwritten offering shall be required, severally and not
jointly, to reimburse the Company for its out-of-pocket expenses reasonably
incurred by it and its executives in connection the efforts specified in this
Section 6.1(i);
(j) otherwise use all commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission and at CVC's
request, make available to the holders of Common Stock and any of its other
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) if CVC or any other Holder of Registrable Shares may
reasonably be deemed to be an underwriter or a Control Person, participate in
the preparation of such registration or comparable statement and require the
insertion therein of material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included and as to
which the Company has no reasonable objection;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such Registration Statement for sale in any
jurisdiction, use all commercially reasonable efforts promptly to obtain the
withdrawal of such order; and
(m) with respect to any underwritten sale of Registrable Shares,
or any sale of Registrable Shares as to which the Holder reasonably determines,
after consultation with its counsel, that such Holder may have liability under
Section 11 of the Securities Act as an underwriter or a Control Person, at the
request of such underwriter, CVC or such Holder, use all commercially reasonable
efforts to obtain a so-called cold comfort letter from the Company's independent
public accountants to such underwriter, CVC or Holder in customary form and
covering such matters of the type customarily covered by cold comfort letters as
the underwriter, CVC or such Holder, the cost of which comfort letter shall be
borne by the Holders of the Registrable Shares included in the registration.
6.2 SELLING HOLDER INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section 6.1 that
the selling Holders shall promptly furnish to the Company such information
regarding themselves, the Registrable Shares held by them, and the intended
method of disposition of such Registrable Shares, as shall be reasonably
requested by the Company in order to effect the registration of their
Registrable Shares or to comply with applicable state securities laws.
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6.3 PROSPECTUS DELIVERY. CVC acknowledges that there may be times
(including without limitation the circumstances as described in Section 3(e)
hereof) when, notwithstanding the Company's efforts described in Section 6.1(a),
the Company must temporarily suspend the use of the prospectus forming a part of
any such Registration Statement until such time as (i) the company has filed an
amendment to such Registration Statement and such amendment has been declared
effective by the SEC, (ii) the Company has supplemented the relevant prospectus,
or (iii) the Company has filed an appropriate report with the SEC pursuant to
the Exchange Act. The Company shall use all commercially reasonable efforts to
promptly notify each Holder of Registrable Shares covered by such Registration
Statement, at any time when a prospectus relating thereto covered by such
Registration Statement is required to be delivered under the Securities Act, of
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 a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing. During any period in which sales are suspended,
each such Holder agrees not to sell any such Registrable Shares pursuant to any
such prospectus. Subject only to the Company's right to give notice of a
Suspense Period a permitted under Section 3(e), the Company shall promptly
provide the selling Holders with revised prospectuses and, following receipt of
the revised prospectuses, the selling Holders shall be free to resume making
offers of the Registrable Shares.
6.4 SELECTION OF UNDERWRITER. If the Registrable Shares are to be sold
in an underwritten offering, the underwriter shall be such nationally recognized
investment banking firm as CVC may select and to whom the Company shall have no
reasonable objection.
7. ALLOCATION OF EXPENSES.
(a) The Company will pay all Registration Expenses of all
registrations under this Agreement whether or not the registrations have become
effective and whether or not such registrations have counted as one of the
Permitted Registrations; PROVIDED, HOWEVER, that if a registration is withdrawn
at the request of CVC (other than as a result of (x) delay by the Company under
Section 3(e) or (f), or (y) material adverse information concerning the business
or financial condition of the Company which first becomes known to CVC after the
date on which such registration was requested) the Holders who sought to
register Registrable Shares in such registration shall be liable, jointly and
severally, to promptly pay all Registration Expenses of such registration
incurred through the date of such withdrawal, unless CVC elects to have such
registration count as one of the three (3) Permitted Registrations under Section
3, in which event Company shall bear such Registration Expenses.
(b) It is understood and agreed that, in the event that the
Holders are liable for Registration Expenses pursuant to Section 7(a), such
Registration Expenses shall not include the Company's internal expenses
(including, without limitation, salaries and benefits of its officers and
employees performing legal or accounting duties) and the expense of any
liability insurance incurred in connection with a registration of Registrable
Shares hereunder.
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8. INDEMNIFICATION.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each Control Person of any such
seller or underwriter, against any losses, claims, damages or liabilities, joint
or several, to which such seller, underwriter or Control Person may become
subject under the Securities Act, the Exchange Act or state securities laws,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) stem from any third party dispute arising out of or based upon any
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, made
in reliance upon and in conformity with information furnished to the Company by
or on behalf of such seller, underwriter or Control Person specifically for use
in the preparation thereof; and PROVIDED FURTHER that as to any claim arising
out of a preliminary prospectus, the indemnity provided in this Section 8(a)
shall not inure to the benefit of any seller, underwriter or Control Person on
account of any loss, claim, damage, liability or action arising from the sale of
Registrable Shares to any Person by a seller or underwriter that failed to send
or give a copy of the prospectus, as the same may be amended or supplemented, to
that Person within the time required by the Securities Act, and the untrue
statement of a material fact or omission to state a material fact in such
preliminary prospectus was corrected in the final prospectus; and PROVIDED
FURTHER, that the Company shall not be responsible for any losses, claims,
damages or liabilities to the extent that it is finally judicially determined
that they result primarily from actions taken or omitted to be taken by such
Indemnified Party's willful misconduct or gross negligence.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter, if any,
and each Control Person, if any, of the Company or any such underwriter against
any losses, claims, damages or liabilities, joint or several, to which the
Company, such directors and officers, underwriter or Control Person may become
subject under the Securities Act, Exchange Act or state securities laws, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
stem from any third party dispute arising out of or based upon any untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of such seller,
specifically for use in
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connection with the preparation of such Registration Statement, prospectus,
amendment or supplement; PROVIDED, HOWEVER, that the obligation to indemnify
shall be individual, not joint and several, for each selling Holder.
(c) Each party entitled to indemnification under this Section 8
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
upon request permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom; PROVIDED, HOWEVER, that counsel for
the Indemnifying Party , who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld). The failure of any Indemnified Party to give notice
promptly as provided herein shall relieve the Indemnifying Party of its
obligations under this Section 8. The Indemnified Party may participate in such
defense at such party's expense. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified party of a release from all liability in respect
of such claim or litigation, and no Indemnified Party shall consent to entry of
any judgment or settle such claim or litigation without the prior written
consent of the Indemnifying Party.
9. RULE 144 REQUIREMENTS. The Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use all commercially reasonable efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Exchange Act; and
(c) furnish to any Holder upon request a written statement by the
Company as to its compliance with the information requirements of Rule 144 and
of the reporting requirements of the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as such Holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
10. TRANSFERS OF CERTAIN RIGHTS. The rights granted to any Holder
hereunder may be transferred by such Holder to any transferee who acquires not
less than the greater of (x) two percent (2%) of the shares of Common Stock then
outstanding or (y) fifty percent (50%) of the shares of Common Stock received by
such Holder in the Merger; PROVIDED, HOWEVER, that (a) the Company is given
written notice by the transferee stating the name and address of the transferee
and identifying the securities with respect to which such rights are being
assigned, (b) as a condition to the transfer of the rights hereunder, the
transferee shall deliver to the Company a written instrument by which such
transferee makes the representations set forth in Section 11.2 and agrees to be
bound by the obligations imposed upon the transferor under this Agreement to the
same extent as if such transferee were a Seller Stockholder, and (c) CVC may not
transfer its
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rights as the agent of the Holders for purposes of this Agreement without the
Company's consent, which consent shall not be unreasonably withheld.
11. TERMINATION OF REGISTRATION RIGHTS. This Agreement shall terminate,
and all rights and liabilities hereunder shall lapse, seven (7) years after the
Effective Time.
12. REMEDIES. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law or equity. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
13. REPRESENTATIONS
13.1. REPRESENTATIONS OF THE COMPANY.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Connecticut, and has all
requisite power and authority (corporate and other) to enter into this Agreement
and to perform its obligations hereunder.
(b) All necessary and appropriate corporate action has been taken
by the Company with respect to the execution and delivery of this Agreement and
the performance of its obligations hereunder, and this Agreement constitutes a
valid and binding obligation of the Company enforceable against it in accordance
with its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditor's rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief which may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be instituted.
(c) There is no claim, litigation, action, suit, proceeding,
investigation or inquiry, administrative or judicial, pending or, to the best
knowledge of the Company, threatened against the Company, at law or in equity,
before any federal, state or local court or regulatory agency, or other
governmental authority, which, individually or in the aggregate, is reasonably
likely to have, individually or in the aggregate, a material adverse effect on
the Company's ability to perform its obligations hereunder.
(d) Neither the execution and delivery of this Agreement by the
Company, nor the performance by the Company of its obligations hereunder, will
(i) conflict with or result in a breach of any provision of the Company's
certificate of incorporation or by-laws, or (ii) require any consent, approval,
declaration, order or authorization of, or registration or filing with, any
third party, court or governmental body or other agency, instrumentality or
authority by or with respect to the Company in connection with the execution and
delivery of this Agreement or the
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performance of its obligations hereunder, other than filings with the SEC in
connection with the Registration Statement, any filing with or notice to any
state securities regulator, and any filing with or notice to the New York Stock
Exchange, or such other primary exchange or quotation system on which the Common
Stock is then listed or quoted.
13.2. REPRESENTATIONS OF SELLER STOCKHOLDERS. Each Seller Stockholder
hereby represents and warrants, severally and not jointly, as follows:
(a) The Seller Stockholder has the full power and authority to
execute, deliver and perform this Agreement, and this Agreement and the other
instruments delivered pursuant hereto have been or will be, as applicable, duly
executed and delivered by such Seller Stockholder. This Agreement and such
instruments constitute the legal, valid and binding obligations of the Seller
Stockholder, enforceable against the Seller Stockholder in accordance with their
respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditor's rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief which
may be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be instituted.
(b) The Seller Stockholder has been advised and understands that
the Registrable Shares may not be resold unless registered under applicable
state securities laws or an exemption from registration is available, and that
the Company is and will be under no obligation to register the Registrable
Shares under the Securities Act except to the extent provided in this Agreement.
14. MISCELLANEOUS.
14.1 NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement, shall be deemed to have been duly
given and made if in writing and served either by personal delivery (which shall
include delivery by Federal Express or similar services) to the party for whom
it is intended, or by being deposited postage prepaid, certified or registered
mail, return receipt requested (or such form of mail as may be substituted
therefor by postal authorities), in the United States mail, bearing the address
shown in this Agreement for, or such other address as may be designated in
writing hereafter by, such party, or by being sent or a telecopy with a hard
copy sent simultaneously via overnight courier:
If to the Company: MacDermid, Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxx , XX 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
With a copy to: Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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If to CVC: Citicorp Venture Capital, Ltd.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
With a copy to: Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
If to a Holder: At its address shown in the
Company's stock register
14.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, representations,
warranties, statements, promises, and understandings, whether written or oral,
with respect to the subject matter hereof, and cannot be changed or terminated
orally. No party hereto shall be bound by or charged with any written or oral
agreements, representations, warranties, statements, promises, or understandings
not specifically set forth in this Agreement.
14.3 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect the meaning or interpretation of this Agreement.
14.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Connecticut without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Connecticut or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Connecticut.
14.5 CONSTRUCTION OF AGREEMENT. This Agreement embodies the entire
agreement and understanding between the Parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision. The Company and CVC have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by them and no presumption or burden of proof shall arise
favoring or disfavoring either the Company or any Holder by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context
otherwise requires. The word "including" shall mean including without
limitation. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which to ether shall constitute
one and the same instrument and may be delivered by facsimile transmission.
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14.6 SEVERABILITY. If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law. Upon the
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect their original intent as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
14.7 AMENDMENTS AND WAIVERS. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and CVC. Any amendment or waiver effected in accordance with this
Section 14.7 shall be binding upon the Company, each Holder of any Registrable
Shares as of the date of such amendment or waiver, and each future Holder. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in anyone or more instances, shall be seemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
14.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
14.9 BINDING EFFECT. This Agreement shall be binding on all successors
and assigns of the Company, whether by merger, reorganization, sale of assets or
otherwise.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
MACDERMID, INCORPORATED
By: /s/ XXXX X. XXXXXXX
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Secretary
CITICORP VENTURE CAPITAL, LTD.
By: /s/ XXXXXX XXXXXXXXX
--------------------------
Name:
Title:
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