Exhibit 2
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 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.
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2.1 Registration on Request.
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(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.
(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, 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.
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(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 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 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
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 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 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 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.
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(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 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 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, 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 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 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.
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.
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 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 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.
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
