EQUITY REGISTRATION RIGHTS AGREEMENT
among
TRUE TEMPER CORPORATION
and
EMHART, INC.
-----------------------
Dated as of September 30, 1998
TABLE OF CONTENTS
Page
1. Definitions...........................................................1
2. Securities Subject to this Agreement..................................3
3. Piggy-Back Registration...............................................4
4. Hold-Back Agreements..................................................5
5. Registration Expenses.................................................6
6. Indemnification.......................................................7
7. Rule 144..............................................................9
8. Miscellaneous.........................................................9
EQUITY REGISTRATION RIGHTS AGREEMENT
This EQUITY REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made and entered into as of September 30, 1998, among TRUE TEMPER
CORPORATION, a Delaware corporation ("Holdings"), and the purchaser listed on
the signature pages hereto (together with its successors and assigns, the
"Purchaser").
RECITALS
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of September 30, 1998 (as amended, supplemented or otherwise
modified, "Securities Purchase Agreement"), by and among Holdings and the
Purchaser. In order to induce the Purchaser to enter into the Securities
Purchase Agreement, Holdings has agreed to provide the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the
Closing under the Securities Purchase Agreement.
AGREEMENT
The parties agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Common Stock: The authorized common stock, par value $.01 per
share, of Holdings.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Indemnified Parties: See Section 6(a) hereof.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Piggy-Back Registration: See Section 3(a) hereof.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
Registrable Securities: The Registrable Warrants and the
Registrable Warrant Shares; provided that a security ceases to be a Registrable
Security when it is no longer a Transfer Restricted Security.
Registrable Warrant Shares: All Warrant Shares issuable to the
holders of Warrants upon exercise of such Warrants.
Registrable Warrants: All Warrants originally issued pursuant
to the Warrant Agreement.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the
Holdings which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Transfer Restricted Security: Registrable Securities upon
original issuance thereof; provided that a Registrable Security is no longer a
Transfer Restricted Security when such Registrable Security is sold to the
public pursuant to an effective Registration Statement.
Underwritten Registration or Underwritten Offering: A
registration in which securities of Holdings are sold to an underwriter for
reoffering to the public.
Warrant Agreement: The Warrant Agreement dated as of September
30, 1998 among Holdings and the Purchaser, as amended, supplemented or otherwise
modified from time to time.
Warrant Shares: The shares of capital stock (including all
series of preferred and common stock and all other outstanding warrants, options
or other convertible securities) of Holdings issuable to the holders of Warrants
upon exercise of the Warrants, together with any other securities that may in
the future become issuable upon exercising the Warrants.
Warrants: Warrants to purchase capital stock (including all
series of preferred and common stock and all other outstanding warrants, options
or other convertible securities) of Holdings in accordance with the Warrant
Agreement.
2. Securities Subject to this Agreement
(a) Registrable Securities. The securities entitled to the
benefits of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is deemed to
be a holder of Registrable Securities whenever such Person owns Registrable
Securities of record or has provided evidence reasonably satisfactory to
Holdings that such Person has the right to acquire such Registrable Securities,
whether or not such acquisition has actually been effected and disregarding any
legal restrictions upon the exercise of such right.
3.Piggy-Back Registration
(a) Right to Piggyback. Subject to the last sentence
of this subsection (a), whenever Holdings proposes to register any shares of
Common Stock (or securities exercisable or exchangeable for or convertible into,
or options to acquire, Common Stock) with the SEC under the Securities Act and
the registration form to be used may be used for the registration of the
Registrable Securities (a "Piggyback Registration"), Holdings will give written
notice to the Purchaser, at least 30 days prior to the anticipated filing date,
of its intention to effect such a registration, which notice will specify the
proposed offering price, the kind and number of securities proposed to be
registered, the distribution arrangements and such other information that at the
time would be appropriate to include in such notice, and will, subject to
subsection (b) below, include in such Piggyback Registration all Registrable
Securities with respect to which Holdings has received written requests for
inclusion therein within 20 days after the effectiveness of Holdings' notice.
Except as may otherwise be provided in this Agreement, Registrable Securities
with respect to which such request for registration has been received will be
registered by Holdings and offered to the public in a Piggyback Registration
pursuant to this Section 3 on the terms and conditions at least as favorable as
those applicable to the registration of shares of Registrable Securities to be
sold by Holdings and by any other person selling under such Piggyback
Registration.
(b) Priority on Piggyback Registration. Holdings
shall use all reasonable efforts to cause the managing underwriter or
underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested to be included in the registration statement for such
offering to be included on the same terms and conditions as any similar class of
equity securities of Holdings or of such other security holders included
therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver a written opinion to Holdings that either
because of (i) the kind or combination of securities which the holders of
Registrable Securities, Holdings and any other persons or entities intend to
include in such offering or (ii) the size of the offering which such holders,
Holdings and such other persons intend to make, are such that the success of the
offering would be materially and adversely affected by inclusion of the
Registrable Securities requested to be included, then (a) in the event that the
size of the offering is the basis of such managing underwriter's opinion, the
amount of securities to be offered for the accounts of such holders shall be
reduced pro rata (according to the Registrable Securities proposed
for registration) to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount recommended by such
managing underwriter or underwriters; provided that if securities are being
offered for the account of other persons or entities as well as Holdings, then
with respect to the Registrable Securities intended to be offered by such
holders, the proportion by which the amount of such class of securities intended
to be offered by such holders is reduced shall not exceed the proportion by
which the amount of such class of securities intended to be offered by such
other persons or entities is reduced; and (b) in the event that the kind (or
combination) of securities to be offered is the basis of such managing
underwriter's opinion, (x) the Registrable Securities to be included in such
offering shall be reduced as described in clause (a) above (subject to the
proviso in clause (a)) or, (y) if the actions described in clause (x) would, in
the judgment of the managing underwriter, be insufficient to substantially
eliminate the adverse effect that inclusion of the Registrable Securities
requested to be included would have on such offering, such Registrable
Securities will be excluded from such offering.
(c) Selection of Underwriters. If any Piggyback
Registration is an Underwritten Offering, Holdings will select a managing
underwriter or underwriters to administer the offering, which managing
underwriter or underwriters will be of nationally recognized standing.
4. Hold-Back Agreements. Each holder of Registrable Securities
whose Registrable Securities are covered by a Registration Statement filed
pursuant to Section 3 hereof agrees, if requested by the managing underwriters
in an Underwritten Offering, not to effect any public sale or distribution of
securities of Holdings of the same class as the securities included in such
Registration Statement, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such Underwritten Registration), during the
30-day period prior to, and during the 180-day period beginning on, the closing
date of each Underwritten Offering made pursuant to such Registration Statement,
to the extent timely notified in writing by Holdings or the managing
underwriters; provided, however, that each holder of Registrable Securities
shall be subject to the hold-back restrictions of this Section 4(a) only once
during any 365-day period.
The foregoing provisions shall not apply to any holder of
Registrable Securities if such holder is prevented by applicable statute or
regulation from entering any such agreement;
provided, however, that any such holder shall undertake, in its request to
participate in any such Underwritten Offering, not to effect any public sale or
distribution of any Registrable Securities held by such holder and covered by a
Registration Statement commencing on the date of sale of the Registrable
Securities unless it has provided 45 days prior written notice of such sale or
distribution to the underwriter or underwriters.
5. Registration Expenses. All reasonable expenses incident to
Holdings' performance of or compliance with this Agreement, including without
limitation all (i) registration and filing fees, fees and expenses associated
with filings required to be made with the NASD (including, if applicable, the
fees and expenses of any "qualified independent underwriter" and its counsel as
may be required by the rules and regulations of the NASD), (ii) fees and
expenses of compliance with securities or blue sky laws (including fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the managing
underwriters), (iii) printing expenses (including expenses of printing
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses), (iv) fees and
disbursements of counsel for Holdings and for the sellers of the Registrable
Securities, and customary out of pocket expenses and fees paid by issuers to the
extent provided for in an underwriting agreement (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities, transfer taxes or legal expenses of any Person other
than Holdings and the selling holders), (v) the cost of securities acts
liability insurance if Holdings so desires and (vi) fees and expenses of other
Persons retained by Holdings (all such expenses being herein called
"Registration Expenses") will be borne by Holdings, regardless whether the
Registration Statement becomes effective. Each holder of Registrable Securities
will pay any fees or disbursements of counsel to such holder and all
underwriting discounts and commissions and transfer taxes, if any, and provide
other fees, costs and expenses of such holder (other than Registration Expenses)
relating to the sale or disposition of such holder's Registrable Securities.
Holdings, in any event, will pay Holdings' own internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the securities to be registered on each securities exchange on
which similar securities issued by Holdings are then listed, rating agency fees
and the fees and expenses of any Person, including special experts, retained by
Holdings.
6. Indemnification
(a) Indemnification by Holdings. Holdings agrees to
indemnify and hold harmless, to the full extent permitted by law, each holder of
Registrable Securities, its officers, directors and employees and each Person
who controls such holder (within the meaning of the Securities Act) (the
"Indemnified Parties") against all losses, claims, damages, liabilities and
expenses incurred by such party in connection with any actual or threatened
action arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
Prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same arise out of or are based upon any such
untrue statement or omission made in reliance on and in conformity with any
information furnished in writing to Holdings by such holder or its counsel
expressly for use therein; provided, that Holdings shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission in the Prospectus, if such untrue statement or
alleged untrue statement, omission or alleged omission is completely corrected
in an amendment or supplement to the Prospectus and the holder of Registrable
Securities thereafter fails to deliver such Prospectus as so amended or
supplemented prior to or concurrently with the sale of the Registrable
Securities to the person asserting such loss, claim, damage, liability or
expense after Holdings has furnished such holder with a sufficient number of
copies of the same. Holdings shall also indemnify underwriters, their officers
and directors and each Person who controls such Persons (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Indemnified Parties, if requested.
(b) Conduct of Indemnification Proceedings. Any
Person entitled to indemnification hereunder will (i) give prompt notice to
Holdings of any claim with respect to which
it seeks indemnification and (ii) permit Holdings to assume the defense of such
claim with counsel reasonably satisfactory to such Person; provided, however,
that any Person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such Person unless
(a) Holdings has agreed to pay such fees or expenses, or (b) Holdings has failed
to assume the defense of such claim or (c) in the reasonable judgment of any
such Person, based upon advice of its counsel, a conflict of interest may exist
between such Person and Holdings with respect to such claims (in which case, if
the Person notifies Holdings in writing that such Person elects to employ
separate counsel at the expense of Holdings, Holdings shall not have the right
to assume the defense of such claim on behalf of such Person). If such defense
is not assumed by Holdings, Holdings will not be subject to any liability for
any settlement made without its consent (but such consent will not be
unreasonably withheld). Holdings will not be required to 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 Person entitled to
indemnification a release from all liability in respect to such claim or
litigation. If Holdings is not entitled to, or elects not to, assume the defense
of a claim, Holdings will not be obligated to pay the fees and expenses of more
than one counsel for all Persons entitled to indemnification by Holdings with
respect to such claim, unless in the reasonable judgment of any such Person a
conflict of interest may exist between such Person and any other Person entitled
to indemnification hereunder with respect to such claim, in which event Holdings
shall be obligated to pay the fees and expenses of such additional counsel or
counsels, but only of one such additional counsel for each group of similarly
situated Persons in any one jurisdiction.
(c) Contribution. If for any reason the
indemnification provided for in subsection (a) is unavailable to a Person
entitled to indemnification or is insufficient to hold it harmless as
contemplated by the preceding subsection (a), then Holdings shall contribute to
the amount paid or payable by such Person as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Person and Holdings, but also the relative
fault of such Person and Holdings, as well as any other relevant equitable
considerations, provided that no holder of Registrable Securities shall be
required to
contribute an amount greater than the dollar amount of the proceeds received by
such holder of Registrable Securities with respect to the sale of any
securities. 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.
7. Rule 144. Holdings covenants that it will file the reports
required to be filed by them under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder (or, if it is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities made after September 30, 1999, make publicly available
other information so long as necessary to permit sales pursuant to Rule 144
under the Securities Act), and it will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any holder of Registrable Securities, Holdings will
deliver to such holder a written statement as to whether it has complied with
such information and filing requirements.
8. Miscellaneous.
(a) Remedies. Each holder of Registrable Securities,
in addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, in connection with the breach by Holdings
of its obligations to register the Registrable Securities will be entitled to
specific performance of its rights under this Agreement. Holdings agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and agrees, to the
extent permitted under applicable law, to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Holdings 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 holders of
Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of Holdings' securities under any other
agreements. Holdings has not previously entered into any inconsistent agreement
with respect to its securities granting any registration rights to any Person.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions of this Agreement may not be given unless Holdings has obtained the
written consent of holders of at least 66 2/3 % of the principal amount of the
outstanding Registrable Securities (excluding Registrable Securities held by
Holdings or one of its affiliates).
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, facsimile or air courier guaranteeing overnight
delivery:
(i) if to a holder of Registrable
Securities, at the most current address given by such holder to Holdings in
accordance with the provisions of this Section 8(d), which address initially is,
with respect to the Purchaser, the address set forth next to the Purchaser's
name on the signature pages of the Securities Purchase Agreement, with a copy to
Miles & Stockbridge, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 Attention: Xxxxx
Xxxxxxxx; and
(ii) if to Holdings, initially to it at True
Temper Corporation, 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000,
Attention: Vice President--Finance and Administration, and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 8(d), with a copy to Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxx Xxxxx, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail,
postage prepaid if mailed; when answered back, if delivered by facsimile; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto, including without limitation, and without the need for an
express assignment, subsequent holders of Registrable Securities.
(f) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) New York Law; Submission to Jurisdiction; Waiver
of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(i) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of any such provision in such jurisdiction
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(j) Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement with respect to the subject
matter contained herein and intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by Holdings with respect to the securities sold
pursuant to the Securities Purchase Agreement. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties have executed this Equity
Registration Rights Agreement as of the date first written above.
TRUE TEMPER CORPORATION
By:/s/
Name:
Title:
EMHART, INC.
By:/s/
Name:
Title:
