REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 20, 1998, by and among United States Leather, Inc., a
Wisconsin corporation (the "Company"), and the other parties set forth on the
signature page hereto (collectively, the "Stockholders").
W I T N E S S E T H
WHEREAS, in connection with the financial restructuring of the Company
pursuant to the Plan of Reorganization of United States Leather, Inc. (the
"Plan") dated May 11, 1998, and the Company's Restated Articles of Incorporation
dated July 20, 1998, the Company's authorized capital stock will consist of,
among other things, 45,000,000 shares of common stock (the "Company Common
Stock"); and
WHEREAS, the Company has agreed to grant to each of the Stockholders
the registration rights set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
Certain Definitions
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) The term "Affiliate" shall have the meaning set forth in Rule 405
promulgated under the Securities Act.
(b) The term "Commission" shall mean the United States Securities and
Exchange Commission or any successor agency.
(c) The term "Control Person" shall have the meaning set forth in
Section 2.8(a) of this Agreement.
(d) The term "Demand" shall have the meaning set forth in Section
2.1(a) of this Agreement.
(e) The term "Demand Registration" shall have the meaning set forth in
Section 2.1(a) of this Agreement.
(f) The term "Demanding Holder" shall have the meaning set forth in
Section 2.1(a) of the agreement.
(g) The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
(h) The term "Losses" shall have the meaning set forth in Section
2.8(a) of this Agreement.
(i) The term "Maximum Demand Number" shall have the meaning set forth
in Section 2.1(f) of this Agreement.
(j) The term "Maximum Piggyback Number" shall have the meaning set
forth in Section 2.2(b) of this Agreement.
(k) The term "Nasdaq" shall have the meaning set forth in Section
2.6(a)(ix) of this Agreement.
(l) The term "Other Demand Rights" shall have the meaning set forth in
Section 2.2(b) of this Agreement.
(m) The term "Other Demand Sellers" shall have the meaning set forth in
Section 2.2(b) of this Agreement.
(n) The term "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(o) The term "Piggyback" shall have the meaning set forth in Section
2.2(b) of this Agreement.
(p) The term "Piggyback Notice" shall have the meaning set forth in
Section 2.2(a) of this Agreement.
(q) The term "Piggyback Registration" shall have the meaning set forth
in Section 2.2(a) of this Agreement.
(r) The term "Piggyback Sellers" shall have the meaning set forth in
Section 2.2(b) of this Agreement.
(s) The term "Primary Offering" shall have the meaning set forth in
Section 2.2(b)(i) of this Agreement.
(t) The term "Public Offering" shall mean a public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act, including a public offering in which Stockholders are
entitled to sell Shares pursuant to the terms of this Agreement.
(u) The term "Registrable Securities" shall mean (i) any Company Common
Stock is-
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sued to the Stockholders pursuant to the Plan, and (ii) any Company Common Stock
issued or issuable with respect to the securities referred to in clause (i) by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation, or other reorganization. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (x) a registration statement registering such
securities under the Securities Act has been declared effective and such
securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement, (y) such securities are sold
to the public in accordance with Rule 144 (or any successor provision)
promulgated under the Securities Act, or (z) such securities are transferred
under circumstances in which any legend borne by the certificates for such
securities relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed by the Company.
(v) The term "Registration Expenses" shall have the meaning set forth
in Section 2.7 of this Agreement.
(w) The term "Registration Period" shall mean the period commencing on
the date hereof and expiring July 20, 2002.
(x) The term "Requisite Amount" shall mean 25% of the Registrable
Securities outstanding at any given time.
(y) The term "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(z) The term "Selling Stockholders" shall have the meaning set forth in
Section 2.1(f) of this Agreement.
(aa) The term "Shelf Registration" shall have the meaning set forth in
Section 2.3 of this Agreement.
ARTICLE II
Registration Rights
Section 2.1 Demand Registrations.
(a) Requests for Registration. During the Registration Period,
Stockholders holding the Requisite Amount of Registrable Securities may make a
written request of the Company (a "Demand") for registration under the
Securities Act of all or part (which may not be less than the Requisite Amount)
of the Registrable Securities (a "Demand Registration"). Such Demand shall
specify: (i) the aggregate number of Registrable Securities requested to be
registered, (ii) the intended method of distribution in connection with such
Demand Registration to the extent then known, and (iii) the identity of the
Stockholder or Stockholders (each, a "Demanding Holder") requesting such Demand.
Within ten (10) days after receipt of a Demand, the Company shall give written
notice of such Demand to all other Stockholders and shall include in such
registration all Registrable Securities with respect to which the Company has
received a written re-
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quest for inclusion therein within twenty (20) days after the receipt by such
Stockholder of the Company's notice required by this paragraph (it being
understood and agreed that such request for inclusion shall not constitute a
demand).
(b) Number of Demands. The Stockholders shall be entitled to three
(3) Demand Registrations.
(c) Satisfaction of Obligations. A registration shall not be
treated as a permitted Demand for a Demand Registration until (i) the applicable
registration statement under the Securities Act has been filed with the
Commission with respect to such Demand Registration (which shall include any
registration statement that is not withdrawn by holders of Registrable
Securities in the circumstances contemplated by Section 2.3), and (ii) such
registration statement shall have been maintained continuously effective for a
period of at least ninety (90) days or such shorter period as all Registrable
Securities included therein have been disposed of thereunder in accordance with
the manner of distribution set forth in such registration statement.
(d) Availability of Short Form Registrations. The Company shall
use all reasonable efforts to comply with the requirements for use of short form
registration for the sale of securities under the Securities Act.
(e) Restrictions on Demand Registrations. The Company shall not be
obligated (i) in the case of a Demand Registration, to maintain the
effectiveness of a registration statement under the Securities Act, for a period
longer than ninety (90) days, or (ii) to effect any Demand Registration within
one hundred eighty (180) days after the effective date of (A) a "firm
commitment" underwritten registration in which all Stockholders were notified of
their "piggyback" rights pursuant to Section 2.2 hereof, or (B) any other Demand
Registration. In addition, the Company may postpone (upon written notice to all
Stockholders) for up to ninety (90) days the filing or the effectiveness of a
registration statement in respect of a Demand (but no more than once in any
period of twelve (12) consecutive months) if the Board determines in good faith
and in its reasonable judgment that effecting the Demand Registration in respect
of such Demand would have a material adverse affect on any proposal or plan by
the Company to engage in any debt or equity offering, material acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction. In the event
of a postponement by the Company of the filing or effectiveness of a
registration statement in respect of a Demand, the holders making such Demand
shall have the right to withdraw such Demand in accordance with Section 2.3
hereof.
(f) Participation in Demand Registrations. The Company shall not
include any securities other than Registrable Securities in a Demand
Registration, except with the written consent of the holders of the majority of
the Registrable Securities sought to be registered pursuant to such Demand
Registration held by all Stockholders that have elected to include Registrable
Securities in such Demand Registration. If, in connection with a Demand
Registration, any managing underwriter advises the Company and the holders of
the Registrable Securities that, in its opinion, the inclusion of all the
Registrable Securities and, if authorized pursuant to this paragraph, other
securities of the Company, in each case, sought to be registered in connection
with
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such Demand Registration would adversely affect the marketability of the
Registrable Securities sought to be sold pursuant thereto, then (i) the Company
shall include in the registration statement applicable to such Demand
Registration only such securities as the Company and the holders of Registrable
Securities sought to be registered therein (the "Selling Stockholders") are
advised by such underwriter can be sold without such adverse effect (the
"Maximum Demand Number"), and (ii) prior to the inclusion of any securities
which are not Registrable Securities requested to be included which in the
opinion of such underwriters can be sold in an orderly manner within the price
range of such offering, all Registrable Securities held by the Selling
Stockholders are included or, if all such shares exceed the Maximum Demand
Number, a pro rata amount of such shares from each Selling Stockholder based on
the amount of Registrable Securities requested to be included by each such
seller. If such Demand Registration is not an underwritten offering, the
Demanding Holders of a majority of the Registrable Securities to be registered
therein shall select a nationally-recognized, independent underwriter, to be
subject to the approval of the Company, which approval should not be
unreasonably withheld or delayed to advise the Company and the Selling
Stockholders concerning the Maximum Demand Number. The Company shall bear all
the fees and expenses of such underwriter and shall be bound by such advice to
the same extent as set forth in the preceding sentence.
(g) Selection of Underwriters. If the Demanding Holders of a
majority of the Registrable Securities to be included in a Demand Registration
request that such Demand Registration be an underwritten offering, then such
holders shall select a nationally recognized underwriter or underwriters to
manage and administer such offering, such underwriter or underwriters, as the
case may be, to be subject to the approval of the Company, which approval shall
not be unreasonably withheld or delayed, and such underwritings shall be "firm"
underwritings, unless a majority of the Demanding Holders should otherwise
agree. The Company shall bear all the fees and expenses of such underwriter.
(h) Other Registrations. If the Company has received a Demand and
if the applicable registration statement in respect of such Demand has not been
withdrawn or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (other than a registration relating to the Company employee benefit plans,
exchange offers by the Company or a merger or acquisition of a business or
assets by the Company, including, without limitation, a registration on Form S-4
or S-8 or any successor form), whether on its own behalf or at the request of
any holder or holders of such securities, until a period of at least ninety (90)
days has elapsed from the effective date of any Demand Registration, unless a
shorter period of time is approved by the Demanding Holders of a majority of the
Registrable Securities held by all the Demanding Holders. Notwithstanding the
foregoing, the Company shall be entitled to postpone any such Demand
Registration and may file or cause to be effected such other registration in
accordance with the terms of Section 2.1(e) hereof.
Section 2.2 Piggyback Registrations.
(a) Right to Piggyback. During the Registration Period, whenever
the Company proposes to register any of its equity securities or securities
convertible or exchangeable
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into or exercisable for its equity securities under the Securities Act (other
than a registration relating to the Company employee benefit plans, exchange
offers by the Company or a merger or acquisition of a business or assets by the
Company including, without limitation, a registration on Form S-4 or Form S-8 or
any successor form) (a "Piggyback Registration"), the Company shall give all
Stockholders prompt written notice thereof (but not less than twenty (20) days
prior to the filing by the Company with the Commission of any registration
statement with respect thereto). Such notice (a "Piggyback Notice") shall
specify, at a minimum, the number of securities proposed to be registered, the
proposed date of filing of such registration statement with the Commission, the
proposed means of distribution, the proposed managing underwriter or
underwriters (if any and if known), and a good faith estimate by the Company of
the proposed minimum offering price of such securities. Upon the written request
of a Stockholder given within ten (10) business days of such Stockholder's
receipt of the Piggyback Notice (which written request shall specify the number
of Registrable Securities intended to be disposed of by such Stockholder and the
intended method of distribution thereof), the Company shall include in such
registration all Registrable Securities with respect to which the Company has
received such written requests for inclusion.
(b) Priority on Piggyback Registrations. If, in connection with a
Piggyback Registration, any managing underwriter (or, if such Piggyback
Registration is not an underwritten offering, a nationally recognized
independent underwriter selected by the Company (reasonably acceptable to the
holders of a majority of the Registrable Securities sought to be included in
such Piggyback Registration and whose fees and expenses shall be borne solely by
the Company)) advises the Company and the holders of the Registrable Securities
to be included in such Piggyback Registration, that, in its opinion, the
inclusion of all the securities sought to be included in such Piggyback
Registration by the Company, any Persons who have sought to have shares
registered thereunder pursuant to rights to demand (other than pursuant to
so-called "piggyback" or other incidental or participation registration rights)
such registration (such demand rights being "Other Demand Rights" and such
Persons being "Other Demanding Sellers"), any holders of Registrable Securities
seeking to sell such securities in such Piggyback Registration ("Piggyback
Sellers") and any other proposed sellers, in each case, if any, would adversely
affect the marketability of the securities sought to be sold pursuant thereto,
then the Company shall include in the registration statement applicable to such
Piggyback Registration only such securities as the Company, the Other Demanding
Sellers, and the Piggyback Sellers are so advised by such underwriter can be
sold without such an effect (the "Maximum Piggyback Number"), as follows and in
the following order of priority:
(i) if the Piggyback Registration is an offering on
behalf of the Company and not any Person exercising Other Demand
Rights (whether or not other Persons seek to include securities
therein pursuant to so called "piggyback" or other incidental or
participatory registration rights) (a "Primary Offering"), then
(A) first, such number of securities to be sold by the Company as
the Company, in its reasonable judgment and acting in good faith
and in accordance with sound financial practice, shall have
determined, (B) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of
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such Registrable Securities on the basis of the number of shares
requested to be included by each such holder, and (C) third, other
securities requested to be included in such registration.
(ii) if the Piggyback Registration is an offering
other than pursuant to a Primary Offering, then (A) first, such
number of securities sought to be registered by each Other
Demanding Seller, pro rata in proportion to the number of
securities sought to be registered by all such Other Demanding
Sellers, (B) second, if the number of securities to be included
under clause (A) above is less than the Maximum Piggyback Number,
the number of Registrable Securities, requested to be included in
such registration, pro rata among the holders of such Registrable
Securities on the basis of the number of shares requested to be
included by each such holder, and (C) third, other securities
requested to be included in such registration.
(c) Withdrawal by the Company. If, at any time after giving
written notice of its intention to register any of its securities as set forth
in Section 2.2 and prior to the time the registration statement filed in
connection with such registration is declared effective, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Stockholder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such particular withdrawn or abandoned
registration (but not from its obligation to pay the Registration Expenses in
connection therewith as provided herein). In the event that the Piggyback
Sellers of such a registration hold the Requisite Amount of Registrable
Securities, such holders may continue the registration as a Demand Registration.
Section 2.3 Shelf Registration.
The Company shall cause to be filed as soon as practicable but in
no event later than 75 days following the date hereof, a shelf registration
statement (the "Shelf Registration") pursuant to Rule 415 under the Securities
Act relating to all Registrable Securities. Notwithstanding the foregoing, the
Company shall not be required to include Registrable Securities of any holder
that has not provided to the Company all information reasonably requested by the
Company for use therein. The Company shall use its reasonable best efforts to
cause such registration statement to become effective within 120 days of the
date hereof and to keep such registration statement continuously effective,
supplemented and amended to the extent necessary to ensure that it is available
for sales of Registrable Securities by the holders thereof, and to ensure that
it complies with the requirements of the Securities Act and the policies, rules
and regulations of the Commission until such time as all Registrable Securities
registered thereunder have been sold pursuant to such registration statement or
otherwise.
Section 2.4 Withdrawal Rights.
Any Stockholder having notified or directed the Company to include
any or all of its Registrable Securities in a registration statement under the
Securities Act may with-
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draw any such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company prior to the effective date of such registration
statement. In the event of any such withdrawal, the Company shall not include
such Registrable Securities in the applicable registration and such Registrable
Securities shall continue to be Registrable Securities hereunder. No such
withdrawal shall affect the obligations of the Company with respect to the
Registrable Securities not so withdrawn; provided that in the case of a Demand
Registration, if such withdrawal shall reduce the number of Registrable
Securities sought to be included in such registration below the Requisite
Amount, then the Company shall as promptly as practicable give each holder of
Registrable Securities sought to be registered notice to such effect, referring
to this Agreement and summarizing this Section 2.4, and within five (5) business
days following the effectiveness of such notice, either the Company or the
holders of a majority of the Registrable Securities sought to be registered may,
by written notices made to each holder of Registrable Securities sought to be
registered and the Company, respectively, elect that such registration statement
not be filed or, if theretofore filed, be withdrawn. During such five (5)
business day period, the Company shall not file such registration statement if
not theretofore filed or, if such registration statement has been theretofore
filed, the Company shall not seek, and shall use its best efforts to prevent,
the effectiveness thereof. Any registration statement withdrawn or not filed (i)
in accordance with an election by the Company, (ii) in accordance with an
election by the holders of the majority of the Registrable Securities sought to
be registered pursuant to such Demand Registration held by all the Selling
Stockholders, (iii) in accordance with an election by the holders of the
majority of the Registrable Securities sought to be registered pursuant to such
Demand Registration held by all the Selling Stockholders prior to the
effectiveness of the applicable Demand Registration Statement or (iv) in
accordance with an election by the holders of the majority of the Registrable
Securities sought to be registered pursuant to such Demand Registration held by
all the Selling Stockholders subsequent to the effectiveness of the applicable
Demand Registration Statement, if any post-effective amendment or supplement to
the applicable Demand Registration Statement contains adverse information
regarding the Company shall not be counted as a Demand. Except as set forth in
clause (iv) of the previous sentence, any Demand withdrawn in accordance with an
election by the Selling Stockholders subsequent to the effectiveness of the
applicable Demand Registration Statement shall be counted as a Demand unless the
Stockholders reimburse the Company for its reasonable out-of-pocket expenses
(but, without implication that the contrary would otherwise be true, not
including any Internal Expenses, as defined below) related to the preparation
and filing of such registration statement (in which event such registration
statement shall not be counted as a Demand hereunder). Upon the written request
of a majority of the Stockholders, the Company shall promptly prepare a
definitive statement of such out-of-pocket expenses in connection with such
registration statement in order to assist such holders with a determination in
accordance with the next preceding sentence.
Section 2.5 Holdback Agreements.
Each Stockholder agrees not to effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the ten (10) day period prior to the date which the
Company has, or in the case of a Demand Registration, the Demand-
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ing Holders have, notified the Stockholders that it or they intend to commence a
Public Offering through the sixty (60) day period immediately following the
effective date of any Demand Registration or any Piggyback Registration (in each
case, except as part of such registration), or, in each case, if later, the date
of any underwriting agreement with respect thereto; provided, however, that the
Stockholders shall not be obligated to comply with this Section 2.5 on more than
one (1) occasion in any nine (9) month period.
Section 2.6 Registration Procedures.
(a) Whenever the Stockholders have requested that any Registrable
Securities be registered pursuant to this Agreement (whether pursuant to Demand
Registration, Piggyback Registration or Shelf Registration), the Company
(subject to its right to withdraw such registration as contemplated by Section
2.2(c)) shall use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof and, in connection therewith, the Company shall as
expeditiously as possible:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable Securities
on any form for which the Company then qualifies and is available
for the sale of Registrable Securities to be registered thereunder
in accordance with the intended method of distribution and use its
reasonable best efforts to cause such registration statement to
become effective within ninety (90) days of the date of such
filing (or, in the case of the Shelf Registration, within 120 days
of the date hereof);
(ii) 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 for a continuous period
of not less than ninety (90) days (or, if earlier, until all
Registrable Securities included in such registration statement
have been sold thereunder in accordance with the manner of
distribution set forth therein) or such longer period as may be
set forth in Section 2.3 and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof as set forth in such registration statement (including,
without limitation, by incorporating in a prospectus supplement or
post-effective amendment, at the request of a seller of
Registrable Securities, the terms of the sale of such Registrable
Securities);
(iii) before filing with the Commission any such
registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to counsel selected
by the holders of a majority of the Registrable Securities held by
the Demanding
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Holders, counsel for the underwriter or sales or placement agent,
if any, and any other counsel for holders of Registrable
Securities, if any, in connection therewith, drafts of all such
documents proposed to be filed and provide such counsel with a
reasonable opportunity for review thereof and comment thereon,
such review to be conducted and such comments to be delivered with
reasonable promptness;
(iv) promptly (i) notify each seller of Registrable
Securities of each of (x) the filing and effectiveness of the
registration statement and prospectus and any amendment or
supplements thereto, (y) the receipt of any comments from the
Commission or any state securities law authorities or any other
governmental authorities with respect to any such registration
statement or prospectus or any amendments or supplements thereto,
and (z) any oral or written stop order with respect to such
registration, any suspension of the registration or qualification
of the sale of such Registrable Securities in any jurisdiction or
any initiation or threatening of any proceedings with respect to
any of the foregoing and (ii) use its best efforts to obtain the
withdrawal of any order suspending the registration or
qualification (or the effectiveness thereof) or suspending or
preventing the use of any related prospectus in any jurisdiction
with respect thereto;
(v) furnish to each seller of Registrable
Securities, the underwriters and the sales or placement agent, if
any, and counsel for each of the foregoing, a conformed copy of
such registration statement and each amendment and supplement
thereto (in each case, including all exhibits thereto and
documents incorporated by reference therein) and such additional
number of copies of such registration statement, each amendment
and supplement thereto (in such case without such exhibits and
documents), the prospectus (including each preliminary prospectus)
included in such registration statement and prospectus supplements
and all exhibits thereto and documents incorporated by reference
therein and such other documents as such seller, underwriter,
agent or counsel may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(vi) if requested by the managing underwriter or
underwriters of any registration or by the Demanding Holders of a
majority of the Registrable Securities held by the Demanding
Holders, subject to approval of counsel to the Company in its
reasonable judgment, promptly incorporate in a prospectus,
supplement or post-effective amendment to the registration
statement such information concerning underwriters and the plan of
distribution of the Registrable Securities as such managing
underwriter or underwriters or such holders reasonably shall
furnish to the Company in writing and request to be included
therein,
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including, without limitation, with respect to the number of
Registrable Securities being sold by such holders to such
underwriter or underwriters, the purchase price being paid
therefor by such underwriter or underwriters and with respect to
any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required
filings of such prospectus, supplement or post-effective amendment
as soon as possible after being notified of the matters to be
incorporated in such prospectus, supplement or post-effective
amendment;
(vii) use its reasonable best efforts to register or
qualify such Registrable Securities under such securities or "blue
sky" laws of such jurisdictions as the holders of a majority of
Registrable Securities sought to be registered reasonably request
and do any and all other acts and things which may be reasonably
necessary or advisable to enable the holders of a majority of
Registrable Securities sought to be registered to consummate the
disposition in such jurisdictions of the Registrable Securities
owned by such holders and keep such registration or qualification
in effect for so long as the registration statement remains
effective under the Securities Act (provided that the Company
shall not be required to (x) qualify generally to do business in
any jurisdiction where it would not otherwise be required to
qualify but for this paragraph, (y) subject itself to taxation in
any such jurisdiction where it would not otherwise be subject to
taxation but for this paragraph or (z) consent to the general
service of process in any jurisdiction where it would not
otherwise be subject to general service of process but for this
paragraph);
(viii) notify each seller of such Registrable
Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon the
discovery that, or of the happening of any event as a result of
which, the registration statement covering such Registrable
Securities, as then in effect, contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or any fact necessary to make the statements
therein not misleading, and promptly prepare and furnish to each
such seller a supplement or amendment to the prospectus contained
in such registration statement so that such Registration Statement
shall not, and such prospectus as thereafter delivered to the
purchasers of such Registrable Securities shall not, contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or any fact necessary to make
the statements therein not misleading;
(ix) use its reasonable best efforts to cause all
such Registrable Securities to be listed on the New York Stock
Exchange and/or any other securities exchange and included in each
established over-the-counter market on which or through which
similar secu-
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rities of the Company are listed or traded and, if not so listed
or traded, to be listed on the NASD automated quotation system
("Nasdaq") and if listed on Nasdaq, use its reasonable efforts to
secure designation of all such Registrable Securities covered by
such registration statement as a Nasdaq "national market system
security" within the meaning of Rule 1lAa2-1 under the Securities
Exchange Act of 1934, as amended, or, failing that, to secure
Nasdaq authorization for such Registrable Securities;
(x) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any
attorney, accountant or other agent retained by any such seller or
underwriter all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors, employees, attorneys and independent
accountants to supply all information reasonably requested by any
such sellers, underwriters, attorneys, accountants or agents in
connection with such registration statement. Information which the
Company determines, in good faith, to be confidential shall not be
disclosed by such persons unless (x) the disclosure of such
information is necessary to avoid or correct a misstatement or
omission in such registration statement, or (y) the release of
such information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction. Each seller of Registrable
Securities agrees, on its own behalf and on behalf of all its
underwriters, accountants, attorneys and agents, that the
information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis
for any market transactions in the securities of the Company
unless and until such is made generally available to the public.
Each seller of Registrable Securities further agrees, on its own
behalf and on behalf of all its underwriters, accountants,
attorneys and agents, that it will, upon learning that disclosure
of such information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure
of the information deemed confidential;
(xi) use its reasonable best efforts to comply with
all applicable laws related to such registration statement and
offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith
(including, without limitation, the Securities Act and the
Exchange Act) and make generally available to its security holders
as soon as practicable (but in any event not later than fifteen
(15) months after the effectiveness of such registration
statement) an earnings statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act;
-12-
(xii) permit any Stockholder, which Stockholder, in
its sole and exclusive judgment, might be deemed to be an
underwriter or controlling person of the Company, to participate
in the preparation of such registration statement and to require
the insertion therein of material, furnished to the Company in
writing, which in the reasonable judgment of such holder and such
holder's counsel should be included;
(xiii) use its reasonable best efforts to furnish to
each seller of Registrable Securities a signed counterpart of (x)
an opinion of counsel for the Company and (y) 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 such matters
with respect to such registration statement 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 for the account of, or on behalf
of, an issuer of common stock, such opinion and comfort letters to
be dated the date of such opinions and comfort letters are
customarily dated in such transactions, and covering in the case
of such legal opinion, such other legal matters and, in the case
of such comfort letter, such other financial matters, as the
holders of a majority of the Registrable Securities being sold may
reasonably request; and
(xiv) take all such other actions as the holders of
a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
(b) Underwriting. Without limiting any of the foregoing, in the
event that the offering of Registrable Securities is to be made by or through an
underwriter, the Company shall enter into an underwriting agreement with a
managing underwriter or underwriters containing representations, warranties,
indemnities and agreements customarily included (but not inconsistent with the
agreements contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the account of, or on
behalf of, such issuers. In connection with the sale of Registrable Securities
hereunder, any seller of such Registrable Securities may, at its option, require
that any and all representations and warranties by, and indemnities and
agreements of, the Company to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such an
underwriter or underwriters if such sale of Registrable Securities were pursuant
to a customary underwritten offering) be made to and for the benefit of such
seller and that any or all of the conditions precedent to the obligations of
such underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with the
disposition of its securities pursuant to the terms
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hereof (it being agreed that in connection with any Demand Registration, without
limiting any rights or remedies of the Stockholders, in the event any such
condition precedent shall not be satisfied and, if not so satisfied, shall not
be waived by the holders of a majority of the Registrable Securities to be
included in such Demand Registration, such Demand Registration shall not be
counted as a permitted Demand hereunder). In connection with any offering of
Registrable Securities registered pursuant to this Agreement, the Company shall
(x) furnish to the underwriter, if any (or, if no underwriter, the sellers of
such Registrable Securities), unlegended certificates representing ownership of
the Registrable Securities being sold, in such denominations as requested and
(y) instruct any transfer agent and registrar of the Registrable Securities to
release any stop transfer order with respect thereto.
(c) Return of Prospectuses. Each seller of Registrable Securities
hereunder agrees that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.6(a)(viii), such
seller shall forthwith discontinue such seller's disposition of Registrable
Securities pursuant to the applicable registration statement and prospectus
relating thereto until such seller's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 2.6(a)(viii) and, if so directed
by the Company, deliver to the Company all copies, other than permanent file
copies, then in such seller's possession of the prospectus current at the time
of receipt of such notice relating to such Registrable Securities. In the event
the Company shall give such notice, the ninety (90)-day period during which such
registration statement must remain effective pursuant to this Agreement shall be
extended by the number of days during the period from the date of giving of a
notice regarding the happening of an event of the kind described in Section
2.6(a)(viii) to the date when all such sellers shall receive such a supplemented
or amended prospectus and such prospectus shall have been filed with the
Commission.
Section 2.7 Registration Expenses.
All expenses incident to the Company's performance of, or
compliance with, its obligations under this Agreement including, without
limitation, all registration and filing fees, all fees and expenses of
compliance with securities laws and "blue sky" laws (including, without
limitation, the fees and expenses of counsel for underwriters or placement or
sales agents in connection therewith), all printing and copying expenses, all
messenger and delivery expenses, all fees and expenses of underwriters and sales
and placement agents in connection therewith (excluding discounts and
commissions), all fees and expenses of the Company's independent certified
public accountants and counsel (including, without limitation, with respect to
"comfort" letters and opinions) (collectively, the "Registration Expenses")
shall be borne by the Company; provided, however, that in the case of a
Piggyback Registration, all incremental costs resulting from applicable federal
and blue sky registration and filing fees, National Association of Securities
Dealers filing fees, the expenses and fees for listing the securities to be
registered on each securities exchange and included in each established
over-the-counter market on which similar securities issued by the Company are
then listed or traded or for listing on Nasdaq and underwriting discounts and
commissions allocable to each Stockholder selling Registrable Securities shall
be borne by such Stockholder. The Company shall be responsible for the fees and
expenses of one (1) legal counsel retained by all of the Stockholders in the
aggregate in connection with
-14-
each sale of Registrable Securities pursuant to a Demand Registration or a
Piggyback Registration. Notwithstanding the foregoing, the Company shall not be
responsible for the fees and expenses of any additional counsel, or any of the
accountants, agents or experts retained by the Stockholders in connection with
the sale of Registrable Securities. The Company will pay its 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
and the expense of any liability insurance) (collectively, "Internal Expenses")
and the expenses and fees for listing the securities to be registered on each
securities exchange and included in each established over-the-counter market on
which similar securities issued by the Company are then listed or traded or for
listing on Nasdaq.
Section 2.8 Indemnification.
(a) By the Company. The Company agrees to indemnify, to the
fullest extent permitted by law, each holder of Registrable Securities being
sold, its officers, directors, employees, shareholders, investment advisors,
agents and Affiliates and each Person who controls (within the meaning of the
Securities Act) such holder (a "Control Person") or such an other indemnified
Person, and each such Affiliate's or Control Person's officers, directors,
shareholders, investment advisors and agents against all losses, claims,
damages, liabilities and expenses (collectively, the "Losses") caused by,
resulting from or relating to any untrue or alleged untrue statement of material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or a fact
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished to the Company by
such holder expressly for use therein or by such holder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering and without limiting any of the Company's other obligations under this
Agreement, the Company shall indemnify such underwriters, their officers,
directors, employees, shareholders, investment advisors, agents and Affiliates
and each Control Person of such underwriters or such an other indemnified
Person, and each such Affiliate's or Control Person's officers, directors,
shareholders, investment advisors and agents, to the same extent as provided
above with respect to the indemnification of the holders of Registrable
Securities being sold.
(b) By the Stockholders. In connection with any registration
statement in which a holder of Registrable Securities is participating, each
such holder will furnish to the Company in writing information regarding such
holder's ownership of Registrable Securities and its intended method of
distribution thereof and, to the extent permitted by law, shall indemnify the
Company, its directors, officers, employees and agents and each Person who
controls (within the meaning of the Securities Act) the Company or such an other
indemnified Person against all Losses caused by, resulting from or relating to
any untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or
-15-
omission is caused by and contained in such information so furnished in writing
by such holder; provided, however, that each holder's obligation to indemnify
the Company hereunder shall be apportioned between each liable holder based upon
the net amount received by such liable holder from the sale of Registrable
Securities, as compared to the total net amount received by all of the liable
holders of Registrable Securities sold pursuant to such registration statement,
no such liable holder being liable to the Company in excess of such
apportionment.
(c) Notice. Any Person entitled to indemnification hereunder shall
give prompt written notice to the indemnifying party of any claim with respect
to which its seeks indemnification; provided, however, the failure to give such
notice shall not release the indemnifying party from its obligation, except to
the extent that the indemnifying party has been materially prejudiced by such
failure to provide such notice.
(d) Defense of Actions. In any case in which any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not (so long as it shall
continue to have the right to defend, contest, litigate and settle the matter in
question in accordance with this paragraph) be liable to such indemnified party
hereunder for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, supervision and monitoring (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to the defenses
available to such indemnifying party, in which event the indemnified party shall
be reimbursed by the indemnifying party for the expenses incurred in connection
with retaining separate legal counsel). An indemnifying party shall not be
liable for any settlement of an action or claim effected without its consent.
The indemnifying party shall lose its right to defend, contest, litigate and
settle a matter if it shall fail to diligently contest such matter (except to
the extent settled in accordance with the next following sentence). No matter
shall be settled by an indemnifying party without the consent of the indemnified
party (which consent shall not be unreasonably withheld).
(e) Survival. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified Person and will survive the transfer of
the Registrable Securities and the termination of this Agreement.
(f) Contribution. If recovery is not available under the foregoing
indemnification provisions for any reason or reasons other than as specified
therein, any Person who would otherwise be entitled to indemnification by the
terms thereof shall nevertheless be entitled to contribution with respect to any
Losses with respect to which such Person would be entitled to such
indemnification but for such reason or reasons. In determining the amount of
contribution to which the respective Persons are entitled, there shall be
considered the Persons' relative knowl-
-16-
edge and access to information concerning the matter with respect to which the
claim was asserted, the opportunity to correct and prevent any statement or
omission, and other equitable considerations appropriate under the
circumstances. It is hereby agreed that it would not necessarily be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation. 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 found guilty of such fraudulent misrepresentation.
Notwithstanding the foregoing, no Stockholder shall be required to make a
contribution in excess of the net amount received by such holder from the sale
of Registrable Securities.
ARTICLE III
Miscellaneous
(a) Headings. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or construction of
any provisions hereof.
(b) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
(c) Notices. All notices and other communications hereunder shall
be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, at the address specified below (or at
such other address for a party as shall be specified by like notice; provided
that notices of change of address shall be effective only upon receipt thereof).
Any such notice shall be effective upon receipt, if personally delivered or
telecopied, or one day after delivery to a courier for next-day delivery.
If to the Company: United States Leather, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
With a Copy to:
Xxxxx & Lardner
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
-17-
Attention: Xxxxxxxx X. Xxxxxx, III
Telecopier: (000) 000-0000
If to the Stockholders: At the respective addresses set forth
on the signature pages hereto.
(d) Applicable Law. The substantive laws of the State of New York
shall govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY
TRIAL WITH RESPECT TO DISPUTES HEREUNDER.
(e) Severability. The invalidity, illegality or unenforceability
of one or more of the provisions of this Agreement in any jurisdiction shall not
affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
(f) Successors; Assigns. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, successors and
permitted assigns whether so expressed or not. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which are for
the benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.
(g) Amendments. This Agreement may not be amended, modified or
supplemented unless such modification is in writing and signed by the Company
and the holders of at least 60% of the Registrable Securities outstanding on the
date thereof.
(h) Waiver. Any waiver (express or implied) of any default or
breach of this Agreement shall not constitute a waiver of any other or
subsequent default or breach.
[Intentionally blank]
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(i)Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the undersigned hereby agree to be bound by
the terms and provisions of this Registration Rights Agreement as of the date
first above written.
UNITED STATES LEATHER, INC.
By: /s/ Kinzie X. Xxxxxx
Name: Kinzie X. Xxxxxx
Its: Secretary
XXXXXX XXXXXXX XXXX XXXXXX HIGH YIELD
SECURITIES, INC.
XXXXXX XXXXXXX XXXX XXXXXX DIVERSIFIED
INCOME FUND
XXXXXX XXXXXXX XXXX XXXXXX VARIABLE
INVESTMENT SERIES-HIGH YIELD PORTFOLIO
HIGH INCOME ADVANTAGE TRUST
HIGH INCOME ADVANTAGE TRUST II
HIGH INCOME ADVANTAGE TRUST III
XXXXXX XXXXXXX XXXX XXXXXX SELECT
DIMENSIONS INVESTMENT SERIES - THE
DIVERSIFIEDINCOME PORTFOLIO
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Its: Vice President
Address: c/o Morgan Xxxxxxx Xxxx Xxxxxx
Advisors Inc.
Xxx Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-19-
CONTRARIAN CAPITAL FUND I, L.P.
By: Contrarian Capital Management, LLC,
its general partner
By: /s/ Xxx X. Xxx
Name: Xxx X. Xxx
Title: Partner
Address: 000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CONTRARIAN CAPITAL FUND II, L.P.
By: Contrarian Capital Management, LLC,
its general partner
By: /s/ Xxx X. Xxx
Name: Xxx X. Xxx
Title: Partner
Address: 000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-20-
CONTRARIAN CAPITAL OFFSHORE FUND LIMITED
By: Contrarian Capital Management, LLC,
its Agent
By: /s/ Xxx X. Xxx
Name: Xxx X. Xxx
Title: Partner
Address: c/o Trident Trust Company
Limited
One Capital Place
Grand Cayman, Cayman Islands
B.W.I.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CONTRARIAN CAPITAL ADVISORS, L.L.C.,
as agent for the entities listed below
By: /s/ Xxx X. Xxx
Name: Xxx X. Xxx
Title: Partner
Address: 000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxxxxxx Horizon Partners, X.X.
Xxxxxxxxxxx Institutional Horizon Partners, X.X.
Xxxxxxxxxxx International Horizon Fund II, Ltd.
CIBC Xxxxxxxxxxx Corp.
The & Trust
-21-
MELLON BANK, N.A., solely in its capacity as Trustee
for First Plaza Group Trust (as directed by
Contrarian Capital Advisors, L.L.C.) and not in its
individual capacity
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
Address: Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx Rm 151-3346
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-22-
