EXHIBIT 10.45
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of June 17, 1997 ("Agreement"),
by and among EMPIRE OF CAROLINA, INC., a Delaware corporation ("Empire" or the
"Company"), and WPG CORPORATE DEVELOPMENT ASSOCIATES IV, L.P. ("CDA IV"), WPG
CORPORATE DEVELOPMENT ASSOCIATES IV (OVERSEAS), LTD. ("CDA IV Overseas"), XXXXX,
XXXX & XXXXX, as trustee under Xxxxx Xxxxxxx XXX, Xxxxx X. Pfister, WEISS, XXXX
& XXXXX, as Trustee under Xxxx Xxxxxxxx XXX, WESTPOOL INVESTMENT TRUST PLC,
XXXXXX X. XXXXXXXX, XX., XXXXXXX XXXXXXX, and GLENBROOK PARTNERS, L.P.
(collectively, the "Investors").
RECITALS
A. Pursuant to that certain Agreement by and between the Company and
Investors dated as of June 17, 1997 (the "WPG Agreement"), the Investors, among
other things, agreed to exchange their outstanding 9% convertible debentures in
return for non-voting Series C Preferred Stock as contemplated by that certain
Securities Purchase Agreement ("Securities Purchase Agreement"), dated as of May
5, 1997, by and between HPA Associates, LLC, EMP Associates LLC and Empire.
B. As a condition to the consummation of the transactions contemplated
by the WPG Agreement and the Securities Purchase Agreement, the parties hereto
(collectively, the "Parties" and each, individually, a "Party") have entered
into this Agreement to provide certain securities registration rights to the
Investors.
C. The provisions of this Agreement supersede and replace any and all
registration rights previously held by any Party with respect to securities of
the Company, including the registration rights contemplated by that certain
Registration Rights Agreement dated December 22, 1994 (the "WPG Registration
Rights Agreement") between the Company and Investors.
AGREEMENTS
In consideration of the foregoing recitals (which are hereby
incorporated into and shall be deemed a part of this Agreement), the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1. Definitions. For the purposes of this Agreement, the
following terms have the meanings indicated:
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"Board" shall mean the Board of Directors of the Company.
"Blackout Event" shall mean any of the following events: (i)
if the Board or the Executive Committee of the Board determines in good faith
that effecting such a registration or continuing such disposition at such time
would have a material adverse effect upon a proposed sale of all (or
substantially all) of the assets of the Company or a merger, reorganization,
recapitalization or similar current transaction materially affecting the capital
structure or equity ownership of the Company, or (ii) if the Company is in
possession of material information which the Board or the Executive Committee of
the Board determines in good faith it is not in the best interests of the
Company to disclose in a registration statement at such time.
"Common Stock" shall mean the Company's Common Stock, $.10
par value, and any Stock into which such Common Stock may hereafter be changed.
"Company" shall mean Empire of Carolina, Inc., a Delaware
corporation, and all successor corporations thereof.
"Conversion Stock" means Common Stock issued upon conversion
of the Series C Preferred Stock.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any federal statute or statutes which shall be enacted to
take the place of such Act, together with all amendments and supplements
thereto.
"Holders" shall mean the Persons who shall from time to time
own of record any Security. The term "Holder" shall mean any one of the Holders.
"Other WPG Stock" shall mean Common Stock issuable or issued
to, or acquired by, the Investors (other than Conversion Stock or Series C
Preferred Stock (as defined below)) and any Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, rights or other
security which is issued as) a dividend, stock split or other distribution with
respect to, or in exchange for or in replacement of such Common Stock.
"Person" shall mean an individual, a corporation, a
partnership, a limited liability company, a trust, an unincorporated
organization or a governmental organization or any agency or political
subdivision thereof.
"Prospectus" shall mean any prospectus which is a part of a
Registration Statement, together with all amendments or supplements thereto.
"Registrable Stock" shall mean at any time: (i) the shares of
the then outstanding Conversion Stock; (ii) the Conversion Stock then issuable
upon conversion of the then outstanding Series C Preferred Stock; and (iii)
Other WPG Stock owned by any Investor
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or any subsequent Holder of Registrable Stock having rights hereunder pursuant
to Section 10 hereof; provided, however, that Registrable Stock shall not be
deemed to include any shares after such shares have been registered under the
Securities Act and sold pursuant to such registration or any shares sold without
registration under the Securities Act in compliance with Rule 144, or pursuant
to any other exemption from registration under the Securities Act to a Person
who is free to resell such shares without registration or restriction under the
Securities Act.
"Registration Statement" shall mean any registration
statement filed with the Securities and Exchange Commission in accordance with
the Securities Act, together with all amendments or supplements thereto.
"Securities" shall mean any debt or equity securities of the
Company or a Subsidiary, whether now or hereafter authorized, and any instrument
convertible into or exchangeable for Securities or a Security. The term
"Security" shall mean any one of the Securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any federal statute or statutes which shall be enacted to take the
place of such Act, together with all rules and regulations promulgated
thereunder.
"Securities and Exchange Commission" shall mean the United
States Securities and Exchange Commission or any successor to the functions of
such agency.
"Seller" shall mean each Holder of Securities of the Company
as to which Securities the Company could be required to file a Registration
Statement or which could be registered under the Securities Act at the request
of such Holder pursuant to any of the provisions of this Agreement.
"Stock" shall include any and all shares, interests or other
equivalents (however designated) of, or participation in, corporate stock.
"Securities Purchase Agreement" shall have the meaning given
such term in the Recitals hereto.
"Series C Preferred Stock" shall mean the Company's Series C
Convertible Preferred Stock, $.01 par value, and any Stock into which such Stock
may hereafter be changed, other than by exercise of the conversion right of such
Series C Preferred Stock.
2. Required Registrations.
(A) Subject to Sections 2(B) and 5 below, upon the written
request to register any number of shares of Registrable Stock under the
Securities Act made at any time by Holders of a majority of the shares of
Registrable Stock then outstanding, the Company will use its reasonable best
efforts to effect the registration of Registrable Stock under the
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Securities Act and the registration or qualification thereof under all
applicable state securities or blue sky laws, but only to the extent provided
for in the following provisions of this Agreement. A request pursuant to this
Section 2(A) shall state the intended method of disposition of the Registrable
Stock sought to be registered. Whenever the Company shall, pursuant to this
Section 2(A), be requested to effect the registration of any Registrable Stock
under the Securities Act, the Company shall promptly give written notice of such
proposed registration to all Holders of Registrable Stock, stating that such
Holders have the right to request that any or all of the Registrable Stock owned
by them be included in such registration. The Company shall include in such
registration all Registrable Stock with respect to which the Company receives
written requests from the Holders thereof for inclusion therein (stating the
intended method of disposition of such Registrable Stock); and thereupon the
Company will, as expeditiously as is practicable, use its reasonable best
efforts to effect the registration, under the Securities Act, of such
Registrable Stock which the Company has been requested to register for
disposition by such Holders in accordance with the intended method of
disposition described in the requests of such Holders, all to the extent
requisite to permit such sale or other disposition by such Holders of the
Registrable Stock so registered.
(B) The foregoing registration rights of Holders of
Registrable Stock shall be deemed satisfied by the Company when two Registration
Statements shall have been filed by the Company with and made effective by the
Securities and Exchange Commission under the Securities Act pursuant to requests
made pursuant to Section 2(A) and all Registrable Stock offered pursuant to each
such Registration Statement shall have been sold. All Holders of Registrable
Stock shall use their best efforts to include all shares of Registrable Stock of
such Holder in the first demand registration pursuant to this Section 2;
provided that such Holders shall not be required to include all such shares of
Registrable Stock if it reasonably believes that the inclusion of all such
shares of Registrable Stock would adversely affect the price at which such
shares could be sold. The Company shall have the right to select the investment
banker or bankers who shall serve as the manager and/or co-managers for the
offering of Securities covered by such Registration Statement, but only with the
consent of the Holders of a majority of the Registrable Stock included in a
Registration Statement filed pursuant to this Section 2, which consent shall not
be unreasonably withheld.
3. Piggyback Registration. At any time whenever the Company
proposes to file a Registration Statement under the Securities Act with respect
to an underwritten public offering of Common Stock by the Company for its own
account or for the account of any other holder of Common Stock, the Company
shall give written notice (the "Offering Notice") of such proposed filing at
least 30 days before the anticipated filing date. Such Offering Notice shall
offer Holder the opportunity to register such number of Common Stock as Investor
may request in writing, which request for registration (each, a "Piggyback
Registration") must be received by the Company within 15 days after the Offering
Notice is given. Subject to Section 9 hereof, the Company shall use all
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit Holder requested to include such
Registrable Securities in such offering on the same terms and conditions as the
Securities of the Company included therein. No registrations of Registrable
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Stock under this Section 3 shall relieve the Company of its obligation to effect
registrations under Section 2 hereof, or shall constitute a registration request
by any Holder of Registrable Stock under Section 2. The Company shall have the
right to select the investment banker or bankers who shall serve as the manager
and/or co-managers for all offerings of Securities under this Section 3.
4. Registration Procedures. Whenever the Company is required by
the provisions of this Agreement to use its reasonable best efforts to effect
the registration of any Registrable Stock under the Securities Act, the Company
will, as expeditiously as is practicable:
(A) prepare and file with the Securities and Exchange
Commission a Registration Statement with respect to such Registrable Stock and
use its reasonable best efforts to cause such Registration Statement to become
and remain effective for a period of not less than one year, provided that
before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, the Company will furnish to counsel for the Holders of
Registrable Stock included in such Registration Statement copies of all such
documents proposed to be filed, which documents will be subject to the review of
such counsel and shall not be filed without the consent of such counsel (which
consent shall not be unreasonably withheld or delayed);
(B) prepare and file with the Securities and Exchange
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 period of not less than one year and to
comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Stock covered by such Registration
Statement during such period in accordance with the intended method or methods
of disposition by the Sellers thereof set forth in such Registration Statement;
(C) furnish to each Seller such number of copies of such
Registration Statement, each amendment and supplement thereto, the Prospectus
included in the Registration Statement (including each preliminary Prospectus),
and such other documents, as such Seller may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Stock owned
by such Seller;
(D) use every reasonable effort to register or qualify all
the Registrable Stock covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Seller shall
reasonably request, and use every reasonable effort to do any and all other acts
and things which may be necessary under such securities or blue sky laws to
enable such Seller to consummate the public sale or other disposition in such
jurisdiction of the Registrable Stock owned by such Seller covered by such
Registration Statement;
(E) notify each Seller at any time when a Prospectus relating
to the Registrable Stock of such Seller covered by such Registration Statement
is required to be
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delivered under the Securities Act, of the happening of any event as a result of
which the Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements
therein not misleading, and at the request of Sellers holding a majority of the
Registrable Stock covered by such Registration Statement and subject to Section
5 below, prepare a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of the Registrable Stock covered by such
Registration Statement, such Prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(F) cause all such Registrable Stock covered by such
Registration Statement to be listed on each securities exchange on which
Securities of the same class are then listed;
(G) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions as the
Holders of a majority of the Registrable Stock included in such Registration
Statement pursuant to the provisions of this Agreement or underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Stock (including effecting a stock split or a combination of
shares);
(H) make available for inspection by any Seller, any
underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by any such
Seller who is the Holder of Registrable Stock included in such registration
pursuant to the provisions of this Agreement or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such Seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement;
(I) if such sale is pursuant to an underwritten offering, use
reasonable efforts to obtain a "cold comfort" letter and updates thereof from
the Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the
managing underwriter or underwriters reasonably request; and
(J) provide, if such sale is pursuant to a firm commitment
underwriting, at the request of the Investor, a legal opinion of the Company's
independent counsel for purpose of such registration with respect to the
Registration Statement, each amendment and supplement thereto, the Prospectus
included therein (including any preliminary Prospectus) and such other documents
relating thereto in customary form and covering such matters of that type
customarily covered by legal opinions of such nature at the date thereof.
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5. Blackout Events.
(A) Notwithstanding any provision of this Agreement to the
contrary, during any period of up to 90 days' duration following the occurrence
of a Blackout Event (a "Blackout Period"), the Company shall not be required to
file, or cause to be declared effective, under the Securities Act any
Registration Statement hereunder, and the Holders of Registrable Stock will
discontinue the disposition of Common Stock pursuant to a Registration Statement
filed pursuant to this Agreement. The aggregate number of days during which one
or more Blackout Periods are in effect shall not exceed 180 days during any
12-month period.
(B) The Company shall promptly notify the Holders in writing
of any decision not to file a Registration Statement or not to cause a
Registration Statement to be declared effective or to discontinue sales of
Registrable Securities pursuant to this Section 6, which notice shall set forth
the reason for such decision (but not disclosing any nonpublic material
information) and shall include an undertaking by the Company promptly to notify
the Holders as soon as exchanges or sales, as applicable, may resume.
6. Expenses. To the fullest extent allowable under applicable
state securities and blue sky laws, all expenses incurred in effecting the
registrations provided for in Sections 2(A) and 3 hereof, including all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of one law firm
serving as counsel for the Sellers (who shall be selected by Sellers holding a
majority of the Registrable Stock being offered and shall be a firm of
nationally recognized standing or which has been approved by the Company, which
consent shall not be unreasonably withheld), underwriting expenses (other than
underwriting discounts and commissions with respect to the Registrable Stock
being sold, which shall be the responsibility of the Sellers), expenses of any
audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions pursuant to
Subsection (D) of Section 4 hereof, shall be borne and paid by the Company;
provided, however, that the Company shall not be required to pay for any
out-of-pocket expenses described above (which amount shall in no event include
any allocation of overhead) directly related to any registration began pursuant
to Section 2 hereof if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Stock to be registered,
if any (in which case all participating Holders shall bear such out-of-pocket
expenses pro rata), unless the Holders of at least 80% of the then existing
Registrable Stock agree to forfeit their right to one registration pursuant to
Section 2 of this Agreement. If a registration request is withdrawn at the
request of the Holders of a majority of the Registrable Stock to be registered,
such participating Holders shall have 30 days after the Company has delivered an
itemized statement setting forth in reasonable detail the out-of-pocket expenses
incurred by the Company and made available to such Holders appropriate back-up
documentation to pay such expenses in accordance with the proviso to the
preceding sentence or to notify the Company in writing of their decision to
forfeit their right to one registration pursuant to Section 2 of this Agreement;
and provided further, however, that if at the time of such withdrawal, the
Holders have learned of a
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material adverse change in the condition, business, or prospects of Empire from
that known to the Holders at the time of their request and have withdrawn the
request with reasonable promptness following disclosure by Empire of such
material adverse change, then the Holders shall retain their rights pursuant to
Section 2(A).
7. Indemnification.
(A) In the event of any registration of any Registrable Stock
under the Securities Act pursuant to this Agreement, the Company, to the extent
permitted by law, shall indemnify and hold harmless the Seller of such
Registrable Stock, each trustee, partner, officer, director and agent of such
Seller ("Seller Representatives"), each underwriter (as defined in the
Securities Act), each other Person who participates in the offering of such
Registrable Stock, and each other Person, if any, who controls (within the
meaning of the Securities Act) such Seller, Seller Representatives, underwriter
or participating Person, against any losses, claims, damages or liabilities,
joint or several, to which such Seller, Seller Representatives, underwriter,
participating Person or controlling Person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (1) any alleged untrue statement of any material fact contained,
on the effective date thereof, in any Registration Statement under which such
Registrable Stock was registered under the Securities Act, any preliminary
Prospectus or final Prospectus contained therein, or any summary Prospectus
issued in connection with any Registrable Stock being registered, or any
amendment or supplement thereto; or (2) any alleged omission to state in any
such document a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each such Seller,
Seller Representatives, or any such underwriter, participating Person or
controlling Person for any legal or other expenses reasonably incurred by such
Seller, Seller Representatives, underwriter, participating Person or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable to any Seller, or any such Seller Representatives, underwriter,
participating Person, or controlling Person in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
alleged untrue statement or alleged omission made in such Registration
Statement, preliminary Prospectus, summary Prospectus, final Prospectus, or
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Seller, specifically for use
therein.
(B) Each Holder of Registrable Stock, by acceptance thereof,
severally and not jointly, indemnifies and holds harmless each other Holder of
Registrable Stock, the Company, its directors and officers, each underwriter (as
defined in the Securities Act), each other Person who participates in the
offering of such Registrable Stock, and each other Person, if any, who controls
(within the meaning of the Securities Act) the Company, any underwriter,
participating Person or any Holder, against any losses, claims, damages, or
liabilities, joint or several, to which any such other Holder, the Company, any
such director or officer, any such underwriter, or any such participating Person
or controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as
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such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (1) any alleged untrue statement of any material
fact contained, on the effective date thereof, in any Registration Statement
under which Registrable Stock was registered under the Securities Act at the
request of such Holder, any preliminary Prospectus or final Prospectus contained
therein, or any summary Prospectus issued in connection with any Registrable
Stock being registered, or any amendment or supplement thereto; or (2) any
alleged omission to state in any such document a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
either case to the extent, and only to the extent, that such alleged untrue
statement or alleged omission was made in such Registration Statement,
preliminary Prospectus, summary Prospectus, final Prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Holder specifically for use therein, and then only to the
extent that such alleged untrue statements or alleged omissions by such Holder
were not based on the authority of an expert as to which such Holder had no
reasonable ground to believe, and did not believe, that the statements made on
the authority of such expert were untrue or that there was an omission to state
a material fact. Each such Holder severally and not jointly shall reimburse each
such other Holder of Registrable Stock, the Company, its directors and officers,
or any such underwriter, participating Person or controlling Person for any
legal or other expenses reasonably incurred by such other Holder of Registrable
Stock, the Company, its directors and officers, or any such underwriter,
participating Person or controlling Person in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding the
foregoing provisions of this Subsection (B), no Holder shall be required to pay
under such provisions an amount in excess of the proceeds (net of brokerage or
underwriting commissions, discounts or the like) received by such Holder in
payment for the Registrable Stock sold by such Holder pursuant to the
Registration Statement.
(C) Indemnification similar to that specified in Subsections
(A) and (B) of this Section 7 shall be given by the Company and each Seller
(with such modifications as shall be appropriate) covered by any registration or
other qualification of Registrable Stock under any federal or state securities
law or regulation other than the Securities Act with respect to any such
registration or other qualification effected pursuant to this Agreement.
(D) Any Person which proposes to assert the right to be
indemnified under Subsection (A), (B) or (C) of this Section 7 shall, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such Person in respect of which a claim is to be made against an
indemnifying Person under such Subsection (A), (B) or (C), notify each such
indemnifying Person of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. The omission to notify the indemnifying
Person promptly of the commencement of any such action shall not relieve the
indemnifying Person of any liability to indemnify the Person claiming
indemnification under Section 7 hereof, except to the extent that the
indemnifying Person shall suffer any loss by reason of such failure to give
notice and shall not relieve the indemnifying Person of any other liabilities
which it may have under this Agreement or otherwise. The indemnifying Person
shall have the right, if such indemnifying Person so notifies the Person
claiming
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indemnification within ten days after receipt of such notice, to investigate and
defend any such loss, claim, damage, liability or action and to employ separate
counsel reasonably satisfactory to the Person claiming indemnification in any
such action and to control the defense thereof. The Person claiming
indemnification shall have the right to participate in the defense of any such
loss, claim, damage, liability or action, and so long as the indemnifying Person
is defending such claim in good faith, the person claiming indemnification will
be responsible for any of the fees and expenses of its own counsel in connection
with such participation; provided, however, that notwithstanding the foregoing,
in any case when indemnification is sought against the Company and (i) the
Person seeking indemnification has been advised by counsel that its defenses may
be different from those of the Company, or (ii) the Company has not proceeded in
a timely or good faith manner to effect such defense, then the reasonable fees
and expenses of counsel for such Person shall be paid by the Company and the
indemnified Person shall have the right to control the defense of such action,
suit or proceeding as it effects such Person. In no event shall a Person against
whom indemnification is sought be obligated to indemnify any Person for any
settlement of any claim or action effected without the indemnifying Person's
consent, which consent shall not be unreasonably withheld.
(E) The indemnification provided for under this Section 7
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified Person or any officer, director or controlling
Person of such indemnified Person and will survive the transfer of Registrable
Stock.
(F) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
Person with respect to any loss, liability, claim, damage, or expense referred
to herein, then the indemnifying Person, in lieu of indemnifying such
indemnified Person hereunder, shall contribute to the amount paid or payable by
such indemnified Person as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying Person on the one hand and of the indemnified Person on the
other in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
consideration. The relative fault of the indemnifying Person and of the
indemnified Person shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of the material fact or the
omission to state a material fact relates to information supplied by the
indemnifying Person or by the indemnified Person, the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
8. Participation in Underwritten Registrations. No Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's Registrable Stock on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided, however, that no
Holder of Registrable Stock shall be required to make any representations or
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warranties or to provide information in the Registration Statement relating to
such registration except, in either case, with respect to itself and its
intended method of disposition of Registrable Stock.
9. Marketing Restrictions.
(A) If:
(1) any Holder of Registrable Stock is entitled and
wishes to register any Registrable Stock in a registration made
pursuant to Section 2 hereof, and
(2) the offering proposed to be made by the
Holder or Holders for whom such registration is to be made is to be an
underwritten public offering, and
(3) the Company or one or more Holders of Securities
other than Registrable Stock wishes to register Securities in such
registration, and
(4) the managing underwriters of such public
offering furnish a written opinion that the total amount of Securities
to be included in such offering would exceed the maximum amount of
Securities (as specified in such opinion) which can be marketed at a
price reasonably related to the then current market value of such
Securities and without otherwise materially and adversely affecting
such offering,
then the relative rights to participate in such offering of the Holders of
Registrable Stock, the Holders of other Securities having the right to include
such Securities in such registration, and the Company shall be in the following
order of priority:
FIRST: The Holders of Registrable Stock shall be entitled to
participate in accordance with the number of shares of Registrable
Stock which each such Holder shall request to be registered, such
participation to be pro rata in accordance with the number of shares
which each such Holder shall request be registered if, pursuant to
clause 4 of this Subsection (A), the total amount of Securities to be
included in the offering will be less than the number of shares of
Registrable Stock that all of such Holders shall request be registered;
and then
SECOND: The Company and all Holders of other Securities
having the right to include such Securities in such registration shall
be entitled to participate in accordance with the relative priorities,
if any, as shall exist among them;
and no Securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition by
the Company or any Holder of Registrable Stock in a transaction which would
require registration under the Securities Act until the expiration of 180 days
after the effective date of the Registration Statement filed pursuant to Section
2 hereof, or such earlier time consented to by the managing underwriters.
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(B) If:
(1) any Holder of Registrable Stock entitled to do
so requests registration of Registrable Stock under Section 3 hereof,
and
(2) the offering proposed to be made is to be an
underwritten public offering, and
(3) the managing underwriters of such public
offering furnish a written opinion that the total amount of Securities
to be included in such offering would exceed the maximum amount of
Securities (as specified in such opinion) which can be marketed at a
price reasonably related to the then current market value of such
Securities and without materially and adversely affecting such
offering,
then the relative rights to participate in such offering of the Holders of
Registrable Stock, the Holders of other Securities having the right to include
such Securities in such registration, and the Company shall be in the following
order of priority:
FIRST: The Person or Persons (including the Company in the
case of an offering initiated by the Company) requesting such
registration shall be entitled to participate in accordance with the
relative priorities, if any, as shall exist among them; and then
SECOND: If such registration shall have been requested by a
Person or Persons other than the Company, the Company shall be entitled
to include Securities in such registration; and then
THIRD: The Holders of Registrable Stock and all other Holders
of Securities, if any, having the right to include such Securities in
such registration shall be entitled to participate pro rata among
themselves in accordance with the number of shares of Common Stock
which each such Holder shall have requested be registered (for the
purposes of this clause, Securities convertible into or exchangeable or
exercisable for Common Stock shall be treated as if they were so
converted or exchanged or exercised immediately prior to the filing of
the Registration Statement covering such registration), except to the
extent that the Registration Rights Agreement held by holders of the
Series A Preferred Stock pursuant to the Subscription Agreement
therefore relating to the acquisition thereof and the rights of warrant
holders pursuant to the Warrant Agreement dated as of June 17, 1997, in
each case as in effect on the date hereof, specifically provides that
the rights of holders named therein (including their transferees) take
precedence over the Piggyback Rights held by the holder hereunder;
and no Securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition by
the Company or any Holder of Registrable Stock in a transaction which would
require registration under the
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Securities Act until the expiration of 180 days after the effective date of the
Registration Statement in which Registrable Stock was included pursuant to
Section 3 hereof, or such earlier time consented to by the managing
underwriters.
10. Assignability of Registration Rights. The registration
rights set forth in this Agreement shall accrue to each subsequent Holder of
Registrable Stock who consents in writing to be bound by the terms and
conditions of this Agreement.
11. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law. However, in the event that any court or any governmental
authority or agency declares all or any part of any Section of this Agreement to
be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any other Section of this Agreement, and in the event that only a
portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
12. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
13. Notices. All notices required or permitted hereunder shall be
in writing and shall be: (a) sent by telex or facsimile transmission (to be
effective when receipt is acknowledged unless sent after 5:00 p.m. on any
business day, in which event notice shall be deemed received on the next
business day); (b) personally delivered; (c) sent by certified mail, return
receipt requested; or (d) sent by a nationally recognized commercial overnight
delivery service with provisions for a receipt, postage or delivery charges
prepaid and, except as otherwise provided in Section 13(a) above, shall be
deemed given when personally delivered or within three business days after such
mailing, and addressed to the Party, to the Investors at their address on the
books and records of the Company, and to the Company as follows:
To the Company: Empire of Carolina, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxxx Xxxxxx,
Vice President and General Counsel
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Such addresses may be changed by any such Party by providing like notice to the
other Parties in accordance with this Section.
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14. Rule 144. The Company hereby covenants that after the Company
shall have filed a registration statement pursuant to the requirements of
Section 12 of the Exchange Act (or a registration statement on Form S-4), the
Company will file in a timely manner all reports required to be filed by it
under the Securities Act and the Exchange Act (or, if the Company is not
required to file such reports, it will, upon the reasonable request of the
Holder, make publicly available other information so long as necessary to permit
sales by the Holder under Rule 144 under the Securities Act), and it will take
such further action as the Holder may reasonably request, all to the extent
required from time to time to enable the Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the Securities and Exchange Commission. Upon the request of the
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same document.
16. Entire Agreement. This Agreement contains the entire
agreement and understanding of the Parties concerning the subject matter hereof,
and supersedes and replaces all prior and contemporaneous negotiations, proposed
agreements and agreements, written and oral, relating to such subject matter.
There are no agreements, representations or warranties between the Parties as to
the subject matter hereof other than those provided herein. Each of the Parties
agrees and acknowledges that this Agreement replaces and terminates any and all
registration rights provided for in the WPG Registration Rights Agreement.
17. Amendments and Governing Law. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the Company
and Holders of a majority of the then existing shares of Registrable Stock. Any
term, covenant, agreement or condition in this Agreement may be waived (either
generally or in particular instances and either retroactively or prospectively)
by written instruments signed by the Company and Holders of a majority of the
existing shares of Registrable Stock. Any such waiver shall be limited to its
express terms and shall not be deemed a waiver of any other term, covenant,
agreement or condition. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in that state. Any amendment or waiver effected in
accordance with this Section shall be binding upon each Holder of Registrable
Stock then outstanding, each future Holder of such Registrable Stock and the
Company.
18. Further Assurances. Each Party agrees to take all such
steps, execute and deliver such further documents and perform such acts as may
be reasonably requested by any other Party in order to effectuate the
transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.
WPG CORPORATE DEVELOPMENT EMPIRE OF CAROLINA, INC.
ASSOCIATES IV, L.P.
By: WPG PRIVATE EQUITY PARTNERS,
L.P., its sole General Partner By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------
By: /s/ Xxxxxx Xxxxxxxxxx By: Xxxxxxxx Xxxxxx
----------------------------- -----------------------------------
Its: Its: Vice President-General Counsel
------------------------- ------------------------------
XXXXX, XXXX & XXXXX, as Trustee under WPG CORPORATE DEVELOPMENT
Xxxxx Xxxxxxx XXX ASSOCIATES IV (OVERSEAS), LTD.
WPG CDA IV (OVERSEAS) LTD.,
By: /s/ Xxxxxx Xxxxxxxxx GENERAL PARTNER
-----------------------------
Its:
-------------------------
By: /s/ illegible
-----------------------------------
Its: Director
------------------------------
XXXXX, XXXX & XXXXX, as Trustee under WESTPOOL INVESTMENT TRUST PLC
Xxxx Xxxxxxxx XXX
By: /s/ Xxxxxx Xxxxx
-----------------------------------
By: /s/ Xxxxxx Xxxxxxxxx Its: Investment Director
----------------------------- ------------------------------
Its:
-------------------------
GLENBROOK PARTNERS, L.P.
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
By: /s/ Pico Xxxxx
-----------------------------
Its: Executive Vice President /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------ -----------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx
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