Exhibit 2.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of July 1, 1998, by and
between The North face, Inc., a Delaware corporation (the "COMPANY"), and the
undersigned shareholders of La Sportiva USA, Inc., a Colorado corporation (the
"SHAREHOLDERS").
RECITALS
WHEREAS, concurrent with delivery of this Agreement, the Company, and
the Shareholders are entering into a Stock Purchase Agreement (the "PURCHASE
AGREEMENT") which provides for the purchase (the "PURCHASE") of all of the
issued and outstanding shares of common stock of the La Sportiva USA, Inc.
all of which are held by the Shareholders by the Company in exchange for
shares of Company Common Stock;
WHEREAS, as an inducement to the Shareholders to enter into the Purchase
Agreement, as of the Closing Date, the shares of Company Common Stock that are
issued to the Shareholders pursuant to the Purchase Agreement shall be granted
registration rights as set forth herein; and
WHEREAS, all terms not otherwise defined herein shall have the same
meanings ascribed to them in the Purchase Agreement;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "1934 Act" shall mean the Securities Exchange Act
of 1934, as amended.
(c) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(d) The term "Registrable Securities" means the Common Stock
of the Company ("Common Stock") issued to the Shareholders in accordance with
the terms and conditions of the Purchase Agreement and any securities of the
Company issued as a dividend on or other distribution with respect to, or in
exchange for or replacement of, such common stock.
(e) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as soon as reasonably possible:
(a) Prepare and file with the SEC within three (3) SEC
working days after the Closing Date, a registration statement on Form S-3, or
other available form of registration statement with respect to such
Registrable Securities (hereinafter referred to as the "Registration
Statement") and use its reasonable best efforts to cause such registration
statement to become effective as soon as reasonably practicable thereafter,
and, subject to the provisions below, use its reasonable best efforts to,
keep such registration statement effective for a period of 365 days or, if
earlier, until the Shareholders have sold all of the Registrable Securities.
If at any time after a registration statement becomes effective, the Company
advises the Shareholders' Agent (defined below) in writing that due to the
existence of material infor-mation that has not been disclosed to the public
and included in the registration statement it is necessary to amend the
registration statement, the Shareholders shall suspend any further sale of
Registrable Securities pur-suant to the Registration Statement until the
Company advises the Shareholders' Agent that the registration statement has
been amended. In such event, the Company shall cause the registration
statement to be amended promptly thereafter. In addition, the Company may
suspend use of the registration statement to the extent the Company is
advised by its legal counsel, such action is reasonably necessary to comply
with federal securities law. Buyer will promptly take all reasonably
practicable steps to correct such non-compliance. In the event the sales of
Registrable Securities of the Shareholders are suspended as provided above,
the 365-day period during which a registration statement must be kept
effective shall be extended for the total number of days during which sales
are suspended.
(b) Subject to subsection 1.2(a), prepare and file with the
SEC such amendments and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement.
(c) Furnish to Xxxxx Xxxxx (the "Shareholders' Agent") such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such other documents as the
Shareholders may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Shareholders, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Act.
(e) The Company may include securities issued in connection
with any acquisition not otherwise registered on an S-4 Registration Statement
in the registration pursuant to this Agreement.
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(f) In the event that the SEC has not declared a
Registration Statement with respect to the Registerable Securities effective
prior to ten days following the Closing Date (the "First Delay") the Buyer
shall pay each Shareholder a pro rata share of $9,000, payable in cash within
(10) days of such First Delay (a "Delay Payment"). Further at the end of each
(30) day period subsequent to the First Delay, and until the one year
anniversary of the Closing Date (after which no Delay Payments shall accrue),
if a Registration Statement with respect to the Registerable Securities has
not been declared effective by the SEC Buyer shall make a Delay Payment;
PROVIDED, HOWEVER, that each Delay Payment made after the 70th calender day
following the Closing Date shall be in an aggregate amount of $18,000 (to be
paid pro rata among the Shareholders.
1.3 INFORMATION FROM SHAREHOLDERS. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this Section 1 with respect to the Registrable Securities of the Shareholders
that the Shareholders shall furnish to the Company in writing such information
regarding themselves, the Registrable Securities held by them, and the
intended method of disposition of such securities, as shall be requested by
the Company and required to effect the registration of the Registrable
Securities, which is the only information upon which the Buyer shall be
entitled to rely for purposes of this Section 1.3.
1.4 EXPENSES OF REGISTRATION. All expenses of the Shareholders,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company shall be borne by the Company; provided, however, that the Company shall
not be required to pay any professional fees of the Shareholders other than the
fees of one counsel to the Shareholders' Agent (not to exceed $5,000).
1.5 INDEMNIFICATION. In the event any Registrable Securities
are included in the Registration Statement under this Section 1:
(a) The Company will indemnify and hold harmless the
Shareholders, each of their directors, officers, trustees or beneficiaries,
if applicable, and each person, if any, who controls a non-individual
shareholder within the meaning of the Act against any losses, claims,
damages, or liabilities joint or several) to which the Shareholders may
become subject under the Act, or the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, or any rule or regulation promulgated under the Act, or
the 1934 Act; and the Company will pay to the Shareholders as incurred any
legal or other expenses reasonably incurred by the Shareholders in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 1.5(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected
without the consent of
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the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing expressly for use in connection with such registration by
the Shareholders seeking indemnification hereunder. In addition, the Company
shall not be liable for any untrue statement or omission in any prospectus if
a supplement or amendment thereto correcting such untrue statement or
omission was delivered to the Shareholders' Agent prior to the pertinent sale
or sales by the Shareholders.
(b) Each Shareholder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls the Company within
the meaning of the Act, any other shareholder selling securities in such
Registration Statement and any controlling person of any such shareholder,
against any losses, claims, damages, or liabilities (joint or several) to
which any of the foregoing persons may become subject, under the Act, or the
1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Shareholder solely for such Shareholder's
behalf expressly for use in connection with such registration; and such
Shareholder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this subsection
1.5(b), in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Shareholder, which consent
shall not be unreasonably withheld; provided, that, in no event shall any
indemnity under this subsection 1.5(b) by such Shareholder exceed the gross
proceeds from the offering containing the Violation at issue received by such
Shareholder.
(c) Promptly after receipt by an indemnified party under
this Section 1.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.5,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party promptly upon the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.5, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.5.
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(d) If the indemnification provided for in this Section
1.5 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party 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 party on the one hand and of
the indemnified party 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 considerations. The relative fault of
the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) The obligations of the Company, and the Shareholders
under this Section 1.5 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.
1.6 REPORTS UNDER THE SECURITIES EXCHANGE ACT. The Company
agrees to file with the SEC in a timely manner all reports and other
documents and information required of the Company under the 1934 Act, and
take such other actions as may be necessary to assure the availability of
Form S-3 for use in connection with the registration rights provided in this
Agreement.
1.7 RULES 144 AND 144A. The Company shall use commercially
reasonable efforts to file the reports required to be filed by it under the
Act and the 1934 Act in a timely manner and, if at any time the Company is
not required to file such reports, it will, upon the written request of the
Shareholders' Agent, make publicly available other information so long as
necessary to permit sales of the Shareholders' securities pursuant to Rule
144 and 144A. The Company covenants that it will take such further action as
the Shareholders may reasonably request, all to the extent required from time
to time to enable the Shareholders to sell securities without registration
under the Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). The Company will
reimburse Sellers for costs reasonably incurred in connection with sales made
pursuant to Rules 144 and 144A.
2. MISCELLANEOUS.
2.1 NOTICES. Notice to the Shareholders' Agent shall constitute
notice to all the shareholders party hereto. All notices and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by commercial delivery service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile
(with acknowledgment of complete transmission) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
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(1) if to the Company:
The North Face, Inc.
0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Marsden X. Xxxxx
Telephone: (000)000-0000
Telecopier: (000)000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000)000-0000
(2) if to the Shareholders' Agent, to
Xxxxx Xxxxx
00000 Xxxxx Xx. Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000)000-0000
with a copy to:
The Law Offices of Xxxxxxxxxxx X. Xxxxxx, P.C.
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxx
Facsimile No.: (000)000-0000
2.2 INTERPRETATION. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by
the words "without limitation." The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
2.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
2.4 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the
documents and instruments and other agreements among the parties hereto
referenced herein: (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof;
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(b) are not intended to confer upon any other person (including, without
limitation, those persons listed on any exhibits hereto) any rights or
remedies hereunder; and (c) without the prior written consent of each party
shall not be assigned by operation of law or otherwise, except that the
Company may assign its rights and obligations hereunder to an affiliate of
the Company provided that the Company shall remain liable for all its
obligations hereunder notwithstanding such assignment. Any assignment of
rights or delegation of duties under this Agreement by a party without the
prior written consent of the other parties, if such consent is required
hereby, shall be void.
2.5 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
2.6 OTHER REMEDIES. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
2.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
THE NORTH FACE, INC.
By:______________________
Address: 0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
SHAREHOLDERS
_________________________
Xxxxx Xxxxx
_________________________
C. Xxxxxx Xxxxxxx
_________________________
Xxxxx Xxxxxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
