EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
dated as of February 12, 2007
among
FOAMEX INTERNATIONAL INC.
and
THE HOLDERS NAMED HEREIN
TABLE OF CONTENTS
SECTION 1.DEFINITIONS...................................................... 1
1.1. Defined terms........................................................ 1
1.2. General interpretive principles...................................... 3
SECTION 2.REGISTRATION RIGHTS.............................................. 3
2.1. Shelf registration................................................... 3
2.2. Demand registrations................................................. 4
2.3. Incidental registrations............................................. 7
2.4. Black-out periods.................................................... 9
2.5. Registration procedures.............................................. 10
2.6. Underwritten offerings............................................... 14
2.7. No inconsistent agreements; additional rights........................ 15
2.8. Registration expenses................................................ 15
2.9. Indemnification...................................................... 15
2.10. Rules 144 and 144A................................................... 18
SECTION 3.MISCELLANEOUS.................................................... 19
3.1. Existing Registration Statements..................................... 19
3.2. Term................................................................. 19
3.3. Injunctive relief.................................................... 19
3.4. Attorneys' fees...................................................... 19
3.5. Notices.............................................................. 19
3.6. Successors, assigns and transferees.................................. 21
3.7. Governing law; service of process; consent to jurisdiction........... 21
3.8. Headings............................................................. 21
3.9. Severability......................................................... 21
3.10. Amendment; waiver.................................................... 21
3.11. Counterparts......................................................... 22
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of
February 12, 2007, by and among Foamex International Inc., a Delaware
corporation (including as reorganized, the "Issuer"), and D. E. Shaw Laminar
Portfolios, L.L.C., Xxxxxxx, Sachs & Co., Sigma Capital Associates, LLC, Par IV
Master Fund, Ltd. and Sunrise Partners Limited Partnership (each, a "Significant
Equityholder").
WHEREAS, in connection with and pursuant to the Issuer's Second Amended
Plan of Reorganization, dated November 27, 2006 (the "Plan"), the Issuer
distributed to its equity holders as of the Record Date (as defined in the Plan)
(i) rights to purchase 2.506 shares of Common Stock (as defined herein) for each
share of the Issuer's Common Stock then held, and (ii) rights to purchase 250.6
shares of Series B preferred stock for each share of the Issuer's preferred
stock then held;
WHEREAS, in connection with and pursuant to the Plan and the Call Option
Agreement, dated as of February 1, 2007, by and among the Issuer and the
Significant Equityholders, and subject to the terms and conditions set forth
therein, the Significant Equityholders acquired from the Issuer a call option
(the "Call Option") entitling the Significant Equityholders to purchase from the
Issuer, at the Rights Offering Exercise Price (as defined in the Plan), any
shares of Common Stock not subscribed for in the Rights Offering (as defined in
the Plan); and
WHEREAS, in connection with and pursuant to the Plan, the Issuer has agreed
with the Significant Equityholders to provide certain rights as set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Adverse Disclosure" means public disclosure of material non-public
information, which disclosure in the good faith judgment of the Board of
Directors after consultation with counsel to the Issuer (i) would be required to
be made in any Registration Statement so that such Registration Statement would
not be materially misleading, (ii) would not be required to be made at such time
but for the filing of such Registration Statement and (iii) would have a
material adverse effect on the Issuer or its business or on the Issuer's ability
to effect a material acquisition, disposition or financing.
"Agreement" has the meaning set forth in the preamble hereto.
"Board of Directors" means the Board of Directors of the Issuer.
"Call Option" has the meaning set forth in the preamble hereto.
"Common Stock" means the common stock, par value $0.01, of the Issuer
and any securities of the Issuer or any successor or assign of the Issuer into
which such Common Stock is reclassified or reconstituted or into which such
stock is converted or otherwise exchanged in connection with a combination of
shares, recapitalization, merger, sale of assets, consolidation or other
reorganization or otherwise.
"Demand Registration" has the meaning set forth in Section 2.2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"Free Writing Prospectus" means a free writing prospectus, as defined
in Rule 405 under the Securities Act.
"holder" or "holders" means any holder or holders of Registrable
Securities who is a party hereto or who otherwise agrees in writing to be bound
by the provisions of this Agreement pursuant to Section 3.6.
"Incidental Registration" has the meaning set forth in Section 2.3(a).
"Inspector" has the meaning set forth in Section 2.5(a)(xix).
"Issuer" has the meaning set forth in the preamble hereto and shall
include the Issuer's successors by merger, acquisition, reorganization or
otherwise.
"Issuer Free Writing Prospectus" means an issuer free writing
prospectus, as defined in Rule 433 under the Securities Act, relating to an
offer of the Registrable Securities.
"Significant Equityholder" has the meaning set forth in the preamble
hereto.
"Loss" has the meaning set forth in Section 2.9(a).
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, firm, limited liability company or
partnership, joint venture, corporation, joint stock company, trust or
unincorporated organization, incorporated or unincorporated association,
government (or any department, agency or political subdivision thereof) or other
entity of any kind.
"Plan" has the meaning set forth in the preamble hereto.
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus and all material
incorporated by reference in such prospectus.
"Records" has the meaning set forth in Section 2.5(a)(xix).
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"Registrable Securities" means (i) the shares of Common Stock of the
Issuer issued to the Significant Equityholders pursuant to the exercise of
rights in the Rights Offering; (ii) the shares of Common Stock, if any, issued
by the Issuer to the Significant Equityholders pursuant to the exercise of the
Call Option; (iii) any other shares of Common Stock held by the Significant
Equityholders; and (iv) any securities that may be issued or distributed or be
issuable to the Significant Equityholders in respect of the foregoing by way of
stock dividend, stock split or other distribution, merger, consolidation,
exchange offer, recapitalization or reclassification or similar transaction or
exercise or conversion of any of the foregoing; provided, however, that any of
the foregoing securities listed in the preceding clauses (i) through (iv) shall
cease to be "Registrable Securities" to the extent (i) a Registration Statement
with respect to their sale has become effective under the Securities Act and
they have been disposed of pursuant to such Registration Statement, (ii) they
have been distributed pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act, (iii) they may be publicly resold (without
volume or method of sale restrictions) without registration under the Securities
Act or (iv) they have ceased to be outstanding. For purposes of this Agreement,
a "class" of Registrable Securities shall mean all Securities with the same
terms and a "percentage" (or a "majority") of the Registrable Securities (or,
where applicable, of any other securities) shall be determined (x) based on the
number of shares of such securities, in the case of Registrable Securities which
are equity securities, and (y) based on the principal amount of such securities,
in the case of Registrable Securities which are debt securities.
"registration" means a registration of the Issuer's securities for
sale to the public under a Registration Statement.
"Registration Statement" means any registration statement of the
Issuer filed with, or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such registration
statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor thereto, and any rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time.
"Shelf Registration" means a registration effected pursuant to Section
2.1.
"Shelf Registration Statement" means a Registration Statement of the
Issuer filed with the SEC on Form S-3 or Form S-3ASR (or any successor form or
other appropriate form under the Securities Act) for an offering to be made on a
continuous or delayed basis pursuant to Rule 415 under the Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities.
"Underwritten Offering" means a registration in which securities of
the Issuer are sold to an underwriter or underwriters on a firm commitment basis
for reoffering to the public.
"Valid Business Reason" has the meaning set forth in Section 2.1(c).
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1.2. General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. The name assigned this Agreement and the
section captions used herein are for convenience of reference only and shall not
be construed to affect the meaning, construction or effect hereof. Unless
otherwise specified, the terms "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole (including the exhibits, schedules and
disclosure statements hereto), and references herein to Sections refer to
Sections of this Agreement.
SECTION 2. REGISTRATION RIGHTS
2.1. Shelf Registration.
(a) Filing. Subject to Section 2.1(c), if the Issuer becomes eligible
to file a registration statement on Form S-3 or Form S-3ASR (or any successor
form) in respect of any class of Registrable Securities, it shall promptly
notify the holders of such eligibility, and within 60 days following the request
of any holder or holders holding at least 25% of any such class, the Issuer
shall file with the SEC a Shelf Registration Statement relating to the offer and
sale of any Registrable Securities held by the holders thereof from time to time
in accordance with the methods of distribution elected by such holders and shall
use its reasonable best efforts to cause such Shelf Registration Statement to
become effective under the Securities Act.
(b) Continued Effectiveness. Subject to Section 2.1(c), the Issuer
shall use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming a part thereof
to be usable by the holders during the term of this Agreement. The Issuer shall
not be deemed to have used its reasonable best efforts to keep the Shelf
Registration Statement effective if the Issuer voluntarily takes any action or
omits to take any action that would result in the inability of any holder of
Registrable Securities covered by such Registration Statement to be able to
offer and sell any such Registrable Securities during the term of this
Agreement, unless such action or omission is required by applicable law.
(c) Suspension of Registration. If the filing, initial effectiveness
or continued use of the Shelf Registration Statement at any time would require
the Issuer to make an Adverse Disclosure or, if in the good faith judgment of
the Board of Directors, there exists a Valid Business Reason, the Issuer may,
upon giving prompt written notice of such action to the holders, delay the
filing or initial effectiveness of, or suspend use of, the Shelf Registration
Statement; provided, however, that the Issuer shall not be permitted to do so
(A) more than one time during any three-month period, (B) for a period exceeding
45 days on any one occasion or (C) for a period exceeding 90 days in any
12-month period. In the event the Issuer exercises its rights under the
preceding sentence, the holders agree to suspend, immediately upon their receipt
of the notice referred to above, their use of the Prospectus relating to the
Shelf Registration and any Issuer Free Writing Prospectuses in connection with
any sale or offer to sell Registrable Securities. The Issuer shall immediately
notify the holders upon the expiration of any period during which it exercised
its rights under this Section 2.1(c). The Issuer represents that it currently
has no knowledge of any circumstance that would reasonably be expected to cause
the Issuer to exercise its rights under this Section 2.1(c).
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(d) Underwritten Offering. If the holders of not less than a majority
of any class of Registrable Securities included in any offering pursuant to the
Shelf Registration Statement so elect, such offering shall be in the form of an
Underwritten Offering and the Issuer, if necessary, shall use its reasonable
best efforts to amend or supplement the Shelf Registration Statement for such
purpose. The Issuer, after consulting with the holders of a majority of the
class of Registrable Securities to be included in such Underwritten Offering,
shall have the right to select the managing underwriter or underwriters for the
offering. If the managing underwriter or underwriters of any such proposed
Underwritten Offering informs the holders of Registrable Securities of any class
sought to be included in such registration in writing that, in its or their
opinion, the total amount or kind of securities which such holders and any other
Persons intend to include in such offering exceeds the number or amount which
can be sold in such offering without being likely to have a significant adverse
effect on the price, timing or distribution of the class or classes of the
securities offered or the market for the class or classes of securities offered,
then the securities of each class to be included in such registration shall be
allocated as follows:
(i) first, pro rata among the holders which have requested
participation in such Underwritten Offering (based, for each such holder,
on the percentage derived by dividing (x) the number or amount of
Registrable Securities of such class which such holder has requested to
include in such Underwritten Offering by (y) the aggregate number or amount
of Registrable Securities of such class which all such holders have
requested to include);
(ii) second, and only if all the securities referenced in clause
(i) have been included, any other securities of the Issuer requested by the
holders thereof to included in such registration that, in the opinion of
such underwriter or underwriters, can be sold without having such adverse
effect shall be included therein, with such number to be allocated pro rata
among such holders (based, for each such holder, on the percentage derived
by dividing (x) the number or amount of such securities of such class which
such holder has requested to include in such registration by (y) the
aggregate number or amount of securities of such class which all such
holders have requested to include); and
(iii) third, and only if all of the Registrable Securities
referenced in clauses (i) and (ii) have been included and in the opinion of
such underwriter or underwriters such securities can be sold without having
such adverse effect securities offered by the Issuer for its own account.
2.2. Demand Registrations.
(a) Demand by Holders. (i) At any time the holders of not less than
25% percent of any class of the Registrable Securities may make a written
request to the Issuer for registration of all or part of the Registrable
Securities held by such holders, provided that at least 25% of such class shall
be so registered. Any such requested registration shall hereinafter be referred
to as a "Demand Registration." Each request for a Demand Registration shall
specify the aggregate amount of Registrable Securities to be registered and the
intended methods of disposition thereof.
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(ii) Within ten days following receipt of any request for a Demand
Registration, the Issuer shall deliver written notice of such request to all
other holders of Registrable Securities of the class or classes to be
registered. Thereafter, the Issuer shall include in such Demand Registration any
additional Registrable Securities of each such class which the holder or holders
thereof have requested in writing be included in such Demand Registration,
provided that all requests therefor have been received by the Issuer within ten
days of the Issuer's having sent the applicable notice to such holder or
holders. The failure of any such holder to respond within such ten-day period
shall be deemed to be a waiver of such holder's rights under Section 2.2(a)(ii)
with respect to such Demand Registration. All such requests shall specify the
aggregate amount and class of Registrable Securities to be registered and the
intended method of distribution of the same.
(iii) As promptly as practicable (and, in any event, within 60 days)
following receipt of a request for a Demand Registration, the Issuer shall file
a Registration Statement relating to such Demand Registration and shall use its
reasonable best efforts to cause such Registration Statement to become effective
under the Securities Act.
(b) Limitation on Demand Registrations. In no event shall the Issuer
be required to effect more than two Demand Registrations.
(c) Demand Withdrawal. A holder may withdraw its Registrable
Securities from a Demand Registration at any time. If all such holders do so,
the Issuer shall cease all efforts to secure registration and such registration
nonetheless shall be deemed a Demand Registration for purposes of Section 2.2(b)
unless (i) the withdrawal is based on the reasonable determination of the
holders who requested such registration that there has been, since the date of
such request, a material adverse change in the business or prospects of the
Issuer or (ii) the holders who requested such registration shall have paid or
reimbursed the Issuer for all of the reasonable out-of-pocket fees and expenses
incurred by the Issuer in connection with the withdrawn registration.
(d) Effective Registration. The Issuer shall be deemed to have
effected a Demand Registration if the applicable Registration Statement becomes
effective and remains effective for not less than 180 days (or such shorter
period as will terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn), or, if such Registration
Statement relates to an Underwritten Offering, such longer period as, in the
opinion of counsel for the underwriter or underwriters, is required by law for
the delivery of a Prospectus in connection with the sale of Registrable
Securities by an underwriter or dealer. No Demand Registration shall be deemed
to have been effected if an Underwritten Offering is contemplated by such Demand
Registration and the conditions to closing specified in the applicable
underwriting agreement are not satisfied by reason of a wrongful act,
misrepresentation or breach of such underwriting agreement or this Agreement by
the Issuer.
(e) Suspension of Registration. If the filing, initial effectiveness
or continued use of a Registration Statement in respect of a Demand Registration
at any time would require the Issuer to make an Adverse Disclosure or, if in the
good faith judgment of the Board of Directors, it would materially interfere
with any material financing, acquisition, corporate reorganization or merger or
other material transaction involving the Issuer (a "Valid Business
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Reason"), the Issuer may, upon giving prompt written notice of such action to
the holders, delay the filing or initial effectiveness of, or suspend use of,
the such Registration Statement; provided, however, that the Issuer shall not be
permitted to do so (A) more than one time during any three-month period, (B) for
a period exceeding 45 days on any one occasion or (C) for a period exceeding 90
days in any 12-month period. In the event the Issuer exercises its rights under
the preceding sentence, the holders agree to suspend, immediately upon their
receipt of the notice referred to above, their use of the Prospectus relating to
the Demand Registration and any Issuer Free Writing Prospectus in connection
with any sale or offer to sell Registrable Securities. The Issuer shall
immediately notify the holders of the expiration of any period during which it
exercised its rights under this Section 2.2(e). The Issuer represents that it
currently has no knowledge of any circumstance that would reasonably be expected
to cause the Issuer to exercise its rights under this Section 2.2(e).
(f) Underwritten Offering. If the holders of not less than a majority
of the Registrable Securities of any class which are included in any offering
pursuant to a Demand Registration so elect, the Issuer shall use its reasonable
best efforts to cause such offering to be in the form of an Underwritten
Offering. The Issuer, after consulting with the holders of a majority of the
class of Registrable Securities to be included in such Underwritten Offering,
shall have the right to select the managing underwriter or underwriters for the
offering.
(g) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of a class of Registrable Securities included in a Demand
Registration (or, in the case of a Demand Registration not being underwritten,
the holders of a majority of a class of Registrable Securities included in such
Registration Statement), inform the holders of such Registrable Securities in
writing that, in its or their opinion, the number or amount of securities of
such class requested to be included in such Demand Registration exceeds the
number or amount which can be sold in such offering without being likely to have
a significant adverse effect on the price, timing or distribution of the class
of securities offered or the market for the class of securities offered, the
number or amount of Registrable Securities of such class that can be included
without having such an adverse effect shall be allocated:
(i) first, pro rata among the holders which have requested
participation in the Demand Registration (based, for each such holder, on
the percentage derived by dividing (x) the number or amount of Registrable
Securities of such class which such holder has requested to include in such
Demand Registration by (y) the aggregate number or amount of Registrable
Securities of such class which all such holders have requested to include);
(ii) second, and only if all the securities referenced in clause
(i) have been included, any other securities of the Issuer requested by the
holders thereof to included in such registration that, in the opinion of
such underwriter or underwriters, can be sold without having such adverse
effect shall be included therein, with such number to be allocated pro rata
among such holders (based, for each such holder, on the percentage derived
by dividing (x) the number or amount of such securities of such class which
such holder has requested to include in such registration by (y) the
aggregate number or amount of securities of such class which all such
holders have requested to include); and
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(iii) third, and only if all of the Registrable Securities
referenced in clauses (i) and (ii) have been included and in the opinion of
such underwriter or underwriters such securities can be sold without having
such adverse effect securities offered by the Issuer for its own account.
To the extent that any Registrable Securities requested to be
registered are excluded pursuant to the foregoing, the holders thereof shall
have the right to one additional Demand Registration under this Section 2.2.
(h) Registration Statement Form. Registrations under this Section 2.2
shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Issuer and as shall be reasonably acceptable to the holders of a
majority of each class of Registrable Securities requesting participation in the
Demand Registration and (ii) as shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
specified in the applicable holders' requests for such registration.
Notwithstanding the foregoing, if, pursuant to a Demand Registration, (x) the
Issuer proposes to effect registration by filing a Registration Statement on
Form S-3 or Form S-3ASR (or any successor or similar short-form registration
statement), (y) such registration is in connection with an Underwritten Offering
and (z) the managing underwriter or underwriters shall advise the Issuer in
writing that, in its or their opinion, the use of another form of registration
statement (or the inclusion, rather than the incorporation by reference, of
information in the Prospectus related to a Registration Statement on Form S-3 or
Form S-3ASR (or other short-form registration statement)) is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form (or such information shall be so included
in such Prospectus); provided, however, that the Issuer shall not be required to
use any form that it reasonably believes, based on the advice of legal counsel,
that it is not eligible to use and that no Demand Registration shall be effected
using a Form S-4 or a Form S-8 or any successor form thereto.
2.3. Incidental Registrations.
(a) Participation. (i) If the Issuer at any time proposes to file a
Registration Statement with respect to any offering of its securities for its
own account or for the account of any holders of its securities (other than (A)
a registration under Section 2.1 or Section 2.2 hereof, (B) a registration on
Form S-4 or S-8 or any successor form to such forms or (C) a registration of
securities solely relating to an offering and sale to employees or directors of
the Issuer pursuant to any employee stock plan or other employee benefit plan
arrangement, then, as soon as practicable (but in no event less than 20 days
prior to the proposed date of filing such Registration Statement), the Issuer
shall give written notice of such proposed filing to all holders of Registrable
Securities that are equity securities (in the case of a sale of equity
securities, including securities convertible into equity securities) or of
Registrable Securities that are debt securities (in the case of a sale of debt
securities), and such notice shall offer the holders of such Registrable
Securities the opportunity to register such number or amount of Registrable
Securities as each such holder may request in writing (an "Incidental
Registration"). Subject to Section 2.3(b), the Issuer shall include in such
Registration Statement all such Registrable Securities which are requested to be
included therein within 10 days after the receipt by such holder of any such
notice. The failure of any such holder to respond within such ten-day period
shall be deemed to be a waiver of such holder's rights under this Section 2.3(a)
with respect to
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such Incidental Registration. If at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
Registration Statement filed in connection with such registration, the Issuer
shall determine for any reason not to register or to delay registration of such
securities, the Issuer may, at its election, give written notice of such
determination to each holder of Registrable Securities and, (x) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration, and (y) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.
(ii) If the offering pursuant to an Incidental Registration is to be
an Underwritten Offering, then each holder making a request for its Registrable
Securities to be included therein must, and the Issuer shall use its reasonable
best efforts to make such arrangements with the underwriters so that each such
holder may, participate in such Underwritten Offering on the same terms as the
Issuer and other Persons selling securities in such Underwritten Offering. If
the offering pursuant to such registration is to be on any other basis, then
each holder making a request for an Incidental Registration pursuant to this
Section 2.3(a) must participate in such offering on such basis. In connection
with any Incidental Registration under Section 2.3 that is an Underwritten
Offering, the Issuer shall not be required to include any Registrable Securities
in such Underwritten Offering unless the participating holders thereof accept
the terms of the Underwritten Offering provided in Section 2.6(a), and then only
in such quantity as set forth in Section 2.3(b).
(iii) Each holder of Registrable Securities shall be permitted to
withdraw, by written notice to the Issuer, all or part of such holder's
Registrable Securities from an Incidental Registration at any time; provided,
however, that, except in the case of a withdrawal pursuant to Section 2.6(b),
the Issuer shall be entitled to reimbursement from the holder of such withdrawn
Registrable Securities for any SEC registration fees incurred by the Issuer in
connection with the registration of such Registrable Securities.
(b) Priority of Incidental Registration. If the managing underwriter
or underwriters of any proposed Underwritten Offering of a class of securities
included in an Incidental Registration (or in the case of an Incidental
Registration not being underwritten, the Issuer) informs the holders of
Registrable Securities of any class sought to be included in such registration
in writing that, in its or their opinion, the total amount or kind of securities
which such holders and any other Persons intend to include in such offering
exceeds the number or amount which can be sold in such offering without being
likely to have a significant adverse effect on the price, timing or distribution
of the class or classes of the securities offered or the market for the class or
classes of securities offered, then the securities of each class to be included
in such registration shall be allocated as follows:
(i) first, 100% of the securities that the Issuer or (subject to
Section 2.7) any Person (other than a holder of Registrable
Securities) exercising a contractual right to demand registration
has proposed to sell shall be included therein;
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(ii) second, and only if all the securities referenced in clause (i)
have been included, the number or amount of Registrable
Securities of such class that, in the opinion of such underwriter
or underwriters (or in the case of an Incidental Registration not
being underwritten, the Issuer), can be sold without having such
adverse effect shall be included therein, with such number or
amount to be allocated pro rata among the holders which have
requested participation in the Incidental Registration (based,
for each such holder, on the percentage derived by dividing (x)
the number or amount of Registrable Securities of such class
which such holder has requested to include in such Incidental
Registration by (y) the aggregate number or amount of Registrable
Securities of such class which all such holders have requested to
include); and
(iii) third, and only if all of the Registrable Securities referenced
in clauses (i) and (ii) have been included, any other securities
eligible for inclusion in such registration shall be included
therein.
2.4. Black-out Periods
(a) Black-out Periods for Holders. In the event of a registration by
the Issuer involving the offering and sale by the Issuer of equity securities or
securities convertible into or exchangeable for its equity securities, the
holders of Registrable Securities agree, if requested by the Issuer (or, in the
case of an Underwritten Offering, by the managing underwriter or underwriters),
not to effect any public sale or distribution) of any securities (except, in
each case, as part of the applicable registration, if permitted) which
securities are the same as or similar to those being registered in connection
with such registration, or which are convertible into or exchangeable or
exercisable for such securities, and not to offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
enter into any hedging or similar transaction with the same economic effect as a
public sale or distribution of any such securities, during the period beginning
seven days before, and ending 90 days (or such lesser period as may be permitted
by the Issuer or such managing underwriter or underwriters) after, the effective
date of the Registration Statement filed in connection with such registration,
to the extent such holders are timely notified in writing by the Issuer or the
managing underwriter or underwriters; provided, however, that nothing in this
Section 2.4(a) shall prohibit any sale of, or other transaction relating to,
Registrable Securities pursuant to Rule 144 under the Securities Act (or any
similar provision then in force).
(b) Black-out Period for the Issuer and Others. (i) In the case of a
registration of a class of Registrable Securities pursuant to Section 2.1 or 2.2
involving the offering and sale of equity securities or securities convertible
into or exchangeable for equity securities, the Issuer agrees, if requested by
the holders of a majority of such class of Registrable Securities to be sold
pursuant to such registration (or, in the case of an Underwritten Offering, by
the managing underwriter or underwriters in such Underwritten Offering), not to
effect (or register for sale) any public sale or distribution of any securities
which are the same as or similar to those being registered, or which are
convertible into or exchangeable or exercisable for such securities, and not to
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase or enter into any hedging or similar transaction
with the same economic effect as a
10
public sale or distribution of any such securities, during the period beginning
seven days before, and ending 90 days (or such lesser period as may be permitted
by such holders or such underwriter or underwriters) after, the effective date
of the Registration Statement filed in connection with such registration (or, in
the case of an Underwritten Offering under the Shelf Registration, the date of
the closing under the underwriting agreement in connection therewith), to the
extent the Issuer is timely notified in writing by a holder of Registrable
Securities covered by such Registration Statement or the managing underwriter or
underwriters. Notwithstanding the foregoing, the Issuer may effect a public sale
or distribution of securities of the type described above and during the periods
described above if the same (A) is made pursuant to registrations on Forms S-4
or S-8 or any successor form to such forms or (B) as part of any registration of
securities for offering and sale to employees or directors of the Issuer
pursuant to any employee stock plan or other employee benefit plan arrangement.
(ii) Subject to Section 2.7, if after the date hereof the Issuer
grants any Person (other than a holder of Registrable Securities) any rights to
demand or participate in a registration, the Issuer agrees that the agreement
with respect thereto shall include such Person's agreement not to effect any
public sale or distribution of the securities subject to such agreement (other
than securities purchased in a public offering), or securities that are
convertible into or exchangeable or exercisable for such securities, and not to
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase or enter into any hedging or similar transaction
with the same economic effect as a public sale or distribution of any such
securities, during any period referred to in this Section 2.4(b).
2.5. Registration Procedures.
(a) In connection with the Issuer's registration obligations in this
Agreement, the Issuer will, subject to the limitations set forth herein, use its
reasonable best efforts to effect any such registration so as to permit the sale
of the applicable Registrable Securities in accordance with the intended method
or methods of distribution thereof as expeditiously as reasonably practicable,
and in connection therewith the Issuer will:
(i) before filing a Registration Statement, Prospectus or any Issuer
Free Writing Prospectus, or any amendments or supplements thereto and in
connection therewith, furnish to the underwriter or underwriters, if any, and to
holders of a majority of each class of Registrable Securities covered by such
Registration Statement, copies of all documents prepared to be filed, which
documents will be subject to the review of such underwriters and such holders
and their respective counsel and, except in the case of a registration under
Section 2.3, not file any Registration Statement or Prospectus or amendments or
supplements thereto to which the holders of a majority of the class of
Registrable Securities covered by the same or the underwriter or underwriters,
if any, shall reasonably object;
(ii) prepare and file with the SEC such amendments or supplements to
the applicable Registration Statement, Prospectus or any Issuer Free Writing
Prospectus as may be (A) reasonably requested by any participating holder (to
the extent such request relates to information relating to such holder), (B)
necessary to keep such registration effective for the period of time required by
this Agreement or (C) reasonably requested by the holders of a majority of any
class of the participating Registrable Securities;
11
(iii) notify the selling holders of Registrable Securities and the
managing underwriter or underwriters, if any, and (if requested) confirm such
advice in writing, as soon as reasonably practicable after notice thereof is
received by the Issuer (A) when the applicable Registration Statement or any
amendment thereto has been filed or becomes effective and when the applicable
Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement
thereto has been filed, (B) of any written comments by the SEC or any request by
the SEC or any other federal or state governmental authority for amendments or
supplements to any such Registration Statement, Prospectus or Free Writing
Prospectus or for additional information, (C) of the issuance by the SEC of any
stop order suspending the effectiveness of such Registration Statement or any
order or notice preventing or suspending the use of any preliminary or final
Prospectus or any Issuer Free Writing Prospectus or the initiation or threat of
any proceedings for such purposes and (D) of the receipt by the Issuer of any
notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose;
(iv) promptly notify each selling holder of Registrable Securities and
the managing underwriter or underwriters, if any, when the Issuer becomes aware
of the happening of any event as a result of which the applicable Registration
Statement, Prospectus (as then in effect) or any Issuer Free Writing Prospectus
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein (in the case of a Prospectus or
Issuer Free Writing Prospectus, in the light of the circumstances under which
they were made) not misleading, when any Issuer Free Writing Prospectus includes
information that may conflict with the information contained in the Registration
Statement, or, if for any other reason it shall be necessary to amend or
supplement any such Registration Statement, Prospectus or Issuer Free Writing
Prospectus in order to comply with the Securities Act and, in either case,
subject to Sections 2.1(c) and 2.2(e), as promptly as reasonably practicable
thereafter, prepare and file with the SEC an amendment or supplement to such
Registration Statement, Prospectus or Free Writing Prospectus which will correct
such statement or omission or effect such compliance;
(v) make every reasonable effort to prevent or obtain at the earliest
possible moment the withdrawal of any stop order with respect to the applicable
Registration Statement or other order or notice preventing or suspending the use
of any preliminary or final Prospectus or any Issuer Free Writing Prospectus;
(vi) promptly incorporate in a Prospectus supplement, Issuer Free
Writing Prospectus or post-effective amendment to the applicable Registration
Statement such information as the managing underwriter or underwriters, if any,
or the holders of a majority of the Registrable Securities of the class being
sold agree should be included therein relating to the plan of distribution with
respect to such Registrable Securities; and make, subject to Sections 2.1(c) and
2.2(e), all required filings of such Prospectus supplement, Issuer Free Writing
Prospectus or post-effective amendment as soon as reasonably practicable after
being notified of the matters to be incorporated in such Prospectus supplement,
Issuer Free Writing Prospectus or post-effective amendment;
12
(vii) furnish to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, as many conformed copies as
such holder or managing underwriter may reasonably request of the applicable
Registration Statement;
(vii) deliver to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, as many copies of the
applicable Prospectus (including each preliminary Prospectus) and any Issuer
Free Writing Prospectus as such holder or managing underwriter may reasonably
request (it being understood that the Issuer consents to the use of the
Prospectus and any Issuer Free Writing Prospectus by each of the selling holders
of Registrable Securities and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered
thereby) and such other documents as such selling holder or managing underwriter
may reasonably request in order to facilitate the disposition of the Registrable
Securities by such holder or underwriter;
(ix) on or prior to the date on which the applicable Registration
Statement becomes effective, use its reasonable best efforts to register or
qualify such Registrable Securities for offer and sale under the securities or
"Blue Sky" laws of each state and other jurisdiction of the United States, as
any such selling holder or underwriter, if any, or their respective counsel
reasonably requests in writing, and do any and all other acts or things
reasonably necessary or advisable to keep such registration or qualification in
effect so as to permit the commencement and continuance of sales and dealings in
such jurisdictions for as long as may be necessary to complete the distribution
of the Registrable Securities covered by the Registration Statement; provided,
however, that the Issuer will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to taxation or general service of process in any
such jurisdiction where it is not then so subject;
(x) cooperate with the selling holders of Registrable Securities and
the managing underwriter, underwriters or agent, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends;
(xi) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(xii) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities and provide the
applicable transfer agent with printed certificates for the Registrable
Securities which certificates shall be in a form eligible for deposit with The
Depository Trust Company;
(xiii) obtain for delivery to the holders of each class of Registrable
Securities being registered and to the underwriter or underwriters, if any, an
opinion or opinions from counsel for the Issuer dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, in customary
13
form, scope and substance, which counsel and opinions shall be reasonably
satisfactory to a majority of the holders of each such class and underwriter or
underwriters, if any, and their respective counsel;
(xiv) in the case of an Underwritten Offering, obtain for delivery to
the Issuer and the underwriter or underwriters, if any, with copies to the
holders of Registrable Securities included in such registration, cold comfort
letters from the Issuer's independent certified 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;
(xv) cooperate with each seller of Registrable Securities and each
underwriter or agent, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD;
(xvi) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and make generally available to its security
holders, as soon as reasonably practicable (but not more than 15 months) after
the effective date of the applicable Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;
(xvii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(xviii) cause all Registrable Securities of a class covered by the
applicable Registration Statement to be listed or quoted on each securities
exchange on which any of the Issuer's securities of such class are then listed
or quoted and on each inter-dealer quotation system on which any of the Issuer's
securities of such class are then quoted;
(xix) make available upon reasonable notice at reasonable times and
for reasonable periods for inspection by a representative appointed by the
holders of a majority of the Registrable Securities of each class covered by the
applicable Registration Statement, by any managing underwriter or underwriters
participating in any disposition to be effected pursuant to such Registration
Statement and by any attorney, accountant or other agent retained by such
sellers or any such managing underwriter (each an "Inspector", and collectively,
the "Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Issuer (collectively, the "Records"),
and cause all of the Issuer's officers, directors and employees and the
independent public accountants who have certified its financial statements to
make themselves reasonably available to discuss the business of the Issuer and
to supply all information reasonably requested by the Inspectors in connection
with such Registration Statement as shall be necessary to enable them to
exercise their due diligence responsibility; provided that Records that the
Issuer determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Issuer if
the Issuer shall so request) unless (a) the disclosure of such Records is
necessary, in the Issuer's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (b) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction
14
after exhaustion of all appeals therefrom or (c) the information in such Records
was known to the Inspectors on a non-confidential basis prior to its disclosure
by the Issuer or has been made generally available to the public. Each seller of
Registrable Securities agrees that it shall, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Issuer and allow the Issuer, at the Issuer's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential. In the event
that the Issuer is unsuccessful in preventing the disclosure of such Records,
such seller agrees that it shall furnish only portion of those Records which it
is advised by counsel is legally required and shall exercise all reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded to those Records;
(xx) in the case of an Underwritten Offering, cause the senior
executive officers of the Issuer to participate in the customary "road show"
presentations that may be reasonably requested by the managing underwriter in
any such Underwritten Offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and customary selling
efforts related thereto; and
(xxi) promptly after the issuance of an earnings release or upon the
request of any holder, prepare a current report on Form 8-K with respect to such
earnings release or a matter of disclosure as requested by such holder and file
such Form 8-K with the SEC.
(b) The Issuer may require each selling holder of Registrable
Securities as to which any registration is being effected to furnish to the
Issuer such information regarding the distribution of such Securities and such
other information relating to such holder and its ownership of the applicable
Registrable Securities as the Issuer may from time to time reasonably request.
Each holder of Registrable Securities agrees to furnish such information to the
Issuer and to cooperate with the Issuer as necessary to enable the Issuer to
comply with the provisions of this Agreement. The Issuer shall have the right to
exclude any holder that does not comply with the preceding sentence from the
applicable registration.
(c) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Issuer of
the happening of any event of the kind described in Section 2.5(a)(iv), such
holder will discontinue disposition of its Registrable Securities pursuant to
such Registration Statement until such holder's receipt of the copies of the
supplemented or amended Prospectus or Issuer Free Writing Prospectus, as the
case may be, contemplated by Section 2.5(a)(iv), or until such holder is advised
in writing by the Issuer that the use of the Prospectus or Issuer Free Writing
Prospectus, as the case may be, may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus or such Issuer Free Writing Prospectus or any amendments or
supplements thereto and, if so directed by the Issuer, such holder will deliver
to the Issuer (at the Issuer's expense) all copies, other than permanent file
copies then in such holder's possession, of the Prospectus or any Issuer Free
Writing Prospectus covering such Registrable Securities which are current at the
time of the receipt of such notice. In the event that the Issuer shall give any
such notice in respect of a Demand Registration, the period during which the
applicable Registration Statement is required to be maintained effective shall
be extended by the number of days during the period from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such
15
Registration Statement either receives the copies of the supplemented or amended
Prospectus or Issuer Free Writing Prospectus contemplated by Section 2.5(a)(iv)
or is advised in writing by the Issuer that the use of the Prospectus or Issuer
Free Writing Prospectus may be resumed.
(d) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that it will not use any Free Writing Prospectus
relating to the offer or sale of such securities without the prior written
consent of the Issuer, which shall not be unreasonably withheld or delayed.
2.6. Underwritten Offerings.
(a) Underwriting Agreements. If requested by the underwriters for any
Underwritten Offering requested by holders pursuant to Section 2.1 or 2.2, the
Issuer and the holders of Registrable Securities to be included therein shall
enter into an underwriting agreement with such underwriters, such agreement to
be reasonably satisfactory in substance and form to the Issuer, the holders of a
majority of each class of the Registrable Securities to be included in such
Underwritten Offering and the underwriters, and to contain such terms and
conditions as are generally prevailing in agreements of that type, including,
without limitation, indemnities no less favorable to the recipient thereof than
those provided in Section 2.9. The holders of any Registrable Securities to be
included in any Underwritten Offering pursuant to Section 2.3 shall enter into
such an underwriting agreement at the request of the Issuer. All of the
representations and warranties by, and the other agreements on the part of, the
Issuer to and for the benefit of such underwriters included in each such
underwriting agreement shall also be made to and for the benefit of such holders
and any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders. No holder shall be required in any such
underwriting agreement to make any representations or warranties to or
agreements with the Issuer or the underwriters other than representations,
warranties or agreements regarding such holder, such holders Registrable
Securities, such holder's intended method of distribution and any other
representations required by law.
(b) Price and Underwriting Discounts. In the case of an Underwritten
Offering requested by holders pursuant to Section 2.1 or 2.2, the price,
underwriting discount and other financial terms for each class of Registrable
Securities of the related underwriting agreement shall be determined by the
holders of a majority of such class of Registrable Securities included in such
Underwritten Offering. In the case of any Underwritten Offering pursuant to
Section 2.3, such price, discount and other terms shall be determined by the
Issuer, subject to the right of the holders to withdraw their request to
participate in the registration pursuant to Section 2.3(a)(iii) after being
advised of such price, discount and other terms.
(c) Participation in Underwritten Offerings. No Person may participate
in an Underwritten Offering unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by
the Persons entitled to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
16
2.7. No Inconsistent Agreements; Additional Rights. The Issuer will
not enter into, and is not currently a party to, any agreement which is, or
could be, inconsistent with the rights granted to the holders of Registrable
Securities by this Agreement.
2.8. Registration Expenses. (a) Subject to Section 2.2(c), the Issuer
shall pay all of the expenses set forth in this Section 2.8(a) in connection
with its performance or compliance with this Agreement, including (i) all
registration and filing fees, and any other fees and expenses associated with
filings required to be made with the SEC or the NASD, (ii) all fees and expenses
of compliance with state securities or "Blue Sky" laws, (iii) all printing,
duplicating, word processing, messenger, telephone, facsimile and delivery
expenses (including expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing prospectuses and Issuer Free Writing Prospectuses), (iv) all fees
and disbursements of counsel for the Issuer and of all independent certified
public accountants of the Issuer, (v) Securities Act liability insurance or
similar insurance if the Issuer so desires or the underwriter or underwriters,
if any, so require in accordance with then-customary underwriting practice, (vi)
all fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange or the quotation of the Registrable
Securities on any inter-dealer quotation system and (vii) all applicable rating
agency fees with respect to any applicable Registrable Securities. In addition,
in all cases the Issuer shall 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 audit and the fees and expenses
of any Person, including special experts, retained by the Issuer. In addition,
the Issuer shall pay all reasonable fees and disbursements of one law firm or
other counsel selected by the holders of a majority of the Registrable
Securities being registered.
(b) The Issuer shall not be required to pay any other costs or
expenses in the course of the transactions contemplated hereby, including
underwriting discounts and commissions and transfer taxes attributable to the
sale of Registrable Securities and the fees and expenses of counsel to the
underwriters other than pursuant to Section 2.8(a).
2.9. Indemnification.
(a) Indemnification by the Issuer. The Issuer agrees to indemnify and
hold harmless, to the full extent permitted by law, each holder of Registrable
Securities and their respective affiliates, and each of their respective
officers, directors, partners, members, employees, agents, counsel, financial
advisors and assignees (including affiliates of such assignees) and each Person
who controls (within the meaning of the Securities Act or the Exchange Act) such
Persons from and against any and all losses, claims, damages, liabilities (or
actions or proceedings in respect thereof, whether or not such indemnified party
is a party thereto) and expenses (including reasonable costs of investigation
and reasonable legal expenses), joint or several (each, a "Loss" and
collectively "Losses"), arising out of or based upon (i) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein) or any Issuer Free Writing Prospectus or amendment thereof or
supplement thereto or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
17
the statements therein (in the case of a Prospectus or Issuer Free Writing
Prospectus, in the light of the circumstances under which they were made) not
misleading, and the Issuer agrees to reimburse (on an as-incurred monthly
basis) each indemnified party for any reasonable legal or other reasonable
expenses incurred in connection with investigating, defending or participating
in any such Loss (whether or not such indemnified party is a party to any action
or proceeding out of which indemnified expenses arise); provided, however, that
the Issuer shall not be liable to any indemnified party in any such case to the
extent that any such Loss arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
Registration Statement in reliance upon and in conformity with written
information furnished to the Issuer by such holder expressly for use in the
preparation thereof. This indemnity shall be in addition to any liability the
Issuer may otherwise have. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any
indemnified party and shall survive the transfer of such securities by such
holder. The Issuer will also indemnify, if applicable and if requested,
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution pursuant hereto, their officers
and directors and each Person who controls such Persons (within the meaning of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Indemnified Persons.
(b) Indemnification by the Holders. Each selling holder of Registrable
Securities agrees (severally and not jointly) to indemnify and hold harmless, to
the full extent permitted by law, the Issuer, its officers, directors,
employees, agents, counsel and financial advisors and each Person who controls
the Issuer (within the meaning of the Securities Act and the Exchange Act) from
and against any Losses resulting from any untrue statement of a material fact or
any omission of a material fact required to be stated in the Registration
Statement under which such Registrable Securities were registered under the
Securities Act (including any final, preliminary or summary Prospectus contained
therein or any amendment thereof or supplement thereto or any documents
incorporated by reference therein) or any Issuer Free Writing Prospectus or
amendment thereof or supplement thereto, or necessary to make the statements
therein (in the case of a Prospectus or Issuer Free Writing Prospectus, in the
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission had been
contained in any information furnished in writing by such selling holder to the
Issuer specifically for inclusion in such Registration Statement, including,
without limitation, information furnished to the Issuer pursuant to Section
2.5(b) hereof. This indemnity shall be in addition to any liability such holder
may otherwise have. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder under the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided, however, that any delay or failure to so notify the indemnifying
party shall relieve the indemnifying party of its obligations hereunder only to
the extent, if at all, that it is actually and materially prejudiced by reason
of such delay or failure) and (ii) permit such indemnifying party to assume the
defense of such claim with counsel chosen by it and reasonably satisfactory to
the indemnified party; provided, however, that any Person entitled to
indemnification hereunder shall have the right to select and
18
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such Person unless
(A) the indemnifying party has agreed in writing to pay such fees or expenses,
(B) the indemnifying party shall have failed to assume the defense of such claim
within a reasonable time after having received notice of such claim from the
Person entitled to indemnification hereunder and to employ counsel reasonably
satisfactory to such Person, (C) in the reasonable judgment of any such Person,
based upon advice of its counsel, a conflict of interest may exist between such
Person and the indemnifying party with respect to such claims or (D) the
indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party
(in which case, if the Person notifies the indemnifying party in writing that
such Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent, but such consent may not be
unreasonably withheld; provided, however, that an indemnifying party shall not
be required to consent to any settlement involving the imposition of equitable
remedies or involving the imposition of any material obligations on such
indemnifying party other than financial obligations for which such indemnified
party will be indemnified hereunder. If the indemnifying party assumes the
defense, the indemnifying party shall have the right to settle such action
without the consent of the indemnified party; provided, however, that the
indemnifying party shall be required to obtain such consent (which consent shall
not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any restriction on the
indemnified party or its officers or directors. No indemnifying party shall
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to each indemnified party of an unconditional release from all liability in
respect to such claim or litigation. The indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm (together with one firm of local counsel) at any
one time from all such indemnified party or parties unless (x) the employment of
more than one counsel has been authorized in writing by the indemnifying party
or parties, (y) a conflict or potential conflict exists or may exist (based on
advice of counsel to an indemnified party) between such indemnified party and
the other indemnified parties or (z) an indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it that are different from or in addition to those available to the
other indemnified parties, in each of which cases the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.
(d) Contribution. If for any reason the indemnification provided for
in paragraphs (a) and (b) of this Section 2.9 is unavailable to an indemnified
party or insufficient to hold it harmless as contemplated by paragraphs (a) and
(b) of this Section 2.9, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such Loss in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to
19
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Notwithstanding anything
in this Section 2.9(d) to the contrary, no indemnifying party (other than the
Issuer) shall be required pursuant to this Section 2.9(d) to contribute any
amount in excess of the amount by which the net proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the Losses of the indemnified parties relate exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 2.9(d)
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. If indemnification is available under this Section
2.9, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Sections 2.9(a) and 2.9(b) hereof without regard to the
relative fault of said indemnifying parties or indemnified party.
2.10. Rules 144 and 144A. The Issuer covenants that it will take such
action to the extent required from time to time to enable any holder of
Registrable Securities to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 or 144A or Regulation S under the Securities Act, as such Rules may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any holder of Registrable Securities,
the Issuer will deliver to such holder a written statement as to whether it has
complied with such requirements and, if not, the specifics thereof.
SECTION 3. MISCELLANEOUS
3.1. Existing Registration Statements. Notwithstanding anything herein
to the contrary and subject to applicable law and regulation, the Issuer may
satisfy any obligation hereunder to file a Registration Statement or to have a
Registration Statement become effective by a specified date by designating, by
notice to the Significant Equityholders, a registration statement that
previously has been filed with the SEC or become effective, as the case may be,
as the relevant Registration Statement for purposes of satisfying such
obligation, and all references to any such obligation shall be construed
accordingly. To the extent this Agreement refers to the filing or effectiveness
of other registration statements by or at a specified time and the Issuer has,
in lieu of then filing such registration statements or having such registration
statements become effective, designated a previously filed or effective
registration statement as the relevant registration statement for such purposes,
such references shall be construed to refer to such designated registration
statement.
3.2. Term. This Agreement shall terminate upon the earliest of (i) the
later of (A) the two-year anniversary of the date of this Agreement and (B) the
two-year anniversary of the initial Shelf Registration, if any, becoming
effective and (ii) the date as of which (A) all of the Registrable Securities
have been sold pursuant to a Registration Statement (but in no event prior to
the applicable period referred to in Section 4(3) of the Securities Act and Rule
174
20
thereunder), (B) the holders are permitted to sell their Registrable Securities
under Rule 144(k) under the Securities Act (or any similar provision then in
force permitting the sale of restricted securities without limitation on the
amount of securities sold or the manner of sale) or (C) all Registrable
Securities having ceased to be Registrable Securities pursuant to the definition
thereof. The provisions of Section 2.9 and Section 2.10 shall survive any
termination of this Agreement.
3.3. Injunctive Relief. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled (in addition to any other remedy to which it may be
entitled in law or in equity) to injunctive relief, including, without
limitation, specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.
3.4. Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
3.5. Notices. (a) All notices, other communications or documents
provided for or permitted to be given hereunder, shall be made in writing and
shall be given either personally by hand delivery, by facsimile transmission, by
electronic mail, by mailing the same in a sealed envelope, registered or
certified first-class mail, postage prepaid, return receipt requested, or by air
courier guaranteeing overnight delivery:
If to the Significant Equityholders, to:
X. X. Xxxx & Co., L.P. Par IV Master Fund, Ltd.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx 00 Xxxx Xxxx. 0xx Xxxxx
Xxx Xxxx, XX 00000 Xxxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx Attention: Xxxxxx X. Xxxxx
Facsimile No.: 1 212 845 1628 Facsimile No.: 000 000 0000
Telephone No.: 0 000 000 0000 Telephone No.: 000 000 0000
Email: Xxxxxxx.xxxxxxxxx@xxxxxx.xxx Email: xxxxx@xxx0xxxxxxx.xxx
Xxxxxxx, Xxxxx & Co. Sunrise Partners Limited Partnership
One New York Plaza, 00xx Xxxxx Xxx Xxxxxxxx Xxxx
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: 000 000 0000 Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000 Telephone No.: 000 000 0000
Email: xxxxxx.xxxxxx@xx.xxx Email: xxxxxxx@xxxxxx.xxx
21
Sigma Capital Management, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000
Email: xxxxxx@xxxxxxxxxx.xxx
With a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: 212 225 3999
Telephone No.: 000 000 0000
If to the Issuer, to:
Foamex International Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Executive Vice President
Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000 000 0000
Telephone No.: 000 000 0000
(b) Each holder, by written notice given to the Issuer in accordance
with this Section 3.5 may change the address to which notices, other
communications or documents are to be sent to such holder. All notices, other
communications or documents shall be deemed to have been duly given: (i) at the
time delivered by hand, if personally delivered; (ii) when receipt is
acknowledged in writing by addressee, if by facsimile transmission; (iii) five
business days after having been deposited in the mail, postage prepaid, if
mailed by first class mail; (iv) when receipt is acknowledged, if transmitted by
facsimile transmission or by electronic mail; and (v) on the first business day
with respect to which a reputable air courier guarantees delivery; provided,
however, that notices of a change of address shall be effective only upon
receipt.
22
3.6. Successors, Assigns and Transferees. (a) The registration rights
of any holder under this Agreement with respect to any Registrable Securities
may be transferred and assigned, provided, however, that no such transfer or
assignment shall be binding upon or obligate the Issuer to any such assignee
unless and until the Issuer shall have received notice of such assignment as
herein provided and a written agreement of the assignee to be bound by the
provisions of this Agreement. Any transfer or assignment made other than as
provided in the first sentence of this Section 3.6 shall be null and void.
(b) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, and their respective successors and permitted
assigns.
3.7. Governing Law; Service of Process; Consent to Jurisdiction. (a)
This agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed within
the state.
(b) To the fullest extent permitted by applicable law, each party
hereto (i) agrees that any claim, action or proceeding by such party seeking any
relief whatsoever arising out of, or in connection with, this Agreement or the
transactions contemplated hereby shall be brought only in the United States
District Court for the Southern District of New York and in any New York State
court located in the Borough of Manhattan and not in any other State or Federal
court in the United States of America or any court in any other country, (ii)
agrees to submit to the exclusive jurisdiction of such courts located in the
State of New York for purposes of all legal proceedings arising out of, or in
connection with, this Agreement or the transactions contemplated hereby and
(iii) irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(c) The parties hereto hereby irrevocably waive, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
3.8. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
3.9. Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
therein.
3.10. Amendment; Waiver.
(a) This Agreement may not be amended or modified and waivers and
consents to departures from the provisions hereof may not be given, except by an
instrument or
23
instruments in writing making specific reference to this Agreement and signed by
the Issuer and the holders of a majority of Registrable Securities of each class
then outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment, modification, waiver or
consent authorized by this Section 3.10(a), whether or not such Registrable
Securities shall have been marked accordingly.
(b) The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. Except
as otherwise expressly provided herein, no failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
3.11. Counterparts. This Agreement may be executed in any number of
separate counterparts and by the parties hereto in separate counterparts each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
24
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
D. E. SHAW LAMINAR PORTFOLIOS, L.L.C. PAR IV MASTER FUND, LTD.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxx
------------------------------------- ----------------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory Title: Director
XXXXXXX, SACHS & CO. SUNRISE PARTNERS LIMITED PARTNERSHIP
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------------- ----------------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director Title: Vice President
SIGMA CAPITAL ASSOCIATES, LLC
By: Sigma Capital Management, LLC
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
FOAMEX INTERNATIONAL INC.
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Xxxxx: EVP & General Counsel
