Exhibit 10.3
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT dated as of August 20, 1998 among
Evenflo Company, Inc., a Delaware corporation (the "Company"), KKR 1996 Fund
L.P., a Delaware limited partnership (the "KKR Fund") and Great Star
Corporation, a British Virgin Islands corporation ("Great Star")
RECITALS
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated
as of August 20, 1998 between the Lisco, Inc., a Delaware corporation and Great
Star (the "Stock Purchase Agreement"), Great Star will purchase shares of Common
Stock (as defined herein);
WHEREAS, immediately following the consummation of the
transactions contemplated by the Stock Purchase Agreement, the KRR Fund and
Great Star will own approximately 51% and 6.6% of the issued and outstanding
Common Stock, respectively; and
WHEREAS, the Company, the KKR Fund and Great Star wish to
provide for certain matters relating to the respective holdings by KKR Fund and
Great Star of Common Stock;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I. INTRODUCTORY MATTERS
1.1. Defined Terms. In addition to the terms defined elsewhere
herein, the following terms have the following meanings when used herein with
initial capital letters:
"Affiliate" shall have the meaning given to that term in Rule
405 promulgated under the Securities Act and shall include members of a
Person's immediate family or trusts for the benefit of members of the
immediate family of such Person; provided that officers, directors and
employees of the Company will not be deemed to be Affiliates of a
stockholder of the Company for purposes hereof solely by reason of
being officers, directors or employees of the Company.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Assumption Agreement" means a writing reasonably satisfactory
in form and substance to the Company whereby a Permitted Transferee of
shares of Common Stock becomes a party to, and agrees to be bound to
the same extent as its transferor, by the terms of this Agreement.
"Board" means the Board of Directors of the Company.
"Business Day" means a day other than a Saturday, Sunday,
federal or New York State holiday or other day on which commercial
banks in New York City are authorized or required by law to close.
"Common Stock" means the shares of Class A Common Stock, $1.00
par value per share, of the Company and any stock or other securities
or property of the Company into which such common stock may thereafter
be converted or exchanged and any other shares of the Company's common
equity securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as the
same may be amended from time to time.
"New Common Stock" means, for purposes of Article IV of this
Agreement, any Common Stock issued by the Company for cash. New Common
Stock shall not include (i) Common Stock issuable upon exercise or
conversion of securities convertible or exchangeable for Common Stock;
(ii) Common Stock or any options, warrants or rights offered to the
public generally pursuant to a registration statement under the
Securities Act; (iii) Common Stock issuable upon the exercise of any
options, warrants or rights or exchanged for any other equity
securities of the Company; (iv) any shares of the Company's Common
Stock issued to the officers, directors or employees of the Company;
(v) Common Stock, or Common Stock issuable upon options, rights or
warrants or securities convertible or exchangeable for Common Stock,
which are issued in connection with any acquisition, merger, purchase
of assets; or (vi) shares of the Company's Common Stock issued in
connection with any stock split, stock dividend or recapitalization of
the Company.
"Other Registration Rights Agreement" means any written
agreement to which the Company and any holder of shares of Common Stock
are parties that provides for the registration of shares of Common
Stock of such holder by the Company.
"Permitted Transferee" means any Person to whom shares of
Common Stock are Transferred in a Transfer in accordance with Section
2.2 or otherwise not in violation of this Agreement and who is required
to, and does, enter into an Assumption Agreement, and includes any
Person to whom a Permitted Transferee (or a Permitted Transferee of a
Permitted Transferee) so further Transfers shares of Common Stock and
who is required to, and does, become bound by the terms of this
Agreement.
"Person" means any individual, corporation, limited liability
company, partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, governmental authority or
other legal entity of any nature whatsoever.
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"Public Offering" means the sale of shares of Common Stock to
the public pursuant to an effective registration statement (other than
a registration statement on Form S-4 or S-8 or any similar or successor
form) filed under the Securities Act.
"Registrable Securities" means (i) Common Stock held by Great
Star on the date hereof and (ii) Common Stock acquired by Great Star
from the Company or any affiliate of the Company whether by purchase or
otherwise and (iii), in the case of (i) and (ii) above, any Common
Stock which may be issued or distributed in respect thereof by way of
stock dividend or stock split or other distribution, recapitalization
or reclassification. As to any particular Registrable Securities, once
issued, such Registrable Securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale
by the holder of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) such securities shall
have been distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act, (c) such securities
shall have been otherwise transferred, new certificates for such
securities not bearing a legend restricting further transfer shall have
been delivered by the Company and subsequent disposition of such
securities shall not require registration or qualification of such
securities under the Securities Act or any state securities or blue sky
law then in force, or (d) such securities shall have ceased to be
outstanding.
"Registration Expenses" means any and all expenses incident to
the performance by the Company of its obligations under Sections 3.1
and 3.2, including without limitation (i) all SEC, stock exchange, or
National Association of Securities Dealers, Inc. (the "NASD")
registration and filing fees (including, if applicable, the fees and
expenses of any "qualified independent underwriter," as such term is
defined in Rule 2720 of the NASD, and of its counsel), (ii) all fees
and expenses of complying with securities or blue sky laws (including
fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) all fees and expenses
incurred in connection with the listing of the Registrable Securities
on any securities exchange and all rating agency fees, (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or "cold
comfort" letters required by or incident to such performance and
compliance, (vi) any fees and disbursements of underwriters customarily
paid by the issuers or sellers of securities, including liability
insurance if the Company so desires or if the underwriters so require,
and the reasonable fees and expenses of any special experts retained in
connection with the requested registration, but excluding underwriting
discounts and commissions and transfer taxes, if any, (vii) the
reasonable out-of-pocket expenses of not more than one law firm
incurred by Great Star and Great Star's Permitted Transferees in
connection with the registration, and (viii) the costs and expenses of
the Company relating to analyst and investor presentations or any "road
show" undertaken in connection with the registration and/or marketing
of the Registrable Securities.
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"Registration Rights Holders" means, collectively, Great Star
and Great Star's Permitted Transferees.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may
be amended from time to time.
"Transfer" means a transfer, sale, assignment, or other
disposition, whether directly or indirectly pursuant to the creation of
a derivative security, the grant of an option or other right, the
imposition of a restriction on disposition or voting or transfer by
operation of law, but shall not include any pledge or hypothecation
unless followed by a transfer or assignment of such shares.
1.2. Construction. (a) The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Unless the context otherwise requires: (i) "or" is disjunctive but not
exclusive, (ii) words in the singular include the plural, and in the plural
include the singular, and (iii) the words "hereof", "herein", and "hereunder"
and words of similar import when used in this Agreement refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section
references are to this Agreement unless otherwise specified.
ARTICLE II. TRANSFERS
2.1. Limitations on Transfer by Great Star. (a) Neither Great
Star nor any Permitted Transferee may Transfer any shares of Common Stock other
than (i) in connection with a Public Offering effected in accordance with
Section 3.1, (ii) after a Public Offering, in a bona fide sale to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act or
(iii) in accordance with Sections 2.2, 2.3 or 2.4.
(b) In the event of any purported Transfer by Great Star or a
Permitted Transferee of any shares of Common Stock in violation of the
provisions of this Agreement, such purported Transfer will be void and of no
effect and the Company will not give effect to such Transfer.
(c) Each certificate representing shares of Common Stock held
by Great Star or any Permitted Transferee will bear a legend substantially to
the following effect (with such additions thereto or changes therein as the
Company may be advised by counsel are required by law or necessary to give full
effect to this Agreement, the "Legend"):
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A STOCKHOLDERS' AGREEMENT AMONG EVENFLO COMPANY, INC., KKR 1996 FUND
L.P. AND GREAT STAR, A COPY OF
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WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT."
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED
UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Company by the delivery of substitute
certificates without such Legend in the event of (i) a Transfer permitted by
this Agreement and in which the Transferee is not required to enter into an
Assumption Agreement or (ii) the termination of Article II pursuant to the terms
hereof, provided, however, that the second paragraph of the Legend will only be
removed if at such time it is no longer required for purposes of applicable
securities laws. If any shares of Common Stock cease to be Registrable
Securities under clause (a) or (b) of the second sentence of the definition
thereof, the Company shall, upon the written request of the holder thereof,
issue to such holder a new certificate or certificates evidencing such shares,
without the second paragraph of the Legend.
2.2. Transfers to Permitted Transferees. Great Star may
Transfer any or all of the shares of Common Stock held by it to any Person who
duly executes and delivers an Assumption Agreement; provided that in connection
therewith the Company, if it so requests promptly following its receipt of such
Assumption Agreement (and, in such event, such Assumption Agreement shall not be
effective unless and until this proviso has been satisfied), has been furnished
with an opinion in form and substance reasonably satisfactory to the Company of
counsel reasonably satisfactory to the Company that such Transfer is exempt from
or not subject to the provisions of Section 5 of the Securities Act and any
other applicable securities laws; and, provided, further, that no Transfer under
this Section 2.2 shall be permitted if such Transfer would require the Company
to register a class of equity securities under Section 12 of the Exchange Act
under circumstances where the Company does not then have securities of any class
registered under Section 12 of the Exchange Act and such transfer would cause
such registration to be required.
2.3. Tag-Along Rights. (a) So long as this Agreement remains
in effect, with respect to any proposed Transfer by the KKR Fund or any of its
Affiliates (collectively, the "Selling Partnership") of shares of Common Stock
to any Person not an Affiliate of the KKR Fund, other than (i) in a Public
Offering, (ii) pursuant to a bona fide sale to the public pursuant to Rule 144
under the Securities Act, (iii) pursuant to a distribution to the limited
partners of the KKR Fund or (iv) pursuant to any agreement or plan of merger or
combination, including any tender or exchange offer in respect thereof, that is
approved by the Board and that provides for equal treatment of all outstanding
shares of Common Stock
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(any such transaction, a "Proposed Sale"), Great Star and each Permitted
Transferee will have the right to require the proposed Transferee or acquiring
Person to purchase from Great Star and each Permitted Transferee who exercises
its rights under this Section 2.3(a) in accordance with this Section 2.3
(collectively, the "Tagging Stockholders") a number of shares of Common Stock up
to the product (rounded up to the nearest whole number) of (i) the quotient
determined by dividing (A) the aggregate number of shares of Common Stock owned
by the Tagging Stockholders by (B) the aggregate number of shares of Common
Stock owned by the KKR Fund and its Affiliates and the Tagging Stockholders and
(ii) the total number of shares of Common Stock proposed to be directly or
indirectly Transferred to the transferee or acquiring Person in the Proposed
Sale (a "Proposed Transferee"), at the same price per share of Common Stock and
upon the same terms and conditions (including, without limitation, time of
payment, form of consideration and adjustments to purchase price) as the Selling
Partnership; provided that in order to be entitled to exercise its right to sell
shares of Common Stock to the Proposed Transferee pursuant to this Section 2.3,
each Tagging Stockholder (x) shall agree to the same covenants as the Selling
Partnership agrees to in connection with the Proposed Sale and (y) shall make
such representations and warranties as to the title of the shares as the Selling
Partnership makes. Each Tagging Stockholder will be responsible for its
proportionate share of the fees, commissions and other out-of-pocket expenses
(collectively, "Costs") of the Proposed Sale to the extent not paid or
reimbursed by the Company, the Proposed Transferee or another Person (other than
the Selling Partnership). The Selling Partnership shall be entitled to estimate
the Tagging Stockholders' proportionate share of such Costs and to withhold such
amounts from payments to be made to the Tagging Stockholder at the time of
closing of such Proposed Sale; provided that (i) such estimate shall not
preclude the Selling Partnership from recovering additional amounts from the
Tagging Stockholder in respect of such Tagging Stockholder's proportionate share
of such Costs and (ii) the Selling Partnership shall reimburse the Tagging
Stockholder to the extent actual amounts are ultimately less than the estimated
amounts or any such amounts are paid by the Company, the Proposed Transferee or
another Person (other than the Selling Partnership).
(b) The Selling Partnership will give notice to Great Star of
each Proposed Sale not more than ten days after the execution of the definitive
agreement relating to the Proposed Sale, setting forth the number of shares of
Common Stock proposed to be so Transferred, the name and address of the Proposed
Transferee, the proposed amount and form of consideration (and if such
consideration consists in part or in whole of property other than cash, the
Selling Partnership will provide such information, to the extent reasonably
available to the Selling Partnership, relating to such non-cash consideration as
Great Star may reasonably request in order to evaluate such non-cash
consideration) and other terms and conditions of payment offered by the Proposed
Transferee. The Selling Partnership will deliver or cause to be delivered to
each Tagging Stockholder copies of all transaction documents relating to the
Proposed Sale promptly as the same become available. The tag-along rights
provided by this Section 2.3 must be exercised by Great Star within seven days
following receipt of the notice required by the preceding sentence by delivery
of a written notice to the Selling Partnership indicating its desire to exercise
its rights and specifying the number of shares of Common Stock it desires to
sell (the "Tag-Along Notice"). The Tagging Stockholders will be entitled under
this Section 2.3 to Transfer to the Proposed Transferee the number of shares of
Common Stock calculated in accordance with Section 2.3(a). The
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closing of the Proposed Sale may not take place prior to the expiration of the
seven day period commencing after the receipt of the notice of the Proposed
Sale.
(c) If any Tagging Stockholder exercises its rights under
Section 2.3(a), the closing of the purchase of the Common Stock with respect to
which such rights have been exercised will take place concurrently with the
closing of the sale of the Selling Partnership's Common Stock to the Proposed
Transferee.
2.4. Drag-Along Rights. (a) So long as this Agreement remains
in effect, if the KKR Fund or any of its Affiliates (collectively, the "Dragging
Partnership") receive an offer from a Person other than an Affiliate of the KKR
Fund (a "Third Party") to purchase (in a transaction of a type referred to in
the first sentence of Section 2.3(a)) at least a majority of the shares of
Common Stock then outstanding and such offer is accepted by the Dragging
Partnership, then Great Star and each Permitted Transferee (collectively, the
"Drag-Along Stockholders") hereby agrees that, if requested by the Dragging
Partnership, it will Transfer to such Third Party, subject to Section 2.4(b), on
the terms of the offer so accepted by the Dragging Partnership, including,
without limitation, time of payment, form of consideration and adjustments to
purchase price, the number of shares of Common Stock equal to the number of
shares of Common Stock owned by it multiplied by the percentage of the then
outstanding shares of Common Stock to which the Third Party offer is applicable.
(b) The Dragging Partnership will give notice (the "Drag-Along
Notice") to the Drag-Along Stockholders of any proposed Transfer giving rise to
the rights of the Dragging Partnership set forth in Section 2.4(a) (a "Section
2.4 Transfer") within 10 days following the Dragging Partnership's acceptance of
the offer referred to in Section 2.4(a) and, in any event, no later than 10 days
prior to the proposed closing date for such Section 2.4 Transfer. The Drag-Along
Notice will set forth the number of shares of Common Stock proposed to be so
Transferred, the name of the proposed Transferee or acquiring Person, the
proposed amount and form of consideration (and if such consideration consists in
part or in whole of property other than cash, the Dragging Partnership will
provide such information, to the extent reasonably available to the Dragging
Partnership, relating to such non-cash consideration as the Drag-Along
Stockholders together may reasonably request in order to evaluate such non-cash
consideration), the number of shares of Common Stock sought and the other terms
and conditions of the offer. Each Drag-Along Stockholder (x) shall agree to the
same covenants as the Dragging Partnership agrees to in connection with the
Section 2.4 Transfer and (y) shall make such representations and warranties and
provide indemnity concerning its title to the shares of Common Stock to be sold
in connection with the Section 2.4 Transfer and its authority to enter into and
consummate the Section 2.4 Transfer as the Dragging Partnership makes, but shall
not be required to make any other representations and warranties or provide any
other indemnification or contribute to any escrow arrangement. Each Drag-Along
Stockholder will be responsible for its proportionate share of the Costs of the
Section 2.4 Transfer to the extent not paid or reimbursed by the Company, the
Third Party or another Person (other than the Dragging Partnership. The Dragging
Partnership shall be entitled to estimate the Drag-Along Stockholders'
proportionate share of such Costs and to withhold such amounts from payments to
be made to the Drag-Along Stockholder at the time of closing of the Section 2.4
Transfer; provided that (i) such estimate shall not preclude the
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Dragging Partnership from recovering additional amounts from the Drag-Along
Stockholder in respect of such Drag-Along Stockholder's proportionate share of
such Costs and (ii) the Dragging Partnership shall reimburse the Drag-Along
Stockholder to the extent actual amounts are ultimately less than the estimated
amounts or any such amounts are paid by the Company, the Third Party or another
Person (other than the Dragging Partnership). If the Section 2.4 Transfer is not
consummated within 180 days from the date of the Drag-Along Notice, the Dragging
Partnership must deliver another Drag-Along Notice in order to exercise its
rights under this Section 2.4 with respect to such Section 2.4 Transfer.
2.5. Custody Agreement and Power of Attorney. Upon delivering
a Tag Along Notice or receiving a Drag-Along Notice, Great Star and each
Permitted Transferee will, if reasonably requested by the Selling Partnership or
the Dragging Partnership, as the case may be, execute and deliver a custody
agreement and power of attorney in form and substance reasonably satisfactory to
the Selling Partnership or the Dragging Partnership, as the case may be, and
Great Star and its Permitted Transferees with respect to the shares of Common
Stock which are to be sold by Great Star and Permitted Transferees pursuant
hereto (a "Custody Agreement and Power of Attorney"). The Custody Agreement and
Power of Attorney will provide, among other things, that Great Star and each
Permitted Transferee will deliver to and deposit in custody with the custodian
and attorney-in-fact named therein a certificate or certificates representing
such shares of Common Stock (duly endorsed in blank by the registered owner or
owners thereof) and irrevocably appoint said custodian and attorney-in-fact as
its agent and attorney-in-fact with full power and authority to act under the
Custody Agreement and Power of Attorney on its behalf with respect to the
matters specified in Section 2.3 or Section 2.4, as the case may be.
ARTICLE III. REGISTRATION RIGHTS
3.1. Piggyback Rights. (a) Piggyback Rights. If the Company at
any time after the date hereof proposes to register Common Stock under the
Securities Act (other than a registration on Form S-4 or S-8, or any successor
or similar forms), whether or not for sale for its own account, it will, at each
such time, give prompt written notice to the Registration Rights Holders of its
intention to do so and of the Registration Rights Holders' rights under this
Section 3.1. Upon the written request of any Registration Rights Holder made
within 14 days after the receipt of any such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by such
Registration Rights Holder), the Company will use its reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the Registration Rights
Holders; provided that (i) 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 Company
or any other holder of securities that initiated such registration (an
"Initiating Holder") shall determine for any reason not to proceed with the
proposed registration of the securities to be sold by it, the Company or such
Initiating Holder may, at its election, give written notice of such
determination to the Registration Rights Holders and, thereupon, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its
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obligation to pay the Registration Expenses incurred in connection therewith),
and (ii) if such registration involves an underwritten offering, the
Registration Rights Holders requesting to be included in the registration must
sell their Registrable Securities to the underwriters selected by the Company or
the Initiating Holders, as the case may be, on the same terms and conditions as
apply to the Company or the Initiating Holders, as the case may be, with, in the
case of a combined primary and secondary offering, such differences, including
any with respect to indemnification and liability insurance, as may be customary
or appropriate in combined primary and secondary offerings. If a registration
requested pursuant to this Section 3.1(a) involves an underwritten public
offering, any Registration Rights Holder requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register all or any portion of such securities in connection with such
registration.
(b) Expenses. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 3.1.
(c) Priority in Piggyback Registrations. If a registration
pursuant to this Section 3.1 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, so as to be reasonably likely to have an
adverse effect on the price, timing or distribution of the securities offered in
such offering, then the Company will include in such registration (i) first,
100% of the securities proposed to be sold by the Company and (ii) second, to
the extent of the number of securities requested to be included in such
registration which, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above, which number of securities
shall be allocated pro rata among all such requesting holders of Common Stock on
the basis of the relative number of shares of Common Stock then held by each
such holder of Common Stock. In the event that (i) the Company did not initiate
the registration of securities intended to be registered for sale for its own
account and (ii) the number of Registrable Securities and shares of Common Stock
of other holders entitled to registration rights with respect to such Common
Stock, in each case requested to be included in such registration, is less than
the number which, in the opinion of the managing underwriter, can be sold, the
Company may include in such registration the securities it proposes to sell up
to the number of securities that, in the opinion of the underwriter, can be
sold.
3.2. Demand Registration. (a) Demand Registration. At any time
after the 180th day following the initial Public Offering, upon the written
request of Great Star or its Permitted Transferees (in such capacity, a "Demand
Party") requesting that the Company effect the registration under the Securities
Act of all or part of such Demand Party's Registrable Securities and specifying
the amount and intended method of disposition thereof, the Company will promptly
give written notice of such requested registration to the other holders of
Registrable Securities and other holders of securities entitled to notice of
such registration and thereupon will, as expeditiously as possible, file a
registration statement to effect the registration under the Securities Act of:
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(i) such Registrable Securities which the Company has been so
requested to register by the Registration Rights Holders; and
(ii) the securities of other holders entitled to registration
rights pursuant to an Other Registration Rights Agreement which the
Company has been requested to register by written request given to the
Company within 15 days after the giving of such written notice by the
Company (which request shall specify the amount and intended method of
disposition of such securities);
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities and such
other securities to be so registered; provided that the Company shall not be
required to effect the registration of Registrable Securities at the request of
a Demand Party under this Section 3.2(a) on more than two occasions, and
provided further, that the Company shall not be obligated to file a registration
statement relating to any registration request under this Section 3.2(a):
(v) within a period of 180 days (or such lesser period as the
managing underwriters in an underwritten offering may permit) after the
effective date of any other registration statement relating to any
registration request under this Section 3.2(a) or relating to any
registration effected under Section 3.1;
(w) if with respect thereto the managing underwriter, the SEC,
the Securities Act or the rules and regulations thereunder, or the form
on which the registration statement is to be filed, would require the
conduct of an audit other than the regular audit conducted by the
Company at the end of its fiscal year, in which case the filing may be
delayed until the completion of such audit (and the Company shall, upon
request of the Demand Parties, use its reasonable efforts to cause such
audit to be completed expeditiously and without unreasonable delay);
(x) if the Company is in possession of material non-public
information and the Board determines in good faith that disclosure of
such information would not be in the best interests of the Company and
its stockholders, in which case the filing of the registration
statement may be delayed until the earlier of the second business day
after such conditions shall have ceased to exist and the 180th day
after receipt by the Company of the written request from a Demand Party
to register Registrable Securities under this Section 3.2(a);
(y) if the Company furnishes a written opinion of counsel,
which shall be reasonably satisfactory to Great Star or its Permitted
Transferees, to the effect that no registration of such shares is
required in order to consummate the transaction for which registration
has been demanded; or
(z) if Great Star, or its Permitted Transferees making the
demand, demand the registration of less than 50% of the shares of
Common Stock that Great Star beneficially owns on the date of this
Agreement.
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(b) Expenses. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 3.2.
(c) Effective Registration Statement. A registration requested
pursuant to this Article III will not be deemed to have been effected unless it
has become effective; provided that, if, within 180 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court, then such registration will be
deemed not to have been effected.
(d) Selection of Underwriters. If a requested registration
pursuant to this Section 3.2 involves an underwritten offering, the Company
shall have the right to select the investment banker or bankers and managers to
administer the offering, including the lead managing underwriter.
(e) Priority in Demand Registrations. If a requested
registration pursuant to this Section 3.2 involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering, so as to be reasonably likely to
have an adverse effect on the price, timing or distribution of the securities
offered in such offering, then the Company will include in such registration the
number of shares of Common Stock requested to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, which number shall be allocated pro rata
among all such requesting holders of Registrable Securities and holders of
Common Stock who have piggyback registration rights pursuant to an Other
Registration Rights Agreement on the basis of the relative number of shares of
Common Stock then held by each such holder. In the event that the number of
Registrable Securities and shares of Common Stock of other holders, in each case
entitled to registration rights with respect to such Common Stock requested to
be included in such registration is less than the number which, in the opinion
of the managing underwriter, can be sold, the Company may include in such
registration securities it proposes to sell for its own account up to the number
of securities that, in the opinion of the underwriter, can be sold.
3.3. Registration Procedures. If and whenever the Company is
required to file a registration statement with respect to, or to use its
reasonable efforts to effect or cause the registration of, any Registrable
Securities under the Securities Act as provided in this Agreement the Company
will as expeditiously as possible:
(a) prepare and, in any event within 120 days after the end of
the period within which a request for registration may be given to the Company
pursuant to Section 3.2, file with the SEC a registration statement on an
appropriate form with respect to such Registrable Securities and use its
reasonable efforts to cause such registration statement to become effective;
provided, however, that the Company may discontinue any registration of
securities as to which it is the Initiating Party at any time prior to the
effective date of the registration statement relating thereto (and, in such
event, the Company shall pay the Registration Expenses incurred in connection
therewith); provided, further, that before filing a
11
registration statement or prospectus, or any amendments or supplements thereto,
the Company will furnish to counsel for the sellers of Registrable Securities
covered by such registration statement copies of all documents proposed to be
filed, which documents will be subject to the review of such counsel;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period not in excess of 270 days and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; provided that before filing a
registration statement or prospectus, or any amendments or supplements thereto,
the Company will furnish to counsel for the sellers of Registrable Securities
covered by such registration statement copies of all documents proposed to be
filed, which documents will be subject to the review of such counsel;
(c) furnish to each seller of such Registrable Securities such
number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits filed therewith,
including any documents incorporated by reference), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities by such
seller;
(d) use its reasonable efforts to register or qualify such
Registrable Securities covered by such registration in such jurisdictions as
each seller shall reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this subsection (d), it would
not be obligated to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) use its reasonable efforts to cause such Registrable
Securities covered by such 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 to consummate the disposition of such
Registrable Securities;
(f) notify each seller of any such Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act within the
appropriate period mentioned in Section 3.3(b), of the Company's becoming aware
that the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading
12
in the light of the circumstances then existing, and at the request of any such
seller, prepare and furnish to such seller a reasonable number of copies of an
amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(g) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable (but not more than 18 months) after
the effective date of the registration statement, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;
(h) use its reasonable efforts to list such Registrable
Securities on any securities exchange on which the Common Stock is then listed
if such Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange and use its reasonable efforts
to provide a transfer agent and registrar for such Registrable Securities
covered by such registration statement not later than the effective date of such
registration statement;
(i) enter into such customary agreements (including an
underwriting agreement in customary form), which may include indemnification
provisions in favor of underwriters and other Persons in addition to, or in
substitution for the indemnification provisions hereof, and take such other
actions as sellers of a majority of shares of such Registrable Securities or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(j) obtain a "cold comfort" letter or letters from the
Company's independent public accounts in customary form and covering matters of
the type customarily covered by "cold comfort" letters as the seller or sellers
of a majority of shares of such Registrable Securities shall reasonably request;
(k) make available for inspection by any seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such seller or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and cause
all of the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(l) notify counsel for the holders of Registrable Securities
included in such registration statement and the managing underwriter or agent,
immediately, and confirm the notice in writing (i) when the registration
statement, or any post-effective amendment to the registration statement, shall
have become effective, or any supplement to the prospectus or any amendment
prospectus shall have been filed, (ii) of the receipt of any comments from the
13
SEC, (iii) of any request of the SEC to amend the registration statement or
amend or supplement the prospectus or for additional information, and (iv) of
the issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes;
(m) make every reasonable effort to prevent the issuance of
any stop order suspending the effectiveness of the registration statement or of
any order preventing or suspending the use of any preliminary prospectus and, if
any such order is issued, to obtain the withdrawal of any such order at the
earliest possible moment;
(n) if requested by the managing underwriter or agent or any
holder of Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;
(o) cooperate with the holders of Registrable Securities
covered by the registration statement and the managing underwriter or agent, if
any, to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing securities to be sold under the
registration statement, and enable such securities to be in such denominations
and registered in such names as the managing underwriter or agent, if any, or
the Registration Rights Holders may request;
(p) obtain for delivery to the holders of Registrable
Securities being registered and to the underwriter or agent an opinion or
opinions from counsel for the Company in customary form and in form, substance
and scope reasonably satisfactory to such holders, underwriters or agents and
their counsel; and
(q) cooperate with each seller of Registrable Securities and
each underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD.
3.4. Other Registration-Related Matters. (a) The Company may
require any Person that is selling shares of Common Stock in a Public Offering
pursuant to Sections 3.1 or 3.2 to furnish to the Company in writing such
information regarding such Person and pertinent to the disclosure requirements
relating to the registration and the distribution of the Registrable Securities
which are included in such Public Offering as the Company may from time to time
reasonably request in writing.
14
(b) Each Registration Rights Holder agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 3.3(f), it will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until its receipt of the copies of the amended or
supplemented prospectus contemplated by Section 3.3(f) and, if so directed by
the Company, each Registration Rights Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in their
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice. In the event the Company gives any such
notice, the period for which the Company will be required to keep the
registration statement effective will be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 3.3(f) to and including the date when each seller of Registrable
Securities covered by such registration statement has received the copies of the
supplemented or amended prospectus contemplated by Section 3.3(f).
(c) Each Registration Rights Holder will, in connection with a
Public Offering of the Company's securities, upon the request of the Company or
of the underwriters managing any underwritten offering of the Company's
securities, agree in writing not to effect any sale, disposition or distribution
of Registrable Securities (other than those included in the Public Offering)
without the prior written consent of the managing underwriter for such period of
time commencing 7 days before and ending 180 days (or such earlier date as the
managing underwriter shall agree) after the effective date of such registration.
(d) Upon delivering the notice referred to either in (i) the
second sentence of Section 3.1(a) or (ii) the first sentence in Section 3.2(a),
Great Star and each Permitted Transferee will, if requested by the Company,
execute and deliver a Custody Agreement and Power of Attorney, as described in
Section 2.5.
3.5. Indemnification. (a) Indemnification by the Company. In
the event of any registration of any securities of the Company under the
Securities Act pursuant to Section 3.1 or 3.2, the Company hereby indemnifies
and agrees to hold harmless, to the extent permitted by law, the sellers of any
Registrable Securities covered by such registration statement (each a "Holder"),
each Affiliate of such Holder and their respective directors and officers or
general and limited partners (and the directors, officers, employees, affiliates
and controlling Persons of any of the foregoing), each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such Holder or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses to which such Indemnified Party may become subject under
the Securities Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether or
not such Indemnified Party is a party thereto) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to
15
make the statements therein not misleading, in the case of a prospectus, in the
light of the circumstances when they were made, and the Company will reimburse
such Indemnified Party for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided that the Company will not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, in any such
preliminary, final or summary prospectus, or any amendment or supplement thereto
in reliance upon and in conformity with written information with respect to such
Indemnified Party furnished to the Company by such Indemnified Party expressly
for use in the preparation thereof. Such indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of such Holder or
any Indemnified Party and will survive the Transfer of such securities by such
Holder.
(b) Indemnification by the Holders and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed in accordance with Sections 3.1, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holder of such Registrable Securities or any prospective underwriter to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 3.5(a)) the Company, all other Holders or any prospective
underwriter, as the case may be, and any of their respective Affiliates,
directors, officers and controlling Persons, with respect to any untrue
statement in or omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement,
if such untrue statement or omission was made in reliance upon and in conformity
with written information with respect to such Holder or underwriter furnished to
the Company by such Holder or underwriter expressly for use in the preparation
of such registration statement, preliminary, final or summary prospectus or
amendment or supplement, or a document incorporated by reference into any of the
foregoing. Such indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the Holders, or any
of their respective affiliates, directors, officers or controlling Persons and
will survive the Transfer of such securities by such Holder. 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 actually received by
such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Notices of Claims. Etc. Promptly after receipt by an
Indemnified Party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 3.5, such Indemnified Party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided that the failure of the
Indemnified Party to give notice as provided herein will not relieve the
indemnifying party of its obligations under Section 3.5(a) or 3.5(b), except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an Indemnified Party,
unless in such Indemnified Party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party will be entitled to participate in and to
16
assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such Indemnified Party, and after notice from the indemnifying party to such
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. If, in such
Indemnified Party's reasonable judgment, having common counsel would result in a
conflict of interest between the interests of such indemnified and indemnifying
parties, then such Indemnified Party may employ separate counsel reasonably
acceptable to the indemnifying party to represent or defend such Indemnified
Party in such action, it being understood, however, that the indemnifying party
will not be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such Indemnified Parties (and not
more than one separate firm of local counsel at any time for all such
Indemnified Parties) in such action. No indemnifying party will consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
(d) Contribution. If the indemnification provided for
hereunder from the indemnifying party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and Indemnified Parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and Indemnified Parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or Indemnified Parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party under this Section 3.5(d) as
a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 3.5(d) were determined by pro
rata allocation or by any other method of allocation which 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.
(e) Other Indemnification. Indemnification similar to that
specified in this Section 3.5 (with appropriate modifications) shall be given by
the Company and each seller of Registrable Securities with respect to any
required registration or other qualification of
17
securities under any law or with any governmental entity other than as required
by the Securities Act.
(f) Non-Exclusivity. The obligations of the parties under this
Section 3.5 will be in addition to any liability which any party may otherwise
have to any other party.
18
ARTICLE IV. PREEMPTIVE RIGHTS
4.1. Preemptive Right. Great Star shall have the right to
purchase for cash their Preemptive Right Pro Rata Share of New Common Stock
which the Company may from time to time propose to sell for cash. The
"Preemptive Right Pro Rata Share" shall be, at any given time, that proportion
which the number of shares of Common Stock held by Great Star at such time bears
to the total Common Stock issued and outstanding at such time.
4.2. Preemptive Notices. In the event the Company proposes to
undertake an issuance of New Common Stock for cash, it shall give Great Star
written notice (the "Preemptive Notice") of its intention to sell New Common
Stock for cash, the price, the identity of the purchaser and the principal terms
upon which the Company proposes to sell the same. Great Star shall have 15
Business Days from the delivery date of any Preemptive Notice to agree to
purchase a number of shares of New Common Stock up to the Preemptive Right Pro
Rata Share (in each case calculated prior to the issuance) for the price and
upon the terms specified in the Preemptive Notice by giving written notice to
the Company and stating therein the number of shares of New Common Stock to be
purchased.
4.3. Failure to Exercise Preemptive Right. In the event Great
Star fails to purchase all of the Preemptive Right Pro Rata Share pursuant to
this Article IV, the Company shall have 180 days after the date of the
Preemptive Notice to consummate the sale of the New Common Stock with respect to
which the Great Star's preemptive right was not exercised, at or above the price
and upon terms not more favorable to the purchasers of such New Common Stock
than the terms specified in the initial Preemptive Notice given in connection
with such sale. In the event the Company has not sold the New Common Stock
within said 180-day period, the Company shall not thereafter issue or sell any
New Common Stock without first offering such New Common Stock to Great Star in
the manner provided in this Article IV.
ARTICLE V. MISCELLANEOUS
5.1. Additional Securities Subject to Agreement. Great Star
and each Permitted Transferee to whom shares of Common Stock have been
Transferred pursuant to Section 2.2 agrees that any other equity securities of
the Company which it hereafter acquires by means of a stock split, stock
dividend, distribution, exercise of options or warrants or otherwise (other than
pursuant to a Public Offering) will be subject to the provisions of this
Agreement to the same extent as if held on the date hereof.
5.2. Confidential Information. (a) Great Star and each
Permitted Transferee agrees that it will not use at any time any Confidential
Information (as defined below) of which Great Star or any Permitted Transferee
is or becomes aware except in connection with its investment in the Company.
(b) Great Star and each Permitted Transferee further agrees
that the Confidential Information will be kept strictly confidential and will
not be disclosed by it or its
19
Representatives (as defined below), except (i) as required by applicable law,
regulation or legal process, and only after compliance with Section 6.2(c)
(provided that this clause (i) may not be relied upon to the extent any action
is taken by Great Star or a Permitted Transferee which requires such disclosure
and, but for such action, such disclosure would not have been required) and (ii)
that it may disclose the Confidential Information or portions thereof to those
of its officers, employees, directors and representatives of its legal,
accounting and financial advisors (the Persons to whom such disclosure is
permissible being "Representatives") who need to know such information in
connection with the investment by Great Star and any Permitted Transferees in
the Company; provided that such Representatives (x) are informed of the
confidential and proprietary nature of the Confidential Information and (y)
agree to be bound by and perform the provisions of this Section 6.2. Great Star
and each Permitted Transferee agrees to be responsible for any breach of this
Section 6.2 by its Representatives other than those Representatives who after
the date hereof execute a separate confidentiality agreement with the Company
(it being understood that such responsibility shall be in addition to and not by
way of limitation of any right or remedy the Company may have against such
Representatives with respect to any such breach).
(c) If Great Star or any Permitted Transferee or any
Representative becomes legally compelled (including by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose any of the Confidential Information, Great Star
shall provide the Company with prompt prior written notice of such requirement
to disclose such Confidential Information. Upon receipt of such notice, the
Company may seek a protective order or other appropriate remedy. If such
protective order or other remedy is not obtained, Great Star or such Permitted
Transferee or Representative agrees to disclose only that portion of the
Confidential Information which is legally required to be disclosed and to take
all reasonable steps to preserve the confidentiality of the Confidential
Information. In addition, Great Star, the Permitted Transferees and
Representatives will not oppose any action (and will, if and to the extent
requested by the Company, cooperate with, assist and join with the Company, at
the Company's expense and on a reasonable basis, in any reasonable action) by
the Company to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Information.
(d) "Confidential Information" means oral and written
information concerning the Company and its subsidiaries furnished to Great Star
or any Permitted Transferee by or on behalf of the Company (irrespective of the
form of communication and whether such information is so furnished before, on or
after the date hereof), and all analyses, compilations, data, studies, notes,
interpretations, memoranda or other documents prepared by Great Star or any
Permitted Transferee or any Representative containing or based in whole or in
part on any such furnished information. The term "Confidential Information" does
not include any information which (i) at the time of disclosure or thereafter is
generally available to the public (other than as a result of a disclosure
directly or indirectly by Great Star or any Permitted Transferee or
Representative in violation hereof) or (ii) is or becomes available to Great
Star on a nonconfidential basis from a source other than the Company or its
advisors, provided that such source was not known by Great Star or any Permitted
Transferee to be prohibited from disclosing such information to it by a legal,
contractual or fiduciary obligation owed to the Company.
20
5.3. Termination. This Agreement, other than Sections 3.1 and
6.2, will terminate and be of no further force and effect at such time as there
shall have been one or more Public Offerings such that there exists a public
trading market in 20% or more of the Common Stock. Section 3.1 will terminate
and be of no further force and effect on the earlier of the second anniversary
of the date of the initial Public Offering and the tenth anniversary of the date
hereof. Section 6.2 will terminate and be of no further force and effect on the
third anniversary of the first date on which neither Great Star nor any
Permitted Transferee owns any shares of Common Stock.
5.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by cable, by telecopy, by telegram, by telex or
registered or certified mail (postage prepaid, return receipt requested) as
follows (or at such other address for a party as shall be specified in a notice
given in accordance with this Section 6.4):
if to the KKR Fund:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co.
0 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax (000) 000-0000
21
if to Great Star:
Great Star Corporation
x/x Xxxxx Xxxxxxx & Xxxxxxx Xxxxx Xx.
Xxxx Xxxxx Building, Xxxxxxx'x Xxx
Road Town, Tortola
British Virgin Islands
Fax (000) 000-0000
with a copy to:
Finser Corporation
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxx Xxxxxx B.
Fax (000) 000-0000
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. X' Xxxx, Xx.
Fax (000) 000-0000
if to the Company:
Evenflo Company, Inc.
Northwoods Business Center II
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxx
5.5. Further Assurances. The parties hereto will sign such
further documents, cause such meetings to be held, resolutions passed, exercise
their votes and do and perform and cause to be done such further acts and things
as may be necessary in order to give full effect to this Agreement and every
provision hereof.
5.6. Non-Assignability. This Agreement will inure to the
benefit of and be binding on the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned by any party hereto
without the express prior written consent of the other parties, and any
attempted assignment, without such consents, will be null and void; provided,
however, that the KKR Fund may assign or delegate its rights hereunder to any
Affiliate, and in the event of any such assignment references to the "KKR Fund"
herein shall be deemed to refer to such Affiliate.
22
5.7. Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument executed by the
parties hereto. No waiver by any party of any of the provisions hereof will be
effective unless explicitly set forth in writing and executed by the party so
waiving. Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including without limitation, any investigation by or on
behalf of any party, will be deemed to constitute a waiver by the party taking
such action of compliance with any covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach.
5.8. Third Parties. This Agreement does not create any rights,
claims or benefits inuring to any Person that is not a party hereto nor create
or establish any third party beneficiary hereto.
5.9. Governing Law; Jurisdiction and Waiver of Jury Trial.
This Agreement will be governed by, and construed in accordance with, the laws
of the State of New York. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby may only be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in New York City, and
each of the parties hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 5.4 shall be deemed
effective service of process on such party. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
5.10. Specific Performance. Without limiting or waiving in any
respect any rights or remedies of the parties hereto under this Agreement now or
hereinafter existing at law or in equity or by statute, each of the parties
hereto will be entitled to seek specific performance of the obligations to be
performed by the other in accordance with the provisions of this Agreement.
5.11. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof.
5.12. Titles and Headings. The section headings contained in
this Agreement are for reference purposes only and will not affect the meaning
or interpretation of this Agreement.
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5.13. Severability. If any provision of this Agreement is
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement will not be affected and
will remain in full force and effect.
5.14. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an original and all
of which together will be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
EVENFLO COMPANY, INC.
By:
-----------------------------
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general
partner
By: KKR 1996 GP LLC, its general
partner
By:
------------------------
GREAT STAR CORPORATION
By:
----------------------
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