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EXHIBIT 4.3
Cap I and Cap II
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of November 18, 1998 by and between
NATCO Group Inc., a Delaware corporation (the "Company"), and Capricorn
Investors, L.P., a Delaware limited partnership ("Cap I"), and Capricorn
Investors II, L.P., a Delaware limited partnership ("Cap II").
R E C I T A L S:
On November 18, 1998, the Certificate of Incorporation of the Company was
amended to authorize two classes of common stock, par value $0.01 per share
("Common Stock"), to wit: 45,000,000 shares of Class A Common Stock ("Class A
Common Stock") and 5,000,000 shares of Class B Common Stock ("Class B Common
Stock"), and to convert each of the then outstanding shares of common stock of
the Company into one share of Class A Common Stock (the "Charter Amendments").
After giving effect to the Charter Amendments, Cap I owns of record and
beneficially 5,563,667 shares (68.3%) of the outstanding Class A Common Stock.
After giving effect to the Charter Amendments, Cap II owns of record and
beneficially 2,582,259 shares (31.7%) of the outstanding Class A Common Stock.
Together, Cap I and Cap II own of record and beneficially, as of the date
of this Agreement, all the outstanding Class A Common Stock, being all the
outstanding Common Stock.
The Company, National Tank Company, a Delaware corporation and a wholly
owned subsidiary of the Company ("Natco"), Natco Acquisition Company, a Delaware
corporation and a wholly owned subsidiary of the Company ("Newco") and The
Cynara Company, a Delaware corporation ("Cynara"), are parties to an Amended and
Restated Agreement and Plan of Merger dated November 17, 1998 but effective as
of March 26, 1998 (the "Merger Agreement"), pursuant to which Cynara will be
merged with and into Natco (the "Merger") and the Designated Stockholders will
receive shares of Class B Common Stock through conversion of the outstanding
shares of Cynara common stock.
The Company and Cap II have executed and delivered an Investment Agreement
dated November 17, 1998 pursuant to which the Company has agreed to issue and
sell, and Cap II has agreed to purchase, a non-negotiable promissory note
convertible upon the occurrence of the events therein specified into 504,762
shares of Class A Common Stock.
The stockholders of Cynara have entered into a Registration Rights
Agreement of even date herewith between the Company and such stockholders which
contains terms and provisions substantially similar to those herein (the "Cynara
Registration Rights Agreement").
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NOW, THEREFORE, for and in consideration of the foregoing, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions and Usage.
A. Definitions. The terms defined in this Section, wherever used in
this Agreement, shall, unless the context otherwise requires, have the
respective meanings hereinafter specified.
"Affected Stockholders" shall mean each Stockholder all or a portion of
whose shares of Common Stock have been included in a Registration Statement
filed with the Commission pursuant to the provisions of this Agreement.
"Agreement" shall mean this Registration Rights Agreement.
"Cap I" shall have the meaning ascribed to such term in the first paragraph
of this Agreement.
"Cap II" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.
"Class A Common Stock" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Class B Common Stock" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Stock" shall have the meaning ascribed to such term in the recitals
to this Agreement.
"Company" shall mean NATCO Group Inc., a Delaware corporation, and any
successor corporation by merger, consolidation or otherwise and any parent
corporation resulting from the merger or consolidation of the Company with or
into a subsidiary of another corporation.
"Cynara" shall mean The Cynara Corporation, a Delaware corporation.
"Cynara Registration Rights Agreement" shall have the meaning ascribed to
such term in the recitals to this Agreement.
"Distribution Public Offering" shall mean a distribution (as such term is
used in the Securities Act and the Securities Act Rules) of Common Stock by Cap
I or Cap II to its general and
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limited partners pursuant to a Registration Statement filed and declared
effective under the Securities Act and the Securities Act Rules.
"Effective Period" shall mean such period as shall be required under the
provisions of the Securities Act and the Securities Act Rules for delivery of a
prospectus meeting the requirements of Section 10(a) of the Securities Act to
any Person purchasing Common Stock in connection with an Underwritten Public
Offering, a Distribution Public Offering or a Market Public Offering, as the
case may be; provided, however, that such period shall not include any delivery
requirement with respect to the distribution by an underwriter of its unsold
allotment relating to an Underwritten Public Offering.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
as the same shall be in effect at the date of any determination to be made
hereunder.
"Exchange Act Rules" shall mean the rules and regulations promulgated by
the Commission under the Exchange Act, as the same shall be in effect at the
date of any determination to be made hereunder.
"Initial Public Offering" shall mean a public offering of Common Stock by
the Company as a result of which the Company first becomes subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act.
"Market Public Offering" shall mean a public offering for cash of shares of
Common Stock into an existing trading market for outstanding shares of Common
Stock at other than a fixed price on or through the facilities of a national
securities exchange or to or through a market maker otherwise than on an
exchange, but in any case pursuant to a Registration Statement filed and
declared effective under the Securities Act and the Securities Act Rules.
"Merger" shall have the meaning ascribed to such term in the recitals to
this Agreement.
"Merger Agreement" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Notice of Intent to File" shall mean a written notice given by the Company
pursuant to Section 2.D or Section 3.A that the Company is preparing to file a
Primary Distribution Registration Statement or a Secondary Distribution
Registration Statement under the Securities Act relating to an Underwritten
Public Offering of Common Stock.
"Notice of Registration Request" shall mean a written notice given by the
Company pursuant to Section 2.A to the Stockholder that did not send the
applicable Registration Request or pursuant to Section 2.B to all Stockholders
(other than the Stockholder who sent the applicable Registration Request), in
each case notifying such Stockholders that the applicable Registration Request
has been received by the Company and briefly advising such Stockholders that
they have the right to request
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Registration for the distribution of their holdings of Common Stock, subject to
the terms and provisions of this Agreement.
"Person" shall mean an individual, a corporation, a partnership, a trust,
an unincorporated organization or a government or any agency or political
subdivision thereof.
"Primary Distribution" shall mean an Underwritten Public Offering of Common
Stock offered, sold and delivered by the Company.
"Primary Distribution Registration Statement" shall mean a Registration
Statement filed by the Company and declared effective under the Securities Act
and the Securities Act Rules relating to a Primary Distribution.
"Public Offering" shall mean either a Distribution Public Offering, a
Market Public Offering or an Underwritten Public Offering
"Registrable Shares" shall mean shares of Common Stock owned of record by
any Stockholder as to which such Stockholder has requested Registration pursuant
to the provisions of Section 2.A, 2.B, 3.B or 4.A.
"Registration" shall mean the registration under the registration
provisions of the Securities Act of the offering, sale and delivery of shares of
Common Stock.
"Registration Expenses" shall mean the expenses associated with the
preparation and filing of any registration statement pursuant to Section 2.C,
3.C or 4.A herein and any sale covered thereby (including the reasonable fees
and expenses of legal counsel to the Affected Stockholders, fees related to blue
sky qualifications and filing fees in respect of the National Association of
Securities Dealers, Inc.), but excluding underwriting discounts or commissions
in respect of shares of Common Stock to be sold by the Affected Stockholders.
"Registration Request" shall mean a written notice from a Stockholder
requesting that the Company file a Registration Statement with respect to a
Distribution Public Offering pursuant to Section 2.A herein, an Underwritten
Public Offering pursuant to Section 2.B herein or a Public Offering pursuant to
Section 4.A herein, in which the Stockholder advises the Company as to the
number of shares of Common Stock that the Stockholder wishes to include in the
applicable Registration and in which the Stockholder agrees to (i) the specified
method of distribution, (ii), in the case of an Underwritten Public Offering,
the designated managing underwriter and (iii) agrees to provide to the Company
all such information as may be required by the Company pursuant to Section 6
herein.
"Registration Period" shall mean the period of time from the decision of
the Company to prepare and file a Registration Statement to and including the
effective date of such Registration Statement.
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"Registration Statement" shall mean a registration statement filed on Form
X-0, X-0 or S-3 (or any successor form) under the registration provisions of the
Securities Act and the Securities Act Rules.
"Request Period" shall mean a period of ten business days after receipt
pursuant to Section 2.A by the Stockholder that did not send the applicable
Registration Request or after receipt pursuant to Section 2.B by all
Stockholders (other than the Stockholder who sent the applicable Registration
Request) of the Notice of Registration Request.
"Secondary Distribution" shall mean an Underwritten Public Offering of
Common Stock offered, sold and delivered by shareholders of the Company other
than the Stockholders, but including the holders of Common Stock acquired
pursuant to the Merger and subject to the Cynara Registration Rights Agreement.
"Secondary Distribution Registration Statement" shall mean a Registration
Statement filed by the Company and declared effective under the Securities Act
and the Securities Act Rules relating to a Secondary Distribution, including a
distribution requested by the shareholders subject to the Cynara Registration
Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, as the
same shall be in effect at the date of any determination to be made hereunder.
"Securities Act Rules" shall mean the rules and regulations promulgated by
the Commission pursuant to the Securities Act, as the same shall be in effect at
the date of any determination to be made hereunder.
"Stockholders" shall mean Cap I and Cap II and, upon registration of record
ownership of shares of Common Stock by them, Xxxxxxxxx X. Xxxxxxx, Xxxxxxx and
the general and limited partners of Cap I and Cap II and any assignee of any of
them; provided, however, that, in the case of any such record owner, the
offering, sale and delivery of shares of such Common Stock are not exempt from
the registration provisions of the Securities Act pursuant to Section 4(1)
thereof (without regard to the exemption provided by Rule 144 under the
Securities Act unless paragraph (k) of Rule 144 is applicable thereto); and
provided, further, that, in the case of any assignee other than Xxxxxxxxx X.
Xxxxxxx, Xxxxxxx and such general and limited partners, such assignee has agreed
to be bound by the provisions of this Agreement in accordance with Section 15
herein.
"Supplemental Registration Request" shall mean a written notice given by
any Stockholder pursuant to the provisions of Section 2.A, 2.B or 3.B herein, in
which the Stockholder advises the Company as to the number of shares of Common
Stock that the Stockholder wishes to include in the applicable Registration and
in which the Stockholder agrees to (i) the specified method of distribution,
(ii), in the case of an Underwritten Public Offering, the designated managing
underwriter and (iii) agrees to provide to the Company all such information as
may be required by the Company pursuant to Section 7 herein.
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"Underwritten Public Offering" shall mean a firm commitment underwritten
public offering for cash of shares of Common Stock pursuant to a Registration
Statement filed and declared effective under the Securities Act and the
Securities Act Rules.
"Xxxxxxx" shall mean Xxxxxxx X. Xxxxxxx, Xx. or any legal entity (other
than Cap I or Cap II) of which Xx. Xxxxxxx is the predominant beneficial owner.
B. Rules of Construction. Unless the context otherwise requires, as
used in this Agreement: (a) a term has the meaning ascribed to it; (b) "or" is
not exclusive; (c) "including" means "including without limitation;" (d) words
in the singular include the plural; (e) words in the plural include the
singular; (f) words applicable to one gender shall be construed to apply to each
gender; (g) the terms "hereof," "herein," "hereby," "hereto" and derivative or
similar words refer to this entire Agreement; and (h) the term "Section" shall
refer to the specified Section of this Agreement.
Section 2. Registration Rights.
A. Distribution Registration Request. If the Company shall receive a
Registration Request from Cap I or Cap II requesting that the Company file a
Registration Statement relating to a Distribution Public Offering of shares of
Common Stock owned by such Stockholder, the Company shall, if the other
Stockholder (Cap I or Cap II) has not theretofore distributed its holdings of
Common Stock to its partners in complete or partial liquidation, give promptly
(and in any event within ten business days) a Notice of Registration Request to
the Stockholder that did not send the Registration Request of the receipt of the
Registration Request, enclosing a copy of the Registration Request. During the
Request Period, the other Stockholder shall be entitled to give a Supplemental
Registration Request to the Company in which such Stockholder requests that the
Company register pursuant to the Securities Act and the Securities Act Rules the
shares of Common Stock owned by such Stockholder to be distributed in a
Distribution Public Offering.
B. Registration Request. If the Company shall receive a Registration
Request from a Stockholder requesting that the Company file a Registration
Statement relating to an Underwritten Public Offering of shares of Common Stock
owned by such Stockholder, the Company shall give promptly (and in any event
within ten business days) a Notice of Registration Request to each other
Stockholder of the receipt of the Registration Request, enclosing a copy of the
Registration Request. During the Request Period, the other Stockholders shall be
entitled to give a Supplemental Registration Request to the Company in which any
or all such Stockholders request that the Company register pursuant to the
Securities Act and the Securities Act Rules all or any portion of the shares of
Common Stock owned by such Stockholders to be distributed in an Underwritten
Public Offering.
C. Required Registration. At the end of the Request Period in the case of a
Registration Request made pursuant to Section 2.A or 2.B herein, the Company
shall, subject to the provisions of Section 2.D herein, prepare as promptly as
practicable and file a Registration Statement with
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respect to the distribution in accordance with the applicable method of
distribution of the Registrable Shares to be included therein and use its best
efforts to cause the Registration Statement to become effective under the
Securities Act in accordance with the Securities Act Rules,.
D. Suspension of Obligations. The Company's obligations under Section 2.C
and Section 4.A herein to prepare and file a Registration Statement and to seek
its effectiveness shall be subject to the following provisions:
i. The Company shall be required to file no more than an aggregate of
five (5) Registration Statements pursuant to Section 2.A and Section 2.B
and one (1) Registration Statement pursuant to Section 4.A herein.
ii. The Company's obligations to prepare, file and seek effectiveness of
a requested Registration Statement shall be suspended:
(a) in the case of an Underwritten Public Offering, if the aggregate
number of Registrable Shares to be included in such requested
Registration Statement is less than 750,000 shares of the then issued
and outstanding Common Stock;
(b) in any case, during the period from the time that it gives a
Notice of Intent to File to Stockholders that it is preparing to file a
Primary Distribution Registration Statement until 90 days (or such
shorter period as to which the managing underwriter of the Primary
Distribution to which the Primary Distribution Registration Statement
relates shall consent in writing) have lapsed following the effective
date of a Primary Distribution Registration Statement under the
Securities Act; provided, however, that (A) such Notice of Intent to
File is given prior to the time of receipt by the Company of a
Registration Request by any Stockholder and (B) that the Company shall
use its best efforts to cause such Primary Distribution Registration
Statement to be declared effective as promptly as practicable; and
provided further that the obligation to file a Registration Statement on
behalf of any Stockholder shall be reinstated if the Company does not
file a Primary Distribution Registration Statement within 30 days after
giving the Notice of Intent to File;
(c) in any case, during the period from the time that it gives a
Notice of Intent to File to Stockholders that it is preparing to file a
Secondary Distribution Registration Statement until 90 days (or such
shorter period as to which the managing underwriter of a Secondary
Distribution effected by means of a Secondary Distribution Registration
Statement shall consent in writing) have lapsed following the effective
date of the Secondary Distribution Registration Statement under the
Securities Act; provided, however, that (A) such Notice of Intent to
File is given prior to time of receipt by the Company of a Registration
Request by any Stockholder and (B) that the Company shall use its best
efforts to cause such Secondary Distribution Registration Statement to
be declared effective as promptly as practicable; and
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provided further that the obligation to file a Registration Statement on
behalf of any Stockholder shall be reinstated if the Company does not
file a Secondary Distribution Registration Statement within 30 days
after giving the Notice of Intent to File; or
(d) in any case, if at the time of receipt by the Company of a
Registration Request the Company has material inside information as to
which it believes it has a valid business purpose in refraining from
disclosing publicly for the time being and that current public
disclosure of such information would have a material adverse effect on
the Company, for a period commencing with the date of receipt of the
Registration Request and ending on the earlier of (a) 60 days after such
receipt of the Registration Request; (b) the public announcement of such
material inside information; or (c) the date on which the Company gives
the Stockholder who issued the Registration Request a notice that
suspension of its obligation is no longer required; provided, however,
that the same material inside information shall not constitute a basis
for continuation of this suspension period.
iii. A Registration Statement filed pursuant to a Registration Request
made under Section 2.B herein shall first include all Registrable Shares
requested to be included by any and all Stockholders and, only after such
inclusion, may include Common Stock being sold for the account of the
Company or any other security holders. Any Common Stock to be offered on
behalf of the Company or such other security holders will be included in
such Registration Statement only to the extent that, in the reasonable
opinion of the managing underwriter for the Underwritten Public Offering of
Registrable Shares on behalf of Stockholders, such inclusion will not
materially adversely affect the distribution of Registrable Shares on
behalf of such Stockholders.
E. Underwriter. The selection of an underwriter for an Underwritten Public
Offering of Registrable Shares by Stockholders shall be subject to the approval
of the Company, which shall not be unreasonably withheld.
F. Withdrawn Registration Statement. For purposes of Section 2.D(i) herein,
if a requested Registration Statement is filed and the Company otherwise
complies with its obligations hereunder, and
i. the Registration Statement is withdrawn with the consent of the
Affected Stockholders as a result of a delay in the offering requested by
the Company, then no requested Registration Statement shall be deemed to
have been filed; or
ii. the Affected Stockholders cease to prosecute the Public Offering
subject thereto actively and in good faith, the Company shall have the
right to withdraw the Registration Statement without the consent of the
Affected Stockholders and the requested Registration Statement shall be
deemed to have been filed.
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Section 3. Incidental/"Piggy-back" Registration.
A. Notice of Intent to File. If the Company at any time proposes to file a
Primary Distribution Registration Statement or a Secondary Distribution
Registration Statement under the Securities Act relating to an Underwritten
Public Offering of Common Stock that would permit the inclusion therein of
shares of Common Stock to be distributed in accordance with the method of
distribution contemplated by such Registration Statement, the Company shall give
to each Stockholder a Notice of Intent to File promptly after a determination
has been made by the Company to prepare and file such Registration Statement,
but in any event not less than ten days before the filing with the Commission of
such Registration Statement, which notice shall set forth the intended method of
distribution (including the name of the managing underwriter) of the securities
proposed to be registered. The Notice of Intent to File shall include an offer
to include in such filing, subject to the other provisions of this Agreement,
such amount of Registrable Shares as each Stockholder may request.
B. Supplemental Registration Request. If any Stockholder wishes to have
Registrable Shares registered pursuant to this Section 3, it shall advise the
Company by giving a Supplemental Registration Request within 20 days after the
date of receipt of the Notice of Intent to File (or such shorter period, but in
any event not less than ten days, as the Company shall specify in its Notice of
Intent to File), setting forth the amount of Registrable Shares for which
Registration is requested.
C. Registration Obligation. Subject to the provisions of the next sentence,
the Company shall include all Registrable Shares specified in the Supplemental
Registration Requests received by it in accordance with subsection B of this
Section 3. If, however, the managing underwriter of the proposed Primary
Distribution or Secondary Distribution shall advise the Company in writing that,
in the reasonable opinion of such managing underwriter, the inclusion in the
Registration Statement of the aggregate number of shares of Common Stock
requested by the Stockholders to be included in the Primary Distribution or
Secondary Distribution would materially adversely affect such distribution of
securities, then the Company shall so advise the Affected Stockholders and the
number of such shares of Common Stock included in the Registration Statement
shall be reduced to the number acceptable to such managing underwriter and such
reduced number of shares shall be allocated pro rata among the Affected
Stockholders based on the Registrable Shares held by each. If any Stockholder
does not agree to the terms of underwriting of such Primary Distribution or
Secondary Distribution, the shares of Common Stock owned by such Stockholder
shall be excluded therefrom by written notice from the Company or such managing
underwriter.
D. Underwriting Agreement. Any obligation of the Company to include shares
of Common Stock of any Stockholder in a Registration Statement prepared and
filed pursuant to this Section 3 shall be conditioned upon the agreement of such
Stockholder to enter into an underwriting agreement with the Company, other
security holders, if any, and the managing underwriter of the Primary
Distribution or the Secondary Distribution of the type described in subsection
(H) of Section 5.
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Section 4. Special Registration Right.
A. Preparation and Filing. If at any time during the term hereof, (i)
Xxxxxxx acquires the record and beneficial ownership of any Common Stock from
Cap I or Cap II, (ii) in the opinion of counsel, reasonably satisfactory to the
Company, all or part of such shares may not be sold by Xxxxxxx without
registration under the Securities Act or reliance on an exemption from the
registration provisions thereof (other than Section 4(1) of the Securities Act)
and (iii) Xxxxxxx desires in good faith to pledge all or a portion of such
shares as collateral for borrowings by Xxxxxxx from one or more lenders
("Lenders"), then, upon receipt by the Company of a Registration Request from
Xxxxxxx or the Lenders, the Company shall, subject to the provisions of Section
2.D herein, prepare as promptly as practicable and file a Registration Statement
with respect to the offering, sale and delivery by the Lenders of all or any
part of the shares of Common Stock pledged by Xxxxxxx to the Lenders in
accordance with the applicable method of distribution of the Registrable Shares
to be included therein and use its best efforts to cause the Registration
Statement to become effective under the Securities Act in accordance with the
Securities Act Rules. If so requested by Xxxxxxx or the Lenders, the
Registration Statement shall be filed pursuant to Rule 415 (relating to "shelf
registration statements") of the Securities Act Rules.
B. Distribution. The applicable method of distribution of the Registrable
Shares shall be as requested by the Lenders (or Xxxxxxx on behalf of the
Lenders) and the methods of distribution may include a distribution by one or
more broker-dealers named in the Registration Statement "at the market" pursuant
to a Market Public Offering. The Company agrees that it will amend the
Registration Statement or supplement the prospectus to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
C. Limitations. The preparation and filing of a Registration Statement
pursuant to this Section 4 and the offering, sale and delivery of Registrable
Shares pursuant thereto shall be subject to the following limitations:
i. The Company shall be obligated to prepare, file and cause to become
effective only one Registration Statement pursuant to this Section 4.
ii. The only offering, sale and delivery of Registrable Shares under
such Registration Statement shall be for the account of the Lenders after a
foreclosure of the lien against such shares following a default in payment
of the borrowings made against such collateral, and no sales of such shares
shall be effected by the Lenders under such Registration Statement prior to
the delivery to the Company of a certificate of the Lenders to such effect.
iii. The proposed and actual filing by the Company of a Registration
Statement pursuant to this Section 4 shall not entitle any Stockholder to
registration rights pursuant to Section 3 herein.
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iv. The offering, sale and delivery of Registrable Shares pursuant to
any Registration Statement filed pursuant to Rule 415 (relating to "shelf
registration statements") of the Securities Act Rules under this Section 4
shall be suspended if, at the time of any offering, sale and delivery
pursuant to a shelf registration statement, the Company has material inside
information as to which it believes it has a valid business purpose in
refraining from disclosing publicly for the time being and that current
public disclosure of such information would have a material adverse effect
on the Company. Such suspension period shall commence upon notice by the
Company to Xxxxxxx and the Lenders and shall continue until the earlier of
(a) the expiration of 60 days thereafter; (b) the public announcement of
such material inside information; or (c) the date on which the Company
gives Xxxxxxx and the Lenders notice that such suspension is no longer
required; provided, however, that the same material inside information
shall not constitute a basis for continuation of this suspension period.
v. The Company shall be obligated to maintain the effectiveness of a
Registration Statement filed pursuant to Rule 415 (relating to "shelf
registration statements") of the Securities Act Rules under this Section 4
until the third anniversary of the effective date thereof and no longer.
D. Benefits. Upon receipt by the Company of a Registration Request under
this Section 4, the Lenders shall have the benefits and obligations of an
Affected Stockholder under Sections 5, 6, 7 and 8 of this Agreement and of a
Stockholder under Sections 9, 10, 11, 12, 13, 16 and 17 of this Agreement.
Section 5. Registration Procedures. If the Company is required by the
provisions of Section 2, 3 or 4 to effect the Registration of any of the
Registrable Shares, the Company shall, as expeditiously as possible:
A. Filing. Prepare and file with the Commission a Registration Statement
with respect to such shares of Common Stock and use its best efforts to cause
such Registration Statement to become and, subject to subsection C of this
Section 5, remain effective.
B. Amendments. Prepare and file with the Commission during the Registration
Period such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to permit such
Registration Statement to become effective in accordance with the Securities Act
and the Securities Act Rules and to ensure that such Registration Statement and
the prospectus used in connection therewith comply with the disclosure standards
of Section 11 of the Securities Act and Section 10(b) of the Exchange Act and
that such prospectus complies with Section 10 of the Securities Act, in each
case during the Effective Period.
C. Maintenance of Effectiveness. Subject to the provisions of Section 4.C
herein, use its best efforts to maintain the effectiveness of such Registration
Statement and to ensure compliance of the prospectus contained therein with
Section 10(a) of the Securities Act for the Effective Period.
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D. Copies. Furnish to each Affected Stockholder (i) such number of copies
of such Registration Statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
included in such Registration Statement (including each preliminary prospectus,
summary prospectus and prospectus supplement), in conformity with the
requirements of the Securities Act, and such other documents, as such Affected
Stockholder may reasonably require in order to facilitate the offering, sale and
delivery or other disposition of the Registrable Shares owned by such Affected
Stockholder and (ii), during the Registration Period and the Effective Period,
copies of any written correspondence or memoranda relating to oral
communications in each case with the Commission and copies of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the prospectus included therein or for additional information.
E. Blue Sky Laws. Use its best efforts to register or qualify the Common
Stock covered by such Registration Statement under the securities or blue sky
laws of such jurisdictions as the managing underwriter of such Distribution may
reasonably request (excluding, however, any jurisdiction in which the filing
would subject the Company to additional tax liability and any jurisdiction in
which the Company would thereby be required to execute a general consent to
service of process) and use all reasonable efforts to do such other acts and
things as may be required to enable the Affected Stockholders to consummate the
public sale or other disposition in such jurisdictions of the Registrable Shares
owned by such Affected Stockholders.
F. Earnings Statement. Make available to its holders of Common Stock, as
soon as reasonably practicable, an earnings statement covering the period of at
least 12 months, but not more than 18 months, beginning with the first month
after the effective date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
G. Amended Prospectuses. Notify each Affected Stockholder immediately if
the Company shall become aware at any time during the Effective Period that the
prospectus included in the Registration Statement, as such prospectus may be
amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading in light of the
circumstances then existing, and at the request of any Affected Stockholder to
prepare promptly and to furnish to each Affected Stockholder such number of
copies of an amended or supplemental prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Shares, 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 in order to
make the statements therein not misleading in the light of the circumstances
then existing.
H. Underwriting Agreements. Enter into such agreements (including an
underwriting agreement in customary form and containing customary provisions
relating to legal opinions and accountants' letters, representations and
warranties and mutual indemnification and contribution between the Company and
the underwriters for the Affected Stockholders) and use all reasonable
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efforts to take such other actions as the Affected Stockholders may reasonably
request in order to expedite or facilitate the disposition of such Registrable
Shares.
I. Inspection. Make available for inspection by the Affected Stockholders,
by any underwriter participating in any distribution to be effected pursuant to
such Registration Statement and by any attorney, accountant or other agent
retained by Affected Stockholders 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 such information requested by the Affected Stockholders, such
underwriter, attorney, accountant or agent, as is reasonably needed in
connection with such Registration.
6. Classes of Stock. The parties hereto intend that any capital stock sold
by a Stockholder pursuant to the provisions of this Agreement shall be Class A
Common Stock if sold prior to January 1, 2002 or Common Stock if sold
thereafter. Accordingly, any reference herein to the inclusion of Common Stock
in a Registration Statement for offering, sale and delivery by a Stockholder
hereunder shall, subject to the proviso to Article Fourth, II-A-4, of the
Certificate of Incorporation of the Company, prior to January 1, 2002 be deemed
to refer to Class A Common Stock and thereafter to Common Stock.
7. Expenses; Limitations on Registration. The Registration Expenses
relating to any Registration effected by the Company pursuant to this Agreement
shall be for the account of the Company; provided, however, that any and all
underwriting discounts and commissions attributable to the sale of the shares of
Common Stock of the Affected Stockholders shall be for the account of the
Affected Stockholders.
For purposes of this Section 7, the Company shall be obligated to pay the
fees and expenses of only one law firm representing the Affected Stockholders.
If more than one such firm shall represent the Affected Stockholders in
connection with a Registration under this Agreement, the Affected Stockholders
shall notify the Company as to which firm shall be deemed to represent the
Affected Stockholders for purposes of this Section 7.
Section 8. Stockholders' Information. The Affected Stockholders shall
provide all information reasonably requested by the Company for inclusion in any
Registration Statement to be filed hereunder. The actual provision of such
information shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Agreement in respect of the Registration of
Registrable Shares of any Affected Stockholder.
Section 9. Indemnification.
A. In connection with the Registration of any Registrable Shares under the
Securities Act pursuant to this Agreement, the Company agrees to indemnify and
hold harmless each Affected Stockholder, its partners, directors, officers and
employees, and each other Person, if any, who controls such Affected Stockholder
within the meaning of Section 15 of the Securities Act, against
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any losses, claims, damages or liabilities, joint or several, to which such
Affected Stockholder or any such partner, director, officer, employee or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or any alleged untrue statement of a material fact contained in the
Registration Statement or the prospectus included therein at the time the
Registration Statement is declared effective or any omission or alleged omission
of a material fact required to be stated therein or necessary in order to make
the statements therein not misleading or (ii) any untrue statement of a material
fact or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus, the prospectus included
therein or any amendment or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary in order
to make the statements concerning the Company therein, in the light of the
circumstances under which they were made, not misleading and shall reimburse
each Affected Stockholder and each such partner, director, officer, employee and
controlling Person for any legal or other expenses reasonably incurred by such
Affected Stockholder or such partner, director, officer employee or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
preliminary prospectus, prospectus, or amendment or supplement in reliance upon
and in conformity with written information furnished by or on behalf of an
Affected Stockholder to the Company expressly for use therein; and provided,
further, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if such untrue statement or
alleged untrue statement or omission or alleged omission was corrected in the
final prospectus included in the Registration Statement at the time it became
effective and the Affected Stockholder, in the case of a Distribution Public
Offering or a Market Public Offering, or the managing underwriter, in the case
of an Underwritten Public Offering, failed to provide the final prospectus as
required by the Securities Act and the Securities Act Rules. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of any Affected Stockholder or any such partner, director, officer,
employee or controlling Person, and shall survive the transfer of such
securities by any Affected Stockholder.
B. Each Affected Stockholder agrees to indemnify and hold harmless the
Company, its directors, officers and employees, each other Person, if any, who
controls the Company and each other Affected Stockholder against any losses,
claims, damages or liabilities, joint or several, to which the Company, any such
director, officer or employee, any such controlling Person or such other
Affected Stockholder may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or any alleged untrue statement of a material fact contained in the
Registration Statement or the prospectus included therein at the time the
Registration Statement is declared effective or any omission or alleged omission
of a material fact required to be stated therein or necessary in order to make
the statements therein not misleading or
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(ii) any untrue statement of a material fact or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus, the prospectus included therein or any amendment or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary in order to make the statements concerning the
Company therein, in the light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such
alleged untrue statement or alleged omission was made in such Registration
Statement, preliminary prospectus, prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished by or on
behalf of an Affected Stockholder to the Company expressly for use therein, and
shall reimburse the Company or such director, officer, employee or other Person
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability or action.
C. Promptly after receipt by an indemnified party hereunder of written
notice of the commencement of any action or proceeding involving a claim
referred to in subsection (A) or (B) of this Section 9, 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 any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligation under this subsection
C to the extent the indemnifying party is not materially prejudiced by such
failure. In case any such action is brought against an indemnified party, the
indemnified party shall permit the indemnifying party to assume the defense of
such action or proceeding, provided that counsel for the indemnifying party, who
shall conduct the defense of such action or proceeding, shall be approved by the
indemnified party (whose approval shall not be unreasonably withheld) and the
indemnified party may participate in such defense (in which case, such
participation shall be at such indemnified party's expense, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified party and the indemnifying party shall exist in respect of such
claim, in which event the indemnifying party shall pay the reasonable fees and
expense of separate counsel for the indemnified party). No indemnifying party
shall consent to entry of any judgment or enter into any settlement that 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
to such claim or litigation. The indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm for all indemnified
parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent.
D. Indemnification similar to that specified in the preceding subsections
of this Section 9 shall be given by the Company and each Affected Stockholder
(with such modifications as shall be appropriate) with respect to liability
related to any required registration or other qualification of Registrable
Shares under any Federal or state law or regulation of governmental authority
other than the Securities Act.
E. If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsection (A) or (B)
above, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims,
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damages or liabilities referred to in subsection (A) or (B) above, in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and each Affected Stockholder, on the other, in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. 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 information supplied by the
Company or such Affected Stockholder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Affected Stockholders agree
that it would not be just and equitable if contributions pursuant to this
subsection (E) were to be 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 first sentence of this subsection (E). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (E) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim (which
shall be limited as provided in subsection (C) above if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) that is the subject of this subsection (E). Notwithstanding the
provisions of this subsection (E), in respect of any loss, claim, damage or
liability based upon any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact that relates to
information other than information supplied by any Affected Stockholder, no
Affected Stockholder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Shares offered by it
and distributed to the public exceeds the amount of any damages that such
Affected Stockholder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Promptly after receipt by an indemnified party
under this subsection (E) of notice of the commencement of any action against
such party in respect of which a claim for contribution may be made against an
indemnifying party under this subsection (E), such indemnified party shall
notify the indemnifying party in writing of the commencement thereof if the
notice specified in subsection (C) above has not been given with respect to such
action; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party under this
subsection (E) to the extent such omission is not prejudicial.
Section 10. Public Availability of Information. The Company shall comply
with all applicable public information reporting requirements of the Commission,
to the extent required from time to time to enable each Stockholder to sell
Registrable Shares without Registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any
Stockholder, the Company will deliver to such Stockholder a written statement as
to whether it has complied with such requirements.
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Section 11. Supplying Information. The Company shall cooperate with each
Stockholder in supplying such information as may be necessary for such
Stockholder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Registrable Shares.
Section 12. Specific Performance. Each party hereto acknowledges and agrees
that each other party hereto would be irreparably harmed and would have no
adequate remedy of law if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, it is agreed that, in addition to any other remedies by law or in
equity which may be available, the parties hereto shall be entitled to obtain
preliminary and permanent injunctive relief with respect to any breach or
threatened breach of, or otherwise obtain specific performance of, the covenants
and other agreements contained in this Agreement.
Section 13. Representations and Warranties of the Company. The Company
represents and warrants to each Stockholder that, as of the date of this
Agreement, (a) the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or any of the transactions contemplated
hereby and (c) this Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company, and,
assuming that this Agreement constitutes a valid and binding obligation of each
of Cap I and Cap II, is enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance and similar laws affecting creditors' rights generally
from time to time and to general principles of equity and except as the
enforceability thereof may be limited by considerations of public policy.
Section 14. Representations and Warranties of Cap I and Cap II. Each of Cap
I and Cap II represents and warrants to the Company that, as of the date of this
Agreement, (a) it is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the
organizational power and authority to enter into this Agreement and to carry out
its obligations hereunder, (b) the execution and delivery of this Agreement by
such Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby have been duly authorized by all necessary organizational
action on the part of such Stockholder and no other organizational proceedings
on the part of such Stockholder are necessary to authorize this Agreement or any
of the transactions contemplated hereby and (c) this Agreement has been duly
executed and delivered by such Stockholder and constitutes a valid and binding
obligation of such Stockholder and, assuming that this Agreement constitutes a
valid and binding obligation of the Company, is enforceable against such
Stockholder in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and similar laws
affecting creditors'
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rights generally from time to time and to general principles of equity and
except as the enforceability thereof may be limited by considerations of public
policy.
Section 15. Expiration. This Agreement and the rights, benefits, duties and
obligations hereunder of the parties hereto and their successors and permitted
assigns shall expire and be of no further force or effect on the 180th day after
the later to occur of (i) May 31, 2004 and (ii) the first date on which each and
all of Cap I, Cap II, Xxxxxxxxx X. Xxxxxxx and, to the extent that Xxxxxxx has
acquired the record and beneficial ownership of shares of Common Stock from Cap
I or Cap II, Xxxxxxx is able to sell shares of Common Stock subject hereto in
reliance upon the exemption from the registration provisions of the Securities
Act contained in Rule 144(k) or any successor Securities Act Rule.
Section 16. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or transmitted
by telex, telegram or facsimile transmission or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Cap I, to:
Capricorn Investors, L.P.
c/o Winokur Holdings, Inc.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
President
Telecopy No.: (000) 000-0000
with a copy to:
O'Melveny & Xxxxx LLP
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn.: Xx. Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(b) if to Cap II, to:
Capricorn Investors II, L.P.
c/o Capricorn Holdings, LLC
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Manager
Telecopy No.: (000) 000-0000
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with a copy to:
O'Melveny & Xxxxx LLP
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn.: Xx. Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(c) if to the Company, to:
NATCO Group, Inc.
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn.: Xx. Xxxxxxxxx X. Xxxxxxx, Chairman and Chief
Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn.: Xx. Xxxxxxx X. Xxxx III
Facsimile No.: (000) 000-0000
Section 17. Benefit and Assignment.
(a) The terms and conditions of this Agreement shall inure to the
benefit of and be binding on the parties hereto and their respective
successors and permitted assigns; provided, however, that, except as
otherwise provided in this Section, this Agreement shall not be assignable
by any party hereto except by operation of law or with the prior express
written consent of the other parties hereto. Upon registration of record
ownership of shares of Common Stock by Xxxxxxxxx X. Xxxxxxx, Xxxxxxx or any
general or limited partner of Cap I or Cap II, such person shall become a
Stockholder and a third party beneficiary of all the rights of a
Stockholder hereunder. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, their
respective successors and permitted assigns and such third party
beneficiaries, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
(b) If Cap I or Cap II shall transfer and assign shares of Common
Stock to any Person otherwise than in a Distribution Public Offering or an
Underwritten Public Offering, Cap I or Cap II (or any Person who shall be a
transferee or assignee pursuant to this subsection (b)), as the case may
be, may assign such portion of its rights and benefits under
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this Agreement as is necessary to permit such Person to act as a
Stockholder hereunder; provided, however, that such Person shall agree in
writing to be bound by the duties and obligations of a Stockholder
hereunder.
Section 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the application of doctrines of conflicts of law.
Section 19. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, any of which may have been transmitted and received by
facsimile transmission and each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
(The remainder of this page left blank intentionally.)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their officers thereunto duly authorized.
NATCO GROUP INC.
BY: /s/ XXXXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
CAPRICORN INVESTORS, L.P.
By: Capricorn Holdings, G.P.,
its general partner
By: Xxxxxxx Holdings, Inc.,
its general partner
By: /s/ XXXXXXX X. XXXXXXX, XX.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President.
CAPRICORN INVESTORS II, L.P.
By: Capricorn Holdings, LLC,
its general partner
By: /s/ XXXXXXX X. XXXXXXX, XX.
-------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Manager
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