EXHIBIT 10.41
REGISTRATION RIGHTS AGREEMENT
AGREEMENT (this "AGREEMENT"), dated as of October 27, 2005, by and among XX
XXXX'X CORPORATION ("PARENT"), a Delaware corporation, AEA MEZZANINE FUND LP
("AEAMF"), a Delaware limited partnership, and AEA MEZZANINE (UNLEVERAGED) FUND
LP ("AEAUMF" and collectively with AEAMF, the "INSTITUTIONAL INVESTORS" and
individually, an "INSTITUTIONAL INVESTOR").
W I T N E S S E T H :
WHEREAS, pursuant to the terms, and subject to the conditions, of the
Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of October
12, 2005, by and among XX Xxxx'x Incorporated, a Pennsylvania corporation, Plant
Engineering Consultants, LLC, a Tennessee limited liability company, XX Xxxx'x
Enterprises, Inc., a Delaware corporation (collectively, the "BORROWERS"), AEA
Mezzanine Funding LLC ("AEAM FUNDING"), a Delaware limited liability company,
the Institutional Investors, Parent and X.X. Xxxx'x Canada Ltd., an Ontario
corporation, (a) AEAM Funding is purchasing from the Borrowers a Senior
Subordinated Promissory of the Borrowers in the principal amount of
$10,185,086.06; (b) AEAMF is purchasing from Parent a warrant (the "AEAMF
WARRANT") to purchase an aggregate of 118,147 shares of common stock of Parent,
$.01 par value per share (the "COMMON STOCK"); and (c) AEAUMF is purchasing from
(i) the Borrowers a Senior Subordinated Promissory Note of the Borrowers in the
principal amount of $4,814,913.94 and (ii) Parent a warrant (the "AEAUMF
WARRANT" and collectively with the AEAMF Warrant, the "WARRANTS" and
individually, a "WARRANT") to purchase an aggregate of 55,853 shares of Common
Stock;
WHEREAS, Parent and the other parties hereto desire to provide for the
circumstances under which Parent will register securities of Parent on behalf of
such other parties.
NOW, THEREFORE, as an inducement to the Institutional Investors to
consummate the transactions contemplated by the Purchase Agreement and in
consideration of the premises and of the mutual covenants and obligations
hereinafter set forth, Parent hereby covenants and agrees with the other parties
hereto, and with each subsequent holder of the Warrants, as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall have the
following ----------- respective meanings:
"CERTIFICATE OF INCORPORATION" shall mean the Certificate of
Incorporation of Parent, as amended, in effect on the date hereof.
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean, collectively, the shares of common stock,
$.01 par value per share, of Parent, and any class or series of common
stock of Parent authorized after the date hereof, or any other class or
series of stock resulting from successive changes or reclassifications of
any class or series of common stock of Parent.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"INSTITUTIONAL INVESTORS" shall mean AEAMF, AEAUMF and their
respective successors and assigns.
"PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority or
other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 4 hereof.
"REGISTRABLE STOCK" shall mean the shares of Common Stock underlying
the Warrants, and any capital stock or other securities issued or issuable
with respect to such Common Stock by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
conversion, consolidation or other reorganization.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 4
hereof.
"WARRANTS" shall have the meaning ascribed to such term in the first
Whereas clause.
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SECTION 2. INCIDENTAL REGISTRATION; FORM S-3 REGISTRATION.
(a) If Parent at any time proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Form S-8 or another form not available for
registering Registrable Stock for sale to the public), each such time it will
give written notice to all holders of Registrable Stock of its intention to do
so. Upon the written request of any such holder, given within 20 days after the
date of any such notice, to register any of its Registrable Stock (which request
shall specify the aggregate number of shares of Registrable Stock to be
registered and will also state the intended method of disposition thereof),
Parent will cause the Registrable Stock as to which registration shall have been
so requested to be included in the securities to be covered by the registration
statement proposed to be filed by Parent, all to the extent requisite to permit
the sale or other disposition by the holder (in accordance with its written
request) of such Registrable Stock so registered. Parent may withdraw any such
registration statement before it becomes effective or postpone the offering of
securities contemplated by such registration statement without any obligation to
the holders of any Registrable Stock. In the event that any registration
pursuant to this Section 2 shall be, in whole or in part, an underwritten public
offering of Common Stock, any request by a holder pursuant to this Section 2 to
register Registrable Stock shall specify that either (i) such Registrable Stock
is to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration or (ii) such Registrable Stock is to be sold in the open market
without any underwriting, on terms and conditions comparable to those normally
applicable to offerings of common stock in reasonably similar circumstances. The
number of shares of Registrable Stock to be included in such an underwriting may
be reduced (pro rata among the requesting holders) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by Parent therein; provided,
however, that if any shares are to be included in such underwriting for the
account of any Person other than Parent, the number of shares to be included by
any such Person shall be reduced first. With respect to the first proviso of the
preceding sentence, if Parent elects to reduce pro rata the amount of
Registrable Stock proposed to be offered in the underwriting for the accounts of
all Persons other than Parent, for purposes of making any such reduction, each
holder of Registrable Stock which is a partnership, together with the
affiliates, partners, employees, retired partners and retired employees of such
holder, the estates and family members of any such partners, employees, retired
partners and retired employees and of their spouses, and any trusts for the
benefit of any of the foregoing Persons shall be deemed to be a single "Person,"
and any pro rata reduction with respect to such "Person" shall be based upon the
aggregate number of shares of Registrable Stock owned by all entities and
individuals included as such "Person", as defined in this sentence (and the
aggregate number so allocated to such "Person" shall be allocated among the
entities and individuals included in such "Person" in such manner as such holder
of Registrable Stock may reasonably determine). Notwithstanding anything to the
contrary contained in this Section 2, in the event that there is an underwritten
offering of securities of Parent pursuant to a registration covering Registrable
Stock and a selling holder of Registrable Stock does not elect to sell his, her
or its Registrable Stock to the underwriters of Parent's securities in
connection with such offering, such holder shall refrain from selling such
Registrable Stock not registered pursuant to this Section 2 during the period of
distribution of Parent's securities by such underwriters and the period in which
the underwriting syndicate participates in the after market; provided, however,
that such holder shall, in no event, be entitled to sell its Registrable Stock
during the 10-day period prior to, and during the 180-day period beginning on
the effective date of such registration statement if requested by the managing
underwriter or underwriters.
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(b) If, at a time when Form S-3 is available for such registration,
Parent shall receive from any Institutional Investor a written request or
requests that Parent effect a registration on Form S-3 of any of such holder's
Registrable Stock, Parent will promptly give written notice of the proposed
registration to all other holders of Registrable Stock and, as soon as
practicable, effect such registration and all such related qualifications and
compliances as may be requested and as would permit or facilitate the sale and
distribution of all Registrable Stock as are specified in such request and any
written requests of other holders given within 20 days after receipt of such
notice. Parent shall not be required to file a registration statement under Form
S-3 if counsel to Parent opines to the requesting Institutional Investors that
the filing of such a registration statement would require the disclosure of
material non-public information about Parent, the disclosure of which could have
a material adverse effect on the business or financial condition of Parent, in
which event no such registration statement shall be filed until the earlier of
the lapse of 90 days from the issuance of the opinion of Parent counsel or such
date that such information is no longer required to be disclosed, is not
material or non-public, or its disclosure would not have a material adverse
effect on the business or financial condition of Parent; provided, however, that
Parent may not exercise its right under this clause more than once in any
12-month period. Parent shall have no obligation to effect a registration under
this Section 2(b) (1) unless either (i) all the outstanding shares of
Registrable Stock are requested to be sold pursuant to such registration or (ii)
the aggregate offering price of the securities requested to be sold pursuant to
such registration is, in the good faith judgment of Parent, expected to be equal
to or greater than $1,000,000, and (2) more than four (4) occasions; provided,
however, that as to such occasion such obligation shall be deemed satisfied only
when a registration statement covering all shares of Registerable Stock
specified in requests received as aforesaid, for sale in accordance with the
method of disposition specified by the requesting Institutional Investor, shall
have become effective and, if such method of disposition is a firm commitment
underwritten public offering, all such shares shall have been sold pursuant
thereto.
SECTION 3. REGISTRATION PROCEDURES. If and whenever Parent is required by
the provisions of Section 2 hereof to effect the registration of any shares of
Registrable Stock under the Securities Act, Parent will, as expeditiously as
possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 2
hereof, shall be on Form S-1 or other form of general applicability satisfactory
to the managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective (provided that before filing a registration
statement or any amendments or supplements thereto, Parent will furnish to the
counsel selected by the holders of a majority of the Registrable Stock covered
by such registration statement copies of all such documents and include any
comments of such counsel in such documents pertaining to the disclosure relating
to the holders of Registrable Stock and the sale by such holders of the
Registrable Stock) for the period of the distribution contemplated thereby
(determined as hereinafter provided); provided, that Parent may discontinue any
registration of shares for its own account which is being effected pursuant to
Section 2 herein at any time prior to the effective date of the registration
statement relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 3(a) above and as to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
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(c) furnish to each seller and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and any amendment or supplement thereto)
and such other documents as such Persons may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Stock covered
by such registration statement;
(d) use its best efforts to register or qualify the Registrable Stock
covered by such registration statement under the securities or blue sky laws of
such jurisdictions as the sellers of Registrable Stock or, in the case of an
underwritten public offering, the managing underwriter shall reasonably request
and do any and all other acts and things which are reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Stock owned by such seller (provided that
Parent will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection or (ii) consent to general service of process (i.e., service of
process which is not limited solely to securities law violations) in any such
jurisdiction);
(e) immediately notify each seller under such registration statement
and each underwriter, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing and, at
the request of any seller, Parent will promptly prepare a supplement or
amendment to such registration statement so that, as thereafter delivered to the
purchasers of such Registrable Stock, such registration statement will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(f) furnish, at the request of any seller, on the date that
Registrable Stock is delivered to the underwriters for sale pursuant to such
registration, a letter dated such date from the independent public accountants
retained by Parent, addressed to the underwriters and to such seller, (A)
stating that they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the financial
statements of Parent included in the registration statement or the prospectus,
or any amendment or supplement thereof, comply as to form in all material
respects with the applicable accounting requirements of the Securities Act, and
such letter shall additionally cover such other financial matters (including
information as to the period ending no more than five business days prior to the
date of such letter) with respect to the registration in respect of which such
letter is being given as such underwriters or such seller may reasonably
request; and (B) containing "cold comfort" language covering such matters of the
type customarily covered by "cold comfort" letters as the holders of a majority
in nominal value of the Registrable Stock being sold reasonably request;
(g) make available for inspection by each seller, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
all pertinent financial and other records, pertinent corporate documents and
properties of Parent, and cause Parent'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;
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(h) use its best efforts to cause all such Registrable Stock to be
listed on a recognized U.S. stock exchange or traded on a U.S. inter-dealer
quotation system and, if similar securities issued by Parent are already so
listed, on each securities exchange or inter-dealer quotation system on which
similar securities issued by Parent are then listed or traded;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission or any other applicable regulatory authority,
and make available to its security holders, as soon as reasonably practicable
after the effective date of the registration statement, an earnings statement
covering the period of at least twelve months beginning with the first day of
Parent's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(j) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related offering document or suspending the
qualification of any Registrable Stock included in such registration statement
or offering document for sale in any jurisdiction, Parent will use its best
efforts promptly to obtain the withdrawal of such order;
(k) use its best efforts to cause such Registrable Stock 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 sellers
thereof to consummate the disposition of such Registrable Stock; and
(l) take all such other actions as the holders of a majority in
nominal value of Registrable Stock being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Stock (including, without limitation, effecting a stock split or a
combination of shares).
For purposes of Sections 3(a) and (b) above, the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby or nine months after the effective
date thereof.
In connection with each registration hereunder, the selling holders of
Registrable Stock will furnish to Parent in writing such information with
respect to themselves and the proposed distribution by them as shall be
necessary in order to assure compliance with Federal and applicable state
securities laws.
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In connection with each registration pursuant to Section 2 hereof covering
an underwritten public offering, Parent agrees to enter into such customary
agreements (including, without limitation) as the managing underwriter selected
in the manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of Parent's size and investment stature, provided
that such agreement shall not contain any such provision applicable to Parent
which is inconsistent with the provisions hereof.
SECTION 4. EXPENSES. All expenses incurred by Parent in complying with
Section 2 hereof, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for Parent, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars and costs
of insurance and fees and expenses of one counsel for the sellers of Registrable
Stock, but excluding any Selling Expenses, are herein called "Registration
Expenses". All underwriting discounts and selling commissions applicable to the
sale of Registrable Stock are herein called "Selling Expenses." Parent will pay
all Registration Expenses in connection with each registration statement filed
pursuant to Section 2 hereof. All Selling Expenses incurred in connection with
any sale of Registrable Stock by any participating seller shall be borne by such
participating seller, or by such Persons other than Parent (except to the extent
Parent shall be a seller) as they may agree.
SECTION 5. INDEMNIFICATION.
(a) Indemnification by Parent. In the event of a registration of any
of the Registrable Stock under the Securities Act pursuant to Section 2 hereof,
Parent will indemnify and hold harmless each seller of such Registrable Stock
thereunder and each underwriter of such Registrable Stock thereunder and their
respective officers, directors and employees and each other Person, if any, who
controls such seller or underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which such Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Stock was registered under the Securities Act
pursuant to Section 2, any preliminary prospectus or final prospectus contained
therein, any amendment or supplement thereof, any materials or information
provided to investors by, or with the approval of, Parent in connection with the
marketing of the offering of the Registrable Stock, including any roadshow or
investor presentations made to investors by Parent (whether in person or
electronically), or any application, filing or other material filed, registered,
distributed or otherwise furnished by Parent or with the consent of Parent in
connection with the securities laws of any state or political subdivision
thereof, including any blue sky application, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such Person for any reasonable legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, expense or action; provided, however, that
Parent will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary or final prospectus or amendment or
supplement in reliance upon and in conformity with written information furnished
to Parent by such Person, specifically for inclusion in any such document; or
(ii) an untrue statement or alleged untrue statement, omission or alleged
omission in a prospectus if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement to the
prospectus which amendment or supplement is delivered to such Person in a timely
manner and such Person thereafter fails to deliver such prospectus as so amended
or supplemented prior to or concurrently with the sale of such Registrable Stock
to the Person asserting such loss, claim, damage or liability.
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(b) Indemnification by Holders of Registrable Stock Which Are
Registered. In the event of a registration of any of the Registrable Stock under
the Securities Act pursuant to Section 2 hereof, each seller of such Registrable
Stock thereunder, severally and not jointly, will indemnify and hold harmless to
the fullest extent permitted by law Parent and each Person, if any, who controls
Parent within the meaning of the Securities Act, each officer of Parent who
signs the registration statement, each director of Parent, each underwriter and
each Person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages, expenses or liabilities, to which
Parent or such officer or director or underwriter or controlling Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Stock was registered under the Securities Act pursuant to Section 2,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse Parent and each such officer, director, underwriter and controlling
Person for any reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to Parent by such seller specifically for use in such registration
statement or prospectus; provided, further, however, that the liability of each
seller hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense which is equal to the proportion that the public
offering price of the shares sold by such seller under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not to exceed the net proceeds received by such seller from the
sale of Registrable Stock covered by such registration statement.
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(c) Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
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 Section 5
unless, and only to the extent that, such omission results in the indemnified
party's forfeiture of substantive rights or defenses. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election to assume and undertake the defense thereof,
the indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided, however, that,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to select
a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right
to retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the indemnified party
as aforesaid, (ii) the indemnified party shall have reasonably concluded that
there may be reasonable defenses available to it which are different from or
additional to those available to the indemnifying party or that the interests of
the indemnified party conflict with the interests of the indemnifying party, or
(iii) the indemnifying party and such indemnified party shall have mutually
agreed to the retention of such counsel. It is understood that the indemnifying
party shall not, in connection with any action or related actions in the same
jurisdiction, be liable for the fees and disbursements of more than one separate
firm qualified in such jurisdiction to act as counsel for the indemnified party.
The indemnifying party shall not (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any proceeding
effected without its written consent, (which consent shall not be unreasonably
withheld) be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
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(d) Contribution. If the indemnification provided for in Section 5(a)
or 5(b) is unavailable to or insufficient to hold harmless an indemnified party
under such paragraphs in respect of any losses, claims, damages or liabilities
or actions referred to therein, then each indemnifying party shall in lieu of
indemnifying such indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or actions in such proportion as appropriate to reflect the relative fault of
Parent, on the one hand, and the sellers of such Registrable Stock, on the
other, in connection with the statement or omissions which resulted in such
losses, claims, damages, liabilities or actions, as well as any other relevant
equitable considerations including, without limitation, the failure to give any
notice under Section 5(b). 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 Parent, on the one hand, or by the sellers of
such Registrable Stock, on the other hand, and to the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Parent and the sellers of Registrable Stock agree that it would not be just
and equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation (even if all of the sellers of Registrable Stock were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or action referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this and the immediately
preceding paragraph, the sellers of such Registrable Stock shall not be required
to contribute any amount in excess of the amount, if any, by which the total
price at which the Common Stock sold by each of them was offered to the public
exceeds the amount of any damages which they would have otherwise been required
to pay by reason of such untrue or alleged untrue statement of omission, but not
to exceed the net proceeds received by such seller on the sale of Registrable
Stock covered by such Registration Statement. 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 is not guilty of such
fraudulent misrepresentation. The indemnification of underwriters provided for
in this Section 5 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters and the indemnification
of the sellers of Registrable Stock in such underwriting shall, at the sellers'
request, be modified to conform to such terms and conditions.
The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities.
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SECTION 6. CHANGES IN COMMON STOCK. If, and as often as, there are any
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted by this Agreement shall continue with respect to the Common Stock as so
changed.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and
warrants to each of the other parties hereto as follows (which representations
and warranties shall survive the execution and delivery of this Agreement):
(a) The execution, delivery and performance of this Agreement by
Parent have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or By-laws of Parent, or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of Parent or any of its subsidiaries, except for
such violations, conflicts or defaults that would not materially adversely
affect the ability of Parent to perform its obligations hereunder.
(b) This Agreement has been duly executed and delivered by Parent and
constitutes the legal, valid and binding obligation of Parent, enforceable in
accordance with its terms.
SECTION 8. RULE 144 REPORTING. Parent agrees with each of the other parties
hereto as follows: ------------------
(a) Parent shall use reasonable best efforts to make and keep public
information available as those terms are understood and defined in Rule 144
under the Securities Act, at all times.
(b) Parent shall use reasonable best efforts to file with the
Commission in a timely manner all reports and other documents as the Commission
may prescribe under Section 13(a) or 15(d) of the Exchange Act.
(c) Parent shall furnish to each holder of Registrable Stock forthwith
upon request a written statement by Parent as to its compliance with the
reporting requirements of Rule 144, and of the Securities Act and the Exchange
Act.
SECTION 9. MISCELLANEOUS.
(a) For purposes of this Agreement a holder of a Warrant shall be
deemed to hold the Registrable Stock underlying such Warrant. The obligations
and rights under Section 3 shall terminate as to an Institutional Investor if
such Institutional Investor is not longer an "affiliate" as used in Rule 144 and
is permitted to sell all Registrable Stock then held by it pursuant to Rule
144(k).
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(b) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. Without limiting the generality of the foregoing, the registration rights
conferred herein on the holders of Registrable Stock shall inure to the benefit
of any and all subsequent holders from time to time of Registrable Stock.
(c) All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier (with receipt
confirmed), courier service or personal delivery:
(i) if to AEA Mezzanine Fund LP:
AEA Mezzanine Fund LP c/o AEA Mezzanine
Partners LP c/o AEA Mezzanine Management LP
000 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxxxx
00000 Fax No.: (000) 000-0000 Attention:
Xxxxxx X. Xxxxxxxxx, Xx.
(ii) if to AEA Mezzanine (Unleveraged) Fund LP:
AEA Mezzanine (Unleveraged) Fund LP c/o AEA
Mezzanine Partners LP c/o AEA Mezzanine
Management LP 000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Fax No.: (203)
564-2661 Attention: Xxxxxx X. Xxxxxxxxx, Xx.
in the case of (i) and (ii) above, with a copy to:
Xxxxxxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
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(iii) if to Parent:
XX Xxxx'x Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
with a copy to:
Dechert LLP
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
or to such other address or addresses as shall have been furnished in writing to
the other parties hereto.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; if mailed, five
Business Days (as defined in the Purchase Agreement) after being deposited in
the mail, postage prepaid; or if telecopied, when receipt is acknowledged.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS OR
INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE.
(e) (I) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH
COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE
AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 9(C), SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
13
(II) PARENT WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, PARENT HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. PARENT (X) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE INSTITUTIONAL INVESTORS HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH INSTITUTIONAL INVESTOR WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (Y)
ACKNOWLEDGES THAT THE INSTITUTIONAL INVESTORS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
HEREIN.
(f) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or amended
except in writing executed by the parties hereto.
(g) Telefacsimile transmissions of any executed original document
and/or retransmission of any executed telefacsimile transmission shall be deemed
to be the same as the delivery of an executed original. At the request of any
party hereto, the other parties hereto shall confirm telefacsimile transmissions
by executing duplicate original documents and delivering the same to the
requesting party or parties. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Parent (on the one hand) and the Institutional Investors (on the
other hand) agree that any amendment to the Federal securities laws (and
regulations promulgated thereunder (and related registration forms), and related
state securities laws shall not affect the substantive registration requirements
(and other obligations of Parent) set forth in this Agreement; and, following
any such amendment, Parent shall continue to be required to cause the
registration of Registrable Stock (and pay all Registration Expenses and provide
indemnification) under the Federal securities laws, as amended, in a manner
consistent to carry out the intent and purposes of (and on terms as similar as
practicable as the terms set forth in) this Agreement.
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(i) If any one or more of the provisions contained in this Agreement,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions of this Agreement. The parties hereto further agree to
replace such invalid, illegal or unenforceable provision of this Agreement with
a valid, legal and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, illegal or
unenforceable provision.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
XX XXXX'X CORPORATION
By: _________________________________
Name:
Title:
AEA MEZZANINE FUND LP
By: AEA Mezzanine Partners LP,
its General Partner
By: AEA Mezzanine Management GP LLC,
its General Partner
By: _________________________________
Name:
Title:
AEA MEZZANINE (UNLEVERAGED) FUND LP
By: AEA Mezzanine Partners LP,
its General Partner
By: AEA Mezzanine Management GP LLC,
its General Partner
By: _________________________________
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
