REGISTRATION RIGHTS AGREEMENT dated as of February 12, 2007 among FOAMEX INTERNATIONAL INC. and THE HOLDERS NAMED HEREIN
Exhibit
3
dated
as
of February 12, 2007
among
FOAMEX
INTERNATIONAL INC.
and
THE
HOLDERS NAMED HEREIN
TABLE
OF CONTENTS
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SECTION
1 DEFINITIONS
1.1. Defined
terms
1.2. General
interpretive principles
SECTION
2.REGISTRATION RIGHTS
2.1. Shelf
registration
2.2. Demand
registrations
2.3. Incidental
registrations
2.4. Black-out
periods
2.5. Registration
procedures
2.6. Underwritten
offerings
2.7. No
inconsistent agreements; additional rights
2.8. Registration
expenses
2.9. Indemnification
2.10. Rules
144 and 144A
SECTION
3.MISCELLANEOUS
3.1. Existing
Registration Statements
3.2. Term
3.3. Injunctive
relief
3.4. Attorneys’
fees
3.5 Notice
3.6. Successors,
assigns and transferees
3.7. Governing
law; service of process; consent to jurisdiction
3.8. Headings
3.9. Severability
3.10. Amendment;
waiver
3.11. Counterparts
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This
REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is
dated as of February 12, 2007, by and among Foamex International Inc., a
Delaware corporation (including as reorganized, the “Issuer”),
and
D. E. Shaw Laminar Portfolios, L.L.C., Xxxxxxx, Sachs & Co., Sigma Capital
Associates, LLC, Par IV Master Fund, Ltd. and Sunrise Partners Limited
Partnership (each, a “Significant
Equityholder”).
WHEREAS,
in connection with and pursuant to the Issuer’s Second Amended Plan of
Reorganization, dated November 27, 2006 (the “Plan”),
the
Issuer distributed to its equity holders as of the Record Date (as defined
in
the Plan) (i) rights to purchase 2.506 shares of Common Stock (as defined
herein) for each share of the Issuer’s Common Stock then held, and
(ii) rights to purchase 250.6 shares of Series B preferred stock for each
share of the Issuer’s preferred stock then held;
WHEREAS,
in connection with and pursuant to the Plan and the Call Option Agreement,
dated
as of February 1, 2007, by and among the Issuer and the Significant
Equityholders, and subject to the terms and conditions set forth therein,
the
Significant Equityholders acquired from the Issuer a call option (the
“Call
Option”)
entitling the Significant Equityholders to purchase from the Issuer, at the
Rights Offering Exercise Price (as defined in the Plan), any shares of Common
Stock not subscribed for in the Rights Offering (as defined in the Plan);
and
WHEREAS,
in connection with and pursuant to the Plan, the Issuer has agreed with the
Significant Equityholders to provide certain rights as set forth
herein.
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, covenants
and agreements of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
SECTION
1. DEFINITIONS
1.1. Defined
Terms.
As used
in this Agreement, the following terms shall have the following
meanings:
“Adverse
Disclosure”
means
public disclosure of material non-public information, which disclosure in
the
good faith judgment of the Board of Directors after consultation with counsel
to
the Issuer (i) would be required to be made in any Registration Statement
so
that such Registration Statement would not be materially misleading, (ii)
would
not be required to be made at such time but for the filing of such Registration
Statement and (iii) would have a material adverse effect on the Issuer or
its
business or on the Issuer’s ability to effect a material acquisition,
disposition or financing.
“Agreement”
has
the
meaning set forth in the preamble hereto.
“Board
of Directors”
means
the Board of Directors of the Issuer.
“Call
Option”
has
the
meaning set forth in the preamble hereto.
“Common
Stock”
means
the common stock, par value $0.01, of the Issuer and any securities of the
Issuer or any successor or assign of the Issuer into which such Common Stock
is
reclassified or reconstituted or into which such stock is converted or otherwise
exchanged in connection with a combination of shares, recapitalization, merger,
sale of assets, consolidation or other reorganization or otherwise.
“Demand
Registration”
has
the
meaning set forth in Section 2.2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor thereto,
and
any rules and regulations promulgated thereunder, all as the same shall be
in
effect from time to time.
“Free
Writing Prospectus”
means
a
free writing prospectus, as defined in Rule 405 under the Securities
Act.
“holder”
or
“holders”
means
any holder or holders of Registrable Securities who is a party hereto or
who
otherwise agrees in writing to be bound by the provisions of this Agreement
pursuant to Section 3.6.
“Incidental
Registration”
has
the
meaning set forth in Section 2.3(a).
“Inspector”
has
the
meaning set forth in Section 2.5(a)(xix).
“Issuer”
has
the
meaning set forth in the preamble hereto and shall include the Issuer’s
successors by merger, acquisition, reorganization or otherwise.
“Issuer
Free Writing Prospectus”
means
an issuer free writing prospectus, as defined in Rule 433 under the Securities
Act, relating to an offer of the Registrable Securities.
“Significant
Equityholder”
has
the
meaning set forth in the preamble hereto.
“Loss”
has
the
meaning set forth in Section 2.9(a).
“NASD”
means
the National Association of Securities Dealers, Inc.
“Person”
means
any individual, firm, limited liability company or partnership, joint venture,
corporation, joint stock company, trust or unincorporated organization,
incorporated or unincorporated association, government (or any department,
agency or political subdivision thereof) or other entity of any
kind.
“Plan”
has
the
meaning set forth in the preamble hereto.
“Prospectus”
means
the prospectus included in any Registration Statement, all amendments and
supplements to such prospectus and all material incorporated by reference
in
such prospectus.
“Records”
has
the
meaning set forth in Section 2.5(a)(xix).
2
“Registrable
Securities”
means
(i) the shares of Common Stock of the Issuer issued to the Significant
Equityholders pursuant to the exercise of rights in the Rights Offering;
(ii)
the shares of Common Stock, if any, issued by the Issuer to the Significant
Equityholders pursuant to the exercise of the Call Option; (iii) any other
shares of Common Stock held by the Significant Equityholders; and (iv) any
securities that may be issued or distributed or be issuable to the Significant
Equityholders in respect of the foregoing by way of stock dividend, stock
split
or other distribution, merger, consolidation, exchange offer, recapitalization
or reclassification or similar transaction or exercise or conversion of any
of
the foregoing; provided,
however,
that
any of the foregoing securities listed in the preceding clauses (i) through
(iv)
shall cease to be “Registrable Securities” to the extent (i) a Registration
Statement with respect to their sale has become effective under the Securities
Act and they have been disposed of pursuant to such Registration Statement,
(ii)
they have been distributed pursuant to Rule 144 (or any similar provision
then
in force) under the Securities Act, (iii) they may be publicly resold (without
volume or method of sale restrictions) without registration under the Securities
Act or (iv) they have ceased to be outstanding. For purposes of this Agreement,
a “class” of Registrable Securities shall mean all Securities with the same
terms and a “percentage” (or a “majority”) of the Registrable Securities (or,
where applicable, of any other securities) shall be determined (x) based
on the
number of shares of such securities, in the case of Registrable Securities
which
are equity securities, and (y) based on the principal amount of such securities,
in the case of Registrable Securities which are debt securities.
“registration”
means
a
registration of the Issuer’s securities for sale to the public under a
Registration Statement.
“Registration
Statement”
means
any registration statement of the Issuer filed with, or to be filed with,
the
SEC under the rules and regulations promulgated under the Securities Act,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and any successor thereto, and any
rules
and regulations promulgated thereunder, all as the same shall be in effect
from
time to time.
“Shelf
Registration”
means
a
registration effected pursuant to Section 2.1.
“Shelf
Registration Statement”
means
a
Registration Statement of the Issuer filed with the SEC on Form S-3 or Form
S-3ASR (or any successor form or other appropriate form under the Securities
Act) for an offering to be made on a continuous or delayed basis pursuant
to
Rule 415 under the Act (or any similar rule that may be adopted by the SEC)
covering the Registrable Securities.
“Underwritten
Offering”
means
a
registration in which securities of the Issuer are sold to an underwriter
or
underwriters on a firm commitment basis for reoffering to the
public.
“Valid
Business Reason”
has
the
meaning set forth in Section 2.1(c).
3
1.2. General
Interpretive Principles.
Whenever used in this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, any noun or pronoun shall be deemed
to
include the plural as well as the singular and to cover all genders. The
name
assigned this Agreement and the section captions used herein are for convenience
of reference only and shall not be construed to affect the meaning, construction
or effect hereof. Unless otherwise specified, the terms “hereof,” “herein,”
“hereunder” and similar terms refer to this Agreement as a whole (including the
exhibits, schedules and disclosure statements hereto), and references herein
to
Sections refer to Sections of this Agreement.
SECTION
2. REGISTRATION RIGHTS
2.1. Shelf
Registration.
(a) Filing.
Subject
to Section 2.1(c), if the Issuer becomes eligible to file a registration
statement on Form S-3 or Form S-3ASR (or any successor form) in respect of
any
class of Registrable Securities, it shall promptly notify the holders of
such
eligibility, and within 60 days following the request of any holder or holders
holding at least 25% of any such class, the Issuer shall file with the SEC
a
Shelf Registration Statement relating to the offer and sale of any Registrable
Securities held by the holders thereof from time to time in accordance with
the
methods of distribution elected by such holders and shall use its reasonable
best efforts to cause such Shelf Registration Statement to become effective
under the Securities Act.
(b) Continued
Effectiveness.
Subject
to Section 2.1(c), the Issuer shall use its reasonable best efforts to keep
the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming a part thereof to be usable by the holders during the
term of
this Agreement. The Issuer shall not be deemed to have used its reasonable
best
efforts to keep the Shelf Registration Statement effective if the Issuer
voluntarily takes any action or omits to take any action that would result
in
the inability of any holder of Registrable Securities covered by such
Registration Statement to be able to offer and sell any such Registrable
Securities during the term of this Agreement, unless such action or omission
is
required by applicable law.
(c) Suspension
of Registration.
If the
filing, initial effectiveness or continued use of the Shelf Registration
Statement at any time would require the Issuer to make an Adverse Disclosure
or,
if in the good faith judgment of the Board of Directors, there exists a Valid
Business Reason, the Issuer may, upon giving prompt written notice of such
action to the holders, delay the filing or initial effectiveness of, or suspend
use of, the Shelf Registration Statement; provided,
however,
that
the Issuer shall not be permitted to do so (A) more than one time during
any
three-month period, (B) for a period exceeding 45 days on any one occasion
or
(C) for a period exceeding 90 days in any 12-month period. In the event the
Issuer exercises its rights under the preceding sentence, the holders agree
to
suspend, immediately upon their receipt of the notice referred to above,
their
use of the Prospectus relating to the Shelf Registration and any Issuer Free
Writing Prospectuses in connection with any sale or offer to sell Registrable
Securities. The Issuer shall immediately notify the holders upon the expiration
of any period during which it exercised its rights under this Section 2.1(c).
The Issuer represents that it currently has no knowledge of any circumstance
that would reasonably be expected to cause the Issuer to exercise its rights
under this Section 2.1(c).
4
(d) Underwritten
Offering.
If the
holders of not less than a majority of any class of Registrable Securities
included in any offering pursuant to the Shelf Registration Statement so
elect,
such offering shall be in the form of an Underwritten Offering and the Issuer,
if necessary, shall use its reasonable best efforts to amend or supplement
the
Shelf Registration Statement for such purpose. The Issuer, after consulting
with
the holders of a majority of the class of Registrable Securities to be included
in such Underwritten Offering, shall have the right to select the managing
underwriter or underwriters for the offering. If the managing underwriter
or
underwriters of any such proposed Underwritten Offering informs the holders
of
Registrable Securities of any class sought to be included in such registration
in writing that, in its or their opinion, the total amount or kind of securities
which such holders and any other Persons intend to include in such offering
exceeds the number or amount which can be sold in such offering without being
likely to have a significant adverse effect on the price, timing or distribution
of the class or classes of the securities offered or the market for the class
or
classes of securities offered, then the securities of each class to be included
in such registration shall be allocated as follows:
(i) first,
pro rata
among
the holders which have requested participation in such Underwritten Offering
(based, for each such holder, on the percentage derived by dividing (x) the
number or amount of Registrable Securities of such class which such holder
has
requested to include in such Underwritten Offering by (y) the aggregate number
or amount of Registrable Securities of such class which all such holders
have
requested to include);
(ii)
second,
and
only if all the securities referenced in clause (i) have been included, any
other securities of the Issuer requested by the holders thereof to included
in
such registration that, in the opinion of such underwriter or underwriters,
can
be sold without having such adverse effect shall be included therein, with
such
number to be allocated pro rata
among
such holders (based, for each such holder, on the percentage derived by dividing
(x) the number or amount of such securities of such class which such holder
has
requested to include in such registration by (y) the aggregate number or
amount
of securities of such class which all such holders have requested to include);
and
(iii) third,
and
only if all of the Registrable Securities referenced in clauses (i) and (ii)
have been included and in the opinion of such underwriter or underwriters
such
securities can be sold without having such adverse effect securities offered
by
the Issuer for its own account.
2.2. Demand
Registrations.
(a) Demand
by Holders.
(i) At
any time the holders of not less than 25% percent of any class of the
Registrable Securities may make a written request to the Issuer for registration
of all or part of the Registrable Securities held by such holders, provided
that
at least 25% of such class shall be so registered. Any such requested
registration shall hereinafter be referred to as a “Demand
Registration.”
Each
request for a Demand Registration shall specify the aggregate amount of
Registrable Securities to be registered and the intended methods of disposition
thereof.
5
(ii)
Within ten days following receipt of any request for a Demand Registration,
the
Issuer shall deliver written notice of such request to all other holders
of
Registrable Securities of the class or classes to be registered. Thereafter,
the
Issuer shall include in such Demand Registration any additional Registrable
Securities of each such class which the holder or holders thereof have requested
in writing be included in such Demand Registration, provided that all requests
therefor have been received by the Issuer within ten days of the Issuer’s having
sent the applicable notice to such holder or holders. The failure of any
such
holder to respond within such ten-day period shall be deemed to be a waiver
of
such holder’s rights under Section 2.2(a)(ii) with respect to such Demand
Registration. All such requests shall specify the aggregate amount and class
of
Registrable Securities to be registered and the intended method of distribution
of the same.
(iii)
As
promptly as practicable (and, in any event, within 60 days) following receipt
of
a request for a Demand Registration, the Issuer shall file a Registration
Statement relating to such Demand Registration and shall use its reasonable
best
efforts to cause such Registration Statement to become effective under the
Securities Act.
(b) Limitation
on Demand Registrations.
In no
event shall the Issuer be required to effect more than two Demand
Registrations.
(c) Demand
Withdrawal.
A
holder may withdraw its Registrable Securities from a Demand Registration
at any
time. If all such holders do so, the Issuer shall cease all efforts to secure
registration and such registration nonetheless shall be deemed a Demand
Registration for purposes of Section 2.2(b) unless (i) the withdrawal is
based
on the reasonable determination of the holders who requested such registration
that there has been, since the date of such request, a material adverse change
in the business or prospects of the Issuer or (ii) the holders who requested
such registration shall have paid or reimbursed the Issuer for all of the
reasonable out-of-pocket fees and expenses incurred by the Issuer in connection
with the withdrawn registration.
(d) Effective
Registration.
The
Issuer shall be deemed to have effected a Demand Registration if the applicable
Registration Statement becomes effective and remains effective for not less
than
180 days (or such shorter period as will terminate when all Registrable
Securities covered by such Registration Statement have been sold or withdrawn),
or, if such Registration Statement relates to an Underwritten Offering, such
longer period as, in the opinion of counsel for the underwriter or underwriters,
is required by law for the delivery of a Prospectus in connection with the
sale
of Registrable Securities by an underwriter or dealer. No Demand Registration
shall be deemed to have been effected if an Underwritten Offering is
contemplated by such Demand Registration and the conditions to closing specified
in the applicable underwriting agreement are not satisfied by reason of a
wrongful act, misrepresentation or breach of such underwriting agreement
or this
Agreement by the Issuer.
(e) Suspension
of Registration.
If the
filing, initial effectiveness or continued use of a Registration Statement
in
respect of a Demand Registration at any time would require the Issuer to
make an
Adverse Disclosure or, if in the good faith judgment of the Board of Directors,
it would materially interfere with any material financing, acquisition,
corporate reorganization or merger or other material transaction involving
the
Issuer (a “Valid
Business Reason”),
the
Issuer may, upon giving prompt written notice of such action to the holders,
delay the filing
or initial
effectiveness of, or suspend
use of, the such Registration Statement; provided,
however,
that
the Issuer shall not be permitted to do so (A) more than one time during
any
three-month period, (B) for a period exceeding 45 days on any one occasion
or
(C) for a period exceeding 90 days in any 12-month period. In the event the
Issuer exercises its rights under the preceding sentence, the holders agree
to
suspend, immediately upon their receipt of the notice referred to above,
their
use of the Prospectus relating to the Demand Registration and any Issuer
Free
Writing Prospectus in connection with any sale or offer to sell Registrable
Securities. The Issuer shall immediately notify the holders of the expiration
of
any period during which it exercised its rights under this Section 2.2(e).
The
Issuer represents that it currently has no knowledge of any circumstance
that
would reasonably be expected to cause the Issuer to exercise its rights under
this Section 2.2(e).
6
(f) Underwritten
Offering.
If the
holders of not less than a majority of the Registrable Securities of any
class
which are included in any offering pursuant to a Demand Registration so elect,
the Issuer shall use its reasonable best efforts to cause such offering to
be in
the form of an Underwritten Offering. The Issuer, after consulting with the
holders of a majority of the class of Registrable Securities to be included
in
such Underwritten Offering, shall have the right to select the managing
underwriter or underwriters for the offering.
(g) Priority
of Securities Registered Pursuant to Demand Registrations.
If the
managing underwriter or underwriters of a proposed Underwritten Offering
of a
class of Registrable Securities included in a Demand Registration (or, in
the
case of a Demand Registration not being underwritten, the holders of a majority
of a class of Registrable Securities included in such Registration Statement),
inform the holders of such Registrable Securities in writing that, in its
or
their opinion, the number or amount of securities of such class requested
to be
included in such Demand Registration exceeds the number or amount which can
be
sold in such offering without being likely to have a significant adverse
effect
on the price, timing or distribution of the class of securities offered or
the
market for the class of securities offered, the number or amount of Registrable
Securities of such class that can be included without having such an adverse
effect shall be allocated:
(i) first,
pro rata
among
the holders which have requested participation in the Demand Registration
(based, for each such holder, on the percentage derived by dividing (x) the
number or amount of Registrable Securities of such class which such holder
has
requested to include in such Demand Registration by (y) the aggregate number
or
amount of Registrable Securities of such class which all such holders have
requested to include);
(ii)
second,
and
only if all the securities referenced in clause (i) have been included, any
other securities of the Issuer requested by the holders thereof to included
in
such registration that, in the opinion of such underwriter or underwriters,
can
be sold without having such adverse effect shall be included therein, with
such
number to be allocated pro rata
among
such holders (based, for each such holder, on the percentage derived by dividing
(x) the number or amount of such securities of such class which such holder
has
requested to include in such registration by (y) the aggregate number or
amount
of securities of such class which all such holders have requested to include);
and
7
(iii) third,
and
only if all of the Registrable Securities referenced in clauses (i) and (ii)
have been included and in the opinion of such underwriter or underwriters
such
securities can be sold without having such adverse effect securities offered
by
the Issuer for its own account.
To
the
extent that any Registrable Securities requested to be registered are excluded
pursuant to the foregoing, the holders thereof shall have the right to one
additional Demand Registration under this Section 2.2.
(h) Registration
Statement Form.
Registrations under this Section 2.2 shall be on such appropriate registration
form of the SEC (i) as shall be selected by the Issuer and as shall be
reasonably acceptable to the holders of a majority of each class of Registrable
Securities requesting participation in the Demand Registration and (ii) as
shall
permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the applicable holders’
requests for such registration. Notwithstanding the foregoing, if, pursuant
to a
Demand Registration, (x) the Issuer proposes to effect registration by filing
a
Registration Statement on Form S-3 or Form S-3ASR (or any successor or similar
short-form registration statement), (y) such registration is in connection
with
an Underwritten Offering and (z) the managing underwriter or underwriters
shall
advise the Issuer in writing that, in its or their opinion, the use of another
form of registration statement (or the inclusion, rather than the incorporation
by reference, of information in the Prospectus related to a Registration
Statement on Form S-3 or Form S-3ASR (or other short-form registration
statement)) is of material importance to the success of such proposed offering,
then such registration shall be effected on such other form (or such information
shall be so included in such Prospectus); provided,
however,
that
the Issuer shall not be required to use any form that it reasonably believes,
based on the advice of legal counsel, that it is not eligible to use and
that no
Demand Registration shall be effected using a Form S-4 or a Form S-8 or any
successor form thereto.
2.3. Incidental
Registrations.
(a) Participation.
(i) If
the Issuer at any time proposes to file a Registration Statement with respect
to
any offering of its securities for its own account or for the account of
any
holders of its securities (other than (A) a registration under Section 2.1
or
Section 2.2 hereof, (B) a registration on Form S-4 or S-8 or any successor
form
to such forms or (C) a registration of securities solely relating to an offering
and sale to employees or directors of the Issuer pursuant to any employee
stock
plan or other employee benefit plan arrangement, then, as soon as practicable
(but in no event less than 20 days prior to the proposed date of filing such
Registration Statement), the Issuer shall give written notice of such proposed
filing to all holders of Registrable Securities that are equity securities
(in
the case of a sale of equity securities, including securities convertible
into
equity securities) or of Registrable Securities that are debt securities
(in the
case of a sale of debt securities), and such notice shall offer the holders
of
such Registrable Securities the opportunity to register such number or amount
of
Registrable Securities as each such holder may request in writing (an
“Incidental
Registration”).
Subject to Section 2.3(b), the Issuer shall include in such Registration
Statement all such Registrable Securities which are requested to be included
therein within 10 days after the receipt by such holder of any such notice.
The
failure of any such holder to respond within such ten-day period shall be
deemed
to be a waiver of such holder’s rights under this Section 2.3(a) with respect to
such Incidental Registration. If at any time after giving written notice
of its
intention to register any securities and prior to the effective date of the
Registration Statement filed in connection with such registration, the Issuer
shall determine for any reason not to register or to delay registration of
such
securities, the Issuer may, at its election, give written notice of such
determination to each holder of Registrable Securities and, (x) in the case
of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration, and (y)
in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.
8
(ii) If
the
offering pursuant to an Incidental Registration is to be an Underwritten
Offering, then each holder making a request for its Registrable Securities
to be
included therein must, and the Issuer shall use its reasonable best efforts
to
make such arrangements with the underwriters so that each such holder may,
participate in such Underwritten Offering on the same terms as the Issuer
and
other Persons selling securities in such Underwritten Offering. If the offering
pursuant to such registration is to be on any other basis, then each holder
making a request for an Incidental Registration pursuant to this Section
2.3(a)
must participate in such offering on such basis. In connection with any
Incidental Registration under Section 2.3 that is an Underwritten Offering,
the
Issuer shall not be required to include any Registrable Securities in such
Underwritten Offering unless the participating holders thereof accept the
terms
of the Underwritten Offering provided in Section 2.6(a), and then only in
such
quantity as set forth in Section 2.3(b).
(iii) Each
holder of Registrable Securities shall be permitted to withdraw, by written
notice to the Issuer, all or part of such holder’s Registrable Securities from
an Incidental Registration at any time; provided,
however,
that,
except in the case of a withdrawal pursuant to Section 2.6(b), the Issuer
shall
be entitled to reimbursement from the holder of such withdrawn Registrable
Securities for any SEC registration fees incurred by the Issuer in connection
with the registration of such Registrable Securities.
(b) Priority
of Incidental Registration.
If the
managing underwriter or underwriters of any proposed Underwritten Offering
of a
class of securities included in an Incidental Registration (or in the case
of an
Incidental Registration not being underwritten, the Issuer) informs the holders
of Registrable Securities of any class sought to be included in such
registration in writing that, in its or their opinion, the total amount or
kind
of securities which such holders and any other Persons intend to include
in such
offering exceeds the number or amount which can be sold in such offering
without
being likely to have a significant adverse effect on the price, timing or
distribution of the class or classes of the securities offered or the market
for
the class or classes of securities offered, then the securities of each class
to
be included in such registration shall be allocated as follows:
(i) |
first,
100% of the securities that the Issuer or (subject to Section 2.7)
any
Person (other than a holder of Registrable Securities) exercising
a
contractual right to demand registration has proposed to sell shall
be
included therein;
|
9
(ii) |
second,
and only if all the securities referenced in clause (i) have been
included, the number or amount of Registrable Securities of such
class
that, in the opinion of such underwriter or underwriters (or in the
case
of an Incidental Registration not being underwritten, the Issuer),
can be
sold without having such adverse effect shall be included therein,
with
such number or amount to be allocated pro rata
among the holders which have requested participation in the Incidental
Registration (based, for each such holder, on the percentage derived
by
dividing (x) the number or amount of Registrable Securities of such
class
which such holder has requested to include in such Incidental Registration
by (y) the aggregate number or amount of Registrable Securities of
such
class which all such holders have requested to include); and
|
(iii) |
third,
and only if all of the Registrable Securities referenced in clauses
(i)
and (ii) have been included, any other securities eligible for inclusion
in such registration shall be included
therein.
|
2.4. Black-out
Periods
(a) Black-out
Periods for Holders.
In the
event of a registration by the Issuer involving the offering and sale by
the
Issuer of equity securities or securities convertible into or exchangeable
for
its equity securities, the holders of Registrable Securities agree, if requested
by the Issuer (or, in the case of an Underwritten Offering, by the managing
underwriter or underwriters), not to effect any public sale or distribution)
of
any securities (except, in each case, as part of the applicable registration,
if
permitted) which securities are the same as or similar to those being registered
in connection with such registration, or which are convertible into or
exchangeable or exercisable for such securities, and not to offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or enter into any hedging or similar transaction with
the
same economic effect as a public sale or distribution of any such securities,
during the period beginning seven days before, and ending 90 days (or such
lesser period as may be permitted by the Issuer or such managing underwriter
or
underwriters) after, the effective date of the Registration Statement filed
in
connection with such registration, to the extent such holders are timely
notified in writing by the Issuer or the managing underwriter or underwriters;
provided,
however,
that
nothing in this Section 2.4(a) shall prohibit any sale of, or other transaction
relating to, Registrable Securities pursuant to Rule 144 under the Securities
Act (or any similar provision then in force).
(b) Black-out
Period for the Issuer and Others.
(i) In
the case of a registration of a class of Registrable Securities pursuant
to
Section 2.1 or 2.2 involving the offering and sale of equity securities or
securities convertible into or exchangeable for equity securities, the Issuer
agrees, if requested by the holders of a majority of such class of Registrable
Securities to be sold pursuant to such registration (or, in the case of an
Underwritten Offering, by the managing underwriter or underwriters in such
Underwritten Offering), not to effect (or register for sale) any public sale
or
distribution of any securities which are the same as or similar to those
being
registered, or which are convertible into or exchangeable or exercisable
for
such securities, and not to offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or enter into any
hedging or similar transaction with the same economic effect as a public
sale or
distribution of any such securities, during the period beginning seven days
before, and ending 90 days (or such lesser period as may be permitted by
such
holders or such underwriter or underwriters) after, the effective date of
the
Registration Statement filed in connection with such registration (or, in
the
case of an Underwritten Offering under the Shelf Registration, the date of
the
closing under the underwriting agreement in connection therewith), to the
extent
the Issuer is timely notified in writing by a holder of Registrable Securities
covered by such Registration Statement or the managing underwriter or
underwriters. Notwithstanding the foregoing, the Issuer may effect a public
sale
or distribution of securities of the type described above and during the
periods
described above if the same (A) is made pursuant to registrations on Forms
S-4
or S-8 or any successor form to such forms or (B) as part of any registration
of
securities for offering and sale to employees or directors of the Issuer
pursuant to any employee stock plan or other employee benefit plan
arrangement.
10
(ii) Subject
to Section 2.7, if after the date hereof the Issuer grants any Person (other
than a holder of Registrable Securities) any rights to demand or participate
in
a registration, the Issuer agrees that the agreement with respect thereto
shall
include such Person’s agreement not to effect any public sale or distribution of
the securities subject to such agreement (other than securities purchased
in a
public offering), or securities that are convertible into or exchangeable
or
exercisable for such securities, and not to offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase
or
enter into any hedging or similar transaction with the same economic effect
as a
public sale or distribution of any such securities, during any period referred
to in this Section 2.4(b).
2.5. Registration
Procedures.
(a) In
connection with the Issuer’s registration obligations in this Agreement, the
Issuer will, subject to the limitations set forth herein, use its reasonable
best efforts to effect any such registration so as to permit the sale of
the
applicable Registrable Securities in accordance with the intended method
or
methods of distribution thereof as expeditiously as reasonably practicable,
and
in connection therewith the Issuer will:
(i) before
filing a Registration Statement, Prospectus or any Issuer Free Writing
Prospectus, or any amendments or supplements thereto and in connection
therewith, furnish to the underwriter or underwriters, if any, and to holders
of
a majority of each class of Registrable Securities covered by such Registration
Statement, copies of all documents prepared to be filed, which documents
will be
subject to the review of such underwriters and such holders and their respective
counsel and, except in the case of a registration under Section 2.3, not
file
any Registration Statement or Prospectus or amendments or supplements thereto
to
which the holders of a majority of the class of Registrable Securities covered
by the same or the underwriter or underwriters, if any, shall reasonably
object;
(ii) prepare
and file with the SEC such amendments or supplements to the applicable
Registration Statement, Prospectus or any Issuer Free Writing Prospectus
as may
be (A) reasonably requested by any participating holder (to the extent such
request relates to information relating to such holder), (B) necessary to
keep
such registration effective for the period of time required by this Agreement
or
(C) reasonably requested by the holders of a majority of any class of the
participating Registrable Securities;
11
(iii) notify
the selling holders of Registrable Securities and the managing underwriter
or
underwriters, if any, and (if requested) confirm such advice in writing,
as soon
as reasonably practicable after notice thereof is received by the Issuer
(A)
when the applicable Registration Statement or any amendment thereto has been
filed or becomes effective and when the applicable Prospectus or any Issuer
Free
Writing Prospectus or any amendment or supplement thereto has been filed,
(B) of
any written comments by the SEC or any request by the SEC or any other federal
or state governmental authority for amendments or supplements to any such
Registration Statement, Prospectus or Free Writing Prospectus or for additional
information, (C) of the issuance by the SEC of any stop order suspending
the
effectiveness of such Registration Statement or any order or notice preventing
or suspending the use of any preliminary or final Prospectus or any Issuer
Free
Writing Prospectus or the initiation or threat of any proceedings for such
purposes and (D) of the receipt by the Issuer of any notification with respect
to the suspension of the qualification of the Registrable Securities for
offering or sale in any jurisdiction or the initiation or threat of any
proceeding for such purpose;
(iv) promptly
notify each selling holder of Registrable Securities and the managing
underwriter or underwriters, if any, when the Issuer becomes aware of the
happening of any event as a result of which the applicable Registration
Statement, Prospectus (as then in effect) or any Issuer Free Writing Prospectus
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein (in the case of a Prospectus
or
Issuer Free Writing Prospectus, in the light of the circumstances under which
they were made) not misleading, when any Issuer Free Writing Prospectus includes
information that may conflict with the information contained in the Registration
Statement, or, if for any other reason it shall be necessary to amend or
supplement any such Registration Statement, Prospectus or Issuer Free Writing
Prospectus in order to comply with the Securities Act and, in either case,
subject to Sections 2.1(c) and 2.2(e), as promptly as reasonably practicable
thereafter, prepare and file with the SEC an amendment or supplement to such
Registration Statement, Prospectus or Free Writing Prospectus which will
correct
such statement or omission or effect such compliance;
(v) make
every reasonable effort to prevent or obtain at the earliest possible moment
the
withdrawal of any stop order with respect to the applicable Registration
Statement or other order or notice preventing or suspending the use of any
preliminary or final Prospectus or any Issuer Free Writing
Prospectus;
(vi) promptly
incorporate in a Prospectus supplement, Issuer Free Writing Prospectus or
post-effective amendment to the applicable Registration Statement such
information as the managing underwriter or underwriters, if any, or the holders
of a majority of the Registrable Securities of the class being sold agree
should
be included therein relating to the plan of distribution with respect to
such
Registrable Securities; and make, subject to Sections 2.1(c) and 2.2(e),
all
required filings of such Prospectus supplement, Issuer Free Writing Prospectus
or post-effective amendment as soon as reasonably practicable after being
notified of the matters to be incorporated in such Prospectus supplement,
Issuer
Free Writing Prospectus or post-effective amendment;
12
(vii) furnish
to each selling holder of Registrable Securities and each managing underwriter,
if any, without charge, as many conformed copies as such holder or managing
underwriter may reasonably request of the applicable Registration
Statement;
(vii) deliver
to each selling holder of Registrable Securities and each managing underwriter,
if any, without charge, as many copies of the applicable Prospectus (including
each preliminary Prospectus) and any Issuer Free Writing Prospectus as such
holder or managing underwriter may reasonably request (it being understood
that
the Issuer consents to the use of the Prospectus and any Issuer Free Writing
Prospectus by each of the selling holders of Registrable Securities and the
underwriter or underwriters, if any, in connection with the offering and
sale of
the Registrable Securities covered thereby) and such other documents as such
selling holder or managing underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities by such holder or
underwriter;
(ix) on
or
prior to the date on which the applicable Registration Statement becomes
effective, use its reasonable best efforts to register or qualify such
Registrable Securities for offer and sale under the securities or “Blue Sky”
laws of each state and other jurisdiction of the United States, as any such
selling holder or underwriter, if any, or their respective counsel reasonably
requests in writing, and do any and all other acts or things reasonably
necessary or advisable to keep such registration or qualification in effect
so
as to permit the commencement and continuance of sales and dealings in such
jurisdictions for as long as may be necessary to complete the distribution
of
the Registrable Securities covered by the Registration Statement; provided,
however,
that
the Issuer will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would
subject it to taxation or general service of process in any such jurisdiction
where it is not then so subject;
(x) cooperate
with the selling holders of Registrable Securities and the managing underwriter,
underwriters or agent, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends;
(xi) use
its
reasonable best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the
seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities;
(xii) not
later
than the effective date of the applicable Registration Statement, provide
a
CUSIP number for all Registrable Securities and provide the applicable transfer
agent with printed certificates for the Registrable Securities which
certificates shall be in a form eligible for deposit with The Depository
Trust
Company;
(xiii) obtain
for delivery to the holders of each class of Registrable Securities being
registered and to the underwriter or underwriters, if any, an opinion or
opinions from counsel for the Issuer dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the
date of
the closing under the underwriting agreement, in customary form, scope and
substance, which counsel and opinions shall be reasonably satisfactory to
a
majority of the holders of each such class and underwriter or underwriters,
if
any, and their respective counsel;
13
(xiv) in
the
case of an Underwritten Offering, obtain for delivery to the Issuer and the
underwriter or underwriters, if any, with copies to the holders of Registrable
Securities included in such registration, cold comfort letters from the Issuer’s
independent certified public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters as the managing
underwriter or underwriters reasonably request;
(xv) cooperate
with each seller of Registrable Securities and each underwriter or agent,
if
any, participating in the disposition of such Registrable Securities and
their
respective counsel in connection with any filings required to be made with
the
NASD;
(xvi) use
its
reasonable best efforts to comply with all applicable rules and regulations
of
the SEC and make generally available to its security holders, as soon as
reasonably practicable (but not more than 15 months) after the effective
date of
the applicable Registration Statement, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(xvii) provide
and cause to be maintained a transfer agent and registrar for all Registrable
Securities covered by the applicable Registration Statement from and after
a
date not later than the effective date of such Registration
Statement;
(xviii) cause
all
Registrable Securities of a class covered by the applicable Registration
Statement to be listed or quoted on each securities exchange on which any
of the
Issuer’s securities of such class are then listed or quoted and on each
inter-dealer quotation system on which any of the Issuer’s securities of such
class are then quoted;
(xix) make
available upon reasonable notice at reasonable times and for reasonable periods
for inspection by a representative appointed by the holders of a majority
of the
Registrable Securities of each class covered by the applicable Registration
Statement, by any managing underwriter or underwriters participating in any
disposition to be effected pursuant to such Registration Statement and by
any
attorney, accountant or other agent retained by such sellers or any such
managing underwriter (each an “Inspector”,
and
collectively, the “Inspectors”),
all
pertinent financial and other records, pertinent corporate documents and
properties of the Issuer (collectively, the “Records”),
and
cause all of the Issuer’s officers, directors and employees and the independent
public accountants who have certified its financial statements to make
themselves reasonably available to discuss the business of the Issuer and
to
supply all information reasonably requested by the Inspectors in connection
with
such Registration Statement as shall be necessary to enable them to exercise
their due diligence responsibility; provided
that
Records that the Issuer determines, in good faith, to be confidential and
which
it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors (and the Inspectors shall confirm their agreement in writing in
advance to the Issuer if the Issuer shall so request) unless (a) the
disclosure of such Records is necessary, in the Issuer’s judgment, to avoid or
correct a misstatement or omission in the Registration Statement, (b) the
release of such Records is ordered pursuant to a subpoena or other order
from a
court of competent jurisdiction after exhaustion of all appeals therefrom
or
(c) the information in such Records was known to the Inspectors on a
non-confidential basis prior to its disclosure by the Issuer or has been
made generally available to the public. Each seller of Registrable Securities
agrees that it shall, upon learning that disclosure of such Records is sought
in
a court of competent jurisdiction, give notice to the Issuer and allow the
Issuer, at the Issuer’s expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential. In the event that the Issuer
is
unsuccessful in preventing the disclosure of such Records, such seller agrees
that it shall furnish only portion of those Records which it is advised by
counsel is legally required and shall exercise all reasonable efforts to
obtain
reliable assurance that confidential treatment will be accorded to those
Records;
14
(xx) in
the
case of an Underwritten Offering, cause the senior executive officers of
the
Issuer to participate in the customary “road show” presentations that may be
reasonably requested by the managing underwriter in any such Underwritten
Offering and otherwise to facilitate, cooperate with, and participate in
each
proposed offering contemplated herein and customary selling efforts related
thereto; and
(xxi) promptly
after the issuance of an earnings release or upon the request of any holder,
prepare a current report on Form 8-K with respect to such earnings release
or a
matter of disclosure as requested by such holder and file such Form 8-K with
the
SEC.
(b) The
Issuer may require each selling holder of Registrable Securities as to which
any
registration is being effected to furnish to the Issuer such information
regarding the distribution of such Securities and such other information
relating to such holder and its ownership of the applicable Registrable
Securities as the Issuer may from time to time reasonably request. Each holder
of Registrable Securities agrees to furnish such information to the Issuer
and
to cooperate with the Issuer as necessary to enable the Issuer to comply
with
the provisions of this Agreement. The Issuer shall have the right to exclude
any
holder that does not comply with the preceding sentence from the applicable
registration.
(c) Each
holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Issuer of the happening
of
any event of the kind described in Section 2.5(a)(iv), such holder will
discontinue disposition of its Registrable Securities pursuant to such
Registration Statement until such holder’s receipt of the copies of the
supplemented or amended Prospectus or Issuer Free Writing Prospectus, as
the
case may be, contemplated by Section 2.5(a)(iv), or until such holder is
advised
in writing by the Issuer that the use of the Prospectus or Issuer Free Writing
Prospectus, as the case may be, may be resumed, and has received copies of
any
additional or supplemental filings that are incorporated by reference in
the
Prospectus or such Issuer Free Writing Prospectus or any amendments or
supplements thereto and, if so directed by the Issuer, such holder will deliver
to the Issuer (at the Issuer’s expense) all copies, other than permanent file
copies then in such holder’s possession, of the Prospectus or any Issuer Free
Writing Prospectus covering such Registrable Securities which are current
at the
time of the receipt of such notice. In the event that the Issuer shall give
any
such notice in respect of a Demand Registration, the period during which
the
applicable Registration Statement is required to be maintained effective
shall
be extended by the number of days during the period from and including the
date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement either receives
the copies of the supplemented or amended Prospectus or Issuer Free Writing
Prospectus contemplated by Section 2.5(a)(iv) or is advised in writing by
the
Issuer that the use of the Prospectus or Issuer Free Writing Prospectus may
be
resumed.
15
(d) Each
holder of Registrable Securities agrees by acquisition of such Registrable
Securities that it will not use any Free Writing Prospectus relating to the
offer or sale of such securities without the prior written consent of the
Issuer, which shall not be unreasonably withheld or delayed.
2.6. Underwritten
Offerings.
(a) Underwriting
Agreements.
If
requested by the underwriters for any Underwritten Offering requested by
holders
pursuant to Section 2.1 or 2.2, the Issuer and the holders of Registrable
Securities to be included therein shall enter into an underwriting agreement
with such underwriters, such agreement to be reasonably satisfactory in
substance and form to the Issuer, the holders of a majority of each class
of the
Registrable Securities to be included in such Underwritten Offering and the
underwriters, and to contain such terms and conditions as are generally
prevailing in agreements of that type, including, without limitation,
indemnities no less favorable to the recipient thereof than those provided
in
Section 2.9. The holders of any Registrable Securities to be included in
any
Underwritten Offering pursuant to Section 2.3 shall enter into such an
underwriting agreement at the request of the Issuer. All of the representations
and warranties by, and the other agreements on the part of, the Issuer to
and
for the benefit of such underwriters included in each such underwriting
agreement shall also be made to and for the benefit of such holders and any
or
all of the conditions precedent to the obligations of such underwriters under
such underwriting agreement be conditions precedent to the obligations of
such
holders. No holder shall be required in any such underwriting agreement to
make
any representations or warranties to or agreements with the Issuer or the
underwriters other than representations, warranties or agreements regarding
such
holder, such holders Registrable Securities, such holder’s intended method of
distribution and any other representations required by law.
(b) Price
and Underwriting Discounts.
In the
case of an Underwritten Offering requested by holders pursuant to Section
2.1 or
2.2, the price, underwriting discount and other financial terms for each
class
of Registrable Securities of the related underwriting agreement shall be
determined by the holders of a majority of such class of Registrable Securities
included in such Underwritten Offering. In the case of any Underwritten Offering
pursuant to Section 2.3, such price, discount and other terms shall be
determined by the Issuer, subject to the right of the holders to withdraw
their
request to participate in the registration pursuant to Section 2.3(a)(iii)
after
being advised of such price, discount and other terms.
(c) Participation
in Underwritten Offerings.
No
Person may participate in an Underwritten Offering unless such Person (i)
agrees
to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements
and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
16
2.7. No
Inconsistent Agreements; Additional Rights.
The
Issuer will not enter into, and is not currently a party to, any agreement
which
is, or could be, inconsistent with the rights granted to the holders of
Registrable Securities by this Agreement.
2.8. Registration
Expenses.
(a)
Subject to Section 2.2(c), the Issuer shall pay all of the expenses set forth
in
this Section 2.8(a) in connection with its performance or compliance with
this
Agreement, including (i) all registration and filing fees, and any other
fees
and expenses associated with filings required to be made with the SEC or
the
NASD, (ii) all fees and expenses of compliance with state securities or “Blue
Sky” laws, (iii) all printing, duplicating, word processing, messenger,
telephone, facsimile and delivery expenses (including expenses of printing
certificates for the Registrable Securities in a form eligible for deposit
with
The Depository Trust Company and of printing prospectuses and Issuer Free
Writing Prospectuses), (iv) all fees and disbursements of counsel for the
Issuer
and of all independent certified public accountants of the Issuer, (v)
Securities Act liability insurance or similar insurance if the Issuer so
desires
or the underwriter or underwriters, if any, so require in accordance with
then-customary underwriting practice, (vi) all fees and expenses incurred
in
connection with the listing of the Registrable Securities on any securities
exchange or the quotation of the Registrable Securities on any inter-dealer
quotation system and (vii) all applicable rating agency fees with respect
to any
applicable Registrable Securities. In addition, in all cases the Issuer shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any audit and the fees and expenses of any Person, including
special experts, retained by the Issuer. In addition, the Issuer shall pay
all
reasonable fees and disbursements of one law firm or other counsel selected
by
the holders of a majority of the Registrable Securities being
registered.
(b)
The
Issuer shall not be required to pay any other costs or expenses in the course
of
the transactions contemplated hereby, including underwriting discounts and
commissions and transfer taxes attributable to the sale of Registrable
Securities and the fees and expenses of counsel to the underwriters other
than
pursuant to Section 2.8(a).
2.9. Indemnification.
(a) Indemnification
by the Issuer.
The
Issuer agrees to indemnify and hold harmless, to the full extent permitted
by
law, each holder of Registrable Securities and their respective affiliates,
and
each of their respective officers, directors, partners, members, employees,
agents, counsel, financial advisors and assignees (including affiliates of
such
assignees) and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons from and against any and all losses,
claims, damages, liabilities (or actions or proceedings in respect thereof,
whether or not such indemnified party is a party thereto) and expenses
(including reasonable costs of investigation and reasonable legal expenses),
joint or several (each, a “Loss”
and
collectively “Losses”),
arising out of or based upon (i) any untrue or alleged untrue statement of
a
material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act (including
any
final, preliminary or summary Prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein) or any Issuer Free Writing Prospectus or amendment thereof or
supplement thereto or (ii) any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or Issuer Free Writing Prospectus, in
the
light of the circumstances under which they were made) not misleading , and
the
Issuer agrees to reimburse (on an as-incurred monthly basis) each indemnified
party for any reasonable legal or other reasonable expenses incurred in
connection with investigating, defending or participating in any such Loss
(whether or not such indemnified party is a party to any action or proceeding
out of which indemnified expenses arise); provided,
however,
that
the Issuer shall not be liable to any indemnified party in any such case
to the
extent that any such Loss arises out of or is based upon an untrue statement
or
alleged untrue statement or omission or alleged omission made in any such
Registration Statement in reliance upon and in conformity with written
information furnished to the Issuer by such holder expressly for use in the
preparation thereof. This indemnity shall be in addition to any liability
the
Issuer may otherwise have. Such indemnity shall remain in full force and
effect
regardless of any investigation made by or on behalf of such holder or any
indemnified party and shall survive the transfer of such securities by such
holder. The Issuer will also indemnify, if applicable and if requested,
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution pursuant hereto, their officers
and directors and each Person who controls such Persons (within the meaning
of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Indemnified Persons.
17
(b) Indemnification
by the Holders.
Each
selling holder of Registrable Securities agrees (severally and not jointly)
to
indemnify and hold harmless, to the full extent permitted by law, the Issuer,
its officers, directors, employees, agents, counsel and financial advisors
and
each Person who controls the Issuer (within the meaning of the Securities
Act
and the Exchange Act) from and against any Losses resulting from any untrue
statement of a material fact or any omission of a material fact required
to be
stated in the Registration Statement under which such Registrable Securities
were registered under the Securities Act (including any final, preliminary
or
summary Prospectus contained therein or any amendment thereof or supplement
thereto or any documents incorporated by reference therein) or any Issuer
Free
Writing Prospectus or amendment thereof or supplement thereto, or necessary
to
make the statements therein (in the case of a Prospectus or Issuer Free Writing
Prospectus, in the light of the circumstances under which they were made)
not
misleading, to the extent, but only to the extent, that such untrue statement
or
omission had been contained in any information furnished in writing by such
selling holder to the Issuer specifically for inclusion in such Registration
Statement, including, without limitation, information furnished to the Issuer
pursuant to Section 2.5(b) hereof. This indemnity shall be in addition to
any
liability such holder may otherwise have. In no event shall the liability
of any
selling holder of Registrable Securities hereunder be greater in amount than
the
dollar amount of the proceeds received by such holder under the sale of the
Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings.
Any
Person entitled to indemnification hereunder will (i) give prompt written
notice
to the indemnifying party of any claim with respect to which it seeks
indemnification (provided,
however,
that
any delay or failure to so notify the indemnifying party shall relieve the
indemnifying party of its obligations hereunder only to the extent, if at
all,
that it is actually and materially prejudiced by reason of such delay or
failure) and (ii) permit such indemnifying party to assume the defense of
such
claim with counsel chosen by it and reasonably satisfactory to the indemnified
party; provided,
however,
that
any Person entitled to indemnification hereunder shall have the right to
select
and employ separate counsel and to participate in the defense of such claim,
but
the fees and expenses of such counsel shall be at the expense of such Person
unless (A) the indemnifying party has agreed in writing to pay such fees
or
expenses, (B) the indemnifying party shall have failed to assume the defense
of
such claim within a reasonable time after having received notice of such
claim
from the Person entitled to indemnification hereunder and to employ counsel
reasonably satisfactory to such Person, (C) in the reasonable judgment of
any
such Person, based upon advice of its counsel, a conflict of interest may
exist
between such Person and the indemnifying party with respect to such claims
or
(D) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party (in which case, if the Person notifies the indemnifying party in writing
that such Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such Person). If such defense is not
assumed by the indemnifying party, the indemnifying party will not be subject
to
any liability for any settlement made without its consent, but such consent
may
not be unreasonably withheld; provided,
however,
that an
indemnifying party shall not be required to consent to any settlement involving
the imposition of equitable remedies or involving the imposition of any material
obligations on such indemnifying party other than financial obligations for
which such indemnified party will be indemnified hereunder. If the indemnifying
party assumes the defense, the indemnifying party shall have the right to
settle
such action without the consent of the indemnified party; provided,
however,
that
the indemnifying party shall be required to obtain such consent (which consent
shall not be unreasonably withheld) if the settlement includes any admission
of
wrongdoing on the part of the indemnified party or any restriction on the
indemnified party or its officers or directors. No indemnifying party shall
consent to entry of any judgment or enter into any settlement which does
not
include as an unconditional term thereof the giving by the claimant or plaintiff
to each indemnified party of an unconditional release from all liability
in
respect to such claim or litigation. The indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other
charges
of more than one separate firm (together with one firm of local counsel)
at any
one time from all such indemnified party or parties unless (x) the employment
of
more than one counsel has been authorized in writing by the indemnifying
party
or parties, (y) a conflict or potential conflict exists or may exist (based
on
advice of counsel to an indemnified party) between such indemnified party
and
the other indemnified parties or (z) an indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it that are different from or in addition to those available
to the
other indemnified parties, in each of which cases the indemnifying party
shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.
18
(d) Contribution.
If for
any reason the indemnification provided for in paragraphs (a) and (b) of
this
Section 2.9 is unavailable to an indemnified party or insufficient to hold
it
harmless as contemplated by paragraphs (a) and (b) of this Section 2.9, then
the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Loss in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and
the
indemnified party on the other. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
Notwithstanding anything in this Section 2.9(d) to the contrary, no indemnifying
party (other than the Issuer) shall be required pursuant to this Section
2.9(d)
to contribute any amount in excess of the amount by which the net proceeds
received by such indemnifying party from the sale of Registrable Securities
in
the offering to which the Losses of the indemnified parties relate exceeds
the
amount of any damages which such indemnifying party has otherwise been required
to pay by reason of such untrue statement or omission. The parties hereto
agree
that it would not be just and equitable if contribution pursuant to this
Section
2.9(d) were determined by pro rata
allocation or by any other method of allocation that does not take account
of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 2.9, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in Sections
2.9(a) and 2.9(b) hereof without regard to the relative fault of said
indemnifying parties or indemnified party.
19
2.10. Rules
144 and 144A.
The
Issuer covenants that it will take such action to the extent required from
time
to time to enable any holder of Registrable Securities to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 or 144A or Regulation S under
the
Securities Act, as such Rules may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request
of any
holder of Registrable Securities, the Issuer will deliver to such holder
a
written statement as to whether it has complied with such requirements and,
if
not, the specifics thereof.
SECTION
3. MISCELLANEOUS
3.1. Existing
Registration Statements.
Notwithstanding anything herein to the contrary and subject to applicable
law
and regulation, the Issuer may satisfy any obligation hereunder to file a
Registration Statement or to have a Registration Statement become effective
by a
specified date by designating, by notice to the Significant Equityholders,
a
registration statement that previously has been filed with the SEC or become
effective, as the case may be, as the relevant Registration Statement for
purposes of satisfying such obligation, and all references to any such
obligation shall be construed accordingly. To the extent this Agreement refers
to the filing or effectiveness of other registration statements by or at
a
specified time and the Issuer has, in lieu of then filing such registration
statements or having such registration statements become effective, designated
a
previously filed or effective registration statement as the relevant
registration statement for such purposes, such references shall be construed
to
refer to such designated registration statement.
3.2. Term.
This
Agreement shall terminate upon the earliest of (i) the later of (A) the two-year
anniversary of the date of this Agreement and (B) the two-year anniversary
of
the initial Shelf Registration, if any, becoming effective and (ii) the
date as of which (A) all of the Registrable Securities have been sold pursuant
to a Registration Statement (but in no event prior to the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder),
(B)
the holders are permitted to sell their Registrable Securities under Rule
144(k)
under the Securities Act (or any similar provision then in force permitting
the
sale of restricted securities without limitation on the amount of securities
sold or the manner of sale) or (C) all Registrable Securities having ceased
to
be Registrable Securities pursuant to the definition thereof. The provisions
of
Section 2.9 and Section 2.10 shall survive any termination of this
Agreement.
20
3.3. Injunctive
Relief.
It is
hereby agreed and acknowledged that it will be impossible to measure in money
the damages that would be suffered if the parties fail to comply with any
of the
obligations herein imposed on them and that in the event of any such failure,
an
aggrieved Person will be irreparably damaged and will not have an adequate
remedy at law. Any such Person shall, therefore, be entitled (in addition
to any
other remedy to which it may be entitled in law or in equity) to injunctive
relief, including, without limitation, specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any
of the
provisions of this Agreement, none of the parties hereto shall raise the
defense
that there is an adequate remedy at law.
3.4. Attorneys’
Fees.
In any
action or proceeding brought to enforce any provision of this Agreement or
where
any provision hereof is validly asserted as a defense, the successful party
shall, to the extent permitted by applicable law, be entitled to recover
reasonable attorneys’ fees in addition to any other available
remedy.
3.5. Notices.
(a) All
notices, other communications or documents provided for or permitted to be
given
hereunder, shall be made in writing and shall be given either personally
by hand
delivery, by facsimile transmission, by electronic mail, by mailing the same
in
a sealed envelope, registered or certified first-class mail, postage prepaid,
return receipt requested, or by air courier guaranteeing overnight
delivery:
If
to the
Significant Equityholders, to:
X.
X. Xxxx & Co., L.P.
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxxxx
Facsimile
No.: 0 000 000 0000
Telephone
No.: 0 000 000 0000
Email:
Xxxxxxx.xxxxxxxxx@xxxxxx.xxx
Xxxxxxx,
Sachs & Co.
Xxx
Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxx Xxxxxx
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
Email:
xxxxxx.xxxxxx@xx.xxx
Sigma
Capital Management, LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxx Xxxxxx
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
Email:
xxxxxx@xxxxxxxxxx.xxx
|
Par
IV Master Fund, Ltd.
00
Xxxx Xxxx. 0xx Xxxxx
Xxxxxxxxx
Xxxx, XX 00000
Attention:
Xxxxxx X. Xxxxx
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
Email:
xxxxx@xxx0xxxxxxx.xxx
Sunrise
Partners Limited Partnership
Xxx
Xxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxxx X. Xxxxxx
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
Email:
xxxxxxx@xxxxxx.xxx
|
With
a
copy to:
21
Xxxxxx
Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx
Xxxxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx Xxxxxxx
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
If
to the
Issuer, to:
Foamex
International Inc.
0000
Xxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxxx, Esq.
Executive
Vice President
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
With
a
copy to:
Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Facsimile
No.: 000 000 0000
Telephone
No.: 000 000 0000
(b) Each
holder, by written notice given to the Issuer in accordance with this Section
3.5 may change the address to which notices, other communications or documents
are to be sent to such holder. All notices, other communications or documents
shall be deemed to have been duly given: (i) at the time delivered by hand,
if
personally delivered; (ii) when receipt is acknowledged in writing by addressee,
if by facsimile transmission; (iii) five business days after having been
deposited in the mail, postage prepaid, if mailed by first class mail; (iv)
when
receipt is acknowledged, if transmitted by facsimile transmission or by
electronic mail; and (v) on the first business day with respect to which
a
reputable air courier guarantees delivery; provided,
however,
that
notices of a change of address shall be effective only upon
receipt.
22
3.6. Successors,
Assigns and Transferees.
(a) The
registration rights of any holder under this Agreement with respect to any
Registrable Securities may be transferred and assigned, provided,
however,
that no
such transfer or assignment shall be binding upon or obligate the Issuer
to any
such assignee unless and until the Issuer shall have received notice of such
assignment as herein provided and a written agreement of the assignee to
be
bound by the provisions of this Agreement. Any transfer or assignment made
other
than as provided in the first sentence of this Section 3.6 shall be null
and
void.
(b) This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.
3.7. Governing
Law; Service of Process; Consent to Jurisdiction.
(a)
This agreement shall be governed by and construed in accordance with the
laws of
the State of New York applicable to agreements made and to be performed within
the state.
(b) To
the
fullest extent permitted by applicable law, each party hereto (i) agrees
that
any claim, action or proceeding by such party seeking any relief whatsoever
arising out of, or in connection with, this Agreement or the transactions
contemplated hereby shall be brought only in the United States District Court
for the Southern District of New York and in any New York State court located
in
the Borough of Manhattan and not in any other State or Federal court in the
United States of America or any court in any other country, (ii) agrees to
submit to the exclusive jurisdiction of such courts located in the State
of New
York for purposes of all legal proceedings arising out of, or in connection
with, this Agreement or the transactions contemplated hereby and (iii)
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(c) The
parties hereto hereby irrevocably waive, to the fullest extent permitted
by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement.
3.8. Headings.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation
of
this Agreement.
3.9. Severability.
Whenever possible, each provision or portion of any provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law but if any provision or portion of any provision of this Agreement is
held
to be invalid, illegal or unenforceable in any respect under any applicable
law
in any jurisdiction, such invalidity, illegality or unenforceability will
not
affect any other provision or portion of any provision in such jurisdiction,
and
this agreement will be reformed, construed and enforced in such jurisdiction
as
if such invalid, illegal or unenforceable provision or portion of any provision
had never been contained therein.
3.10. Amendment;
Waiver.
(a) This
Agreement may not be amended or modified and waivers and consents to departures
from the provisions hereof may not be given, except by an instrument or
instruments in writing making specific reference to this Agreement and signed
by
the Issuer and the holders of a majority of Registrable Securities of each
class
then outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment, modification, waiver
or
consent authorized by this Section 3.10(a), whether or not such Registrable
Securities shall have been marked accordingly.
23
(b) The
waiver by any party hereto of a breach of any provision of this Agreement
shall
not operate or be construed as a further or continuing waiver of such breach
or
as a waiver of any other or subsequent breach. Except as otherwise expressly
provided herein, no failure on the part of any party to exercise, and no
delay
in exercising, any right, power or remedy hereunder, or otherwise available
in
respect hereof at law or in equity, shall operate as a waiver thereof, nor
shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.
3.11. Counterparts.
This
Agreement may be executed in any number of separate counterparts and by the
parties hereto in separate counterparts each of which when so executed shall
be
deemed to be an original and all of which together shall constitute one and
the
same agreement.
24
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed as of the date first written above.
Name:
/s/
Xxxxxx
Xxxxxx
Title:
Authorized
Signatory
XXXXXXX,
XXXXX & CO.
Name:
/s/
Xxxxxx
Xxxxxx
Title:
Managing
Director
SIGMA
CAPITAL ASSOCIATES, LLC
By
Sigma Capital Management, LLC
Name:
/s/
Xxxxx X.
Xxxxxxxx
Title:
Authorized
Signatory
|
PAR
IV MASTER FUND, LTD.
Name:
/s/
Xxxxxx X.
Xxxxx
Title:
Director
SUNRISE
PARTNERS LIMITED PARTNERSHIP
Name:
/s/
Xxxxxxx X.
Xxxxxxx
Title:
Vice
President
|
FOAMEX
INTERNATIONAL INC.
Name:
/s/
Xxxxxxx X.
Xxxxxxxxx
Xxxxx:
EVP
& General Counsel