Exhibit 10.33
EXECUTION COPY
WARRANTHOLDERS RIGHTS AGREEMENT
WARRANTHOLDERS RIGHTS AGREEMENT dated as of July 13, 1994 among WG,
Inc., a Delaware corporation (together with its successors, "Holdings"), the
stockholders of Holdings listed on the signature pages hereof (collectively, the
"Investors") (the Investors together with any holder of Conversion Shares (as
defined herein) and such other stockholders of Holdings as may, from time to
time, become parties to this Agreement in accordance with the provisions hereof,
the "Stockholders") and the holders of the Warrants (as defined herein) listed
on the signature pages hereof (such Warrantholders and such other warrantholders
of Holdings as may, from time to time, become parties to this Agreement in
accordance with the provisions hereof, the "Warrantholders").
WHEREAS on the date hereof, the Investors purchased from Holdings
and are the beneficial owners of 481,250 shares of Class A Common Stock (as
defined herein), and the Warrantholders listed on the signature pages hereof
purchased and are the beneficial owner of the Warrants (as defined herein) to
purchase 114,773 shares of Class C Common Stock; and
WHEREAS Holdings and each Stockholder (other than the holders of the
Conversion Shares) wish to provide to the Warrantholders and the holders of the
Conversion Shares the rights described herein;
NOW THEREFORE the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Unless otherwise defined herein, the
following terms used in this Agreement shall have the meanings specified below.
"Affiliate" means, with respect to any Person, any of (i) a director
or executive officer of such Person, (ii) a spouse, parent, sibling or
descendant of such Person (or a spouse, parent, sibling or descendant of any
director or executive officer of such Person) and (iii) any other Person (other
than Holdings or any Subsidiary of Holdings) that, directly or indirectly,
controls, or is controlled by or is under common control with such Person. For
the purpose of this definition, "control" (including the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities or by contract or agency or
otherwise.
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"Class A Common Stock" means the Class A common stock of Holdings,
no par value per share.
"Class B Common Stock" means the Class B common stock of Holdings,
no par value per share.
"Class C Common Stock" means the Class C common stock of Holdings,
no par value per share .
"Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the Class A Common Stock, the Class B Common
Stock or the Class C Common Stock, or any combination of the foregoing, as the
context may require.
"Conversion Shares" means (i) any shares of Class C Common Stock or
other securities issued or issuable upon the exercise of any Warrants and (ii)
any securities issued or issuable with respect to any of such shares or other
securities referred to in clause (i) upon the conversion thereof into other
securities (including Class A Common Stock) or by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise; provided that any of such
securities shall cease to be Conversion Shares when such securities shall have
(x) been disposed of pursuant to a Public Sale or (y) ceased to be outstanding.
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"Credit Agreement" means the Credit Agreement dated as of July 13,
1994 among WG Apparel, Inc., Holdings, the lenders named therein and Nations
Financial Capital Corporation, as Agent, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934 shall include a
reference to the comparable section, if any, of any such successor Federal
statute.
"Fair Market Value" as at any date of determination means the price
of as of such date that would be obtained in an arm's length free market
transaction between a willing seller and a willing and able buyer, neither of
whom is under undue pressure to complete the transaction.
"Initial Public Offering" means the first registration of an
offering of shares of Common Stock under the Securities Act which becomes
effective (other than by a registration on Form S-4 or S-8 or any successor or
similar forms).
"Initiating Holders" has the meaning set forth in Section 3.1
hereof.
"Investors Shareholder Agreement" means the Investors Shareholder
Agreement dated as of July 13, 1994 among Holdings and the stockholders of
Holdings named therein, including the Investors.
"Other Shares" has the meaning set forth in Section 3.1.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or a subdivision thereof
or a governmental agency.
"Public Sale" means any sale of Common Stock to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
successor provision then in effect) adopted under the Securities Act.
"Qualified IPO" means an Initial Public Offering,
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the net proceeds to Holdings of which equal or exceed $20,000,000.
"Registrable Securities" means any Conversion Shares until the date
(if any) on which such Conversion Shares shall have been transferred or
exchanged and new certificates for them not bearing a legend restricting further
transfer shall have been delivered by Holdings and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force.
"Registration Expenses" means all expenses incident to Holdings'
performance of or compliance with Sections 3.1 through 3.5 hereof, including (i)
all registration, filing and NASD fees, (ii) all fees and expenses of complying
with securities or blue sky laws, (iii) all word processing, duplicating and
printing expenses, (iv) all messenger and delivery expenses, (v) the fees and
disbursements of counsel for Holdings and of its independent public accountants,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, (vi) premiums and other costs
of policies of insurance (if any) against liabilities arising out of the public
offering of the Registrable Securities being registered if Holdings desires such
insurance and (vii) any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, but not including underwriting discounts
and commissions and transfer taxes, if any, provided that, in any case where
Registration Expenses are not to be borne by Holdings, such expenses shall not
include (1) salaries of Holdings personnel or general overhead expenses of
Holdings, (2) auditing fees, (3) premiums or other expenses relating to
liability insurance required by underwriters of Holdings or (4) other expenses
for the preparation of financial statements or other data, to the extent that
any of the foregoing (1) through (4) is normally prepared by Holdings in the
ordinary course of its business or would have been incurred by Holdings had no
public offering taken place.
"Regulation Y Holder" means any Warrant Securityholder that is a
bank holding company within the meaning of the BHC Act, or a subsidiary thereof
subject to Regulation Y under the BHC Act.
"Regulatory Change" means, with respect to any Regulation Y Holder,
(i) any change on or after the date hereof in United States federal or state or
foreign laws or regulations (including the BHC Act and Regulation Y
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thereunder); (ii) the adoption on or after the date hereof of any interpretation
or ruling applying to a class of Persons including such Regulation Y Holder
under any United States federal or state or foreign laws or regulations by any
court or governmental or regulatory authority charged with the interpretation or
administration thereof; or (iii) the modification on or after the date hereof of
any agreement or commitment of any such governmental or regulatory authority
that is applicable to or binding upon such Regulation Y Holder.
"Restricted Securities" means the Warrants, the Conversion Shares
and any securities obtained upon exchange for or upon conversion or transfer of
or as a distribution on Warrants, the Conversion Shares or any such securities
(including any notes issued upon redemption of the Warrants pursuant to Section
5.2(c) thereof); provided that particular securities shall cease to be
Restricted Securities when such securities shall have (x) been disposed of
pursuant to a Public Sale, (y) been otherwise transferred or exchanged and new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by Holdings and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force or (z) ceased to be outstanding. Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the issuer thereof or its transfer agent,
without expense (other than transfer taxes, if any), new securities of like
tenor not bearing a legend of the character set forth in Section 2.2.
"Securities Act" means the Securities Act of 1933, 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. Reference to a particular section of
the Securities Act of 1933 shall include a reference to the comparable section,
if any, of any such similar Federal statute.
"Stockholder" has the meaning set forth in the introductory
paragraph.
"Substantial Sale" means a transfer of Common Stock by Transferor
(as defined in Section 2.4) or its Affiliates if, after giving effect thereto,
such Transferor and its Affiliates will be the beneficial owners of less than
50% of the equity interest in the Company beneficially owned by such Transferor
and its Affiliates as of the "Closing Date" (as such term is defined in the
Credit
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Agreement).
"Warrant Securityholder" means at any time any Warrantholder or any
holder of Conversion Shares.
"Warrantholders" has the meaning set forth in the introductory
paragraph (and for purposes of Section 2.8 shall include any Person that held
Warrants that were redeemed pursuant to Section 5.3 of the Warrants).
"Warrants" means the Warrant or Warrants originally issued pursuant
to the Credit Agreement, as such Warrants may be transferred or otherwise
assigned, but only to the extent not theretofore exercised, redeemed or expired
in accordance with their respective terms.
"WGI Shareholder Agreement" means the Stockholders Agreement dated
as of July 13, 1994 among Holdings, the Seller and Xxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxx, Xxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxx.
All references herein to "days" shall mean calendar days unless
otherwise specified.
ARTICLE II
TRANSFER OF SHARES;
PAYMENTS TO WARRANT SECURITYHOLDERS
SECTION 2.1 General. Except as otherwise provided in this Agreement
or by law and subject to Section 2.6 hereof, each Stockholder may transfer its
shares of Common Stock at any time to any Person.
SECTION 2.2 Restrictions on Transfer; Legend on Certificates. (a)
Except as otherwise provided in this Agreement, Restricted Securities shall not
be transferable except (i) pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to Rule 144 or 144A (or any successor
provisions) under the Securities Act or (iii) pursuant to a transaction that is
otherwise exempt from the registration requirements of the Securities Act.
(b) Unless otherwise expressly provided herein, each certificate for
Restricted Securities and each certificate issued in exchange for or upon
transfer of any thereof shall be stamped or otherwise imprinted with a
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legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR SALE
UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AND HAVE THE BENEFIT
OF A WARRANTHOLDERS RIGHTS AGREEMENT DATED AS OF JULY 13, 1994 AMONG WG,
INC. AND THE STOCKHOLDERS AND WARRANTHOLDERS PARTIES THERETO, COPIES OF
WHICH ARE ON FILE WITH WG, INC."
(c) Any other provision of this Agreement to the contrary
notwithstanding, no transfer of any Restricted Securities other than pursuant to
a Public Sale may be made to any Person unless such Person shall have agreed in
writing that such Person, as a holder of Restricted Securities, and the
Restricted Securities it acquires shall be bound by and be entitled to the
benefits of all the provisions of this Agreement applicable to such Restricted
Securities (and upon such agreement such Person shall be entitled to such
benefits). Any purported transfer of Restricted Securities without compliance
with the applicable provisions of this Agreement shall be void and of no effect,
and the purported transferee shall have no rights as a Warrantholder or
Shareholder (as applicable) or under this Agreement. In the event of such
non-complying transfer, Holdings shall not transfer any such Restricted
Securities on its books or recognize the purported transferee as a shareholder
or warrantholder, as the case may be, for any purpose, until all applicable
provisions of this Agreement have been complied with.
SECTION 2.3 Permitted Transfers. The restrictions on transfer
provided in Section 2.2(a) shall not be applicable to (i) any transfer in
compliance with federal and all applicable state securities laws to an Affiliate
of the holder of Restricted Securities, from an Affiliate of such holder to such
holder or between Affiliates of such holder (if any such Affiliate to whom
shares of Restricted Securities have been transferred by a holder thereof ceases
to be an Affiliate of such holder of Restricted Securities, such Restricted
Securities shall immediately be transferred back to the transferor thereof),
(ii) any transfer upon the death of any holder of Restricted Securities to such
holder's executors, administrators or testamentary trustees or (iii) any
transfer to a trust the
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beneficiaries of which include only the holder of such Restricted Securities or
such holder's spouse, parents, siblings or descendants (any transferee referred
to in (i), (ii) or (iii) above being referred to herein as a "Permitted
Transferee"); provided that no such transfer shall be made to any Permitted
Transferee unless such Permitted Transferee shall have agreed in writing that
such Permitted Transferee, as a Stockholder or Warrantholder (as the case may
be), and the shares of Common Stock or Warrants it acquires shall be bound by
and be entitled to the benefits of all the provisions of this Agreement
applicable to Common Stock or Warrants (as the case may be), and upon such
agreement such Permitted Transferee shall be entitled to such benefits.
SECTION 2.4 Tag-Along Rights. If at any time or from time to time
prior to a Qualified IPO, any Investor or any Affiliate of such Investor (any
such Person for purposes of this Section 2.4, the "Transferor") wishes to
transfer its shares of Common Stock or any portion thereof to any Person (the
"Transferee"), the Transferor shall first give to Holdings and each Warrant
Securityholder (pursuant to a list provided by Holdings) a written notice (a
"Transfer Notice"), executed by it and the Transferee and containing (i) the
number of shares of Common Stock that the Transferee proposes to acquire from
the Transferor, (ii) the name and address of the Transferee, (iii) the proposed
purchase price, terms of payment and other material terms and conditions of such
proposed transfer, (iv) an estimate, in the Transferor's reasonable judgment, of
the fair market value of any non-cash consideration offered by the Transferee
and (v) an offer by the Transferee or Transferor to purchase, upon the purchase
by the Transferee of any shares of Common Stock owned by the Transferor and for
the same per share consideration, that number of Conversion Shares (or if such
number is not an integral number, the next integral number which is greater than
such number) of each Warrant Securityholder which shall be the product of (x)
the aggregate number of Conversion Shares either then owned, or issuable upon
exercise of Warrants then owned, by such Warrant Securityholder and (y) a
fraction, the numerator of which shall be the number of shares of Common Stock
indicated in the Transfer Notice as subject to purchase by the Transferee and
the denominator of which shall be the sum of (A) the total number of shares of
Common Stock then owned by the Transferor and its Affiliates plus (B) the total
number of Conversion Shares either then owned, or issuable upon exercise of
Warrants then owned, by each Warrant Securityholder, provided that if such
Transfer Notice relates to a Substantial Sale by such Transferor, such offer
shall be to purchase (x) all shares of Conversion
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Shares then owned, or issuable upon exercise of the Conversion Shares then
owned, or issuable upon exercise of the Warrants then owned, by such Warrant
Securityholder at the same per share consideration (subject to Section 2.5).
Each Warrant Securityholder shall have the right, for a period of 20 days after
the Transfer Notice is given, to accept such offer in whole or in part,
exercisable by delivering a written notice to the Transferor and Holdings within
such 20-day period (an "Acceptance Notice"), stating therein the number of
shares of Common Stock (which may be the number of shares set forth in the offer
by the Transferor or Transferee, as the case may be, or a portion thereof) to be
sold by such Warrant Securityholder to the Transferor or Transferee, as the case
may be. Prior to the earlier of (x) the end of such 20-day period (such period,
the "Waiting Period") or (y) the acceptance or rejection by each Warrant
Securityholder of the Transferee's or Transferor's offer, as the case may be, or
if, the provisions of Section 2.5 shall apply, prior to the determination of the
Fair Market Value of the non-cash consideration pursuant to such Section 2.5,
neither the Transferor nor its Affiliates will complete any sale of shares of
Common Stock to the Transferee. Thereafter, for a period of 60 days after the
prohibition under the preceding sentence shall have terminated, the Transferor
may sell to the Transferee for the consideration stated and on the terms set
forth in the Transfer Notice the shares of Common Stock stated in the Transfer
Notice as subject to purchase by the Transferee, provided that the Transferor or
Transferee, as the case may be, shall simultaneously purchase the number of
shares of Common Stock as calculated above from those Warrant Securityholders
who have accepted the Transferor's or Transferee's offer, as the case may be.
The provisions of this Section 2.4 shall not apply to (i) transfers between the
Transferor and any of its Affiliates or between Affiliates of the Transferor;
provided that if any such Affiliate to which a transfer is made in reliance on
this clause (i) ceases to be an Affiliate, the Common Stock so transferred shall
be immediately transferred back to the Transferor or (ii) to the sale by the
trustee of the Holdings ESOP of Common Stock to Holdings pursuant to the
Holdings ESOP.
SECTION 2.5 Non-Cash Consideration. If a Transfer Notice relating to
a Substantial Sale indicates that the purchase price for the Transferor's stock
is to be paid, in whole or in part, other than in cash, then the Warrant
Securityholders that submit Acceptance Notices (the "Selling Holders") may elect
to be paid cash in lieu of, and in an amount equal to the cash Fair Market Value
of, such
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non-cash consideration. In the event that the Selling Holders who have elected
to sell a majority of the shares of Common Stock, as indicated in the Acceptance
Notices (the "Majority Sellers"), and the Transferor fail to agree on the cash
Fair Market Value of any such non-cash consideration within five days after the
end of the Waiting Period, then within a further five days the Transferor and
the Majority Sellers shall deliver to the other its final estimate of such cash
Fair Market Value; provided, that if either of them shall fail to deliver such
an estimate, the estimate made by the other shall be conclusive and binding. If
the higher determination of such two is not greater than 110% of the lower
determination, then the cash Fair Market Value of any such non-cash
consideration shall be the average of such two determinations. If the higher
determination of such two is greater than 110% of the lower determination, then
the Transferor and the Majority Sellers shall, within five Business Days,
jointly select a nationally recognized investment banking firm which shall,
within ten Business Days of its appointment, select the determination of cash
Fair Market Value which it considers to be most accurate, provided, that if the
Transferor and the Majority Sellers cannot agree on such investment banking
firm, each of them shall, within such five Business Day period, select a
nationally recognized investment banking firm that is not an Affiliate of the
Transferor, any Selling Holder or the Transferee and such two investment banking
firms shall jointly select, within a further five Business Day period, a third
nationally recognized investment banking firm that is not an Affiliate of the
Transferor, any Selling Holder or the Transferee, which firm shall make such
determination, provided further, however, that if either the Transferor or the
Majority Sellers shall fail to select such an investment banking firm, such
determination shall be made by the investment baking firm selected by the other.
The Majority Sellers, jointly and severally, or the Transferor, depending on
whose estimate of cash Fair Market Value is not selected as most accurate, shall
pay the fees of any such investment baking firm that is chosen to make the
determination of cash Fair Market Value. Any determination of the cash Fair
Market Value pursuant to this Section, including by agreement of the Majority
Sellers and the Company, failure to take action as aforesaid or determination of
an investment baking firm, shall be final and binding on the Company and all
Selling Holders.
SECTION 2.6 Common Stockholders' Agreements. In addition to any
other restrictions on transfer provided for herein, the transfer of shares of
Common Stock owned by the Investors shall be subject to the terms and provisions
of
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the Investors Shareholders Agreement and the WGI Shareholder Agreement.
SECTION 2.7. Restrictions on Transfer by Regulation Y Holders. (a)
No Regulation Y Holder may transfer any Warrant or any Conversion Shares;
provided that such Regulation Y Holder may transfer such Warrant or Conversion
Shares, (i) to Holdings; (ii) to the public in an offering registered under the
Securities Act; (iii) in a transaction pursuant to Rule 144 or Rule 144A (or any
successor provisions) under the Securities Act or otherwise exempt from the
registration requirements of the Securities Act in which no single purchaser
receives an interest (treating any such Warrant as exercised and any Class C
Common Stock as converted to Class A Common Stock) equivalent to more than two
percent of the outstanding Class A Common Stock; or (iv) in a single transaction
to a third party who acquires at least a majority of the Common Stock without
regard to the transfer of such Warrant or Conversion Shares. In the event of a
Regulatory Change, the effect of which is to permit such Regulation Y Holder to
transfer such Warrant or Conversion Shares in any other manner, the foregoing
proviso shall be deemed modified to permit a transfer of such Warrant or
Conversion Shares in such other manner.
(b) Nothing in Sections 2.4, 2.5 or 2.6 of this Agreement shall
require any Regulation Y Holder to make a transfer of Warrants or Conversion
Shares in a manner not permitted by Section 2.7(a) (an "Impermissible
Transfer"). If Sections 2.4, 2.5 or 2.6 of this Agreement would otherwise
require any Regulation Y Holder to make an Impermissible Transfer as a condition
precedent to making a transfer of Warrants or Conversion Shares in a manner
permitted by Section 2.7(a) (a "Permissible Transfer"), then such Regulation Y
Holder shall not be required to make such Impermissible Transfer as a condition
precedent to making such Permissible Transfer.
SECTION 2.8 Adjustment Event Fee. If on or prior to the date nine
months after the redemption of the outstanding Warrants pursuant to Section 5.3
thereof, (i) Holdings completes an Initial Public Offering, (ii) an event
described in clause (k) of Section 9.01 of the Credit Agreement resulting from
the sale of Common Stock shall have occurred and be continuing or (iii) Common
Stock constituting more than 25% of the Common Stock (on a Fully Diluted Basis
(as defined in the Warrants)) is sold to any Person or Persons (other than a
Person that is an Affiliate of Holdings prior to the consummation of such sale
of sales)
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as part of a single sale or series of sales (each of the foregoing events being
herein called an "Adjustment Event"), then Holdings shall pay to each Warrant
Securityholder as additional compensation an amount equal to (a) the product of
(x) the difference between the weighted average price per share paid or to be
paid by Persons purchasing Common Stock in connection with such Adjustment Event
(less underwriting commissions and other appropriate costs and expenses) less
the Optional Redemption Price (as defined in the Warrants) (determined on a per
share basis) paid to such holder multiplied by (y) the number of shares of
Non-Voting Common Stock that such Warrant Securityholder would have been
entitled to purchase upon exercise of such Warrants less (b) the interest earned
by such Warrant Securityholder on the aggregate Optional Redemption Price
received by it from the date of receipt of such Optional Redemption Price to and
including the date of receipt of such additional compensation, determined at a
rate per annum announced by NationsBank of North Carolina, N.A. from time to
time as its prime rate (calculated on the basis of a 360-day year for the actual
number of days elapsed).
ARTICLE III
REGISTRATION RIGHTS
SECTION 3.1 Registration on Request. (a) At any time or from time to
time after the date of consummation of an Initial Public Offering, upon the
written request of the holder or holders of a majority of all outstanding
Conversion Shares and Warrants (such majority determined, for purposes of this
Section 3.1, by calculating the number of Conversion Shares for which such
Warrants are then exercisable) (the "Initiating Holders"), requesting that
Holdings effect the registration under the Securities Act of all or part of such
Initiating Holders' Registrable Securities and specifying the intended method of
disposition thereof, Holdings will promptly give written notice of such
requested registration to all holders of Warrants and Registrable Securities,
and thereupon Holdings will use its best efforts to effect the registration
under the Securities Act of:
(i) the Registrable Securities which Holdings has been so requested
to register by such Initiating Holders for disposition in accordance with
the intended method of disposition stated in such request;
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(ii) all other Registrable Securities the holders of which shall have
made a written request to Holdings for registration thereof within 30 days
after the giving of such written notice by Holdings (which request by the
holder of such other Registrable Securities shall specify the intended
method of disposition of such Registrable Securities); and
(iii) all shares of Common Stock which Holdings may elect to register
in connection with the offering of Registrable Securities pursuant to this
Section 3.1, whether for its own account or for the account of a holder of
Common Stock,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any, to be so registered, provided that
the Warrant Securityholders as a class shall be entitled to not more than one
registration upon request pursuant to this Section 3.1.
(b) Registrations under this Section 3.1 shall be on such
appropriate registration form of the Commission (i) as shall be selected by
Holdings and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
their request for such registration. Holdings agrees to include in any such
registration statement all information which holders of Registrable Securities
being registered shall reasonably request.
(c) Holdings will pay all Registration Expenses in connection with
one registration requested pursuant to this Section 3.1, provided that no
registration upon request pursuant to which less than 50% of the Registrable
Shares requested to be registered by such Initiating Holders are registered and
sold shall be counted as a requested registration for purposes of this Section
3.1. The Registration Expenses (and underwriting discounts and commissions and
transfer taxes, if any allocable to the Registrable Shares requested to be
registered by the Initiating Holders) in connection with each other registration
requested under this Section 3.1 shall be paid for by the Initiating Holders
requesting such registration.
(d) A registration requested pursuant to this Section 3.1 shall not
be deemed to have been effected (i) unless a registration statement with respect
thereto has become effective; provided that a registration which does
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not become effective after Holdings has filed a registration statement with
respect thereto solely by reason of the refusal to proceed by the Initiating
Holders (other than a refusal to proceed based upon the advice of counsel
relating to a matter with respect to Holdings) shall be deemed to have been
effected by Holdings at the request of the Initiating Holders unless the
Initiating Holders shall have elected to pay all Registration Expenses in
connection with such registration, (ii) if, after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason, other than by reason of some act or omission by any Warrantholder or
Warrant Securityholder, or (iii) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied, other than by reason of some act or
omission by any Warrantholder or Warrant Securityholder.
(e) If a requested registration pursuant to this Section 3.1
involves an underwritten offering, the underwriter or underwriters thereof shall
be selected by the holders of at least a majority (by a number of shares) of the
Registrable Securities as to which registration has been requested and shall be
reasonably acceptable to Holdings.
(f) If a requested registration pursuant to this Section 3.1
involves an underwritten offering, and the managing underwriter shall advise
Holdings (with a copy of any such notice to each holder of Registrable
Securities requesting registration) that, in its opinion, the number of
securities requested to be included in such registration (including securities
proposed to be sold for the account of Holdings) exceeds the number which can be
sold in such offering within a price range acceptable to the Initiating Holders,
Holdings will include in such registration, to the extent of the number which
Holdings is so advised can be sold in such offering, (i) first, Registrable
Securities requested to be included in such registration by the holder or
holders of Registrable Securities, pro rata among such holders requesting such
registration on the basis of the number of such securities requested to be
included by such holders, (ii) second, all shares proposed to be included by
Holdings in such registration and (iii) third, all shares other than Registrable
Shares (any such shares with respect to any registration, "Other Shares")
requested to be included in such registration by the holder or holders thereof.
SECTION 3.2 Incidental Registration. (a) If
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Holdings at any time proposes to register any of its securities under the
Securities Act (other than (x) by a registration on Form S-4 or S-8 or any
successor or similar forms or (y) pursuant to Section 3.1) whether for its own
account or for the account of the holder or holders of any Other Shares, it will
each such time give prompt written notice to all Warrant Securityholders of its
intention to do so and of such holders' rights under this Section 3.2. Upon the
written request of any such holder made within 20 days after the receipt of any
such notice (which request shall specify the Registrable Securities intended to
be disposed of by such holder and the intended method of disposition thereof),
Holdings will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which Holdings has been so
requested to register by the holders thereof, to the extent requisite to permit
the disposition (in accordance with the intended methods thereof as aforesaid)
of the Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the securities
which Holdings proposes to register; provided that 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, Holdings shall determine for any reason either not to register or
to delay registration of such securities, Holdings may, at its election, give
written notice of such determination to each holder of Registrable Securities
and, thereupon, (i) 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 (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any Warrant Securityholder or Warrant Securityholders entitled to do so to
request that such registration be effected as a registration under Section 3.1,
and (ii) 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. No registration effected under this
Section 3.2 shall relieve Holdings of its obligation to effect any registration
upon request under Section 3.1, nor shall any such registration hereunder be
deemed to have been effected pursuant to Section 3.1. Holdings will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 3.2.
(b) If Holdings at any time proposes to register any of its
securities under the Securities Act as
15
contemplated by Section 3.2 and such securities are to be distributed by or
through one or more underwriters, Holdings will, if requested by any holder of
Registrable Securities as provided in this Section 3.2, use its best efforts to
arrange for such underwriters to include all the Registrable Securities to be
offered and sold by such holder among the securities to be distributed by such
underwriters, provided that if the managing underwriter of such underwritten
offering shall inform Holdings and holders of the Registrable Securities
requesting such registration and all other holders of any other shares of Common
Stock which shall have exercised, in respect of such underwritten offering,
registration rights comparable to the rights under this Section 3.2 by letter of
its belief that inclusion in such distribution of all or a specified number of
such securities proposed to be distributed by such underwriters would interfere
with the successful marketing of the securities being distributed by such
underwriters (such letter to state the basis of such belief and the approximate
number of such Registrable Securities and such Other Shares proposed so to be
registered which may be distributed without such effect), then Holdings may,
upon written notice to all holders of such Registrable Securities and holders of
such Other Shares, reduce pro rata (if and to be extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities and Other Shares the registration of which shall have
been requested by each holder thereof so that the resultant aggregate number of
such Registrable Securities and Other Shares so included in such registration,
together with the number of securities to be included in such registration for
the account of Holdings, shall be equal to the number of shares stated in such
managing underwriter's letter.
SECTION 3.3 Registration Procedures. (a) If and whenever Holdings is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1 and 3.2, Holdings shall, as
expeditiously as possible:
(i) prepare and (within 90 days after the end of the period within
which requests for registration may be given to Holdings or in any event
as soon thereafter as possible; provided that, in the case of a
registration pursuant to Section 3.1, such filing to be made within 90
days after the initial request of an Initiating Holder of Registrable
Securities or in any event as soon thereafter as possible) file with the
Commission the requisite registration statement to
16
effect such registration (including such audited financial statements as
may be required by the Securities Act) and thereafter use its best efforts
to cause such registration statement to become and remain effective;
provided further that Holdings may discontinue any registration of its
securities which are not Registrable Securities at any time prior to the
effective date of the registration statement relating thereto; provided
further that before filing such registration statement or any amendments
thereto, Holdings will furnish to the counsel selected by the holders of
Registrable Securities which are to be included in such registration
copies of all such documents proposed to be filed, which documents will be
subject to the timely review of such counsel;
(ii) 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 and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement until the earlier of (x) in the case of a
registration pursuant to Section 3.1, the expiration of 120 days after
such registration statement becomes effective, or (y) in the case of a
registration pursuant to Section 3.2, the expiration of 90 days after such
registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as
such seller and underwriter, if any, may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities owned by such seller;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under blue sky or
17
similar laws of such jurisdictions as any seller thereof and any
underwriter of the securities being sold by such seller shall reasonably
request, to keep such registrations or qualifications in effect for so
long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such
seller and underwriter to consummate the disposition in such jurisdictions
of the securities owned by such seller, except that Holdings shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of
(x) an opinion of counsel for Holdings, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date
of the closing under the underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(y) on a best efforts basis, a "cold comfort" letter in
customary form, dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, a letter dated the date of the closing under the
underwriting agreement), signed by the independent public
accountants who have certified Holdings' financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants'
18
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and
in accountants' letters delivered to the underwriters in underwritten
public offerings of securities;
(vii) notify the holders of Registrable Securities and the managing
underwriter or underwriters, if any, promptly and confirm such advice in
writing promptly thereafter:
(A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(B) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration or the initiation
of any proceedings by any Person for that purpose; and
(D) of the receipt by Holdings of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(viii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon Holdings'
discovery that, or upon the happening of any event as a result of which,
the prospectus included 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 such seller promptly prepare and
furnish to such seller and each underwriter, if any, a reasonable number
of copies of a supplement to or an
19
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(ix) make every reasonable effort to obtain the withdrawal of any
order of which Holdings has knowledge suspending the effectiveness of the
registration statement at the earliest possible moment;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar quarter after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
(xi) make available for inspection by a representative of the
holders of Registrable Securities participating in the offering, any
underwriter participating in any disposition pursuant to the registration
and any attorney or accountant retained by such selling holders or
underwriter (each, an "Inspector"), all financial and other records,
pertinent corporate documents and properties of Holdings (the "Records"),
and cause Holdings' officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection with
such registration; provided that Holdings shall not be required to comply
with this subdivision (xi) if there is a reasonable likelihood, in the
judgment of Holdings, that such delivery could result in the loss of any
attorney-client privilege related thereto; and provided further that
Records which Holdings determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors (other than to any holder of Registrable Securities
participating in the offering) unless (x) such Records have become
generally available to the public or (y) the disclosure of such Records
may be necessary or appropriate (A) to comply with any law, rule,
regulation or order applicable to any such Inspectors or holder of
Registrable Securities, (B) in response to
20
any subpoena or other legal process or (C) in connection with any
litigation to which such Inspectors or any holder of Registrable
Securities is a party (provided that Holdings is provided with reasonable
notice of such proposed disclosure and a reasonable opportunity to seek a
protective order or other appropriate remedy with respect to such
Records);
(xii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
Registration Statement;
(xiii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the Common Stock is then listed and, if not so listed, to be listed
on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use its best efforts to secure designation of
all such Registrable Securities covered by such registration statement as
a NASDAQ "national market system security" within the meaning of Rule
11Aa2-1 of the Securities and Exchange Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable
Securities with the NASD; and
(xiv) use its best efforts to provide a CUSIP number for the
Registrable Securities, not later than the effective date of the
registration.
Holdings may require each seller of Registrable Securities as to which any
registration is being effected to furnish Holdings such information regarding
such seller and the distribution of such securities as Holdings may from time to
time reasonably request in writing for purposes of preparing the relevant
registration statement and amendments and supplements thereto.
(b) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from Holdings of
the occurrence of any event of the kind described in subdivision (viii) of
Section 3.3(a), such holder will forthwith discontinue such holder's disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable
21
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by subdivision (viii) of Section 3.3(a). In the
event Holdings shall give any such notice, the periods specified in subdivision
(ii) of Section 3.3(a) shall be extended by the length of the period from and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received such notice to the date on which
each such seller has received the copies of the supplemented or amended
prospectus contemplated by subdivision (viii) of Section 3.3(a).
(c) If any such registration or comparable statement refers to any
holder of Registrable Securities by name or otherwise as the holder of any
securities of Holdings, then such holder shall have the right to require, in the
event that such reference to such holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force, the deletion of
the reference to such holder.
SECTION 3.4 Underwritten Offerings. (a) If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 3.1, Holdings will enter into
an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to Holdings, each such holder
and the underwriters, and to contain such representations and warranties by
Holdings and such other terms as are generally prevailing in agreements of such
type, including, without limitation, indemnities to the effect and to the extent
provided in Section 3.5 or otherwise acceptable to Holdings and the underwriters
for such offering. The holders of the Registrable Securities will cooperate with
Holdings in the negotiation of the underwriting agreement.
(b) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any equity securities of Holdings, during the ten days
prior to and the 90 days after the effective date of any underwritten
registration pursuant to Section 3.1 or 3.2 has become effective, except as part
of such underwritten registration, whether or not such holder participates in
such registration, and except as otherwise permitted by the managing underwriter
of such underwriting (if any). Each holder of Registrable Securities agrees that
Holdings may instruct its transfer agent to place stop
22
transfer notations in its records to enforce this Section 3.4(b).
(c) Holdings agrees (x) not to sell, make any short sale of, loan,
grant any option for the purchase of, effect any public sale or distribution of
or otherwise dispose of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the ten days prior
to and the 90 days after the effective date of any registration pursuant to
Section 3.1 or 3.2 has become effective, except (i) as part of such
registration, (ii) pursuant to registrations on Form S-4 or S-8 or any successor
or similar forms thereto or (iii) as otherwise permitted by the managing
underwriter of such offering (if any), and (y) to use all reasonable efforts to
cause each holder of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in each case purchased
from Holdings at any time after the date of this Agreement (other than in a
public offering) to agree not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of such securities during such period except as part of such
underwritten registration.
(d) No Person may participate in any underwritten offering hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved, subject to the terms and
conditions hereof, by the Person or a majority of the Persons entitled to
approve such arrangements and (ii) completes and executes all agreements,
questionnaires, indemnities and other documents (other than powers of attorney)
reasonably required under the terms of such underwriting arrangements; provided
that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to
Holdings or the underwriters other than representations and warranties regarding
such holder and such holder's intended method of distribution.
SECTION 3.5 Indemnification. (a) Holdings agrees to indemnify and
hold harmless each holder of Registrable Securities whose Registrable Securities
are covered by any registration statement, its directors and officers and each
other Person, if any, who controls such holder within the meaning of the
Securities Act, against any losses,
23
claims, damages or liabilities, joint or several, to which any such indemnified
party may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, 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 securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
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
Holdings will reimburse each such indemnified party for any reasonable legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided
that Holdings shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to Holdings by or on behalf of such holder specifically for use in the
preparation thereof. In addition, Holdings shall indemnify any underwriter of
such offering and each other Person, if any, who controls any such underwriter
within the meaning of the Securities Act in substantially the same manner and to
substantially the same extent as the indemnity herein provided to each
Indemnified Party. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such holder.
(b) Each prospective seller of Registrable Securities hereunder
shall indemnify and hold harmless (in the same manner and to the same extent as
set forth in subdivision (a) of this Section 3.5) Holdings, each director of
Holdings, each officer of Holdings and each other person, if any, who controls
Holdings within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereof, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to Holdings by or on behalf of
such seller
24
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of Holdings or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 3.5, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 3.5, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. No indemnified party shall
consent to entry of any judgment or enter into any settlement of any such action
the defense of which has been assumed by an indemnifying party without the
consent of such indemnifying party.
(d) If the indemnification provided for in the preceding
subdivisions of this Section 3.5 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified
25
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such expense, loss, claim, damage or liability (i) in such
proportion as is appropriate to reflect the relative benefits received by
Holdings on the one hand and the holder or underwriter, as the case may be, on
the other from the distribution of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of Holdings on the
one hand and of the holder or underwriter, as the case may be, on the other in
connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by Holdings on the one hand and
the holder or underwriter, as the case may be, on the other in connection with
the distribution of the Registrable Securities shall be deemed to be in the same
proportion as the total net proceeds received by Holdings from the initial sale
of the Registrable Securities by Holdings to the purchaser bear to the gain
realized by the selling holder or the underwriting discounts and commissions
received by the underwriter, as the case may be. The relative fault of Holdings
on the one hand and of the holder or underwriter, as the case may be, on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission to state a
material fact relates to information supplied by Holdings, by the holder or by
the underwriter and parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission; provided that
the foregoing contribution agreement shall not inure to the benefit of any
indemnified party if indemnification would be unavailable to such indemnified
party by reason of the proviso contained in the first sentence of subdivision
(a) of this Section 3.5, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (d) exceed the amount
that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 3.5 had been available under the circumstances.
Holdings and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (d)
were determined by pro rata allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not
26
take account of the equitable considerations referred to in the immediately
preceding paragraph and subdivision (c) of this Section 3.5. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities 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 subdivision (d), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. 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.
SECTION 3.6 Rule 144; Rule 144A. (a) If Holdings shall have filed a
registration statement pursuant to Section 12 of the Exchange Act or a
registration statement pursuant to the Securities Act, Holdings will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder and will take
such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, Holdings will deliver to such holder a written
statement as to whether it has complied with such requirements.
(b) Holdings represents and warrants that as of the date hereof, the
Common Stock is not, and is not part of a class of securities that is, listed on
a national securities exchange registered under Section 6 of
27
the Exchange Act or quoted in an automated inter-dealer quotation system. For so
long as any shares of Registrable Securities are restricted securities within
the meaning of Rule 144(a)(3) under the Securities Act, Holdings covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) of the Exchange Act, make available to any holder of Registrable
Securities in connection with the sale of such holder Registrable Securities and
any prospective purchaser of Registrable Securities from such, in each case upon
request, the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Securities Act.
SECTION 3.7. Other Agreements. (a) Other Registration Rights. Except
as provided in this Agreement and in the WGI Shareholder Agreement, Holdings
shall not grant to any Persons the right to request Holdings to register any
equity securities of Holdings, or any securities convertible or exchangeable
into or exercisable for such securities, without the prior written consent of
the holders of at least 66 2/3% of the Registrable Securities.
(b) No Inconsistent Agreements. Holdings shall not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(c) Adjustments Affecting Registrable Securities. Holdings shall not
take any action, or permit any change to occur, with respect to its securities
which would adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in a registration undertaken
pursuant to this Agreement or which would adversely affect the marketability of
such Registrable Securities in any such registration (including, without
limitation, effecting a stock split or a combination of shares).
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 Notices. All notices and other communications provided
for hereunder shall be dated and in writing and shall be deemed to have been
given (i) if given by telecopy, when such telecopy is transmitted to the
28
telecopy number specified in this Section and telephonic confirmation of receipt
thereof is obtained or (ii) if given by mail, prepaid overnight courier or any
other means, when received at the address specified in this Section or when
delivery at such address is refused. Such notices shall be addressed to the
appropriate party to the attention of the person who executed this Agreement at
the address or telecopy number set forth under such party's signature below (or
to the attention of such other person or to such other address or telecopy
number as such party shall have furnished to each other party in accordance with
this Section 4.1).
SECTION 4.2 Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto or their successors in interest, except as expressly otherwise provided
herein.
SECTION 4.3 Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 4.4 Specific Performance. Without limiting the rights of
each party hereto to pursue all other legal and equitable rights available to
such party for the other parties' failure to perform their obligations under
this Agreement, the parties hereto acknowledge and agree that the remedy at law
for any failure to perform their obligations hereunder would be inadequate and
that each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
SECTION 4.5 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO
29
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PARTY 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. EACH OF THE
PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 4.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF
ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
SECTION 4.6 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
SECTION 4.7 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, 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 contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
SECTION 4.8 Entire Agreement. This Agreement is intended by the
parties hereto as a final and complete expression of their agreement and
understanding in respect to the subject matter contained herein. This Agreement
supersedes all prior agreement and understandings, written or oral, between the
parties with respect to such subject matter.
SECTION 4.9 Amendment and Waiver. Any provision of this Agreement
may be amended if, but only if, such amendment is in writing and is signed by
Holdings and Stockholders and Warrantholders owning, or having Warrants
exercisable for, at least a majority of shares of Common Stock either then
outstanding or issuable upon the exercise of all outstanding Warrants, provided
that no such amendment may adversely affect the rights of any Warrant
Securityholder unless signed by such Warrant Securityholder. Any provision may
be waived if, but only if, such waiver is in writing and is signed by the party
or parties waiving such provision and for whose benefit such provision is
intended.
SECTION 4.10 No Third Party Beneficiaries. Nothing in this Agreement
shall convey any rights upon any person or entity which is not a party or an
assignee of a party to this Agreement.
30
SECTION 4.11 ESOP. If Holdings shall establish an employee stock
ownership plan, in connection therewith and prior to allowing the trustee
thereof to obtain any cash or shares of Common Stock, Holdings shall use its
best efforts to cause such trustee to execute counterparts of this Agreement
under the heading "Stockholders" on the signature page of this Agreement and
deliver the same to the other parties hereto, whereupon the trustee shall be
deemed to be a "Stockholder" for all purposes of this Agreement.
31
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WG, INC.
By /s/ Xxxx X. Xxxxxxx
-------------------------------
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telefax:
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WG, INC.
By
-------------------------------
Title:
Address:
Telefax:
STOCKHOLDERS
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Address: 000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx Xxx, XX 00000
----------------------------------
Name: Xxxx Xxxxxx
Address:
----------------------------------
Name: Xxxxxxx Xxxxx
Address:
----------------------------------
Name: Xxxxx Xxxxx
Address:
/s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Address:
/s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx, as
Trustee of the Xxxx
X. Xxxxxxx Trust
Address:
31
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WG, INC.
By
-------------------------------
Title:
Address:
Telefax:
STOCKHOLDERS
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Address:
/s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Address: 00000 Xxxxxx Xx.
Xxxxxxxxxx, XX 00000
----------------------------------
Name: Xxxxxxx Xxxxx
Address:
----------------------------------
Name: Xxxxx Xxxxx
Address:
----------------------------------
Name: Xxxx X. Xxxxxxx
Address:
----------------------------------
Name: Xxxx X. Xxxxxxx, as
Trustee of the Xxxx
X. Xxxxxxx Trust
Address:
31
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WG, INC.
By
-------------------------------
Title:
Address:
Telefax:
STOCKHOLDERS
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Address: 000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx Xxx, XX 00000
----------------------------------
Name: Xxxx Xxxxxx
Address:
/s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Address: 0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
----------------------------------
Name: Xxxxx Xxxxx
Address:
----------------------------------
Name: Xxxx X. Xxxxxxx
Address:
----------------------------------
Name: Xxxx X. Xxxxxxx, as
Trustee of the Xxxx
X. Xxxxxxx Trust
Address:
31
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
WG, INC.
By
-------------------------------
Title:
Address:
Telefax:
STOCKHOLDERS
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Address:
----------------------------------
Name: Xxxx Xxxxxx
Address:
----------------------------------
Name: Xxxxxxx Xxxxx
Address:
/s/ Xxxxx X. Xxxxx III
as Power of Attorney (attached)
----------------------------------
Name: Xxxxx Xxxxx
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
----------------------------------
Name: Xxxx X. Xxxxxxx
Address:
----------------------------------
Name: Xxxx X. Xxxxxxx, as
Trustee of the Xxxx
X. Xxxxxxx Trust
Address:
31
WARRANTHOLDERS
NATIONS FINANCIAL CAPITAL
CORPORATION
By /s/ [illegible]
-------------------------------
Title:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telefax: 000-000-0000
CONTINENTAL BANK
By
-------------------------------
Title:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
WARRANTHOLDERS
NATIONS FINANCIAL CAPITAL
CORPORATION
By
-------------------------------
Title:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Telefax: 000-000-0000
CONTINENTAL BANK
By /s/ M.E. Xxxxx
-------------------------------
Title: Vice President
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
