EXHIBIT 4.8
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of [_____ __, 200_] among [THL -
Nortek Investors, Inc./Nortek Holdings, Inc.], a Delaware corporation (the
"COMPANY"), Nortek Inc., a Delaware corporation ("NORTEK"), Xxxxxx X. Xxx Equity
Fund V, L.P., Xxxxxx X. Xxx Parallel Fund V, L.P., Xxxxxx X. Xxx Cayman Fund V,
L.P., Xxxxxx X. Xxx Investors Limited Partnership, 1997 Xxxxxx X. Xxx Nominee
Trust, Xxxxxx Investments Holdings, LLC, Xxxxxx Investments Employees'
Securities Company I, LLC, Xxxxxx Investments Employees' Securities Company II,
LLC (collectively, the "THL PARTIES"), the Third Party Investors (as defined in
the Securityholders Agreement (as defined below)) and those employees of the
Company or its subsidiaries listed on Schedule 1 hereto (collectively, the
"MANAGEMENT STOCKHOLDERS"). The THL Parties, the Third Party Investors and the
Management Stockholders are hereinafter referred to collectively as the
"STOCKHOLDERS." Capitalized terms used herein without definition are defined in
Section 10.
WHEREAS, the Stockholders hold shares of common stock, par value [$0.01]
(the "Common Stock") of the Company;
WHEREAS, the Stockholders and the Company are parties to a Securityholders
Agreement dated as of August 27, 2004 (the "Securityholders Agreement") which
provides that, under certain circumstances set forth in Section 7.1 of the
Securityholders Agreement, the parties will enter into this Agreement; and
WHEREAS, the circumstances contemplated by Section 7.1 of the
Securityholders Agreement have occurred.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
1. Registrations Upon Request.
1.1. Requests by the THL Parties.
(a) At any time, the THL Parties, on behalf of the THL Group (as
defined in the Stockholders Agreement), shall have the right to make up to
six (6) separate requests that the Company effect the registration (which
may at the option of the THL Parties be effected as a "shelf registration")
under the Securities Act of the offer and sale of all or a portion of the
Registrable Securities owned by members of the THL Group, each such request
to specify the intended method or methods of disposition thereof; provided,
however, that the Company shall not be required to effect a registration
relating to an underwritten offering pursuant to this Section 1.1 until a
period of 120 days shall have elapsed from the effective date of the most
recent registration relating to an underwritten offering. A request made by
the THL Parties shall not be counted for purposes of the request
limitations set forth above: (a) if the THL Parties, on behalf of the THL
Group, determine in their good faith judgment to withdraw the proposed
registration of the offer and sale of any Registrable Securities requested
to be registered pursuant to this Section 1.1 due to marketing or
regulatory reasons; (b) the registration statement relating to any such
request is not declared effective within 90 days of the date
such registration statement is first filed with the Commission; (c) if,
within 180 days after the registration relating to any such request 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 and the Company fails to have
such stop order, injunction or other order or requirement removed,
withdrawn or resolved to the reasonable satisfaction of the THL Parties
within 30 days after the occurrence of any such interference; (d) if more
than 10% of the Registrable Securities requested by the THL Parties to be
included in the registration are not so included pursuant to Section 1.5;
or (e) the conditions to closing specified in the underwriting agreement or
purchase agreement entered into in connection with the registration
relating to any such request are not satisfied (other than as a result of a
default or breach thereunder by the THL Group). Upon any such request, the
Company will promptly, but in any event within 15 days of such request,
give written notice of such request to all holders of Registrable
Securities and thereupon the Company will, subject to Section 1.5, use its
best efforts to effect the prompt registration under the Securities Act of:
(i) the offer and sale of the Registrable Securities which
the Company has been so requested to register by the THL Parties on
behalf of the THL Group; and
(ii) the offer and sale of all other Registrable Securities
which the Company has been requested to register by the holders
thereof by written request given to the Company by such holders within
15 days after the giving of such written notice by the Company to such
holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or
methods of disposition of the THL Group.
(b) Notwithstanding the foregoing, if the Company shall at any
time furnish to each proposed seller of Registrable Securities a
certificate signed by the President of the Company stating that the Company
has pending or in process a material transaction (including a financing
transaction), the disclosure of which would, in the good faith judgment of
the Board, materially and adversely affect the Company, the Company may
defer the filing (but not the preparation) of a registration statement to
be filed pursuant to this Section 1.1 for up to 60 days (but the Company
shall use its best efforts to complete the transaction and file the
registration statement as soon as possible).
1.2. Request by Xxxxxxx X. Xxxxxx.
(a) Following the later of (i) such time as Xxxxxxx X. Xxxxxx
("RLB") ceases to be CEO (as defined in the Stockholders Agreement) and
(ii) the one year anniversary of an IPO (as defined in the Stockholders
Agreement), RLB shall have the right to make two requests that the Company
effect the registration under the Securities Act of the offer and sale of
all or a portion of the Registrable Securities owned by him, such request
to specify the intended method or methods of disposition thereof; provided,
however, that the Company shall not be required to effect a registration
relating to an
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underwritten offering pursuant to this Section 1.2 until a period of 120
days shall have elapsed from the effective date of the most recent
registration relating to an underwritten offering; provided, further, that
the RLB shall not be entitled to have such registration effected by means
of a "shelf" registration unless the effectiveness of such "shelf"
registration is limited in duration to 180 days; provided further, that, at
any time when the fair market value of the Common Stock and all options
held by RLB in the aggregate falls below $20 million (such fair market
value to be based on the average of the closing prices of the Common Stock
on any exchange on which the Common Stock is listed or on NASDAQ for the 10
trading days preceding any date of determination and to take into account
the exercise price of options), RLB shall not have the right to request the
registration of the offer and sale of such Registrable Securities if such
registration is not required under the Securities Act to permit the
immediate disposition of all such shares on any exchange on which the
Common Stock is listed or on NASDAQ. A request made by RLB shall not be
counted for purposes of the request limitation set forth above: (a) if RLB
determines in his good faith judgment to withdraw the proposed registration
of the offer and sale of any Registrable Securities requested to be
registered pursuant to this Section 1.2 due to marketing or regulatory
reasons; (b) the registration statement relating to any such request is not
declared effective within 90 days of the date such registration statement
is first filed with the Commission; (c) if, within 180 days after the
registration relating to any such request 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 and the Company fails to have such stop order,
injunction or other order or requirement removed, withdrawn or resolved to
RLB's reasonable satisfaction within 30 days after the occurrence of any
such interference; (d) the conditions to closing specified in the
underwriting agreement or purchase agreement entered into in connection
with the registration relating to any such request are not satisfied (other
than as a result of a default or breach thereunder by RLB); or (e) if more
than 10% of the Registrable Securities requested by RLB to be included in
the registration are not so included pursuant to Section 1.5. Upon any such
request, the Company will promptly, but in any event within 15 days of such
request, give written notice of such request to all holders of Registrable
Securities and thereupon the Company will, subject to Section 1.5, use its
best efforts to effect the prompt registration under the Securities Act of:
(i) the offer and sale of the Registrable Securities which
the Company has been so requested to register by RLB, and
(ii) the offer and sale of all other Registrable Securities
which the Company has been requested to register by the holders
thereof by written request given to the Company by such holders within
15 days after the giving of such written notice by the Company to such
holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or
methods of disposition of RLB; provided, however, that RLB shall not be
entitled to have such registration effected by means of a "shelf"
registration unless the effectiveness of such "shelf' registration is
limited in duration to 180 days.
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(b) Notwithstanding the foregoing, if the Company shall at any
time furnish to each proposed seller of Registrable Securities a
certificate signed by the President of the Company stating that the Company
has pending or in process a material transaction (including a financing
transaction), the disclosure of which would, in the good faith judgment of
the Board, materially and adversely affect the Company, the Company may
defer the filing (but not the preparation) of a registration statement to
be filed pursuant to this Section 1.2 for up to 60 days (but the Company
shall use its best efforts to complete the transaction and file the
registration statement as soon as possible).
(c) Any rights exercisable by the Management Stockholders under
this Agreement shall be exercisable solely by a majority in interest of the
Management Stockholders; provided, however, that so long as RLB is CEO, any
rights exercisable by Management Stockholders shall be exercisable solely
by RLB on their behalf, unless the Company consents otherwise. The Company
shall be entitled to deal exclusively with the party or parties having the
right to act on behalf of the Management Stockholders at any given time and
to rely on such party's or parties' consent, waiver or other action as the
consent, waiver or other action of all of the Management Stockholders.
1.3. Registration Statement Form. A registration requested pursuant to
Sections 1.1 or 1.2 shall be effected by the filing of a registration statement
on a form determined by the Company; provided that S-1 type information may be
included therein if the managing underwriter states in writing that it believes
that it would be beneficial for the marketing of the offering.
1.4. Expenses. The Company will pay all Registration Expenses in
connection with any registration requested under Section 1.1 or 1.2, including
the reasonable fees and expenses of one counsel selected by the Management
Stockholders by a majority vote (and reasonably acceptable to the Company) to
represent the Management Stockholders and the Third Party Investors; provided,
however, that if such counsel has a conflict of interest that would prevent such
counsel from representing both the Management Stockholders and the Third Party
Investors, then the Company shall pay all Registration Expenses in connection
with any registration requested under Section 1.1 or 1.2, including the
reasonable fees and expenses of one counsel selected by the Management
Stockholders by a majority vote (and reasonably acceptable to the Company) to
represent the Management Stockholders and one counsel selected by the Third
Party Investors by a majority vote (and reasonably acceptable to the Company) to
represent the Third Party Investors; provided, further, that each seller of
Registrable Securities shall pay all Registration Expenses to the extent
required to be paid by such seller under applicable law and all underwriting
discounts and commissions and transfer taxes, if any.
1.5. Priority in Demand Registrations. If a registration pursuant to
Section 1.1 or 1.2 involves an underwritten offering, and the managing
underwriter (or, in the case of an offering which is not underwritten, a
nationally recognized investment banking firm) shall advise the Company in
writing (with a copy to each Person requesting registration of the offer and
sale of Registrable Securities) that, in its opinion, the number of securities
requested and otherwise proposed to be included in such registration exceeds the
number which can be sold in such offering without materially and adversely
affecting the offering price, the Company will include in such registration to
the extent of the number which the Company is so advised can be sold in
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such offering without such material adverse effect, first, the Registrable
Securities of the THL Group, the Third Party Investors and the Management
Stockholders on a pro rata basis (based on the number of shares of Registrable
Securities owned by each such Stockholder), and second, the securities, if any,
being sold by the Company. Notwithstanding the foregoing, the Management
Stockholders (and any successor managers of the Company and its subsidiaries)
will not be entitled to participate in any such registration requested by the
THL Parties to the extent that the managing underwriter (or, in the case of an
offering that is not underwritten, a nationally recognized investment banking
firm) shall determine in good faith and in writing (with a copy to each affected
Person requesting registration of Registrable Securities), that the
participation of management would adversely affect the marketability or offering
price of the securities being sold in such registration, it being understood
that the Company will include in such registration that number of shares of the
Management Stockholders, if any, which can be sold in such offering without
adversely affecting the marketability or offering price of the other securities
to be sold in such registration. In the event of any such determination under
this Section 1.5, the Company shall give the affected holders of Registrable
Securities notice of such determination and in lieu of the notice otherwise
required under Sections 1.1 or 1.2, as the case may be. The THL Parties shall
use their commercially reasonable best efforts to persuade the managing
underwriter not to make or to minimize the determination set forth in the second
preceding sentence of this Section 1.5.
1.6. No Company Initiated Registration. After receipt of notice of a
requested registration pursuant to Section 1.1 or 1.2, the Company shall not
initiate, without the consent of the THL Parties, in the case of Section 1.1 or
RLB in the case of Section 1.2, a registration of the offer and sale of any of
its equity securities for its own account until 90 days after such registration
has been terminated or declared effective (unless advised by the managing
underwriter that a longer period, not to exceed 180 days, is required, or such
shorter period as the managing underwriter for any underwritten offering may
agree), except for transactions of a type described in clauses (iii) and (iv) of
Section 5(b).
2. Incidental Registrations. If the Company at any time proposes to
register the offer and sale of any of its equity securities under the Securities
Act (other than pursuant to (x) an employee equity compensation plan, including
an option plan, or (y) an acquisition, strategic or business combination
transaction), then the Company will give prompt written notice to all holders of
Registrable Securities regarding such proposed registration. Upon the written
request of any such holder made within 15 days after the receipt of any such
notice (which request shall specify the number of Registrable Securities
intended to be disposed of by such holder and the intended method or methods of
disposition thereof), the Company will use its best efforts to effect, in
connection with such proposed registration by the Company, the registration
under the Securities Act of the offer and sale of such Registrable Securities on
a pro rata basis (based on the number of Registrable Securities owned by each
holder of Registrable Securities) in accordance with such intended method or
methods of disposition, provided that:
(a) (i) if such registration shall be in connection with an IPO,
the Company shall not include any Registrable Securities in such proposed
registration if the Board shall have determined, after consultation with
the managing underwriter for such offering, that it is not in the best
interests of the Company to include any Registrable Securities in such
registration and (ii) the Company shall not include any Registrable
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Securities of any Management Stockholder in any proposed registration
pursuant to this Section 2 to the extent that the managing underwriter (or,
in the case of an offering that is not underwritten, a nationally
recognized investment banker) shall determine in good faith that the
participation of such Management Stockholder would adversely affect the
offering and provided, further, that in the event of any such determination
under subsection (i) or (ii), the Company shall give the affected holders
of Registrable Securities notice of such determination and in lieu of the
notice otherwise required by the first paragraph of this Section 2. The
Company shall use its commercially reasonable best efforts to persuade the
managing underwriter not to make or to minimize the determination set forth
in the preceding sentence of this 2(a);
(b) if, at any time after giving written notice (pursuant to this
Section 2) of its intention to register the offer and sale of equity
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason not to register the offer and sale of such equity securities,
the Company may, at its election, give written notice of such determination
to each holder of Registrable Securities and, thereupon, shall not be
obligated to register the offer and sale of any Registrable Securities in
connection with such registration (but shall nevertheless pay the
Registration Expenses in connection therewith), without prejudice, however,
to the rights of the THL Parties, on behalf of the THL Group, or RLB to
request that a registration be effected under Section 1.1 or 1.2, as the
case may be;
(c) if, in connection with a registration pursuant to this
Section 2, the managing underwriter of such registration (or, in the case
of an offering that is not underwritten, a nationally recognized investment
banking firm) shall advise the Company in writing (with a copy to each
holder of Registrable Securities requesting registration thereof) that the
number of securities requested and otherwise proposed to be included in
such registration exceeds the number which can be sold in such offering
without materially and adversely affecting the offering price, then in the
case of any registration pursuant to this Section 2, the Company will
include in such registration to the extent of the number which the Company
is so advised can be sold in such offering without such material adverse
effect, first, the securities, if any, being sold by the Company in such
registration for its own account and second, the Registrable Securities of
the THL Group, the Third Party Investors and the Management Stockholders
being sold by them in such registration pursuant to this Section 2, on a
pro rata basis (based on the number of shares of Registrable Securities
owned by each holder of Registrable Securities);
(d) the Company will pay all Registration Expenses in connection
with each registration of the offer and sale of Registrable Securities
requested pursuant to this Section 2, including the reasonable fees and
expenses of one counsel selected by the Management Stockholders by a
majority vote (and reasonably acceptable to the Company) to represent the
Management Stockholders and the Third Party Investors; provided, however,
that if such counsel has a conflict of interest that would prevent such
counsel from representing both the Management Stockholders and the Third
Party Investors, the Company will pay all Registration Expenses in
connection with each registration of the offer and sale of Registrable
Securities requested pursuant to this Section 2, including the reasonable
fees and expenses of one counsel selected by the
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Management Stockholders by a majority vote (and reasonably acceptable to
the Company) to represent the Management Stockholders and one counsel
selected by the Third Party Investors by a majority vote (and reasonably
acceptable to the Company) to represent the Third Party Investors;
provided, further, that each seller of Registrable Securities shall pay all
Registration Expenses to the extent required to be paid by such seller
under applicable law and all underwriting discounts and commissions and
transfer taxes, if any. No registration effected under this Section 2 shall
relieve the Company from its obligation to effect registrations under
Sections 1.1 and 1.2;
(e) notwithstanding the intended method or methods specified by a
holder of Registrable Securities, in the event that the registration giving
rise to the registration rights in this Section 2 is to be effected
pursuant to an underwritten offering, then such method of distribution
shall be pursuant to such underwritten offering and in the event that the
registration giving rise to the registration rights in this Section 2 is to
be effected pursuant to a "shelf" registration, then such method of
distribution shall be pursuant to such "shelf" registration, and the
duration thereof shall not be longer than that of such "shelf"
registration.
(f) the Company shall have no obligation under this Section 2 to
use its best efforts to effect any registration of any shares of
Registrable Securities which any Third Party Investors or Management
Stockholder (other than RLB) has requested be registered, unless shares of
Registrable Securities owned by members of the THL Group shall be included
in such registration or unless the THL Parties determine otherwise;
(g) the Company shall not be required to effect any registration
of Registrable Securities under this Section 2 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend reinvestment
plans or stock option or other executive or employee benefit or
compensation plans; and
(h) in the event of an underwritten IPO covering shares of Common
Stock for the account of the Company, the THL Parties shall have the right
by written notification to the Company at any time to convert such
registration into a registration of shares of Registrable Securities
pursuant to and governed by the provisions of Section 2.
3. Registration Procedures. If and whenever the Company is required to use
its best efforts to effect the registration of the offer and sale of any
Registrable Securities under the Securities Act as provided in Sections 1.1, 1.2
and 2, the Company will promptly:
(a) prepare, and as soon as practicable, but in any event within
60 days thereafter, file with the Commission, a registration statement with
respect to the offer and sale of such Registrable Securities, make all
required filings with the NASD or applicable securities exchange and use
its best efforts to cause such registration statement to become effective
as soon as practicable;
(b) prepare and promptly file with the Commission such amendments
and post-effective amendments and supplements to such registration
statement and the
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prospectus used in connection therewith as may be necessary to keep such
registration statement effective for so long as is required to comply with
the provisions of the Securities Act and to complete the disposition of all
securities covered by such registration statement in accordance with the
intended method or methods of disposition thereof, but in no event for a
period of more than six months after such registration statement becomes
effective;
(c) furnish copies of all documents proposed to be filed with the
Commission in connection with such registration to (i) (x) counsel selected
by the THL Parties in the case of a registration pursuant to Section 1.1,
(y) counsel selected by RLB in the case of registration pursuant to Section
1.2 and (z) in all other circumstances, counsel selected by the THL Parties
and, if different, counsel selected by the holders of a majority of the
Registrable Securities to be sold in such registration, and, in each case,
which counsel may also be counsel to the Company and (ii) each seller of
Registrable Securities (or in the case of the initial filing of a
registration statement, within five business days of such initial filing)
and such documents shall be subject to the review of any such counsel
referred to in clause (i) above. The Company shall not file any
registration statement or any amendment or post-effective amendment or
supplement to such registration statement or the prospectus used in
connection therewith to which such counsel shall have reasonably objected
in writing on the grounds that such amendment or supplement does not comply
(explaining why) in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(d) furnish to each seller of Registrable Securities, without
charge, such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits and documents filed therewith) and such number of copies of the
prospectus included 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 may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller in accordance with the intended
method or methods of disposition thereof;
(e) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as each seller shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition of such
Registrable Securities in such jurisdictions in accordance with the
intended method or methods of disposition thereof, provided that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, subject itself to taxation in any jurisdiction wherein it is
not so subject, or take any action which would subject it to general
service of process in any jurisdiction wherein it is not so subject;
(f) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental
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agencies, authorities or self-regulatory bodies as may be necessary by
virtue of the business and operations of the Company to enable the seller
or sellers thereof to consummate the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof;
(g) furnish to the THL Parties, on behalf of the THL Group, and
to RLB, if requested by him in connection with a registration pursuant to
Section 1.2:
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration
statement (and, if such registration includes an underwritten public
offering, the date of the closing under the underwriting agreement);
and
(ii) a "comfort" letter (unless the registration is pursuant
to Section 2 and such a letter is not otherwise being furnished to the
Company), dated the effective date of such registration statement (and
if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), signed by
the independent public accountants who have issued an audit report on
the Company's financial statements included in the registration
statement,
covering such matters as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other matters as the
THL Parties or RLB, as applicable, may reasonably request;
(h) notify each seller of any Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of
any event or existence of any fact 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 light of the circumstances then existing, and, as
promptly as is practicable, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an 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 light
of the circumstances then existing;
(i) otherwise 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 of the Company (in form
complying with the provisions of Rule 158 under the Securities Act)
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of such
registration statement;
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(j) notify each seller of any Registrable Securities covered by
such registration statement (i) when the prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same
has become effective, (ii) of any request by the Commission for amendments
or supplements to such registration statement or to amend or to supplement
such prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that
purpose and (iv) of the suspension of the qualification of such securities
for offering or sale in any jurisdiction, or of the institution of any
proceedings for any of such purposes;
(k) use every reasonable effort to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
registration statement at the earliest possible moment;
(l) use its best efforts (i) (A) to list such Registrable
Securities on any securities exchange on which the equity securities of the
Company are then listed or, if no such equity securities are then listed,
on an exchange selected by the Company, if such listing is then permitted
under the rules of such exchange, or (B) if such listing is not
practicable, to secure designation of such securities as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act or, failing that, to secure NASDAQ authorization for such
Registrable Securities, and, without limiting the foregoing, to arrange for
at least two market makers to register as such with respect to such
Registrable Securities with the NASD, and (ii) to provide a transfer agent
and registrar for such Registrable Securities not later than the effective
date of such registration statement and to instruct such transfer agent (A)
to release any stop transfer order with respect to the certificates with
respect to the Registrable Securities being sold and (B) to furnish
certificates without restrictive legends representing ownership of the
shares being sold, in such denominations requested by the sellers of the
Registrable Securities or the lead underwriter;
(m) enter into such agreements and take such other actions as the
sellers of Registrable Securities or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, preparing for, and participating
in, such number of "road shows" and all such other customary selling
efforts as the underwriters reasonably request in order to expedite or
facilitate such disposition;
(n) furnish to any holder of such Registrable Securities such
information and assistance as such holder may reasonably request in
connection with any "due diligence" effort which such seller deems
appropriate; and
(o) use its best efforts to take all other steps necessary to
effect the registration of such Registrable Securities contemplated hereby.
As a condition to its registration of the offer and sale of
Registrable Securities of any prospective seller, the Company may require
such seller of any Registrable Securities
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as to which any registration is being effected to execute
powers-of-attorney, custody arrangements and other customary agreements
appropriate to facilitate the offering and to furnish to the Company such
information regarding such seller, its ownership of Registrable Securities
and the disposition of such Registrable Securities as the Company may from
time to time reasonably request in writing and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder not
materially misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith,
which refers to (in a capacity as a selling stockholder) any seller of any
Registrable Securities covered thereby by name, or otherwise identifies
such seller as the holder of any Registrable Securities, to which counsel
to the sellers may reasonably object, without the prior written consent of
such seller, which consent shall not be unreasonably withheld.
Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described
in Section 3(h), such holder will promptly discontinue such holder's
disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt
of the copies of the supplemented or amended prospectus contemplated by
Section 3(h). If so directed by the Company, each holder of Registrable
Securities will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, in such holder's possession of
the prospectus covering such Registrable Securities at the time of receipt
of such notice. In the event that the Company shall give any such notice,
the period mentioned in Section 3(a) 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 any Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section
3(h).
4. Underwritten Offerings.
4.1. Underwriting Agreement. If requested by the underwriters for any
underwritten offering pursuant to a registration requested under Section 1.1,
1.2 or 2, the Company shall enter into an underwriting agreement with the
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the underwriters and to the THL Parties (unless the THL
Group is not participating in such registration, in which case, the holders of a
majority of the Registrable Securities to be distributed by such underwriter).
Any such underwriting agreement shall contain such representations and
warranties by the Company and such other terms and provisions as are customarily
contained in agreements of this type, including, without limitation, indemnities
to the effect and to the extent provided in Section 8. The holders of all of the
Registrable Securities to be distributed by such underwriter shall be parties to
such underwriting agreement and may, at their option, require that any or all of
the representations and warranties by, and the agreements on the part of, the
Company to and for the benefit of such underwriters be made to and for the
benefit of such holders of Registrable
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Securities and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement shall also be conditions
precedent to the obligations of such holders of Registrable Securities. No
underwriting agreement (or other agreement in connection with such offering)
shall require the members of the THL Group or the Management Stockholders or the
Third Party Investors in their respective capacities as stockholders and/or
controlling persons, to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, the ownership of such holder's Registrable
Securities and such holder's intended method or methods of disposition and any
other representation required by law or to furnish any indemnity to any Person
which is broader than the indemnity furnished by such holder pursuant to Section
8.2. No holder of Registrable Securities shall have the right not to enter into
an underwriting agreement described in this Section 4.1 unless it shall have
notified the Company prior to any "road show" for such offering or, if no such
"road show" is contemplated, prior to such time as the Company may reasonably
determine.
4.2. Selection of Underwriters. If the Company at any time proposes to
register any of its securities under the Securities Act for sale for its own
account pursuant to an underwritten offering, the Company will have the right to
select the managing underwriter (which shall be of nationally recognized
standing) to administer the offering; provided, however, that any selection must
be approved by the THL Parties, on behalf of the THL Group, if the THL Group at
such time owns at least 10% of the number of shares of Company Stock they own on
the date hereof. Notwithstanding the foregoing sentence, whenever (i) a
registration requested pursuant to Section 1.1 is for an underwritten offering,
the THL Parties, on behalf of the THL Group, will have the right to select the
managing underwriter (which shall be of nationally recognized standing) to
administer the offering, and (ii) whenever a registration requested under
Section 1.2 is for an underwritten offering, RLB shall have the right to select
the managing underwriter (which shall be of nationally recognized standing), but
only with the approval of the THL Parties and the Company, such approval not to
be unreasonably withheld.
4.3. Block Sales. If the THL Group, as part of a plan of distribution
pursuant to an offer and sale of Registrable Securities under Section 1.1
hereof, effects a registered block sale with one or more market professionals,
RLB shall have the right to participate in such a sale on a pro rata basis with
the THL Group (such percentage to be computed based on the number of Registrable
Securities owned by each such Stockholder).
5. Holdback Agreements.
(a) If and whenever the Company proposes to register the offer
and sale of any of its equity securities under the Securities Act for its
own account (other than pursuant to (x) an employee equity compensation
plan, including an option plan, or (y) an acquisition, strategic or
business combination transaction) or is required to use its best efforts to
effect the registration of the offer and sale of any Registrable Securities
under the Securities Act pursuant to Section 1.1, 1.2 or 2, each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
not to effect any sale or distribution, including any sale pursuant to Rule
144 under the Securities Act, or to request registration under Section 1.1
or 1.2, as the case may be, of any Registrable Securities within seven days
prior to and 90 days (unless advised by the managing underwriter that
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a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree)
after the effective date of the registration statement relating to such
registration, except as part of such registration or, in the case that the
offer and sale of Registrable Securities above is underwritten or is a
registered block sale effected by the THL Group, then only except as part
of such underwritten sale or block sale. If requested by such managing
underwriter, each holder of Registrable Securities agrees to execute an
agreement to such effect with the Company and consistent with such managing
underwriter's customary form of holdback agreement.
(b) The Company agrees not to effect any sale or distribution of
its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities within seven days prior to and 90
days (unless advised in writing by the managing underwriter that a longer
period, not to exceed 180 days, is required, or such shorter period as the
managing underwriter for any underwritten offering may agree) after the
effective date of any registration statement filed pursuant to Section 1.1
or 1.2 (except (i) as part of such registration, (ii) as permitted by the
related underwriting, (iii) pursuant to an employee equity compensation
plan, including an option plan, or (iv) pursuant to an acquisition,
strategic or business combination transaction. In addition, upon the
request of the managing underwriter, the Company shall use its best efforts
to cause each holder (other than any holder already subject to Section
5(a)) of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, whether outstanding
on the date of this Agreement or issued at any time after the date of this
Agreement (other than any such securities acquired in a public offering),
to agree not to effect any such sale or distribution of such securities
during such period, except as part of any such registration if permitted,
and to cause each such holder to enter into an agreement to such effect
with the Company and consistent with such managing underwriter's customary
form of holdback agreement.
6. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering the offer and
sale of Registrable Securities under the Securities Act, the Company will give
counsel to the holders of such Registrable Securities so to be registered the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give such counsel access to
the financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries and opportunities to discuss the business of
the Company with its officers and the independent public accountants who have
issued audit reports on its financial statements in each case as shall be
reasonably requested by such counsel in connection with such registration
statement.
7. No Grant of Future Registration Rights. The Company shall not grant any
other demand or incidental registration rights to any other Person without the
prior written consent of the THL Parties, so long as the THL Group continues to
own at least 10% of the number of shares of Company Stock that the THL Group
owns on the date hereof. If the Company grants any other demand registration
rights to any other person, RLB shall have the same participation rights in such
registration as the members of the THL Group.
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8. Indemnification.
8.1. Indemnification by the Company. In the event of any registration
of the offer and sale of any Registrable Securities pursuant to this Agreement,
the Company will indemnify, defend and hold harmless (a) each seller of such
Registrable Securities, (b) the directors, members, stockholders, officers,
partners, employees, agents and Affiliates of such seller, (c) each Person who
participates as an underwriter in the offering or sale of such securities and
(d) each person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any of the foregoing against
any and all losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), jointly or severally, directly or indirectly, based upon or
arising out of (i) any untrue statement or alleged untrue statement of a fact
contained in any registration statement under which the offer and sale of such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein or used in
connection with the offering of securities covered thereby, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state a fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse each such indemnified party for any
legal or any other expenses reasonably incurred by them in connection with
enforcing its rights hereunder or under the underwriting agreement entered into
in connection with such offering or investigating, preparing, pursuing or
defending any such loss, claim, damage, liability, action or proceeding, except
insofar as any such loss, claim, damage, liability, action, proceeding or
expense arises out of or is based upon an untrue statement or 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 the Company by such seller expressly for
use in the preparation thereof. Such indemnity shall remain in full force and
effect, regardless of any investigation made by such indemnified party and shall
survive the transfer of such Registrable Securities by such seller. If the
Company is entitled to, and does, assume the defense of the related action or
proceedings provided herein, then the indemnity agreement contained in this
Section 8.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, action or proceeding if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld or delayed).
8.2. Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 1.1, 1.2 or 2 that the Company shall have received an
undertaking satisfactory to it from each of the prospective sellers of such
Registrable Securities to indemnify and hold harmless, severally, not jointly,
in the same manner and to the same extent as set forth in Section 8.1, the
Company, its directors, officers, employees, agents and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) the Company 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 thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller in
such seller's capacity as a selling stockholder expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. The Company
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and the holders of the Registrable Securities hereby acknowledge and agree that,
unless otherwise expressly agreed to in writing by such holders, the only
information furnished or to be furnished to the Company by such holders in their
capacities as selling stockholders for use in any registration statement or
prospectus relating to the Registrable Securities or in any amendment,
supplement or preliminary materials associated therewith are statements
specifically relating to (a) transactions between such holder and its
Affiliates, on the one hand, and the Company, on the other hand, (b) the
beneficial ownership of shares of Common Stock by such holder and its Affiliates
and (c) the name and address of such holder. If any additional information about
such holder or the plan of distribution (other than for an underwritten
offering) is required by law to be disclosed in any such document, then such
holder shall not unreasonably withhold its agreement referred to in the
immediately preceding sentence of this Section 8.2. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and shall
survive the transfer of such Registrable Securities by such seller. The
indemnity agreement contained in this Section 8.2 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected without the consent of such seller
(which consent shall not be unreasonably withheld or delayed). The indemnity
provided by each seller of Registrable Securities under this Section 8.2 shall
be limited in amount to the net amount of proceeds actually received by such
seller from the sale of Registrable Securities pursuant to such registration
statement.
8.3. Notices of Claims, etc. 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 paragraphs of this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party of the
commencement of such action or proceeding, provide 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 paragraphs of this
Section 8, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate therein and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof except for the reasonable fees and
expenses of any counsel retained by such indemnified party to monitor such
action or proceeding. Notwithstanding the foregoing, if such indemnified party
reasonably determines, based upon advice of independent counsel, that a conflict
of interest may exist between the indemnified party and the indemnifying party
with respect to such action and that it is advisable for such indemnified party
to be represented by separate counsel, such indemnified party may retain other
counsel, reasonably satisfactory to the indemnifying party, to represent such
indemnified party, and the indemnifying party shall pay all reasonable fees and
expenses of such counsel. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such indemnified party,
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
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8.4. Other Indemnification. Indemnification similar to that specified
in the preceding paragraphs of this Section 8 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration (other than under the Securities Act) or
other qualification of such Registrable Securities under any federal or state
law or regulation of any governmental authority.
8.5. Indemnification Payments. Any indemnification required to be made
by an indemnifying party pursuant to this Section 8 shall be made by periodic
payments to the indemnified party during the course of the action or proceeding,
as and when bills are received by such indemnifying party with respect to an
indemnifiable loss, claim, damage, liability or expense incurred by such
indemnified party.
8.6. Other Remedies. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each such party) and the statements or omissions or alleged statements or
omissions which resulted in such loss, claim, damage, liability, action,
proceeding or expense, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statements or omissions. 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. Notwithstanding the provisions of
this Section 8, no indemnifying party (other than the Company) shall be required
to provide indemnification and/or contribution under this Section 8 in an
aggregate amount in excess of the net proceeds received and retained by such
indemnifying party from the sale of its Registrable Securities covered by the
registration statement filed pursuant hereto, it being understood that (x) net
proceeds, in the case of the THL Group, the Management Stockholders and the
Third Party Investors, shall be calculated, if the THL Group so elects, after
(1) in the case of the THL Group, deducting therefrom the price paid by the THL
Group or its affiliates to acquire the equity securities of THL-Nortek
Investors, LLC pursuant to the Purchase Agreement (as defined in the
Securityholders Agreement) and (2) in the case of the Management Stockholders,
deducting therefrom the Option Cancellation Deferred Amounts (as defined in the
Option Cancellation Agreements) of such Management Stockholders, and (3) in the
case of the Third Party Investors, deducting therefrom the price paid by the
Third Party Investors or its affiliates to acquire the equity securities of
THL-Nortek Investors, LLC and (y) insofar as such net proceeds have been
distributed by any indemnifying party to its partners, stockholders or members,
the amount of such indemnifying party's contribution hereunder shall be limited
to the net proceeds which it actually recovers from its partners, stockholders
or members based upon their relative fault and that to the extent that such
indemnifying party has not distributed such net proceeds, the amount such
indemnifying party's contribution hereunder shall be limited by the percentage
of such net
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proceeds which corresponds to the percentage equity interests in such
indemnifying party held by those of its partners, stockholders or members who
have been determined to be at fault. No party shall be liable for contribution
under this Section 8.6 except to the extent and under such circumstances as such
party would have been liable for indemnification under this Section 8 if such
indemnification were enforceable under applicable law.
9. Representations and Warranties. Each Stockholder represents and warrants
to the Company and each other Stockholder that:
(i) such Stockholder has the power, authority and capacity
(or, in the case of any Stockholder that is a corporation, limited
liability company or limited partnership, all corporate, limited
liability company or limited partnership power and authority, as the
case may be) to execute, deliver and perform this Agreement;
(ii) in the case of a Stockholder that is a corporation,
limited liability company or limited partnership, the execution,
delivery and performance of this Agreement by such Stockholder has
been duly and validly authorized and approved by all necessary
corporate, limited liability company or limited partnership action, as
the case may be;
(iii) this Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and legally
binding obligation of such Stockholder, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to creditors'
rights generally and general principles of equity; and
(iv) the execution, delivery and performance of this
Agreement by such Stockholder does not and will not violate the terms
of or result in the acceleration of any obligation under (A) any
material contract, commitment or other material instrument to which
such Stockholder is a party or by which such Stockholder is bound or
(B) in the case of a Stockholder that is a corporation, limited
liability company or limited partnership, the certificate of
incorporation, certificate of formation, certificate of limited
partnership, by-laws, limited liability company agreement or limited
partnership agreement, as the case may be.
10. Definitions. For purposes of this Agreement, the following terms shall
have the following respective meanings:
Affiliate: a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
Board: the board of directors of the Company.
Commission: the Securities and Exchange Commission.
Common Stock: the common stock of the Company, par value $[0.01] per share.
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Company Stock: as defined in the preamble.
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
IPO: as defined in the Stockholders Agreement.
THL Group: as defined in the Stockholders Agreement.
NASD: National Association of Securities Dealers, Inc.
NASDAQ: the Nasdaq National Market.
Option Cancellation Agreements: the Option Cancellation agreements entered
into by THL-Nortek Investors, LLC, the Management Stockholders and certain other
parties, dated as of August 27, 2004.
Permitted Transferee: as defined in Section 11.2 herein.
Person: an individual, corporation, partnership, limited liability company,
joint venture, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
Registrable Securities: the shares of Common Stock beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) by the THL Group, the
Third Party Investors, the Management Stockholders or the Permitted Transferees.
As to any particular shares of Common Stock, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) a registration statement on Form S-8 with respect to the resale
of such securities shall have become effective under the Securities Act, (iii)
they shall have been sold to the public pursuant to Rule 144 under the
Securities Act, (iv) they shall have been otherwise transferred other than to a
Permitted Transferee or a member of the THL Group 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 (v) they shall have
ceased to be outstanding.
Registration Expenses: all expenses incident to the Company's performance
of or compliance with any registration pursuant to this Agreement, including,
without limitation, (i) registration, filing and NASD fees, (ii) fees and
expenses of complying with securities or blue sky laws, (iii) fees and expenses
associated with listing securities on an exchange or NASDAQ, (iv) word
processing, duplicating and printing expenses, (v) messenger and delivery
expenses, (vi) transfer agents', trustees', depositories', registrars' and
fiscal agents' fees, (vii) fees and disbursements of counsel for the Company and
of its independent public accountants, including the expenses of any special
audits or "cold comfort" letters, (viii) reasonable fees and disbursements of
any one counsel retained by the sellers of Registrable Securities, which counsel
shall be designated in the manner specified in Section 3(c) and (ix) any fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any.
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RLB: as defined in Section 1.2(a) of this Agreement.
Securities Act: the Securities Act of 1933 or any successor federal
statute, and the rules and regulations thereunder which shall be in effect at
the time.
Securityholders Agreement: as defined in the Preamble of this Agreement.
11. Miscellaneous.
11.1. Rule 144, etc. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act
relating to any class of equity securities, the Company 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 successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
11.2. Successors, Assigns and Transferees. This Agreement shall be
binding upon and insure to the benefit of the parties hereto and their
respective successors and permitted assigns under this Section 11.2. Provided
that an express assignment shall have been made, and the assignee has executed a
joinder agreement agreeing to be bound by all of the assignor's obligations
hereunder, including, without limitation, Section 5 hereof, copies of which
shall have been delivered to the Company, the provisions of this Agreement which
are for the benefit of a holder of Registrable Securities shall be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities, provided that such transferee acquires such Registrable Securities
in accordance with the terms of the Securityholders' Agreement ("PERMITTED
TRANSFEREES"). Notwithstanding anything herein to the contrary, each Management
Stockholder must exercise all rights hereunder on behalf of any of its Permitted
Transferees, if applicable, and all other parties hereto shall be entitled to
deal exclusively with the Management Stockholder and rely on the consent, waiver
or any other action by the Management Stockholder as the consent, waiver or
other action, as the case may be, of any such Permitted Transferees of such
Management Stockholder.
11.3. Stock Splits. Each holder of Registrable Securities agrees that
it will vote to effect a stock split, reverse stock split, or combination, or
recapitalization having a similar effect, with respect to any Registrable
Securities in connection with any registration of any Registrable Securities
hereunder, or otherwise, if the managing underwriter shall advise the Company in
writing (or, in connection with an offering that is not underwritten, if an
investment banker shall advise the Company in writing) that in its opinion such
a stock split, reverse stock split, recapitalization or combination would
facilitate or increase the likelihood of success of the offering. The Company
shall cooperate in all respects in effecting any such stock split, reverse stock
split, recapitalization or combination.
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11.4. Amendment and Modification. This Agreement may be amended,
modified or supplemented by the Company with the written consent of the THL
Parties and a majority (by number of shares) of any other holders of Registrable
Securities whose interests would be adversely affected by such amendment.
11.5. Additional Management Stockholder. Notwithstanding anything in
this Agreement to the contrary, the Company may, only with the consent of the
THL Parties, admit additional Management Stockholders to this Agreement and
amend Schedule 1 accordingly, provided that (a) any such Management
Stockholder(s) holds Registrable Securities, (b) has become a party to the
Securityholders Agreement and (c) has executed and delivered a joinder agreement
and such other agreements or documents as may reasonably be requested by the
Company and the THL Parties.
11.6. Governing Law. This Agreement and the rights and obligations of
the parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of Delaware,
without giving effect to the choice of law principles thereof.
11.7. Invalidity of Provision. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
11.8. Notices. All notices, requests, demands, letters, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:
(i) If to the Company, to it at:
Nortek Holdings, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(ii) If to a Management Stockholder, as listed on the
signature page hereto, or, if not so listed, to it at its address as
reflected in the stock records of the Company, or as such Management
Stockholder shall designate to the Company in writing, with a copy to
the THL Group at its address indicated below (provided that any such
designation shall be effective only upon receipt thereof).
(iii) If to a member of the THL Group, to it at:
c/o Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iv) If to a Third Party Investor, as listed on the
signature page hereto, or, if not so listed, to it at its address as
reflected in the stock records of the Company, or as such Third Party
Investor shall designate to the Company in writing, with a copy to the
THL Group at its address indicated above (provided that any such
designation shall be effective only upon receipt therof).
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
personal delivery on the day after such delivery, (x) if by certified or
registered mail, on the fifth business day after the mailing thereof, (y) if by
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
11.9. Headings, Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
11.10. Injunctive Relief. Each of the parties recognizes and agrees
that money damages may be insufficient and, therefore, in the event of a breach
of any provision of this Agreement the aggrieved party may elect to institute
and prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of this Agreement. Such
remedies shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which such party may have.
11.11. Term. This Agreement shall be effective as of the date hereof
and shall continue in effect thereafter until the earlier of (a) its termination
by the consent of the parties hereto or their respective successors in interest
and (b) the date on which no Registrable Securities remain outstanding. No
termination of this Agreement shall effect any indemnification obligations
hereunder arising prior to such termination.
-21-
11.12. Further Assurances. Subject to the specific terms of this
Agreement, each of the Company and the Stockholders shall make, execute,
acknowledge and deliver such other instruments and documents, and take all such
other actions, as may be reasonably required in order to effectuate the purposes
of this Agreement and to consummate the transactions contemplated hereby.
11.13. Entire Agreement. This Agreement, together with the
Securityholders Agreement, is intended by the parties hereto as a final
expression of their agreement and intended to be a complete and exclusive
statement of their agreement and understanding in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
11.14. Release from Transfer Restrictions. Notwithstanding anything
contained in this Agreement or the Securityholders Agreement to the contrary, to
the extent that any Registrable Securities owned by the Third Party Investors
could be sold under Rule 144(k) of the Securities Act, such Registrable
Securities may be sold irrespective of any restrictions on transfer including,
without limitation, any holdback provisions) contained in this Agreement or the
Securityholders Agreement and all rights and obligations of the Third Party
Investors under this Agreement shall terminate, other than (i) the Third Party
Investor's rights and obligations under Section 8 of this Agreement in respect
of any registration that occurred prior to the date of such termination and (ii)
the Third Party Investor's rights and obligations under Sections 11.2, 11.4,
11.6, 11.7, 11.10 and 11.12.
-22-
IN WITNESS WHEREOF this Agreement has been signed by each of the parties
hereto, and shall be effective as of the date first above written.
[THL-NORTEK INVESTORS,
INC./NORTEK HOLDINGS, INC.]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
NORTEK, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-23-
XXXXXX X. XXX EQUITY FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partners
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Managing Director
XXXXXX X. XXX PARALLEL FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Managing Director
XXXXXX X. XXX CAYMAN FUND V, L.P.
By: THL Equity Advisors V, LLC,
its general partner
By: Xxxxxx X. Xxx Partners, L.P.,
its sole member
By: Xxxxxx X. Xxx Advisors LLC,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title: Xxxxxxxx Xxxxxxxx
-00-
0000 XXXXXX X. XXX NOMINEE TRUST
By: US Bank, N.A., not personally, but
solely as Trustee under the 1997
Xxxxxx X. Xxx Nominee Trust
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX X. XXX INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp.,
its general partner
By:
------------------------------------
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
-25-
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY I LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES
COMPANY II LLC
By: Xxxxxx Investments Holdings, LLC,
its managing member
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX INVESTMENTS HOLDINGS, LLC
By: Xxxxxx Investments, LLC,
its managing member
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-26-
Management Stockholders
[SIGNATURE BLOCKS FOR MANAGEMENT
SECURITYHOLDERS TO BE ADDED AS
APPLICABLE]
-27-
Third Party Investors
RGIP, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-28-
EXHIBIT A
SCHEDULE 1
MANAGEMENT STOCKHOLDERS
[To be Revised as Necessary]
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx XxXxxxx
Xxxxxx XxXxxx
Xxxxxxx Xxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxx
Sham Almed
Xxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxxxxx
Xxxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx XxXxxx
Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Forest
Xxx Xxxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
Additional Management Securityholders Signature Page
The undersigned, by its signature below hereby becomes a party to the
Securityholders Agreement, dated as of August 27, 2004, among THL - Nortek
Investors LLC and certain of its Securityholders (the "Securityholders
Agreement") pursuant to Section 11.3 thereof and agrees to be bound by the terms
of the Securityholders Agreement and, for all purposes thereof, to be a
"Management Securityholder".
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
20th day of March 2006.
Signature
---------------------------
Print Name: Xxxx Xxxxx
