INVESTOR RIGHTS AGREEMENT MAY 9TH, 2008
I.C.
XXXXXX & COMPANY, INC.
____________________________
MAY
9TH,
2008
____________________________
TABLE
OF
CONTENTS
| Page | ||
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SECTION
1 Definitions
|
1
|
|
|
SECTION
2 Preemptive Rights
|
3
|
|
|
2.1
|
Preemptive
Rights
|
3
|
|
SECTION
3 Registration Rights
|
6
|
|
|
3.1
|
Demand
Registration
|
6
|
|
3.2
|
Company
Registration
|
8
|
|
3.3
|
Registration
on Form S-3
|
9
|
|
3.4
|
Limitations
on Subsequent Registration Rights
|
9
|
|
3.5
|
Expenses
of Registration
|
10
|
|
3.6
|
Registration
Procedures
|
10
|
|
3.7
|
Indemnification
|
12
|
|
3.8
|
Information
by Holder
|
14
|
|
3.9
|
Rule
144 Reporting and Form S-3
|
14
|
|
3.10
|
Transfer
of Registration Rights
|
15
|
|
SECTION
4 Legends
|
15
|
|
|
4.1
|
Legends
|
15
|
|
SECTION
5 Board Representation; Approval Rights
|
15
|
|
|
5.1
|
Board
Members
|
15
|
|
5.2
|
Approval
Rights
|
17
|
|
5.3
|
Committees
|
17
|
|
5.4
|
Indemnification
|
17
|
|
SECTION
6 Miscellaneous
|
17
|
|
|
6.1
|
Governing
Law
|
17
|
|
6.2
|
Entire
Agreement; Amendment
|
18
|
|
6.3
|
Survival
|
18
|
|
6.4
|
Successors
and Assigns
|
18
|
|
6.5
|
Aggregation
|
18
|
|
6.6
|
Notices,
etc.
|
19
|
|
6.7
|
Severability
|
19
|
|
6.8
|
Counterparts
|
19
|
|
6.9
|
Delays
or Omissions
|
19
|
|
6.10
|
Attorneys’
Fees
|
20
|
|
6.11
|
Specific
Performance
|
20
|
|
6.12
|
Further
Instruments and Actions
|
20
|
|
6.13
|
Effect
of Change in Company’s Capital Structure
|
20
|
I.C.
XXXXXX & COMPANY, INC.
This
Investor Rights Agreement (this “Agreement”)
is
made as of May 9, 2008 by and between I.C.
Xxxxxx & Company, Inc.,
a
Delaware corporation (the “Company”),
and
the entities and persons listed on the Schedule of Investors attached hereto
as
Exhibit A (collectively the “Investors”
and
each individually an “Investor”).
RECITALS
WHEREAS,
the Company and the Investors (or Affiliates thereof) are parties to the Stock
Purchase Agreement of even date herewith (the “Purchase
Agreement”),
pursuant to which the Company has agreed to issue, and the Investors have agreed
to buy, shares of the Company’s Common Stock, on the terms and subject to the
conditions set forth in the Purchase Agreement; and
WHEREAS,
the Purchase Agreement requires, as a condition to closing the issuance and
sale
of the shares of Common Stock, that the parties hereto enter into this
Agreement.
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the Investors hereby agree as follows:
SECTION
1
1.1
Definitions.
As
used
in this Agreement, the following terms shall have the following respective
meanings:
“Affiliate”
shall
mean, with respect to any Investor, any Person which, directly or indirectly,
controls, is controlled by or is under common control with such Person, and
shall include, without limitation, any partner, officer, director, or member
of
such Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “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
agreement or otherwise.
“Board
of Directors”
shall
mean (except where the context clearly indicates otherwise) the board of
directors of the Company after the reconstitution thereof in accordance with
Section 5.1 hereof.
“Commission”
shall
mean the Securities and Exchange Commission or any other U. S. federal agency
at
the time administering the Securities Act.
1
“Common
Stock”
shall
mean shares of the Company’s Common Stock, $0.0001 par value per
share.
“Company”
has
the
meaning set forth in the preamble.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Holder
or Holders”
shall
mean each of the Investors listed on Exhibit A and their transferees as
permitted by Section 3.10 holding Registrable Securities.
“Indemnified
Party”
has
the
meaning set forth in Section 3.7(c).
“Indemnifying
Party”
has
the
meaning set forth in Section 3.7(c).
“Initiating
Holders”
shall
mean (i) any Investor or Investors who hold Registrable Securities or (ii)
any
Holder or Holders who in the aggregate hold at least ten percent (10%) of the
Registrable Securities.
“Investors”
has
the
meaning set forth in the preamble.
“Person”
shall
mean an individual, corporation, limited liability company, trust, general
partnership or other entity.
“Preemptive
Right”
has
the
meaning set forth in Section 2.1(a).
“Preemptive
Notice”
has
the
meaning set forth in Section 2.1(a).
“Registrable
Securities”
shall
mean (a) the Shares, (b) any Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for
or in replacement of, the Shares, and (c) shares of Common Stock issued or
issuable pursuant to the conversion of New Securities (as defined in Section
3.1(a) hereof) acquired by the Investor under Section 3.1 hereof, excluding
in all cases, however, any Registrable Securities that have been sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction or which have been sold in a private transaction in
which
the transferor’s rights under this Agreement are not assigned.
The
terms
“register,”
“registered”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
“Registration
Expenses”
shall
mean all reasonable expenses, except as otherwise stated below, incurred by
the
Company in complying with Sections 3.1, 3.2 and 3.3 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company (and reasonable
fees and disbursements of one special counsel for Holders), accounting fees,
blue sky fees and the expense of any special audits incident to or required
by
any such registration (but excluding the compensation of regular employees
of
the Company which shall be paid in any event by the Company).
2
“Securities
Act”
shall
mean the Securities Act of 1933, as amended, or any similar United States
federal statute and the rules and regulations of the Commission thereunder,
all
as the same shall be in effect at the time.
“Selling
Expenses”
shall
mean all underwriting discounts, selling commissions and stock transfer taxes
applicable to the securities registered by the Holders.
“Shares”
shall
mean
the
shares of the Company’s Common Stock held by the Investors at the date hereof,
whether pursuant to the Purchase Agreement or otherwise, or which are hereafter
transferred from one Investor to another, or which are transferred to other
Holders pursuant to Section 3.10.
“Wurzburg”
shall
mean Wurzburg Holding S.A., one of the Investors.
1.2 Securities
Subject to this Agreement.
The
securities entitled to the benefits of this Agreement are the Registrable
Securities but, with respect to any particular Registrable Security, only so
long as such security continues to be a Restricted Security. A Registrable
Security that has ceased to be a Registrable Security cannot thereafter become
a
Registrable Security. As used herein, a Restricted Security is a Registrable
Security which has not been distributed in accordance with an effective
Registration Statement and which has not been distributed by a Holder pursuant
to Rule 144, Rule 903 or Rule 904, unless, in the case of a Registrable Security
distributed pursuant to Rule 903 or 904, any applicable restricted period has
not expired or the SEC or its staff has taken the position in a published
release, ruling or no-action letter that securities distributed under Rule
903
or 904 are ineligible for resale in the United States under Section 4(1) of
the
Securities Act notwithstanding expiration of the applicable restricted period.
Securities shall cease to be Registrable Securities at such time as they are
tradeable by the then holder without restriction as to volume pursuant to Rule
144.
SECTION
2
Preemptive
Rights
2.1 Preemptive
Rights
The
Company shall not, and it shall not permit any of its subsidiaries to, issue
or
sell any New Securities (as defined in Section 2.1(a)), unless prior to the
issuance or sale of such New Securities, each Investor shall have been given
the
opportunity (such opportunity being herein referred to as the “Preemptive
Right”)
to
purchase such Investor’s pro rata portion (as described in this paragraph) of
New Securities that the Company or any of its subsidiaries may, from time to
time, propose to sell and issue. An Investor’s pro rata portion, for purposes of
this Preemptive Right, is equal to the product of the aggregate number of New
Securities the Company (or its subsidiary) proposes to sell and issue multiplied
by the quotient of (x) the number of shares of Common Stock owned by such
Investor, divided by (y) the total number of shares of Common Stock
outstanding. Each Investor shall have the right to assign, in whole or in part,
its Preemptive Right to purchase its pro rata share of such New Securities
to
any one or more of its Affiliates. The Preemptive Right shall be subject to
the
following provisions:
3
(a) “New
Securities”
shall
mean any common stock of the Company (or any subsidiary, as applicable), whether
now authorized or not, and any rights, options or warrants to purchase said
common stock of the Company (or its subsidiary, as applicable), and securities
of any type whatsoever that are, or may become, convertible into common stock
of
the Company (or its subsidiary, as applicable); provided, however, that New
Securities does not include (i) securities issued pursuant to the
acquisition of another corporation or entity by the Company (or its subsidiary,
as applicable) by merger, purchase of substantially all of the assets or other
reorganization, in each case as approved by the Board of Directors; (ii) up
to 10% of the shares of Common Stock outstanding at closing issued or issuable
to officers, directors, consultants or employees of the Company pursuant to
stock option or stock purchase plans or agreements on terms approved by the
Board of Directors; (iii) securities issued upon the conversion or exercise
of
convertible or exercisable securities provided that such convertible or
exercisable securities were offered to the Investors under this Section 2.1
(or
that such Investors waived their Preemptive Right with respect to such
convertible or exercisable securities) or were outstanding on the date of this
Agreement; (iv) securities issued to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings or similar
transactions approved by the Board of Directors; (v) securities issued in
connection with any stock split, reverse stock split, stock combination, stock
dividend, recapitalization or similar event by the Company (or its subsidiary,
as applicable); (vi) securities issued in connection with any
reorganization, reclassification, exchange, substitution or other similar
adjustment approved by the Board of Directors; (vii) securities issued as a
dividend or distribution on the Common Stock if such dividend or distribution
is
distributed to the holders of Common Stock ratably based on the number of shares
of Common Stock held by all shareholders of the Company on the record date
for
such dividend or distribution; or (viii) securities issued by a wholly-owned
subsidiary to the Company or to another wholly-owned subsidiary of the
Company.
(b) In
the
event that the Company (or any subsidiary, as applicable) proposes to issue
New
Securities, it shall give each Investor at least thirty (30) days prior
written notice (the “Preemptive
Notice”) of
its
intention, describing the type of New Securities, the price, and the general
terms upon which the Company (or its subsidiary, as applicable) proposes to
issue the same, the total amount of capital to be raised, the name and address
of the bona fide purchaser to which the Company (or such subsidiary) proposes
to
issue or sell New Securities and the number of such New Securities which such
Investor is entitled to purchase (determined as provided in the first paragraph
of this Section 2.1). Each Investor shall have twenty (20) days from the
date of mailing of any such notice to agree to purchase up to its full pro
rata
share of such New Securities for the price and upon the general terms specified
in the notice by giving written notice to the Company; provided, that if (i)
the
consideration specified in the Preemptive Notice to be paid for the New
Securities is not all cash, or (ii) any property other than New Securities
is
proposed to be transferred in connection with the issuance of New Securities
to
which the Preemptive Notice relates, then the price payable by an Investor
shall
be the consideration specified in the Preemptive Notice or (at the election
of
the Investor) (A) a cash amount equal to the fair market value thereof in the
case of clause (i) and (B) a cash amount equal to the fair market value of
the
consideration allocable to the New Securities to be purchased by such Investor
in the case of clause (ii). Subject to Section 2.1(e), in the event any
determination of fair market value is required pursuant to this Section 2.1,
such determination shall be made in good faith by the Board of Directors
following (if the property is not publicly traded securities) receipt (at the
Company’s expense) of a valuation from an independent appraiser with appropriate
industry experience. At
the
expiration of such twenty (20) day period, the Company shall promptly notify
each Investor that elects to purchase or acquire all the shares available to
it
(each, a “Fully
Exercising Investor”)
of any
other Investor’s failure to do likewise. During the ten (10) day period
commencing after the Company has given such notice, each Fully Exercising
Investor may, by giving notice to the Company, elect to purchase or acquire,
in
addition to the number of shares specified above, up to that portion of the
New
Securities for which Investors were entitled to subscribe but that were not
subscribed for by the Investors which is equal to the proportion that the Common
Stock issued and held (assuming
conversion, exercise or exchange of all outstanding securities convertible
into
or exercisable or exchangeable for Common Stock) by
such
Fully Exercising Investor bears to the Common Stock issued and held (assuming
conversion, exercise or exchange of all outstanding securities convertible
into
or exercisable or exchangeable for Common Stock)
by all
Fully Exercising Investors who wish to purchase such unsubscribed
shares.
4
(c) If
all
New
Securities referred to in the Preemptive Notice are not elected to be purchased
or acquired as provided in Section
2.1(b),
the
Company may, during the sixty (60) day period following the expiration of the
periods provided in Section
2.1(b),
offer
and sell (or enter into an agreement pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within thirty (30) days
from the execution of such agreement) the remaining unsubscribed portion of
such
New Securities to any Person or Persons at a price not less than, and upon
terms
no more favorable to the offeree than, those specified in the Preemptive Notice.
If the Company does not sell such New Securities within such 60-day period
(or
such 30-day period after execution of such agreement, as applicable), the right
provided under this Section
2.1
shall be
deemed to be revived and such New Securities shall not be offered unless first
reoffered to the Investors in accordance with this Section
2.1.
(d) Any
Investor’s failure to exercise this Preemptive Right on any issuance of New
Securities shall not adversely affect such Investor’s Preemptive Right to
purchase subsequent issuances of New Securities.
(e) If
the
consideration received by the Company (or its subsidiary, as applicable) in
exchange for the New Securities is other securities, its value will be deemed
its fair market value as determined as follows:
(i) Securities
not subject to investment letter or other similar restrictions on free
marketability covered by (ii) below:
(A) If
traded
on a securities exchange, the value shall be deemed to be the average of the
closing prices of the securities on such quotation system over the thirty
(30) day period ending three (3) days prior to the closing
with
the
exercising Investors;
(B) If
actively traded over-the-counter, the value shall be deemed to be the average
of
the closing bid or sale prices (whichever is applicable) over the thirty
(30) day period ending three (3) days prior to the closing with the
exercising Investors; and
(C) If
there
is no active public market, the value shall be the fair market value thereof,
as
determined by the Board of Directors.
5
(ii) The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely
by
virtue of a stockholder’s status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in
(i) (A), (B) or (C) to reflect the approximate fair market value
thereof, as determined by the Board of Directors.
SECTION
3
Registration
Rights
3.1 Demand
Registration
(a) Demand
for Registration.
In case
the Company shall receive from Initiating Holders a written request that the
Company effect any registration, qualification or compliance with respect to
an
offering for an anticipated aggregate offering price of not less than $2,000,000
(before underwriting discounts and other selling expenses), the Company
will:
(i) promptly
(and in no event later than ten (10) days after the date such request is
received) give written notice of the proposed registration, qualification or
compliance to all other Holders; and
(ii) as
soon
as practicable (and in any event within sixty (60) days after the date that
the
Company receives such written request from the Initiating Holders), effect
such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may
be
so requested and as would permit or facilitate the sale and distribution of
all
or such portion of the Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
received by the Company within twenty (20) days after receipt of such
written notice from the Company;
Provided,
however,
that
the Company shall not be obligated to take any action to effect any such
registration, qualification or compliance pursuant to this Section
3.1(a):
(A) In
any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service
in
such jurisdiction and except as may be required by the Securities
Act;
(B) During
the period starting with the date thirty (30) days prior to the Company’s
estimated date of filing of, and ending on the date three (3) months
immediately following the effective date of, any registration statement
pertaining to securities of the Company sold by the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in
good
faith all reasonable efforts to cause such registration statement to become
effective;
6
(C) After
the
Company has effected an aggregate of two (2) registrations pursuant to this
Section 3.1(a) or 3.3(a), provided that (i) such registrations have been
declared or ordered effective and (ii) the offerings thereunder are not
interfered with by any stop order, injunction, order or requirement of the
Commission or other agency or court of competent jurisdiction; or
(D) If
the
Company shall furnish to such Holders a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of
the
Board of Directors it would (i) be materially detrimental to the Company or
its
stockholders, (ii) materially interfere with a significant acquisition,
corporate reorganization, or other similar transaction involving the Company,
or
(iii) require premature disclosure of material information that the Company
has
a bona fide business purpose for preserving as confidential, if a registration
statement were to be filed in the near future, then the Company’s obligation to
register, qualify or comply under this Section 3 shall be deferred for a period
not to exceed ninety (90) days from the date of receipt of written request
from the Initiating Holders, provided, however, that in such event, (i) the
Initiating Holders shall be entitled to withdraw such request and retain its
rights under this Section 3.1(a) and (ii) the Company shall not utilize this
right more than once in any twelve (12) month period.
Subject
to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to
be
registered as soon as practicable after receipt of the request or requests
of
the Initiating Holders.
(b) Underwriting.
In the
event that a registration pursuant to Section 3.1(a) is for a registered public
offering involving an underwriting, the Initiating Holders will so advise the
Company as part of the written request given by such Initiating Holders pursuant
to Section 4.1(a), and the Company shall in turn advise all other Holders as
part of the notice given pursuant to Section 4.1(a)(i). In such event, the
right
of any Holder to registration pursuant to Section 4.1 shall be conditioned
upon
such Holder’s participation in the underwriting arrangements required by this
Section 4.1, and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent requested shall be limited to the extent provided
herein.
The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement
in
customary form with the managing underwriter(s) selected for such underwriting
by the majority in interest of the Initiating Holders, but subject to the
reasonable approval of the Company. Notwithstanding any other provision of
this
Section 3.1, if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares
to
be underwritten, then the Company shall so advise all Holders, and the number
of
shares that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time
of
filing the registration statement.
If
any
Holder disapproves of the terms of the underwriting, such person may elect
to
withdraw therefrom by written notice to the Company, the managing underwriter
and the Initiating Holders. The Registrable Securities and/or other securities
so withdrawn shall also be withdrawn from registration.
7
3.2 Company
Registration
(a) Notice
of Registration.
If at
any time or from time to time the Company shall determine to register any of
its
securities, either for its own account or the account of a security holder
or
holders or a combination thereof, other than (i) a registration relating
solely to employee benefit plans or (ii) a registration relating solely to
a corporate reorganization or other transaction covered by Commission Rule
145,
the Company will:
(i) promptly
(and in no event later than twenty (20) days prior to the filing of any
registration statement) give to each Holder written notice thereof;
and
(ii) include
in such registration (and any related qualification under blue sky laws or
other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests made by any Holder within
twenty (20) days after receipt of such written notice from the
Company.
(b) Underwriting.
If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Holders
as
part of the written notice given pursuant to Section 3.2(a)(i). In such event,
the right of any Holder to registration pursuant to this Section 3.2 shall
be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall, together with the Company, enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company, but subject to the reasonable approval of the
Holders. Notwithstanding any other provision of this Section 3.2, if the
managing underwriter determines that marketing factors require a limitation
of
the number of shares to be underwritten, the managing underwriter may limit
the
number of shares of Registrable Securities to be included in such registration
without requiring any limitation in the number of shares to be registered on
behalf of the Company. The Company shall so advise all Holders and the number
of
shares that may be included in the registration and underwriting by all Holders
requesting inclusion of their Registrable Securities or other Company
securities, as applicable, shall be allocated among them, as nearly as
practicable, first,
to the
Company solely with respect to shares proposed to be sold for the Company’s
account, and second,
among
the Holders in proportion to the respective amounts of Registrable Securities
held by such Holders at the time of filing of the registration statement. If
any
Holder disapproves of the terms of any such underwriting, such holder may elect
to withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration.
Notwithstanding anything contained herein to the contrary, in connection with
any offering involving an underwriting of the Company’s securities the Company
shall not be required to include any of the Registrable Securities in such
an
underwriting unless the Holders accept the terms of the underwriting as agreed
upon between the Company and its underwriters, and then only in such quantity
as
the underwriters in their sole discretion determine will not jeopardize the
success of the offering by the Company. A registration shall not be counted
as
“effected” if, as a result of an exercise of the underwriter’s cutback
provision, fewer than seventy percent (70%) of the total number of Registrable
Securities that Holders have requested to be included in such registration
statement are actually included.
8
(c) Right
to Terminate Registration.
The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 3.2 prior to the effectiveness of such registration
whether or not any Holder has elected to include Registrable Securities in
such
registration. The Company will give written notice of such determination to
each
Holder that has elected to include Registrable Securities in such registration
and will be relieved of its obligation to register any Registrable Securities
in
connection with such registration statement. The expenses of such terminated
or
withdrawn Registration will be borne by the Company.
3.3 Registration
on Form S-3
(a) Request
for Registration.
If any
Holder or Holders request that the Company file a registration statement on
Form
S-3 under the Securities Act (or
any
successor short-form registration statement similar to Form S-3) for
a
public offering of shares of the Registrable Securities held by such Holder
or
Holders the reasonably anticipated aggregate price to the public of which would
exceed $1,000,000 (before underwriting discounts and other selling expenses),
and the Company is a registrant entitled to use Form S-3 (or any successor
short-form registration statement similar to Form S-3) to register the
Registrable Securities for such an offering, the Company shall cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as
such
Holder or Holders may reasonably request; provided,
however,
that
the Company shall not be required to effect more than two (2) registrations
pursuant to this Section 3.3(a) in any twelve (12) month period, provided that
(i) such registrations have been declared or ordered effective and (ii) the
offering is not interfered with by any stop order, injunction, order or
requirement of the Commission or other agency or court of competent
jurisdiction. The substantive provisions of Section 3.1(b) shall be applicable
to each registration initiated under this Section 3.3(a). Any request for
registration under this Section 3.3(a) will not be considered a demand
registration request pursuant to Section 3.1(a) except if such request for
registration under this Section 3.3(a) relates to an underwritten
offering.
(b) Limitations.
Notwithstanding the foregoing, the Company shall not be obligated to take any
action pursuant to Section 3.3(a) in any of the circumstances specified in
clauses (A), (B), (C) or (D) of the proviso to Section 3.1(a).
3.4 Limitations
on Subsequent Registration Rights
From
and
after the date hereof, the Company will not, without the prior written consent
of holders of a majority of the voting power of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder
of
any securities of the Company which allows such holder or prospective holder
of
any securities of the Company to include such securities in any registration
filed under Sections 3.1, 3.2 or 3.3 hereof, or grants any holder or prospective
holder rights which are analogous to those granted under Sections 3.1, 3.2
or
3.3 unless, under the terms of such agreement, such holder or prospective holder
may include such securities in any such registration only to the extent that
the
inclusion of his securities will not diminish the amount of Registrable
Securities which are included.
9
3.5 Expenses
of Registration
(a) Registration
Expenses.
The
Company shall bear all Registration Expenses incurred in connection with all
registrations pursuant to Section 3.1, Section 3.2 and Section
3.3.
(b) Selling
Expenses.
All
Selling Expenses shall be borne by the Holders pro rata on the basis of the
number of shares so registered.
3.6 Registration
Procedures
In
the
case of each registration, qualification or compliance effected by the Company
pursuant to this Agreement, the Company will:
(a) keep
each
Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof;
(b) as
soon
as practicable, prepare and file with the Commission a registration statement
with respect to such securities and use commercially reasonable efforts to
cause
such registration statement to become and remain effective until the earlier
of
(i) one year or (ii) the distribution described in the Registration
Statement has been completed; provided, however, that (i) such one-year
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of the managing underwriter; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such one-year period shall be
extended, if necessary, to keep the registration statement effective until
all
such Registrable Securities are sold;
(c) furnish
to each of the Holders participating in such registration and to the
underwriters of the securities being registered such reasonable number of copies
of the registration statement, preliminary prospectus, final prospectus and
such
other documents as such Holders or underwriters may reasonably request in order
to facilitate the public offering of such securities;
(d) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the
Securities Act with respect to the disposition of all securities covered by
such
registration statement;
(e) use
reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders; provided,
however, that the Company shall not be required in connection therewith, or
as a
condition thereto, to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company
is
already qualified to do business or is subject to service of process in such
jurisdiction, and except as may be required by the Securities Act;
10
(f) in
the
event of an underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing
underwriter of such offering;
(g) notify
each Holder covered by such registration statement (i) when any prospectus
or
any prospectus supplement has been filed with the Commission, and, with respect
to such registration statement or any post-effective amendment thereto, when
the
same has been declared effective by the Commission, (ii) of any request by
the
Commission for amendments or supplements to such registration statement or
related prospectus, or for additional information, (iii) of the issuance by
the
Commission of any stop order or the initiation of any proceedings for such
or a
similar purpose (and the Company shall use commercially reasonable efforts
to
obtain the withdrawal of any such order as soon as practicable), (iv) of the
receipt by the Company of any notification with respect to the suspension of
the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose (and the
Company shall use its commercially reasonable efforts to obtain the withdrawal
of any such suspension as soon as practicable), (v) at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act
of the happening of any event as a result of which the prospectus included
in
such registration statement, as then in effect, includes an untrue statement
of
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements made therein not misleading in the light of
the
circumstances then existing, and, at the request of any such Holder, prepare
and
furnish to such Holder a reasonable number of copies of a supplement or an
amendment to such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable 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 and (vi)
of
the Company’s determination that the filing of a post-effective amendment to
such registration statement shall be necessary or appropriate;
(h) cause
all
such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange or automated quotation system on which similar securities
issued by the Company are then listed, or, if no Company securities are so
listed, the Company will cause all such Registrable Securities registered
pursuant hereunder to be listed on a national securities exchange or national
automated quotation system or the OTC Bulletin Board, as determined by the
Board
of Directors in its sole discretion;
(i) provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration;
(j) permit
a
single firm of counsel designated as selling stockholders' counsel by the
holders of a majority in interest of the Registrable Securities being registered
to review the registration statement and all amendments and supplements thereto
a reasonable period of time prior to their filing with the Commission and state
authorities, and shall not file any document in a form to which such counsel
reasonably objects; and
(k) cause
the
Company's officers, directors and independent certified public accountants
to
supply all information reasonably requested by a representative of any Holder
of
Registrable Securities, and any attorney or accountant retained by such Holder,
in connection with such registration; provided, however, that such
representatives, attorneys or accountants shall, at the request of the Company,
enter into a confidentiality agreement, in form and substance reasonably
satisfactory to the Company, prior to the release or disclosure of any such
information.
11
3.7 Indemnification
(a) By
Company.
The
Company will indemnify each Holder, each of its officers, directors, partners,
legal and financial advisors, and each person controlling such Holder within
the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act and each Investor and its
officers, directors, partners, legal and financial advisors, and each person
controlling such Investor within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages or liabilities, joint or
several (or actions in respect thereof), including any of the foregoing incurred
in settlement of any litigation, commenced or threatened, arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading, or any violation by the Company of the
Securities Act, the Exchange Act or any state or federal securities law, or
any
rule or regulation promulgated under such Acts or law applicable to the Company
in connection with any such registration, qualification or compliance, and
the
Company will reimburse each such Holder, each of its officers, directors,
partners, legal and financial advisors, and each person controlling such Holder,
each such underwriter and each person who controls any such underwriter, each
Investor, each of its officers, directors and partners and each person
controlling such Investor, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not
be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and
in
conformity with written information regarding a Holder furnished to the Company
by such Holder, controlling person, underwriter or Investor and stated to be
specifically for use therein. If the Holders and Investors are represented
by
counsel other than counsel for the Company, the Company will not be obligated
under this Section 3.7(a) to reimburse legal fees and expenses of more than
one
separate counsel for all Holders and Investors.
(b) By
Holders.
Each
Holder will, if Registrable Securities held by such Holder are included in
the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors, each of its officers,
legal and financial advisors, each underwriter, if any, of the Company’s
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors,
legal and financial advisors, and each person controlling such Holder within
the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular
or
other document, 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 will reimburse the Company, such Holders, such
directors, officers, legal and financial advisors, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information regarding
a
Holder furnished to the Company by an instrument duly executed by such Holder
and stated to be specifically for use therein. Notwithstanding the foregoing,
the liability of each Holder under this Section 3.7(b) shall be several, not
joint and several, among the Holders, and shall be limited in an amount equal
to
the net proceeds received by such Holder of the shares sold by such Holder
in
such registration.
12
(c) Procedures.
Each
party entitled to indemnification under this Section 3.7 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may participate
in such defense at such party’s expense. The failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its
obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party’s ability to defend such action.
Notwithstanding the foregoing, the Indemnifying Party shall not assume the
defense for matters as to which there is a conflict of interest or separate
and
different defenses as determined by the Indemnified Party in its reasonable
discretion, in which case, the reasonable fees and expenses of counsel retained
by the Indemnified Party to defend against such matters shall be paid by the
Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or
litigation, shall, except with the consent of each Indemnified Party, 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 to such claim
or
litigation. The indemnification provided for under this Agreement will remain
in
full force and effect regardless of any investigation made by or on behalf
of
the Indemnified Party and will survive the transfer of securities.
(d) Contribution.
If the
indemnification provided for in this Section 3.7 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, 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 or alleged 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 statement or omission. Notwithstanding the foregoing, the liability
of each Holder under this Section 3.7(d) shall be limited in an amount equal
to
the net proceeds received by such Holder of the shares sold by such Holder
in
such registration. 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.
13
(e) Controlling
Agreement.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions of this Section 3.7, the provisions in the underwriting
agreement shall control.
3.8 Information
by Holder
The
Holder or Holders included in any registration shall furnish to the Company
such
information regarding such Holder or Holders, the Registrable Securities held
by
them and the distribution proposed by them as the Company may request in writing
and only as shall be necessary to enable the Company to comply with the
provisions hereof in connection with any registration, qualification or
compliance referred to in this Agreement.
3.9 Rule
144 Reporting and Form S-3
With
a
view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and certain other rules and regulations
of
the Commission which may at any time permit a Holder to sell Registrable
Securities to the public without registration or pursuant to a registration
on
Form S-3, the Company agrees to use commercially reasonable efforts
to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act, at all times after the effective date
that the Company becomes subject to the reporting requirements of the Securities
Act or the Exchange Act;
(b) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act (at any time after
it
has become subject to such reporting requirements); and
(c) furnish
to any Holder forthwith upon request a written statement by the Company:
(i) as to its compliance with the reporting requirements of Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public); (ii) as to its compliance with the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject
to
such reporting requirements); (iii) as to its compliance with the
requirements for qualification as a registrant whose securities may be offered
and sold pursuant to Form S-3 (at any time after it so qualifies); (iv) a
copy of the most recent annual or quarterly report of the Company; or
(v) such other reports and documents of the Company and other information
in the possession of, or reasonably obtainable by, the Company as such Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.
14
3.10 Transfer
of Registration Rights
The
rights to cause the Company to register securities granted Holders under
Sections 3.1, 3.2 and 3.3 may be transferred or assigned by a Holder of
Registrable Securities provided that: (a) such transfer or assignment may
otherwise be effected in accordance with applicable securities laws and
(b) such transferee or assignee (i) will, as a result of such transfer or
assignment, beneficially own at least 5% (except that for purposes of a transfer
or registration rights under Section 3.2 only, such number shall be 3%) of
the
outstanding shares of Common Stock, (ii) in the case of a transfer or assignment
by Xxxxxxx Xxxxxxxxxxx or Xxxx Xxxxx, will hold a number of shares of Common
Stock equal to at least 30% of the shares purchased by such Investor under
the
Purchase Agreement, or (iii) is a current or retired partner, member or holder
of greater than ten percent (10%) of the voting securities of the transferring
or assigning Holder or is an Affiliate, or an immediate family member or trust
for the benefit of immediate family members, of such Holder. No transfer or
assignment will divest a Holder of such rights and powers unless all Registrable
Securities owned by such Holder are transferred or assigned.
SECTION
4
Legends
4.1 Legends
Each
Investor understands that the share certificates evidencing any Registrable
Securities purchased pursuant to the Purchase Agreement shall be endorsed with
the following legend:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION OF SUCH SHARES MAY
BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.”
SECTION
5
Board
Representation; Approval Rights
5.1 Board
Members
15
(a) Prior
to
the consummation of the transactions contemplated by the Purchase Agreement,
the
Company’s Board of Directors consists of 7 members, and Wurzburg or its
Affiliates has designated three (3) of such members (Xxxxxxx Girbaud, Xxxxxxx
Xxxxxxxxxxx and Xxxx Xxxxx, or the “Existing
Designees”).
The
Company, by action of said 7-member Board of Directors shall, as soon as
practicable following the consummation of the transactions contemplated by
the
Purchase Agreement and having been advised by Wurzburg or its Affiliates of
the
three additional individuals that Wurzburg or its Affiliates wish to designate
as directors, (to the extent permitted under applicable law), (i) increase
the
number of directors constituting the Company’s entire Board of Directors to nine
(9) members, (ii) request and accept the resignation of one current director
who
is not an Existing Designee, and (iii) fill the three vacancies so created
with
three (3) additional individuals which shall have been designated by Wurzburg
or
its Affiliates (together with the Existing Designees, the “Wurzburg
Designees”).
Thereafter the number of directors constituting the entire Board of Directors
shall remain nine (9) and Wurzburg or its affiliates shall be entitled to
designate 6 individuals to be elected to the Company’s Board of Directors at
each annual meeting of the stockholders of the Company or at any special meeting
at which directors are elected; provided that if the Investors hereafter hold,
in the aggregate, less than 60% of the issued and outstanding Common Stock,
then
the number of Wurzburg Designees shall be reduced to that number of directors
which is equal to the same percentage of nine directors that the shares of
Common Stock then owned, in the aggregate, by the Investors bears to the total
outstanding shares of Common Stock If the preceding computation results in
a
number which is not a whole number, the number of Wurzburg Designees shall
be
rounded down to the nearest whole number but with one-half and above to be
rounded upward to the nearest whole number.
(b) The
Company hereby agrees to take all actions which are reasonably necessary or
desirable, and to otherwise use its best efforts to give effect to Wurzburg’s
rights under Section 5.1(a) above.
(c) Without
limiting anything contained in Section 5.1(b), at each annual meeting of the
stockholders of the Company (or at any special meeting) at which directors
are
to be elected, Wurzburg or its Affiliates shall submit to the Company the names
of a sufficient number of proposed Wurzburg Designees to fill all of the
directorships belonging to Wurzburg Designees. The Board of Directors shall
use
its best efforts to ensure that all such Wurzburg Designees are elected to
the
Board of Directors. If Wurzburg or its Affiliates fail to designate a sufficient
number of directors to fill all directorships which they are entitled to
designate, then the Company shall use it best efforts to ensure that any
directorship not so filled shall remain vacant until such time as Wurzburg
or
its Affiliates designate a person to fill such directorship.
(d) The
Company shall use it best efforts to ensure that no Wurzburg Designee is removed
without cause without the affirmative vote of the holders of a majority of
shares of Common Stock held by the Investors, given either at a special meeting
of stockholders duly called for that purpose or pursuant to a written consent
of
such stockholders. In furtherance of the foregoing, in case any stockholder
of
the Company proposes to remove any Wurzburg Designee without cause, the Board
of
Directors shall recommend to the other stockholders that they vote against
any
such removal. Any vacancy to be filled by the Board of Directors (pursuant
to
Delaware law) in any directorship intended for a Wurzburg Designee shall be
filled only by a Wurzburg Designee.
16
(e) The
Company agrees to use its best efforts to obtain no later than the date on
which
the size of the board is increased to 9 members pursuant to Section 5.1(a)
the
resignation of one current director who is not a Wurzburg Designee in order
to
create a sufficient number of vacant directorships to allow the 3 new Wurzburg
Designees to be appointed to the Board of Directors, and to ensure that any
such
vacancy created by such resignation shall be filled only by a Wurzburg Designee
as provided in this Section 5.1; provided, that if the Company is unable to
obtain such resignation pursuant hereto, then the Company shall take all actions
reasonably necessary or desirable, and otherwise use its best efforts, to cause
the removal of such non-Wurzburg Designee by written consent of a majority
of
the shares then entitled to vote).
(f) For
the
purposes of this Section 5.1, for any matter that requires the vote of the
Company’s stockholders, the term “best efforts” shall include, without
limitation, (x) making a recommendation to the Company’s stockholders that they
approve or reject (as applicable) the relevant matters referred to in the
respective paragraphs of this Section 5.1 and (y) (except in the case of the
proviso to Section 5.1(e)) soliciting proxies from such stockholders in favor
of
or against (as applicable) such matters.
5.2 Approval
Rights
At
any
time between the date of this Agreement and the date on which all six (6)
Wurzburg Designees have been elected to, and are serving on, the Board of
Directors, as reconstituted pursuant to Section 5.1(a), no action proposed
to be
taken by the Company that requires the approval of the Board of Directors (or
a
committee thereof) shall be taken by the Company without the unanimous approval
of the Existing Designees.
5.3 Committees
The
Board
of Directors will not establish any committee authorized to exercise the power
of the Board of Directors unless the Wurzburg Designees (or their nominees)
are
granted representation on such committee consistent with the proportion of
the
total number of Wurzburg Designees to the total number of members of the entire
Board of Directors; provided, however, that the Investors shall waive such
right
to proportional representation if they receive an opinion in form and substance
reasonably acceptable to the Investors from counsel reasonably acceptable to
the
Investors that such proportionate representation violates a law or regulation
then applicable to the Company or its directors in their capacity as
such.
5.4 Indemnification
The
Company will indemnify members of the Board of Directors to the fullest extent
permitted by applicable law.
SECTION
6
Miscellaneous
6.1 Governing
Law
This
Agreement shall be governed in all respects by the laws of the State of Delaware
as applied to contracts made and to be fully performed entirely within that
state between residents of that state. All disputes arising out of this
Agreement shall be subject to the exclusive jurisdiction and venue of the New
York state courts (or, if there is exclusive federal jurisdiction, the United
States District Courts of the Southern District of New York) and the Company
consents to the personal and exclusive jurisdiction and venue of these
courts.
17
6.2 Entire
Agreement; Amendment
This
Agreement (including the exhibits hereto) constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof. This Agreement or any term hereof may be amended, waived, discharged
or
terminated by a written instrument signed by the Company and the Investors
(or
as to Section 3, the Holders) or transferees of such Investors holding more
than
a majority of the Registrable Securities then outstanding; provided, however,
that if such amendment or waiver adversely and disproportionately affects a
party as compared to another party, increases a benefit of a party without
providing substantially the same benefit on substantially the same terms to
another party, or increases the obligations of a party, then the consent of
such
affected party shall be required.
6.3 Survival
The
representations, warranties, covenants and agreements made herein shall survive
any investigation made by any Holder and the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall
be
deemed to be representations and warranties by the Company hereunder solely
as
of the date of such certificate or instrument.
6.4 Successors
and Assigns
Except
as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors,
and
administrators of the parties hereto and shall inure to the benefit of and
be
enforceable by each person who shall be a holder of Registrable Securities
from
time to time; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities specifying
the full name and address of the transferee, the Company may deem and treat
the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes, including the payment of dividends
or any redemption price and the delivery of any notices required to be given
hereunder.
6.5 Aggregation
For
the
purposes of determining the number of shares of Registrable Securities held
by a
Holder or a transferee or assignee, the holdings of transferees and assignees
of
a partnership, limited liability company or corporation, as applicable, who
are
Affiliates, partners or members or retired partners or retired members of such
partnership, limited liability company (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) or corporation, as applicable,
shall be aggregated together and with the holdings of the partnership, limited
liability company or corporation, as applicable.
18
6.6 Notices,
etc.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered or certified mail, postage prepaid,
or
otherwise delivered by hand or by messenger, or overnight courier addressed
or
by facsimile or electronic mail: (a) if to an Investor (or its transferee),
at the address of such Investor (or its transferee) set forth on the books
of
the Company or the facsimile number of such Investor set forth on the signature
page hereto, or at the address or facsimile number, as applicable, designated
by
such Investor (or its transferee) in a notice delivered to each party hereto
in
accordance with the terms hereof upon not less than ten (10) days notice in
writing; or (b) if to the Company, at the address of its principal office
and addressed to the attention of the Chief Executive Officer at the Company’s
address set forth on the signature page hereto or at such other address or
facsimile number as the Company shall have furnished to the Investors (or its
transferee) upon not less than ten (10) days notice in writing. Any notice
required by the provisions of this Section 6.6 shall be deemed effectively
given: (i) upon personal delivery to the party to be notified,
(ii) when sent by confirmed facsimile or electronic mail if sent during
normal business hours of the recipient; if not, then on the next business day,
(iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.
6.7 Severability
In
the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that
no
such severability shall be effective if it materially changes the economic
benefits or burdens of this Agreement to any party.
6.8 Counterparts
This
Agreement may be executed in any number of counterparts and by facsimile, each
of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one
instrument.
6.9 Delays
or Omissions
It
is
agreed that no delay or omission to exercise any right, power, or remedy
accruing to any party hereto, upon any breach, default or noncompliance by
any
other party under this Agreement shall impair any such right, power, or remedy,
nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of any similar breach, default
or
noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent, or approval of any kind or character on any party’s part of any
breach, default or noncompliance under the Agreement or any waiver on such
party’s part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such
writing. All remedies, either under this Agreement, by law, or otherwise
afforded to the parties hereto, shall be cumulative and not
alternative.
19
6.10 Attorneys’
Fees
Subject
to Section 3.7, in the event that any dispute among the parties to this
Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses
of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.11 Specific
Performance
Each
Investor and the Company hereby declares that it is impossible to measure in
money the damages which will accrue to a party hereto or to its heirs, personal
representatives, or assigns by reason of a failure to perform any of the
obligations under this Agreement and agrees that the terms of this Agreement
shall be specifically enforceable. If Investor or the Company, or his or its
heirs, personal representatives or assigns, institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein
that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
6.12 Further
Instruments and Actions
The
parties agree to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this
Agreement.
6.13 Effect
of Change in Company’s Capital Structure
Appropriate
adjustments shall be made in the number and class of shares set forth herein
in
the event of a stock dividend, stock split, reverse stock split, combination,
reclassification or like change in the capital structure of the
Company.
[Remainder
of page intentionally left blank]
20
IN
WITNESS WHEREOF,
the
undersigned has executed this Agreement as of the date set forth
above.
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COMPANY
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||
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I.C.
XXXXXX & COMPANY, INC.
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a
Delaware corporation
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||
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By:
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/s/ Xxxxxx X. Xxxx | |
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Name: Xxxxxx
X. Xxxx
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Title:
Chief Executive Officer
|
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|
Address:
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[Signature
Page to Investor Rights Agreement]
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INVESTORS
|
||
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TEXTILE
INVESTMENT INTERNATIONAL S.A.
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||
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By:
|
/s/
Xxxx
Xxxxx /s/ Xxx Xxxxxx
|
|
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Name: Xxxx
Xxxxx & Xxx Xxxxxx
|
||
|
Title: Managing
Directors
|
||
|
Facsimile
No.:
|
||
|
WURZBURG
HOLDING S.A.
|
||
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By:
|
/s/
Xxxx
Xxxxx /s/ Xxx Xxxxxx
|
|
|
Name: Xxxx
Xxxxx & Xxx Xxxxxx
|
||
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Title: Managing
Directors
|
||
|
Facsimile
No.:
|
||
|
/s/
Xxxxxxx Xxxxxxxxxxx
|
||
|
Xxxxxxx
Xxxxxxxxxxx
|
||
|
Facsimile
No.:
|
||
|
/s/
Xxxx
Xxxxx
|
||
|
Xxxx
Xxxxx
|
||
|
Facsimile
No.:
|
||
[Signature
Page to Investor Rights Agreement]
EXHIBIT
A
SCHEDULE
OF INVESTORS
Textile
International Investment S.A.
Wurzburg
Holding X.X.
Xxxxxxx
Xxxxxxxxxxx
Xxxx
Xxxxx
