Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 20, 1998, between EVENFLO COMPANY, INC., a Delaware corporation (the
"Company"), and KKR 1996 FUND L.P., a Delaware limited partnership (the "KKR
Fund").
RECITALS
WHEREAS, pursuant to the Stock Purchase Agreement dated as of July 30,
1998 between Lisco, Inc. ("Lisco)" and the KKR Fund, the KKR Fund has purchased
5,100,000 shares of Common Stock, representing approximately 51% of the issued
and outstanding Common Stock.
WHEREAS, the KKR Fund, Lisco and the Company are parties to a
Stockholders' Agreement dated as of August 20, 1998 which sets forth certain
rights and obligations of each of the KKR Fund, Lisco and the Company relating
to the ownership by the KKR Fund and Lisco of the Common Stock.
NOW, THEREFORE, in consideration of the foregoing and the
representations warranties and agreements contained in this Agreement, the
parties agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following respective meanings:
"Common Stock": The shares of Class A Common Stock, $1.00 par
value per share, of the Company and any stock into which such common
stock may thereafter be converted or exchanged.
"Demand Party": (a) the KKR Fund or (b) any other Holder or
Holders, including, without limitation, any Person that may become an
assignee of the KKR Fund's rights hereunder; provided that to be a
Demand Party under this clause (b), a Holder or Holders must either
individually or in aggregate with all other Holders with whom it is
acting together to demand registration, own at least 1% of the total
number of Registrable Securities.
"Exchange Act": The Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference
to a particular section thereof shall be deemed to include a reference
to the comparable section, if any, of any such similar federal statute.
"Holder": The KKR Fund and any other holder of Registrable
Securities (including any direct or indirect transferee of the KKR Fund
who agrees in writing to be bound by the provisions of this Agreement).
"Person": Any individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any
department or agency thereof.
"Other Registration Rights Agreement" means any written
agreement to which the Company and any holder of shares of Common Stock
are parties that provides for the registration of shares of Common
Stock of such holder by the Company.
"Registrable Securities": shall mean (i) any Common Stock
(including the shares of Common Stock purchased from Lisco) held by any
Holder, including shares issued or issuable upon the conversion,
exchange or exercise of any security convertible, exchangeable or
exercisable into Common Stock, (ii) any security of the Company held by
any Holder which is convertible, exchangeable or exercisable into
Common Stock and (iii) any Common Stock or any security convertible,
exchangeable or exercisable into Common Stock which may be issued or
distributed in respect thereof by way of stock dividend or stock split
or other distribution, recapitalization or reclassification. As to any
particular Registrable Securities, once issued, such Registrable
Securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale by the Holder 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, (b) such securities shall have been distributed
to the public pursuant to Rule 144 (or any successor provision) under
the Securities Act, (c) such securities shall have been otherwise
transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company
and subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities
Act or any state securities or blue sky law then in force, or (d) such
securities shall have ceased to be outstanding. For purposes of this
Agreement, any required calculation of the amount of, or percentage of,
Registrable Securities shall be based on the number of shares of Common
Stock which are Registrable Securities, including shares issuable upon
the conversion, exchange or exercise of any security convertible,
exchangeable or exercisable into Common Stock.
"Registration Expenses": Any and all expenses incident to
performance of or compliance with this Agreement, including, without
limitation, (i) all SEC and stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees
(including, if applicable, the fees and expenses of any "qualified
independent underwriter," as such term is defined in Rule 2720 of the
NASD, and of its counsel), (ii) all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications
of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) all fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities
exchange pursuant to clause (viii) of Section 4 and all rating agency
fees, (v) the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to
such performance and compliance, (vi) the reasonable fees and
disbursements of counsel
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selected pursuant to Section 7 hereof by the Holders of the Registrable
Securities being registered to represent such Holders in connection
with each such registration, (vii) any fees and disbursements of
underwriters customarily paid by the issuers or sellers of securities,
including liability insurance if the Company so desires or if the
underwriters so require, and the reasonable fees and expenses of any
special experts retained in connection with the requested registration,
but excluding underwriting discounts and commissions and transfer
taxes, if any, and (viii) other reasonable out-of-pocket expenses of
Holders (provided, that such expenses shall not include expenses of
counsel other than those provided for in clause (vi) above).
"Securities Act": The Securities Act of 1933, as amended, or
any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to
the comparable section, if any, of any such similar federal statute.
"SEC": The Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the
Exchange Act.
2. Incidental Registrations. (a) Right to Include Common
Stock. If the Company at any time after the date hereof proposes to register its
Common Stock (or any security which is convertible, exchangeable or exercisable
into Common Stock) under the Securities Act (other than a registration on Form
S-4 or S-8, or any successor or other forms promulgated for similar purposes),
whether or not for sale for its own account, in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act, it will, at each such time, give prompt written notice to all
Holders of Common Stock of its intention to do so and of such Holders' rights
under this Section 2. Upon the written request of any such Holder made within 30
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder), the Company
will use its best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the Holders thereof, to the extent requisite to permit the disposition of the
Registrable Securities to be so registered; provided, that (i) if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
proceed with the proposed registration of the securities to be sold by it, the
Company may, at its election, give written notice of such determination to each
Holder of Registrable Securities and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) if such registration involves an underwritten
offering, all Holders requesting to be included in the Company's registration
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to the Company, with such
differences, including any with respect to indemnification and liability
insurance, as may be customary or appropriate in combined primary and secondary
offerings. If a registration requested pursuant to this Section 2(a) involves an
underwritten public offering, any Holder requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement
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filed in connection with such registration, not to register such securities in
connection with such registration. Nothing in this Section shall operate to
limit the right of any Holder to (i) request the registration of Common Stock
issuable upon conversion, exchange or exercise of securities held by such Holder
notwithstanding the fact that at the time of request such Holder does not hold
the Common Stock underlying such securities or (ii) request the registration at
one time of both securities convertible, exchangeable or exercisable into Common
Stock and the Common Stock underlying any such securities.
(b) Expenses. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 2.
(c) Priority in Incidental Registrations. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
Registrable Securities requested to be included in such registration exceeds the
number which can be sold in such offering, so as to be reasonably likely to have
an adverse effect on the price, timing or distribution of the securities offered
in such offering, then the Company will include in such registration (i) first,
100% of the securities proposed to be sold by the Company and (ii) second, to
the extent of the number of securities requested to be included in such
registration which, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above, which number of securities
shall be allocated pro rata among all such requesting Holders of Registrable
Securities and requesting holders of similar securities who have piggyback
registration rights pursuant to an Other Registration Rights Agreement, on the
basis of the relative number of shares of Registrable Securities then held by
each such holder of Registrable Securities (provided, that any such amount
thereby allocated to any such Holder that exceeds such Holder's request shall be
reallocated among the remaining requesting Holders in like manner). In the event
that (i) the Company did not initiate the registration of securities intended to
be registered for sale for its own account and (ii) the number of Registrable
Securities of the Holders and the other holders entitled to registration rights
with respect to such Common Stock pursuant to an Other Registration Rights
Agreement, in each case requested to be included in such registration, is less
than the number which, in the opinion of the managing underwriter, can be sold,
the Company may include in such registration the securities it proposes to sell
up to the number of securities that, in the opinion of the underwriter, can be
sold.
3. Registration on Request. (a) Request by the Demand Party.
At any time upon the written request of the Demand Party requesting that the
Company effect the registration under the Securities Act of all or part of such
Demand Party's Registrable Securities and specifying the amount and intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all other Holders of such Registrable Securities,
and thereupon will, as expeditiously as possible, use its best efforts to effect
the registration under the Securities Act of:
(i) such Registrable Securities which the Company has been so
requested to register by the Demand Party; and
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(ii) all other securities of the same class or series as
are to be registered at the request of a Demand Party and which the
Company has been requested to register by any other Holder thereof or
holder of Common Stock who has piggyback registration rights pursuant
to an Other Registration Rights Agreement by written request given to
the Company within 15 days after the giving of written notice by the
Company,
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities and Common
Stock to be so registered; provided that, with respect to any Demand Party other
than the KKR Fund, the Company shall not be obligated to effect any registration
of Registrable Securities or Common Stock under this Section 3(a) unless such
Demand Party requests that the Company register at least 1% of the total number
of Registrable Securities; and provided, further, that, unless Holders of a
majority of the shares of Registrable Securities held by Holders consent thereto
in writing, the Company shall not be obligated to file a registration statement
relating to any registration request under this Section 3(a):
(x) within a period of 180 days (or such lesser period as the
managing underwriters in an underwritten offering may permit) after the
effective date of any other registration statement relating to any
registration request under this Section 3(a) which was not effected on
Form S-3 (or any successor or similar short-form registration
statement) or relating to any registration effected under Section 2
(unless Holders of a majority of the shares of Registrable Securities
held by all Holders consent in writing to the filing of such
registration statement);
(y) if with respect thereto the managing underwriter, the SEC,
the Securities Act or the rules and regulations thereunder, or the form
on which the registration statement is to be filed, would require the
conduct of an audit other than the regular audit conducted by the
Company at the end of its fiscal year, in which case the filing may be
delayed until the completion of such audit (and the Company shall, upon
request of the requesting Demand Holder, use its best efforts to cause
such audit to be completed expeditiously and without unreasonable
delay); or
(z) if the Company is in possession of material non-public
information and the Board of Directors of the Company determines in
good faith that disclosure of such information would not be in the best
interests of the Company and its stockholders, in which case the filing
of the registration statement may be delayed until the earlier of the
second business day after such conditions shall have ceased to exist
and the 90th day after receipt by the Company of the written request
from a Demand Holder to register Registrable Securities under this
Section 3(a).
Nothing in this Section 3 shall operate to limit the right of any Holder to (i)
request the registration of Common Stock issuable upon conversion, exchange or
exercise of securities held by such Holder notwithstanding the fact that at the
time of request such Holder does not hold the Common Stock underlying such
securities (ii) request the registration at one time of
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both securities convertible, exchangeable or exercisable into Common Stock and
the Common Stock underlying any such securities.
(b) Registration Statement Form. If any registration requested
pursuant to this Section 3 which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement) shall be in connection with an underwritten
public offering, and if the managing underwriter shall advise the Company in
writing that, in its opinion, the use of another form of registration statement
is of material importance to the success of such proposed offering, then such
registration shall be effected on such other form.
(c) Expenses. The Company will pay all Registration Expenses
in connection with the first six (6) registrations of each class or series of
Registrable Securities pursuant to this Section 3 upon the written request of
any of the Holders. All expenses for any subsequent registrations of Registrable
Securities pursuant to this Section 3 shall be paid pro rata by the Company and
all other Persons (including the Holders) participating in such registration on
the basis of the relative number of shares of Common Stock of each such Person
whose Registrable Securities are included in such registration.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 3 will not be deemed to have been effected unless it
has become effective; provided that, if within 180 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court, such registration will be
deemed not to have been effected.
(e) Selection of Underwriters. If a requested registration
pursuant to this Section 3 involves an underwritten offering, the Holders of a
majority of the shares of Registrable Securities which are held by Holders and
which the Company has been requested to register shall have the right to select
the investment banker or bankers and managers to administer the offering;
provided, however, that such investment banker or bankers and managers shall be
reasonably satisfactory to the Company.
(f) Priority in Requested Registrations. If a requested
registration pursuant to this Section 3 involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering, so as to be reasonably likely to
have an adverse effect on the price, timing or distribution of the securities
offered in such offering, then the Company will include in such registration the
number of shares of Common Stock requested to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, which number shall be allocated pro rata
among all such requesting holders of Registrable Securities and requesting
holders of Common Stock who have piggyback registration rights pursuant to an
Other Registration Rights Agreement on the basis of the relative number of
shares of Registrable Securities then held by each such holder. In the event
that the number of Registrable Securities entitled to registration rights with
respect to
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such Common Stock requested to be included in such registration is less than the
number which, in the opinion of the managing underwriter, can be sold, the
Company may include in such registration securities it proposes to sell for its
own account up to the number of securities that, in the opinion of the
underwriter, can be sold.
(g) Additional Rights. If the Company at any time grants to
any other holders of securities any rights to request the Company to effect the
registration under the Securities Act of any such securities on terms more
favorable to such holders than the terms set forth in this Section 3, the terms
of this Section 3 shall be deemed amended or supplemented to the extent
necessary to provide the Holders such more favorable rights and benefits.
4. Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:
(i) prepare and, in any event within 120 days after the
end of the period within which a request for registration may be given
to the Company, file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, provided, however, that the
Company may discontinue any registration of its securities which is
being effected pursuant to Section 2 at any time prior to the effective
date of the registration statement relating thereto;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period not in excess of 270 days and to
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations of the SEC thereunder with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement; provided that before filing a registration
statement or prospectus, or any amendments or supplements thereto, the
Company will furnish to counsel selected pursuant to Section 7 hereof
by the Holders of the Registrable Securities covered by such
registration statement to represent such Holders, copies of all
documents proposed to be filed, which documents will be subject to the
review of such counsel;
(iii) furnish to each seller of such Registrable
Securities such number of copies of such registration statement and of
each amendment and supplement thereto (in each case including all
exhibits filed therewith, including any documents incorporated by
reference), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and
summary prospectus), 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 by such seller;
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(iv) use its best efforts to register or qualify such
Registrable Securities covered by such registration in such
jurisdictions as each seller shall reasonably request, and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Seller,
except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this clause (iv), it
would not be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
(v) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) notify each seller of any such Registrable
Securities covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act within the appropriate period mentioned in clause (ii)
of this Section 4, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing,
and at the request of any such seller, prepare and furnish to such
seller a reasonable number of copies of an amended or supplemental
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 the light of the circumstances
then existing;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable (but not more than
eighteen months) after the effective date of the registration
statement, an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(viii) (a) if such Registrable Securities are Common Stock
(including Common Stock issuable upon conversion, exchange or exercise
of another security), use its best efforts to list such Registrable
Securities on any securities exchange on which the Common Stock is then
listed if such Registrable Securities are not already so listed and if
such listing is then permitted under the rules of such exchange; (b) if
such Registrable Securities are convertible, exchangeable or
exercisable into Common Stock, upon the reasonable request of sellers
of a majority of such Registrable Securities, use its best efforts to
list such securities and, if requested, the Common Stock underlying
such securities, notwithstanding that at the time of request such
sellers hold only such securities, on any securities exchange so
requested, if such
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Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange; and (c) use its best
efforts to provide a transfer agent and registrar for such Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;
(ix) enter into such customary agreements (including an
underwriting agreement in customary form), which may include
indemnification provisions in favor of underwriters and other persons
in addition to, or in substitution for the provisions of Section 5
hereof, and take such other actions as sellers of a majority of shares
of such Registrable Securities or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such
Registrable Securities;
(x) obtain a "cold comfort" letter or letters from the
Company's independent public accounts in customary form and covering
matters of the type customarily covered by "cold comfort" letters as
the seller or sellers of a majority of shares of such Registrable
Securities shall reasonably request (provided that Registrable
Securities constitute at least 25% of the securities covered by such
registration statement);
(xi) make available for inspection by any seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other
agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents
and properties of the Company, and cause all of the Company's officers,
directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(xii) notify counsel (selected pursuant to Section 7
hereof) for the Holders of Registrable Securities included in such
registration statement and the managing underwriter or agent,
immediately, and confirm the notice in writing (i) when the
registration statement, or any post-effective amendment to the
registration statement, shall have become effective, or any supplement
to the prospectus or any amendment prospectus shall have been filed,
(ii) of the receipt of any comments from the SEC, (iii) of any request
of the SEC to amend the registration statement or amend or supplement
the prospectus or for additional information, and (iv) of the issuance
by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the
qualification of the registration statement for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings
for any of such purposes;
(xiii) make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
registration statement or of any order preventing or
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suspending the use of any preliminary prospectus and, if any such order
is issued, to obtain the withdrawal of any such order at the earliest
possible moment;
(xiv) if requested by the managing underwriter or agent
or any Holder of Registrable Securities covered by the registration
statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or agent or such Holder reasonably requests to be included therein,
including, without limitation, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or
agent, the purchase price being paid therefor by such underwriter or
agent and with respect to any other terms of the underwritten offering
of the Registrable Securities to be sold in such offering; and make all
required filings of such prospectus supplement or post-effective
amendment as soon as practicable after being notified of the matters
incorporated in such prospectus supplement or post-effective amendment;
(xv) cooperate with the Holders of Registrable
Securities covered by the registration statement and the managing
underwriter or agent, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing securities to be sold under the registration statement,
and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or such
Holders may request;
(xvi) obtain for delivery to the Holders of Registrable
Securities being registered and to the underwriter or agent an opinion
or opinions from counsel for the Company in customary form and in form,
substance and scope reasonably satisfactory to such Holders,
underwriters or agents and their counsel; and
(xvii) cooperate with each seller of Registrable
Securities and each underwriter or agent participating in the
disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD.
The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish the Company with such
information regarding such seller and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
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 clause (vi) of this Section 4, such Holder will forthwith
discontinue 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 clause (vi)
of this Section 4, and, if so directed by the Company, such Holder will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the prospectus covering such
Registrable Securities current at the
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time of receipt of such notice. In the event the Company shall give any such
notice, the period mentioned in clause (ii) of this Section 4 shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to clause (vi) of this Section 4 and including
the date when each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by clause (vi) of this Section 4.
5. Indemnification. (a) Indemnification by the Company. In the
event of any registration of any securities of the Company under the Securities
Act pursuant to Section 2 or 3, the Company will, and it hereby does, indemnify
and hold harmless, to the extent permitted by law, the seller of any Registrable
Securities covered by such registration statement, each affiliate of such seller
and their respective directors and officers or general and limited partners
(including any director, officer, affiliate, employee, agent and controlling
Person of any of the foregoing), each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls such seller or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including reasonable attorney's fees and reasonable expenses of investigation)
to which such Indemnified Party may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof, whether or not such Indemnified
Party is a party thereto) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereto, or (b) any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and the Company will
reimburse such Indemnified Party for any legal or any other expenses reasonably
incurred by it in connection with investigating or defending against any such
loss, claim, liability, action or proceeding; provided that the Company shall
not be liable to any Indemnified Party in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
amendment or supplement thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity with written information furnished
to the Company with respect to such seller through an instrument duly executed
by such seller specifically stating that it is for use in the preparation
thereof; and provided, further, that the Company will not be liable to any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, under the indemnity agreement in this Section
5(a) with respect to any preliminary prospectus or the final prospectus or the
final prospectus as amended or supplemented, as the case may be, to the extent
that any such loss, claim, damage or liability of such underwriter or
controlling Person results from the fact that such underwriter sold Registrable
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus or of the
final prospectus as then amended or supplemented, whichever is
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most recent, if the Company has previously furnished copies thereof to such
underwriter. For purposes of the last proviso to the immediately preceding
sentence, the term "prospectus" shall not be deemed to include the documents
incorporated therein by reference, and no Person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, shall be obligated to send or give any supplement or amendment
to any document incorporated by reference in any preliminary prospectus or the
final prospectus to any person other than a person to whom such underwriter had
delivered such incorporated document or documents in response to a written
request therefor. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any
Indemnified Party and shall survive the transfer of such securities by such
seller.
In addition, the Company will, and it hereby does, indemnify
and hold harmless, to the extent permitted by law, the KKR Fund, each affiliate
of the KKR Fund and their respective directors and officers or general and
limited partners (including any director, officer, affiliate, employee, agent
and controlling Person of any of the foregoing), against any and all losses,
claims, damages or liabilities, joint or several, and expenses (including
reasonable attorney's fees and reasonable expenses of investigation) in any
manner arising out of or relating to (x) the purchase or ownership of capital
stock or other securities of the Company by the KKR Fund or any such other
Person or (y) any litigation to which the KKR Fund or any such other Person is
made a party in its capacity as a stockholder or owner of securities (or a
partner, director, officer, affiliate, employee, agent or controlling Person of
a stockholder or owner of securities) of the Company.
(b) Indemnification by the Seller. The Company may require, as
a condition to including any Registrable Securities in any registration
statement filed in accordance with Section 4 herein, that the Company shall have
received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Securities or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in subdivision
(a) of this Section 5) the Company and all other prospective sellers with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement, if such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company with respect to such seller through an instrument duly executed by
such seller or underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any of
the prospective sellers, or any of their respective affiliates, directors,
officers or controlling Persons and shall survive the transfer of such
securities by such seller. In no event shall the liability of any selling Holder
of Registrable Securities hereunder be greater in amount than the dollar amount
of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
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(c) Notices of Claims, Etc. Promptly after receipt by an
Indemnified Party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 5, such Indemnified Party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided that the failure of the
Indemnified Party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, unless in such Indemnified Party's reasonable
judgment a conflict of interest between such Indemnified Party and indemnifying
parties may exist in respect of such claim, the indemnifying party will be
entitled to participate in 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 other than reasonable costs of
investigation. No indemnifying party will 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.
(d) Contribution. If the indemnification provided for in this
Section 5 from the indemnifying party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and Indemnified Parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and Indemnified Parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or Indemnified Parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party under this Section 5(d) as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
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(e) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 5 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
(f) Non-Exclusivity. The obligations of the parties under this
Section 5 shall be in addition to any liability which any party may otherwise
have to any other party.
6. Rule 144. The Company covenants that it 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 SEC thereunder (or, if the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available such information), and it 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 shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
Notwithstanding anything contained in this Section 6, the Company may deregister
under Section 12 of the Exchange Act if it then is permitted to do so pursuant
to the Exchange Act and the rules and regulations thereunder.
7. Selection of Counsel. In connection with any registration
of Registrable Securities pursuant to Sections 2 and 3 hereof, the Holders of a
majority of the Registrable Securities covered by any such registration may
select one counsel to represent all Holders of Registrable Securities covered by
such registration; provided, however, that in the event that the counsel
selected as provided above is also acting as counsel to the Company in
connection with such registration, the remaining Holders shall be entitled to
select one additional counsel to represent all such remaining Holders.
8. Miscellaneous. (a) Other Investors. The Company may enter
into agreements with other purchasers of Common Stock who are then employees of
the Company or any of its subsidiaries, making them parties hereto (and thereby
giving them all, or a portion, of the rights, preferences and privileges of an
original party hereto) with respect to additional shares of Common Stock (the
"Supplemental Agreements"); provided, however, that pursuant to any such
Supplemental Agreement, such purchaser expressly agrees to be bound by all of
the terms, conditions and obligations of this Agreement as if such purchaser
were an original party hereto. All shares of Common Stock issued or issuable
pursuant to such Supplemental Agreements shall be deemed to be Registrable
Securities.
(b) Holdback Agreement. If any such registration shall be in
connection with an underwritten public offering, each Holder of Registrable
Securities agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act, of any equity securities of
the Company, or of any security convertible into or exchangeable
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or exercisable for any equity security of the Company (in each case, other than
as part of such underwritten public offering), within 7 days before or such
period not to exceed 180 days as the underwriting agreement may require (or such
lesser period as the managing underwriters may permit) after the effective date
of such registration (except as part of such registration), and the Company
hereby also so agrees and agrees to cause each other holder of any equity
security, or of any security convertible into or exchangeable or exercisable for
any equity security, of the Company purchased from the Company (at any time
other than in a public offering) to so agree.
(c) Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of the Holders
of a majority of the Registrable Securities then outstanding; provided, however,
that no amendment, waiver or consent to the departure from the terms and
provisions of this Agreement that is adverse to the KKR Fund or any of its
successors and assigns shall be effective as against any such Person for so long
as such Person holds any Registrable Securities unless consented to in writing
by such Person. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this Section
8(b), whether or not such Registrable Securities shall have been marked to
indicate such consent.
(d) Successors, Assigns and Transferees. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Upon any merger or consolidation of KKR Fund
with the Company or any liquidation of KKR Fund, the stockholder or stockholders
of KKR Fund shall succeed to all of KKR Fund's rights and obligations hereunder.
In addition, and whether or not any express assignment shall have been made, the
provisions of this Agreement which are for the benefit of the parties hereto
other than the Company shall also be for the benefit of and enforceable by any
subsequent Holder of any Registrable Securities, subject to the provisions
contained herein. Without limitation to the foregoing, in the event that the KKR
Fund or any of its successors or assigns or any other subsequent Holder of any
Registrable Securities distributes or otherwise transfers any shares of the
Registrable Securities to any of its present or future shareholders, members,
general or limited partners, the Company hereby acknowledges that the
registration rights granted pursuant to this Agreement shall be transferred to
such shareholders, members or partners on a pro rata basis, and that at or after
the time of any such distribution or transfer, any such shareholder, member,
partner or group of shareholders, members or partners may designate a Person to
act on its behalf in delivering any notices or making any requests hereunder.
(e) Notices. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
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(i) if to the Company, to:
Evenflo Company, Inc.
Northwoods Business Center II
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx Xxxxx
(ii) if to the KKR Fund, to:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
with copies to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
(iii) if to any other holder of Registrable
Securities, to the address of such other
holder as shown in the stock record book of
the Company, or to such other address as any
of the above shall have designated in
writing to all of the other above.
All such notices and communications shall be deemed to have
been given or made (A) when delivered by hand, (B) five business days after
being deposited in the mail, postage prepaid, (C) when telexed answer-back
received or (D) when telecopied, receipt acknowledged.
(f) Descriptive Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
(g) Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
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(h) Counterparts. This Agreement may be executed in
counterparts, and by different parties on separate counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.
(i) Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New York applicable to contracts made and to be performed therein.
The parties to this Agreement hereby agree to submit to the jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof in any
action or proceeding arising out of or relating to this Agreement.
(j) Specific Performance. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that they
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or in equity.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be duly executed on its behalf as of the
date first written above.
EVENFLO COMPANY, INC.
By:
--------------------------------
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general
partner
By: KKR 1996 GP LLC, its general partner
By:
--------------------------------
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