EXHIBIT 10.40
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of December
15, 2006, by and among Xxxxx & Wesson Holding Corporation, a Nevada corporation
with headquarters located at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx
00000 (the "COMPANY"), and the undersigned buyers (each, a "BUYER", and
collectively, the "BUYERS").
WHEREAS:
A. The Company has authorized the issuance of up to $80,000,000
principal amount of its 4% Convertible Senior Notes (the "NOTES") pursuant to
the Indenture dated of even date herewith, between the Company and The Bank of
New York Trust Company, N.A., as Trustee (as the same may be amended from time
to time, the "INDENTURE"), which Notes will, among other things, be convertible
into shares of Common Stock (as defined below) (as converted, the "CONVERSION
SHARES"), in accordance with the terms of the Notes and the Indenture.
B. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to the Buyers an
aggregate of $80,000,000 principal amount of the Notes.
C. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights to the
Buyers under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"1933 ACT" has the meaning set forth in the recitals of this
Agreement.
"1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"ADDITIONAL INTEREST" has the meaning set forth in Section 2(e)
hereof.
"ADDITIONAL INTEREST PAYMENT DATE" means each June 15 and December 15.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by", and "under common control with"), as used with respect to any
Person, shall mean 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.
"BUSINESS DAY" means any day other than Saturday, Sunday or any other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.
"BUYERS" has the meaning set forth in the recitals of this Agreement.
"CLOSING DATE" means the date of the closing of the sale of the Notes
as contemplated by the Securities Purchase Agreement.
"COMMON STOCK" means the common stock, par value $0.001 per share, of
the Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Notes.
"COMPANY" has the meaning set forth in the recitals of this Agreement.
"CONVERSION SHARES" has the meaning set forth in the recitals of this
Agreement.
"EFFECTIVE DATE" means the date the Shelf Registration Statement has
been declared effective by the SEC.
"EFFECTIVENESS DEADLINE" means the date that is one hundred eighty
(180) calendar days after the Closing Date.
"FILING DEADLINE" means ninety (90) calendar days after the Closing
Date.
"HOLDER" means a Person who is a holder or beneficial owner of any
Notes or Conversion Shares.
"HOLDER INFORMATION" with respect to any Holder means information with
respect to such Holder required to be included in any Shelf Registration
Statement or the related Prospectus pursuant to the 1933 Act and which
information is included therein in reliance upon and in conformity with
information furnished to the Company in writing by such Holder specifically for
inclusion therein.
"INDENTURE" has the meaning set forth in the recitals of this
Agreement.
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"LEGAL COUNSEL" means one firm or counsel designated by the Company
(and reasonably acceptable to the Buyers acting on behalf of the Holders) to act
as counsel for the Holders in connection therewith, which firm shall be Xxxxxxx
Xxxx & Xxxxx LLP.
"LOSSES" has the meaning set forth in Section 5(d) hereof.
"MAJORITY HOLDERS" means the Holders of a majority of the then
outstanding aggregate principal amount of Notes being registered under a Shelf
Registration Statement; provided that Holders of the shares of Common Stock
issued upon conversion of Notes shall be deemed to be Holders of the aggregate
principal amount of Notes from which such Common Stock was converted; and
provided further, that Notes or shares of Common Stock which have been sold or
otherwise transferred pursuant to the Shelf Registration Statement shall not be
included in the calculation of Majority Holders.
"NASD" means the National Association of Securities Dealers, Inc.
"NOTES" has the meaning set forth in the recitals hereto.
"NOTICE AND QUESTIONNAIRE" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Exhibit A attached hereto.
"NOTICE HOLDER" means any Holder of Transfer Restricted Securities
that has delivered a properly completed and signed Notice and Questionnaire to
the Company in accordance with Section 2(b) hereof.
"PERSON" has the meaning set forth in the Indenture.
"PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the 1933 Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Notes or Conversion Shares covered by such
Shelf Registration Statement, and all amendments and supplements to such
prospectus, including all documents incorporated or deemed to be incorporated by
reference in such prospectus.
"QUESTIONNAIRE DEADLINE" has the meaning set forth in Section 2(b)
hereof.
"RECORD HOLDER" means each Person who is registered on the books of
the registrar as the holder of Notes at the close of business on June 1 and
December 1 immediately preceding such Additional Interest Payment Date.
"REGISTRATION DEFAULT" has the meaning set forth in Section 2(e)
hereof.
"RULE 144" means Rule 144 under the 1933 Act (or any similar provision
promulgated by the SEC).
"RULE 144A" means Rule 144A under the 1933 Act (or any successor
provision promulgated by the SEC).
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"RULE 144(K)" means Rule 144(k) under the 1933 Act (or any successor
provision promulgated by the SEC).
"RULE 415" means Rule 415 under the 1933 Act (or any successor
provision promulgated by the SEC).
"SEC" means the Securities and Exchange Commission.
"SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the
recitals of this Agreement.
"SHELF REGISTRATION" means a registration effected pursuant to Section
2 hereof.
"SHELF REGISTRATION PERIOD" has the meaning set forth in Section 2(c)
hereof.
"SHELF REGISTRATION STATEMENT" means any "shelf" registration
statement of the Company filed pursuant to the provisions of Section 2(a) hereof
which covers the Transfer Restricted Securities on Form S-3 or on another
appropriate form (as determined by the Company) for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all documents incorporated or deemed to be incorporated by reference
therein.
"SUSPENSION PERIOD" has the meaning set forth in Section 2(d) hereof.
"TRANSFER RESTRICTED SECURITIES" means (a) the Notes; and (b) the
Conversion Shares issued and issuable upon conversion of the Notes (and any
security issued with respect thereto upon any stock dividend, split, or similar
event) until the earliest to occur of the date on which such Notes, Conversion
Shares, or any security issued with respect thereto upon any stock dividend,
split or similar event, as the case may be: (i) has been transferred pursuant to
a Shelf Registration Statement or another registration statement covering such
Notes or Conversion Shares which has been filed with the SEC pursuant to the
1933 Act, in either case after such registration statement has become effective
and while such registration statement is effective under the 1933 Act; (ii) has
been transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant
to Rule 144(k); or (iv) ceases to be outstanding.
"TRUSTEE" means the trustee with respect to the Notes under the
Indenture.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information incorporated or deemed
to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus, or Prospectus shall be deemed to mean and include
any document filed with the SEC under the 1934 Act, after the date of such Shelf
Registration Statement, preliminary Prospectus, or
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Prospectus, as the case may be, which is incorporated or deemed to be
incorporated by reference therein.
2. Shelf Registration Statement.
a. The Company shall, at its expense, prepare and, as soon as
practicable but in no event later than the Filing Deadline, file with the SEC a
Shelf Registration Statement with respect to resales of the Transfer Restricted
Securities by the Holders from time to time on a delayed or continuous basis
pursuant to Rule 415 and in accordance with the methods of distribution set
forth in such Shelf Registration Statement and thereafter shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the 1933 Act as soon as possible, but no later than the
Effectiveness Deadline. The Shelf Registration Statement shall contain the
"Selling Securityholders" and "Plan of Distribution" sections in substantially
the form attached hereto as Exhibit B. The Company shall supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Shelf Registration Statement, or by the 1933 Act, the 1934 Act or the SEC. By
9:30 a.m., New York City time, on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final Prospectus to be used in connection with sales
pursuant to such Shelf Registration Statement.
b. (i) The Company shall name each Holder that delivers a
properly completed and signed Notice and Questionnaire to the Company as a
selling security holder in the Shelf Registration Statement. A Holder of
Transfer Restricted Securities may include such securities in the Shelf
Registration Statement only if the Holder sends by first-class registered mail
or by courier with delivery confirmation, a properly completed Notice and
Questionnaire to the Company. The Company shall deliver the Notice and
Questionnaire to the Buyers within ten (10) Business Days of the Closing Date.
In order for the Transfer Restricted Securities to be included in the Shelf
Registration Statement at the time of its effectiveness, a completed Notice and
Questionnaire must be sent to the Company on or prior to the 30th Business Day
after the date the Notice and Questionnaire is deemed to have been given in
accordance with Section 6(c) hereof (or, in the case of a Holder that is a
transferee of Transfer Restricted Securities, on or prior to the earlier of (x)
the 20th Business Day after the completion of the transfer of Transfer
Restricted Securities to the transferee and (y) 9:00 a.m., New York time, on the
fifth Business Day prior to effectiveness of the Shelf Registration Statement)
(in any case, the "QUESTIONNAIRE DEADLINE"). The Company agrees and undertakes
that it shall distribute a Notice and Questionnaire (A) no later than 30
Business Days prior to the expected effectiveness of the Shelf Registration
Statement to each Holder in accordance with Section 6(c) hereof, and (B) in the
case of a Holder that is a transferee of Transfer Restricted Securities upon the
request of such transferee Holder given in accordance with Section 6(c) hereof,
to such Holder at the address set forth in such request.
(ii) Following the effectiveness of the Shelf Registration
Statement, upon receipt of a completed Notice and Questionnaire from a Holder,
the Company will, as promptly as practicable, but in any event within ten (10)
Business Days after its receipt thereof, file any amendments to the Shelf
Registration Statement or supplements to the related Prospectus as are necessary
to permit the Holder to deliver the Prospectus to purchasers of
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Transfer Restricted Securities (subject to the right of the Company to suspend
the use of the Prospectus as described in Section 2(d) hereof); provided,
however, that (i) if a supplement to the related Prospectus is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall not be required to file more
than one (1) such supplement during any twenty (20) day period and (ii) if a
post-effective amendment to the Shelf Registration Statement is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall have twenty-one (21) Business
Days to file such post-effective amendment and shall not be required to file
more than one (1) post-effective amendment to the Shelf Registration Statement
in any ninety (90) day period. The Company shall use its reasonable best efforts
to cause any such post-effective amendment to become effective under the 1933
Act as promptly as is practicable; provided, that if a Notice and Questionnaire
is delivered to the Company during a Suspension Period, the Company shall not be
obligated to amend the Shelf Registration Statement or supplement the Prospectus
until the termination of such Suspension Period.
(iii) Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the Company upon the
written reasonable request of the Company, which request shall only be made
within three days of the proposed effectiveness of the Registration Statement or
an amendment thereto, (x) such other information as the Company may reasonably
request for use in connection with the Shelf Registration Statement or
Prospectus or in any application to be filed with or under state securities laws
and (y) all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not misleading.
c. The Company shall use its reasonable best efforts to keep the
applicable Shelf Registration Statement continuously effective, supplemented,
and amended under the 1933 Act in order to permit the Prospectus forming a part
thereof to be usable by the Notice Holders, subject to Section 2(e) hereof, by
all Notice Holders until the earliest to occur of: (i) the two year anniversary
of the Issue Date (as defined in the Notes); (ii) the last date on which in the
opinion of counsel to the Company the holding period applicable to sales of all
applicable Transfer Restricted Securities under Rule 144(k) has expired; (iii)
the date as of which all applicable Transfer Restricted Securities have been
transferred under Rule 144; and (iv) such date as of which all applicable
Transfer Restricted Securities have been sold pursuant to the applicable Shelf
Registration Statement (in any such case, such period being called the "SHELF
REGISTRATION PERIOD"). The Company will, in order to fulfill its obligations and
this Section 2(c): (x) subject to Section 2(d), prepare and file with the SEC
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
continuously effective for the Shelf Registration Period; (y) subject to Section
2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act; and (z) comply in all
material respects with the provisions of the 1933 Act with respect to the
disposition of all Transfer Restricted Securities covered by the Shelf
Registration Statement during the Shelf Registration Period.
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d. The Company may suspend the availability of any Shelf
Registration Statement and the use of any Prospectus (the period during which
the availability of any Shelf Registration Statement and any Prospectus may be
suspended herein referred to as the "SUSPENSION PERIOD"), without incurring any
obligation to pay Additional Interest pursuant to Section 2(e), for a period not
to exceed: (i) 30 days in the aggregate in any three-month period; or (iii) 90
days in the aggregate during any 12-month period, in each case for valid
business reasons determined in good faith by the Company in its reasonable
judgment (which shall not include the avoidance of the Company's obligations
hereunder), including, without limitation, the acquisition or divestiture of
assets, pending corporate developments, public filings with the SEC and similar
events; provided, that the Company promptly thereafter complies with the
requirements of Section 3(j) hereof, if applicable.
e. The Company and the Buyers agree that the Holders of Transfer
Restricted Securities will suffer damages, and it would not be feasible to
ascertain the extent of such damages with precision, if the Company fails to
fulfill its obligations under Section 2 hereof. Accordingly, if: (i) the Shelf
Registration Statement covering all the Transfer Restricted Securities required
to be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline or (B)
not declared effective by the SEC on or before the Effectiveness Deadline or
(ii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement Shelf Registration Statement filed and declared effective) or usable
(including as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which exceeds: (x) 30 days in the aggregate in any three-month period;
or (y) 90 days in the aggregate in any 12-month period (each such event referred
to in clauses (i) or (ii), a "REGISTRATION DEFAULT"); the Company shall pay to
each Notice Holder (who is also a Record Holder) during any period in which a
Registration Default has occurred or is continuing, as partial relief (which
remedy shall not be exclusive of any other remedies available at law or in
equity), in an amount (the "ADDITIONAL INTEREST") equal to seventy five one
hundredths of a percent (75 basis points) per 30 day period of such Registration
Default per $1,000 principal amount of Notes related to the Transfer Restricted
Securities subject to such Shelf Registration Statement for the period during
which such Registration Default has occurred and is continuing, it being
understood that all calculations pursuant to this and the preceding sentence
shall be carried out to five decimal places and shall be pro rated for periods
totaling less than thirty days. Following the cure of all Registration Defaults,
Additional Interest will cease to accrue with respect to such Registration
Defaults. All accrued Additional Interest shall be paid by the Company on each
Additional Interest Payment Date in cash to the date of such cure and Additional
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months. Notwithstanding anything in the Agreement to the contrary,
Additional Interest shall only be payable to Notice Holders. Notwithstanding
anything herein or in the Securities Purchase Agreement to the contrary in no
event shall the aggregate amount of Additional Interest exceed, in the
aggregate, 8% of the aggregate Purchase Price.
f. All of the Company's obligations (including, without
limitation, the obligation to pay Additional Interest) set forth in the
preceding paragraph which are outstanding or exist with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
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such security shall have been satisfied in full. Notwithstanding the foregoing,
no Additional Interest shall accrue as to any Transfer Restricted Security from
and after the earlier of: (i) the date such security is no longer a Transfer
Restricted Security; and (ii) the expiration of the Shelf Registration Period.
g. Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the Trustee, so long as the Notes
remain outstanding, notice of such commencement or termination of the obligation
to pay Additional Interest with regard to the Notes, and the amount thereof and
of the nature of the default giving rise to such commencement or the event
giving rise to such termination, as the case may be (such notice to be contained
in an Officer's Certificate (as such term is defined in the Indenture)), and
prior to receipt of such Officer's Certificate the Trustee and the transfer and
paying agent shall be entitled to assume that no such commencement or
termination has occurred, as the case may be.
3. Registration Procedures.
In connection with any Shelf Registration Statement, the following
provisions shall apply:
a. The Company shall: (i) furnish to the Buyers, within a
reasonable period of time, but in any event within five (5) Business Days, prior
to the filing thereof with the SEC to afford the Buyers and their counsel a
reasonable opportunity for review, a copy of each Shelf Registration Statement,
and each amendment thereof, and a copy of each Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the 1934 Act), and shall reflect in each such document, when so filed with the
SEC, such comments as the Buyers may reasonably propose therein; and (ii)
include information regarding the Notice Holders and the methods of distribution
they have elected for their Transfer Restricted Securities provided to the
Company in Notice and Questionnaires as necessary to permit such distribution by
the methods specified therein.
b. Subject to Section 2(d), the Company shall ensure that: (i)
any Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the 1933 Act and the rules and regulations thereunder;
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain 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; and (iii) any Prospectus forming a part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation with respect to any Holder Information.
c. The Company, as promptly as reasonably practicable (but in any
event within two Business Days), shall notify each Notice Holder:
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(i) when any Prospectus or any supplement thereto has been
filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Shelf Registration Statement or of any order preventing or suspending the
use of any Prospectus or the initiation or threat of any proceedings for that
purpose;
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of the Transfer Restricted Securities included in any Shelf Registration
Statement for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose;
(iv) of the occurrence of, but not the nature of or details
concerning, any event or the existence of any condition that requires the making
of any changes in the Shelf Registration Statement or the Prospectus so that, as
of such date, such Shelf Registration Statement or Prospectus do not contain 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 (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading;
(v) of the Company's determination that a post-effective
amendment to the Shelf Registration Statement is necessary (other than a
post-effective amendment pursuant to Section 2(b)(ii)); and
(vi) of the commencement (including as a result of any of
the events or circumstances described in Section 2(b)(ii)) and termination of
any Suspension Period.
d. The Company shall use its reasonable best efforts to obtain:
(i) the withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement and the use of any related Prospectus; and (ii) the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Transfer Restricted Securities for offer or sale in any
jurisdiction in which they have been qualified for sale, in each case at the
earliest possible time, and shall provide notice to each Notice Holder and the
Buyers of the withdrawal of any such orders or suspensions.
e. The Company shall promptly furnish, upon written request and
without charge, to the Buyers and any Notice Holder, (i) at least one copy of
any Shelf Registration Statement and any post-effective amendment thereto,
excluding all documents incorporated or deemed to be incorporated therein by
reference and all exhibits thereto, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Shelf Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Shelf Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto, provided that the Company shall only
be obligated to furnish those documents which are not available on
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the XXXXX System. The Company shall promptly furnish, without charge, to Legal
Counsel copies of any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to any Shelf Registration Statement.
f. The Company shall, during the Shelf Registration Period,
promptly deliver, upon written request and without charge, to the Buyers and
each Notice Holder, as many copies of the Prospectus (including each preliminary
Prospectus) included in any Shelf Registration Statement, and any amendment or
supplement thereto, as such person may reasonably request and except as provided
in Sections 2(d) and 3(p) hereof; and the Company hereby consents (except during
a Suspension Period or during the continuance of an event described in Section
3(c)(ii) through (v)) to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto during the Shelf Registration
Period.
g. The Company shall submit to the SEC, within five (5) Business
Days after the Company learns that no review of a particular Shelf Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on a particular Shelf Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Shelf Registration Statement
to a time and date not later than 48 hours after the submission of such request.
h. Prior to any offering of Transfer Restricted Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Notice Holders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Transfer Restricted Securities for offer
and sale, under the securities or blue sky laws of such jurisdictions within the
United States as any such Notice Holders reasonably request and shall maintain
such qualification in effect so long as required and do any and all other acts
or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Transfer Restricted Securities covered by such Shelf
Registration Statement; provided, however, that the Company will not be required
to: (i) qualify generally to do business as a foreign corporation or as a dealer
in securities in any jurisdiction where it is not then so qualified or; (ii)
take any action which would subject it to service of process or taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then
so subject.
i. If the Transfer Restricted Securities are in certificated
form, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and, with respect of any Notes, in such denominations
permitted by the Indenture and registered in such names as Holders may request
at least two (2) Business Days prior to settlement of sales of Transfer
Restricted Securities pursuant to such Shelf Registration Statement.
j. Subject to the exceptions contained in (i) and (ii) of Section
3(h) above, the Company shall use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or
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approved by such other federal, state and local governmental agencies or
authorities, and self-regulatory organizations in the United States as may be
necessary to enable the Holders to consummate the disposition of such Transfer
Restricted Securities as contemplated by the Shelf Registration Statement;
without limitation to the foregoing, the Company shall provide all such
information as may be required by the NASD in connection with the offering under
the Shelf Registration Statement of the Transfer Restricted Securities
(including, without limitation, such as may be required by NASD Rule 2710 or
2720), and shall cooperate with each Holder in connection with any filings
required to be made with the NASD by such Holder in that regard.
k. Upon the occurrence of any event described in Section 3(c)(iv)
or 3(c)(v) hereof, the Company shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement, or an amendment or
supplement to the related Prospectus, or any document incorporated therein by
reference, or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading and, in the case of a post-effective amendment, use
its reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (k)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(k) shall be automatically reinstated at the end of such Suspension
Period.
l. The Company shall provide, prior to the effective date of any
Shelf Registration Statement hereunder, a CUSIP number for the Transfer
Restricted Securities registered under such Shelf Registration Statement.
m. The Company shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act and Rule 158 promulgated by the SEC
thereunder (or any similar rule promulgated under the 0000 Xxx) for a 12-month
period commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of any Shelf Registration Statement or each
post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days after the end of the 12-month period, if the 12-month
period coincides with the fiscal year of the Company.
n. The Company shall use its reasonable best efforts to cause all
shares of Common Stock issuable upon conversion of the Notes to be reserved for
listing on each securities exchange or quotation system on which the Common
Stock is then listed no later than the date the applicable Shelf Registration
Statement is declared effective and shall use its reasonable best efforts to
cause all Common Stock to be so listed when issued, and, in connection
therewith, to make such filings as may be required under the 1934 Act and use
its reasonable best efforts to have such filings declared effective as and when
required thereunder.
11
o. If any Notice Holder is required to be described in the
Registration Statement as an underwriter, then upon the reasonable written
request of such Notice Holder in connection with any disposition of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Transfer Restricted Securities and
any broker-dealers, attorneys and accountants retained by such Notice Holders,
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours all relevant information reasonably requested by such representative for
the Notice Holders or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that any information that is
designated by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such Persons, unless
disclosure thereof is made in connection with a court, administrative or
regulatory proceeding or required by law, or such information has become
available to the public generally through the Company or through a third party
without an accompanying obligation of confidentiality.
p. Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vi), it shall forthwith discontinue (and shall cause its agents and
representatives to discontinue) disposition of Transfer Restricted Securities
and will not resume disposition of Transfer Restricted Securities until such
Holder has received copies of an amended or supplemented Prospectus contemplated
by Section 3(k) hereof, or until such Notice Holder is advised in writing by the
Company that the use of the Prospectus may be resumed or that the relevant
Suspension Period has been terminated, as the case may be, provided that the
foregoing shall not prevent the sale, transfer or other disposition of Transfer
Restricted Securities by a Holder in a transaction which is exempt from, or not
subject to, the registration requirements of the 1933 Act, so long as such
Holder does not and is not required to deliver the applicable Prospectus or
Shelf Registration Statement in connection with such sale, transfer or other
disposition, as the case may be; and provided, further, that the provisions of
this Section 3(q) shall not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Additional Interest.
q. The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Notes covered by the
Shelf Registration Statement contemplated hereby.
4. Registration Expenses.
The Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2 and 3 hereof and shall
reimburse the Holders for the reasonable fees and disbursements of the Legal
Counsel which amount shall be limited to $10,000. Such fees and expenses shall
include, without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes) and the Company's
expenses for messenger and delivery services
12
and telephone; (iv) all fees and disbursements of counsel to the Company; (v)
all application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company. The
Company shall bear its internal expenses (including, without limitation, all
salaries and expenses of their officers and employees performing legal,
accounting or other duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 4, each Holder shall bear the
expense of any broker's commission, agency fee, or underwriter's discount or
commission, if any, relating to the sale or disposition of such Holder's
Transfer Restricted Securities pursuant to a Shelf Registration Statement.
5. Indemnification and Contribution.
a. The Company agrees to indemnify and hold harmless each Holder
of Transfer Restricted Securities covered by any Shelf Registration Statement,
its directors, officers, partners, members, and employees and each Person, if
any, who controls any such Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act (collectively referred to for purposes of
this Section 5 as a "HOLDER") against any losses, claims, damages, or
liabilities, joint or several, or actions in respect thereof, to which any of
them may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, liabilities, or actions arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement, or in any Prospectus, or any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein (in the case of any Prospectus, in the light of the circumstances under
which they were made) not misleading, and will reimburse each such party for any
legal or other expenses reasonably incurred by such party in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that: (i) the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon Holder Information; and (ii) with respect to any untrue
statement or omission of material fact made in any Shelf Registration Statement,
or in any Prospectus, the indemnity agreement contained in this Section 5(a)
shall not inure to the benefit of a Holder from whom the Person asserting any
such loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Holder occurs
under the circumstance where it shall have been established that: (w) the
Company had previously furnished copies of the Prospectus, and any amendments
and supplements thereto, to such Holder; (x) delivery of the Prospectus, and any
amendment or supplements thereto, was required by the 1933 Act to be made to
such Holder; (y) the untrue statement or omission of a material fact contained
in the Prospectus was corrected in amendments or supplements thereto; and (z)
there was not sent or given to such Holder, at or prior to the written
confirmation of the sale of such securities to such Holder, a copy of such
amendments or supplements to the Prospectus. This indemnity agreement will be in
addition to any liability that the Company may otherwise have. This indemnity
agreement will not apply to any loss, damage, expense, liability or claim
arising from an offer or sale, occurring during a Suspension Period, of Transfer
Restricted Securities by a Notice Holder who has previously received notice from
the Company of the commencement of the Suspension Period pursuant to Section
3(c)(vi).
13
b. Each Holder, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors and officers and each
Person, if any, who controls the Company within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Company to the Holders and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any loss, claim,
damage, liability or action, but only with reference to Holder Information
supplied by such Holder in writing to the Company for the express purpose of
being used in the Registration Statement. In no event shall any Holder, its
directors, officers, partners, members or employees or any Person, if any, who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Shelf Registration
Statement exceeds: (i) the amount paid by such Holder for such Transfer
Restricted Securities; plus (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. This indemnity agreement will be in addition to any
liability that such Holder may otherwise have.
c. Promptly after receipt by an indemnified party under this
Section 5 of notice of any claim or the commencement of any action or proceeding
(including any governmental investigation), such indemnified party will, if a
claim for indemnification in respect thereof is to be made against the
indemnifying party under Section 5(a) or 5(b) hereof, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants (including any impleaded parties) in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless: (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expense of more than one separate counsel (in addition to any
local counsel), approved by the Holders in the case of paragraph (a) of this
Section 5, representing the indemnified parties under such paragraph (a) who are
parties to such action); (ii) the indemnifying party shall not
14
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice or
commencement of the action; (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; or (iv) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes (1) an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, and (2) does
not include a statement as to or an admission of fault, culpability, or failure
to act by or on behalf of any indemnified party. Subject to the provisions of
the immediately following sentence, no indemnifying party shall be liable for
any settlement, compromise or the consent to the entry of judgment in connection
with any such action effected without its written consent, but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action other than a judgment entered with the consent of such indemnified
party, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If at any time an indemnified party shall have requested
that an indemnifying party reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by this Section 5(c) and to which it
would be entitled under Section 5(a) or 5(b) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if: (x) such settlement is entered into more than 45
days after receipt by such indemnifying party of such request for reimbursement,
(y) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (z)
such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
d. In the event that the indemnity provided in paragraph (a) or
(b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each indemnifying party agrees to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively, "LOSSES") to which the indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company from the sale of the Notes, on the one hand, and a Holder with
respect to the sale by such Holder of Notes or Common Stock, on the other hand;
provided, however, that in no case shall an indemnifying party that is a Holder
be responsible for any amount in excess of the total price at which the Transfer
Restricted Securities are sold by such Holder to a purchaser. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and such Holder shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of such Holder on the other in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and such Holder on the other shall be
deemed to be in the same respective proportions as the total net proceeds from
the sale of the Notes (before deducting expenses) received by or on behalf of
the Company, on the one hand, and the total proceeds received by
15
such Holder with respect to its sale of Transfer Restricted Securities under the
Shelf Registration Statement, on the other hand, bear to the total gross
proceeds from the sale of the Notes. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
relates to Holder Information supplied by such Holder, on the other, the intent
of the parties and their relative knowledge, information and opportunity to
correct or prevent such untrue statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 5(d), each
Person who controls such Holder within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
e. The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
underwriter or the Company or any of the officers, directors or controlling
Persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.
f. Rules 144 and 144A. The Company covenants that it shall use
its reasonable best efforts to file the reports required to be filed by it under
the 1933 Act and the 1934 Act in a timely manner so long as the Transfer
Restricted Securities remain outstanding. If at any time the Company is not
required to file such reports, it will, upon request of any Holder or beneficial
owner of Transfer Restricted Securities, make available such information
necessary to permit sales pursuant to Rule 144A. The Company further covenants
that, for as long as any Transfer Restricted Securities remain outstanding, it
will take such further action as any Holder of Transfer Restricted Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under
the 1933 Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A. Upon the written request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
6. Holder's Obligations. Each Buyer agrees, by acquisition of the
Notes, that no Buyer of Notes shall be entitled to sell any of the Notes or
Conversion Shares pursuant to a Shelf Registration Statements or to receive a
Prospectus relating thereto unless such Buyer has furnished the Company with a
completed Notice and Questionnaire as required pursuant to Section 2(b).
7. Miscellaneous.
a. No Inconsistent Agreements. Except as disclosed in the
Securities Purchase Agreement, the Company has not, as of the date hereof,
entered into nor shall it, on or
16
after the date hereof, enter into, any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof. In addition, the Company shall not grant
to any of its Noteholders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in the
Shelf Registration Statement provided for in this Agreement other than the
Transfer Restricted Securities.
b. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company consents in writing and
the Company has obtained the written consent of at least the Majority Holders;
provided that with respect to any matter that directly or indirectly affects the
rights of the Buyers hereunder, the Company shall obtain the written consent of
the Buyers against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being sold pursuant to a Shelf Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders.
c. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to the Buyers, initially at their address set forth
in the Securities Purchase Agreement;
(ii) if to any other Holder, at the most current address of
such Holder maintained by the Registrar under the Indenture or the registrar of
the Common Stock (provided that while the Notes or the Common Stock are in
book-entry form, notice to the Trustee shall serve as notice to the Holders),
or, in the case of the Notice Holder, the address set forth in its Notice and
Questionnaire;
(iii) if to the Company, to:
Xxxxx & Wesson Holding Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
With a copy to:
17
Xxxxxxxxx Traurig, LLP
0000 Xxxx Xxxxxxxxx Xx., Xxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(iv) if to Legal Counsel, to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier.
The Buyers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
d. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and underwriter and any such Holder and
underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other Person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Buyers, whereby such
successor shall assume all of the Company's obligations under this Agreement.
e. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
f. Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
g. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
18
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
h. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
i. Notes Held by the Company, Etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes or
the shares of Common Stock issuable upon conversion thereof is required
hereunder, Notes or the shares of Common Stock issued upon conversion thereof
held by the Company or its Affiliates (other than subsequent Holders of Notes or
the Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Notes) shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.
j. Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5.
k. Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers
19
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Buyer
confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose.
20
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
COMPANY:
XXXXX & WESSON HOLDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
HIGHBRIDGE INTERNATIONAL LLC
By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By: /s/ Xxxx X. Chill
------------------------------------
Name: Xxxx X. Chill
Title: Managing Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
CAPITAL VENTURES INTERNATIONAL
BY: HEIGHTS CAPITAL MANAGEMENT, INC.
ITS AUTHORIZED AGENT
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Investment Manager
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
CORNELL CAPITAL PARTNERS, LP
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title:
---------------------------------
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
CRANSHIRE CAPITAL, L.P.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President - Downsview Capital
The General Partner
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
X.X. XXXXX SPECIAL OPPORTUNITIES FUND,
LTD
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chief Administrative &
Compliance Officer
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
X.X. XXXXX SPECIAL OPPORTUNITIES FUND,
LP
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chief Administrative &
Compliance Officer
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
ENABLE GROWTH PARTNERS LP
By: /s/ Xxxxxxx X'Xxxx
------------------------------------
Name: Xxxxxxx X'Xxxx
Title: Principal and Portfolio Manager
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
EVOLUTION MASTER FUND LTD. SPC,
SEGREGATED PORTFOLIO M
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
GLG MARKET NEUTRAL FUND
BY: GLG PARTNERS LP ACTING AS INVESTMENT
MANAGER TO GLG MARKET NEUTRAL FUND
By: /s/ Xxx Xxxxx
------------------------------------
Name: Xxx Xxxxx
Title: Head of Operations
GLG Partners LP
By: /s/ Xxx Xxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxx
Title: Legal Counsel
GLG Partners LP
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
XXXXXX BAY FUND LP
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Principal and Portfolio Manager
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
XXXXXX BAY OVERSEAS FUND LTD
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Principal and Portfolio Manager
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
IROQUOIS MASTER FUND LTD.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Authorized Signator
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
KAMUNTING STREET MASTER FUND, LTD
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director of Research
Kamunting Street Capital
Management, L.P.
As Investment Manager For
Kamunting Street Master Fund, LTD
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
KINGS ROAD INVESTMENTS LTD.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Co-head, Private Investments
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
LBI GROUP INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: SVP
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
PORTSIDE GROWTH AND OPPORTUNITY FUND
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYER:
RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF
THE CLASS A SEGREGATED PORTFOLIO
By: RG Capital Management, L.P.
By: RGC Management Company, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
XXXXXXXX INVESTMENT MASTER FUND LIMITED
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
XXXXXXX CAPITAL MANAGEMENT, XX XX
By: S&E Partners, LP
Its: general partner
By: Xxxxxxx, Inc.
Its: general partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: CEO
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
SILVER OAK CAPITAL, LLC
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Manager
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
UBS X'XXXXXX LLC FBO X'XXXXXX PIPES
CORPORATE STRATEGIES MASTER LIMITED
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
UBS X'XXXXXX LLC FBO X'XXXXXX GLOBAL
CONVERTIBLE ARBITRAGE II MASTER LIMITED
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
UBS X'XXXXXX LLC FBO X'XXXXXX GLOBAL
CONVERTIBLE ARBITRAGE MASTER LIMITED
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
EXHIBIT A
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
______________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Transfer Restricted Securities Listed in Item 3 below
are held:
______________________________________________________________________
(c) Full Legal Name of DTC participant (if applicable and if not the same
as (b) above) through which Transfer Restricted Securities listed in
Item 3 below are held:
______________________________________________________________________
2. Address for Notices to Selling Securityholder:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Telephone: _____________________________________________________________________
Fax: ___________________________________________________________________________
Contact Person: ________________________________________________________________
3. Beneficial Ownership of Transfer Restricted Securities:
(a) Type and Principal Amount of Transfer Restricted Securities
beneficially owned:
______________________________________________________________________
______________________________________________________________________
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
______________________________________________________________________
(c) Did you acquire the securities listed in Item 3(a) in the ordinary
course of business?
Yes [ ] No [ ]
(d) At the time of your purchase of the securities listed in Item 3(a),
did you have any agreements or understandings, directly or indirectly,
with any person to distribute the securities?
Yes [ ] No [ ]
(e) If your response to Item 3(d) is yes, please describe such agreements
or understandings.
______________________________________________________________________
______________________________________________________________________
4. Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder.
Except as set forth below in this Item 4, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Transfer Restricted Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
______________________________________________________________________
______________________________________________________________________
(b) CUSIP No(s). of such Other Securities beneficially owned:
______________________________________________________________________
______________________________________________________________________
5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5%
of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
______________________________________________________________________
______________________________________________________________________
6. Broker-Dealers and their Affiliates
(a) Is the Selling Securityholder a broker-dealer:
Yes [ ] No [ ]
If so, please answer the remaining question in this section.
(i) Please advise whether the notes were received by the Selling
Securityholder as compensation for investment banking services or as
investment shares, and if so please describe the circumstances.
Note that in general we may be required to identify any registered
broker-dealer as an underwriter in the prospectus.
(ii) Except as set forth below, if the Selling Securityholder is a
registered broker- dealer, the Selling Securityholder does not plan to
make a market in the Transfer Restricted Securities. If the Selling
Securityholder plans to make a market in the Transfer Restricted
Securities, please indicate whether the Selling Securityholder plans
to use the prospectus relating to the Transfer Restricted Securities
as a market-making prospectus.
(b) Affiliation with Broker-Dealers
Is the Selling Securityholder an affiliate(1) of a registered
broker-dealer?
Yes [ ] No [ ]
If so, please answer the remaining questions in this section.
(i) Please describe the affiliation between the Selling
Securityholder and any registered broker-dealer.
(ii) If the notes were purchased by the Selling Securityholder other
than in the ordinary course of business, please describe the
circumstances.
(iii) Please advise whether the notes were received by the Selling
Securityholder as compensation for investment banking services or
as investment shares, and if so please describe the
circumstances.
(iv) If the Selling Securityholder, at the time of its purchase of
Transfer Restricted Securities, had any agreements or
understandings, directly or indirectly, with any person to
distribute the Transfer Restricted Securities, please describe
such agreements or undertakings.
----------
(1) An "affiliate" of a specified person or entity means a person or entity
that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the person or entity
specified.
Note that if the Selling Securityholder is an affiliate of a broker-dealer
and did not purchase its notes in the ordinary course of business or at the
time of the purchase had any agreements or understandings, directly or
indirectly, to distribute the securities, we may be required to identify
the Selling Securityholder as an underwriter in the prospectus.
7. Beneficial Ownership by Entities:
If the Selling Securityholder is an entity, does any natural person have
voting or dispositive power over the Transfer Restricted Securities held by
the Selling Securityholder?(2)
If so, please state the person's or persons' name(s):
8. Beneficial Ownership by Natural Persons or by a Board or Committee
Is the Selling Securityholder a reporting entity with the Securities and
Exchange Commission?
If the Selling Securityholder is a majority owned subsidiary of a reporting
entity, identify the majority stockholder that is a reporting entity.
Yes [ ] No [ ]
If No, please answer the remaining questions in this section.
(i) Please name the natural person or person(s) having voting and/or
investment control over the Selling Securityholder.(3)
(ii) If the voting and/or investment control over the Selling
Securityholder is held by board or committee, please state the name of
the natural person or person(s) on such board or committee.
----------
(2) Please answer "Yes" if any natural person, directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise has or
shares: (a) voting power which includes the power to vote, or to direct the
voting of, such security; and/or, (b) investment power which includes the
power to dispose, or to direct the disposition of, the Transfer Restricted
Securities held by the Selling Securityholder.
(3) Please include any natural person that, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares: (a) voting power which includes the power to vote, or to direct the
voting of, such security; and/or, (b) investment power which includes the
power to dispose, or to direct the disposition of, the Transfer Restricted
Securities held by the Selling Securityholder.
9. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities listed
above in Item 3 pursuant to the Shelf Registration Statement only as
follows (if at all): Such Transfer Restricted Securities may be sold from
time to time directly by the undersigned or, alternatively, through
underwriters, broker-dealers, or agents. If the Transfer Restricted
Securities are sold through underwriters, broker-dealers, or agents, the
Selling Securityholder will be responsible for underwriting discounts or
commissions or agents' commissions. Such Transfer Restricted Securities may
be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of
sale or at negotiated prices. These sales may be effected in transactions,
which may involve crosses or block transactions,
- on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
- through the writing of options, whether such options are listed on an
options exchange or otherwise;
- in ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- in block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- in purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- in an exchange distribution in accordance with the rules of the
applicable exchange;
- in privately negotiated transactions;
- in short sales;
- in sales pursuant to Rule 144;
- in which broker-dealers may agree with the selling securityholders to
sell a specified number of such shares at a stipulated price per
share;
- in a combination of any such methods of sale; and
- in any other method permitted pursuant to applicable law.
State any exceptions here:
___________________________________________________________________________
___________________________________________________________________________
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
written agreement of the Company.
The undersigned acknowledges its obligation to comply with the provisions of the
1934 Act and the rules thereunder relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules or regulations), in connection
with any offering of Transfer Restricted Securities pursuant to the Registration
Rights Agreement. The undersigned agrees that neither it nor any person acting
on its behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.
In accordance with the undersigned's obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company, upon written request (which request shall be made within three days of
the proposed effeteness of the Registration Statement or an amendment thereto),
of any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains effective.
All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.
Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives and assigns of the
Company and the Selling Securityholder with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: Beneficial Owner:
------------------------------ ----------------------
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO XXXXX & WESSON HOLDING CORPORATION
Xxxxx & Wesson Holding Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
EXHIBIT B
SELLING SECURITYHOLDERS
The notes and shares of common stock issuable upon conversion of the notes
that may be offered pursuant to this prospectus will be offered by the selling
securityholders. For additional information regarding the issuance of those
notes and the shares of common stock issuable upon conversion of the notes, see
"Private Placement of Convertible Notes" above. We are registering the notes and
shares of common stock issuable upon conversion of the notes in order to permit
the selling stockholders to offer the notes and the shares of common stock
issuable upon conversion of the notes for resale from time to time. Except for
the ownership of the notes issued pursuant to the Securities Purchase Agreement,
the selling stockholders have not had any material relationship with us within
the past three years.
The following table sets forth the selling securityholders and other
information regarding the beneficial ownership of the shares of common stock and
notes by each of the selling securityholders. The second column lists the
principal amount of notes benefically owned by each selling securityholder as of
________, 200_. The third column lists the number of shares of common stock
beneficially owned by each selling securityholder, based on its ownership of the
notes, as of ________, 200_, assuming conversion of all notes held by the
selling securityholders on that date, without regard to any limitations on
conversions.
The fourth column lists the notes being offered by this prospectus by each
selling securityholder. The fifth column lists the shares of common stock being
offered by this prospectus by each selling securityholder.
In accordance with the terms of a registration rights agreement among the
Company and the selling securityholders, this prospectus generally covers the
resale of the notes and the number of shares of common stock issued or issuable
upon conversion of the notes as of the trading day immediately preceding the
date the registration statement is initially filed with the SEC. Because the
conversion price of the notes may be adjusted, the number of shares that will
actually be issued may be more or less than the number of shares being offered
by this prospectus. The sixth column assumes the sale of all of the notes
offered by the selling securityholders pursuant to this prospectus. The seventh
column assumes the sale of all of the shares of common stock offered by the
selling securityholders pursuant to this prospectus.
Under the terms of the notes, a selling securityholder may not convert the
notes to the extent such conversion would cause such selling securityholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such conversion, excluding for purposes of such determination shares
of common stock issuable upon conversion of the notes which have not been
converted. The number of shares in the fourth column does not reflect this
limitation. The selling securityholders may sell all, some or none of their
notes or shares of common stock issuable upon conversion of the notes in this
offering. See "Plan of Distribution."
PRINCIPAL MAXIMUM MAXIMUM
AMOUNT AT NUMBER OF NUMBER OF
MATURITY NUMBER OF NOTES TO SHARES TO NUMBER OF
OF NOTES SHARES BE SOLD BE SOLD NOTES NUMBER OF
BENEFICIALLY OWNED PURSUANT PURSUANT OWNED SHARES OWNED
OWNED PRIOR PRIOR TO TO THIS TO THIS AFTER AFTER
NAME OF SELLING SECURITYHOLDER TO OFFERING OFFERING PROSPECTUS PROSPECTUS OFFERING OFFERING
------------------------------ ------------ --------- ---------- ---------- --------- ------------
Highbridge International LLC (1) 0
Capital Ventures International
Cornell Capital Partners, LP
Cranshire Capital L.P.
D.B. Xxxxx Special Opportunities
Fund, LTD
X.X. Xxxxx Special Opportunities
Fund, LP
Enable Growth Partners LP
Evolution Master Fund Ltd. SPC,
Segregated Portfolio M
GLG Market Neutral Fund
Xxxxxx Bay Fund XX
Xxxxxx Bay Overseas Fund Ltd
Iroquois Master Fund Ltd.
Kamunting Street Master Fund, Ltd
Kings Road
Investments Ltd.
LBI Group, Inc.
Portside Growth and Opportunity
Fund
Radcliffe SPC, Ltd.
For and on behalf of the Class A
Segregated Portfolio
Xxxxxxxx Investment Master Fund,
Ltd
Xxxxxxx Capital Management, XX XX
Silver Oak Capital, LLC
UBS X'Xxxxxx LLC fbo X'Xxxxxx
PIPES Corporate Strategies
Master Limited
UBS X'Xxxxxx LLC fbo X'Xxxxxx
Global Convertible Arbitrage II
Master Limited
UBS X'Xxxxxx LLC fbo X'Xxxxxx
Global Convertible Arbitrage
Master Limited
(1) Highbridge Capital Management, LLC is the trading manager of Highbridge
International LLC and has voting control and investment discretion over
securities held by Highbridge International LLC. Xxxxx Xxxxx and Xxxxx
Xxxxxx control Highbridge Capital Management, LLC. Each of Highbridge
Capital Management, LLC, Xxxxx Xxxxx and Xxxxx Xxxxxx disclaim beneficial
ownership of the securities held by Highbridge International LLC.
PLAN OF DISTRIBUTION
We are registering the notes and the shares of common stock issuable upon
conversion of the notes to permit the resale of these notes and shares of common
stock by the holders of the notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
securityholders of the notes and shares of common stock issuable upon conversion
of the notes. We will bear all fees and expenses incident to our obligation to
register the notes and shares of common stock issuable upon conversion of the
notes.
The selling securityholders may sell all or a portion of the notes or
shares of common stock issuable upon conversion of the notes beneficially owned
by them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the notes or shares of common stock
issuable upon conversion of the notes are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions. The notes and shares of common
stock issuable upon conversion of the notes may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,
- on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
- through the writing of options, whether such options are listed on an
options exchange or otherwise;
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- sales pursuant to Rule 144;
- broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
If the selling securityholders effect such transactions by selling notes or
common stock issuable upon conversion of the notes to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling securityholders or commissions from purchasers of the notes or such
common stock, as applicable, for whom they may act as agent or to whom they may
sell as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the shares of
common stock issuable upon conversion of the notes or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the shares of common stock issuable upon
conversion of the notes in the course of hedging in positions they assume. The
selling securityholders may also sell shares of common stock issuable upon
conversion of the notes short and deliver shares of common stock covered by this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling securityholders may also loan or
pledge the notes or shares of common stock issuable upon conversion of the notes
to broker-dealers that in turn may sell such shares.
The selling securityholders may pledge or grant a security interest in some
or all of the notes or shares of common stock issuable upon conversion of the
notes owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the notes and
shares of common stock issuable upon conversion of the notes from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling securityholders to include
the pledgee, transferee or other successors in interest as selling
securityholders under this prospectus. The selling securityholders also may
transfer and donate the notes and shares of common stock issuable upon
conversion of the notes in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The selling securityholders and any broker-dealer participating in the
distribution of the notes and shares of common stock issuable upon conversion of
the notes may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular offering of the
notes or shares of common stock issuable upon conversion of the notes is made, a
prospectus supplement, if required, will be distributed which will set forth the
aggregate amount of notes or shares of common stock issuable upon conversion of
the notes being offered and the terms of the offering, including the name or
names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
securityholders and any discounts, commissions or concessions allowed or
reallowed or paid to broker-dealers.
Under the securities laws of some states, the notes and shares of common
stock issuable upon conversion of the notes may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states
the notes and shares of common stock issuable upon conversion of the notes may
not be sold unless such shares have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
There can be no assurance that any selling securityholder will sell any or
all of the notes and shares of common stock issuable upon conversion of the
notes registered pursuant to the registration statement, of which this
prospectus forms a part.
The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the notes and shares of common stock issuable
upon conversion of the notes by the selling securityholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the notes and shares of common stock issuable
upon conversion of the notes to engage in market-making activities with respect
to the notes or shares of common stock issuable upon conversion of the notes.
All of the foregoing may affect the marketability of the notes or shares of
common stock issuable upon conversion of the notes and the ability of any person
or entity to engage in market-making activities with respect to the notes and
shares of common stock issuable upon conversion of the notes.
We will pay all expenses of the registration of the notes and the
underlying shares of common stock pursuant to the registration rights agreement,
estimated to be $[________] in total, including, without limitation, Securities
and Exchange Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that a selling securityholder
will pay all underwriting discounts and selling commissions, if any. We will
indemnify the selling securityholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreements, or the selling securityholders will be entitled to contribution. We
may be indemnified by the selling securityholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling securityholder specifically for use
in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.
Once sold under the registration statement, of which this prospectus forms
a part, the notes and shares of common stock issuable upon conversion of the
notes will be freely tradable in the hands of persons other than our affiliates.
