COMMON STOCK REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT
Dated as of June 25, 1997
among
NORTH ATLANTIC TRADING COMPANY, INC.
and
NATWEST CAPITAL MARKETS LIMITED
(as Initial Purchaser)
THIS COMMON STOCK REGISTRATION RIGHTS AND STOCKHOLDERS
AGREEMENT (the "Agreement") is made and entered into as of June 25, 1997 among
North Atlantic Trading Company, Inc., a Delaware corporation (the "Company") and
NatWest Capital Markets Limited, as Initial Purchaser (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated as of June 18,
1997, between the Company and the Initial Purchaser (the "Purchase Agreement"),
relating, among other things, to the sale by the Company to the Initial
Purchaser of an aggregate of 1,360 Units, each Unit consisting of one share of
the Company's 12% Senior Preferred Stock (the "Senior Preferred Stock") and one
Warrant (collectively, "Warrants") to purchase 32.6765 shares of Common Stock,
par value $0.01 per share ("Common Stock"), of the Company. In order to induce
the Initial Purchaser to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchaser and the Holders (as defined herein)
among other things, the registration rights for the Common Stock set forth in
this Agreement and the Stockholders (as defined) have agreed to provide the
Holders, among other things, the tag-along rights for the Common Stock set forth
herein. In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"Affiliate" means, when used with reference to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person or such other Person, as
the case may be.
For the purposes of this definition, "control" (including, with correlative
meanings, the term "controlling," "controlled by," and "under common control
with"), when used with respect to any specified Person means the power to direct
or cause the direction of management or policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"Business Day" shall mean a day that is not a Legal Holiday.
"Capital Stock" shall mean with respect to any Person any and
all shares or other equivalents (however designated) of capital stock,
partnership interests or any other participation, right or other interest in
nature of an equity interest in such Person or any option, warrant or other
security convertible into any of the foregoing. "Certificate of Designation"
means the certificate of designation governing the Senior Preferred Stock as in
effect on the date hereof.
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Company.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Depository" shall mean, with respect to Warrant Shares
represented by one or more Global Certificates, The Depository Trust Company or
another person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
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"Exempt Transfer" shall mean, with respect to any Existing
Stockholder, a transfer by such Stockholder to any Permitted Transferee.
"Existing Stockholder" shall mean (i) each holder of Common
Stock on the date hereof and any employee of the Company who acquires Common
Stock after the date hereof and (ii) with respect to any such holder, any
Permitted Transferee thereof.
"Fair Market Value" shall mean the value of any securities as
determined (without any discount for lack of liquidity, the amount of Warrants
and Common Stock proposed to be sold or the fact that the shares of Warrants and
Common Stock held by any Holder of such security may represent a minority
interest in a private company) by a nationally recognized investment banking
firm selected by the Company for the determination of such value.
"Global Certificate" shall mean a certificate representing all
or part of the Warrant Shares issued to the Depository and bearing the legend
set forth in Exhibit A hereto.
"Holder" shall mean a holder of Warrants and/or Warrant Shares
as the context may require.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on
which banking institutions in New York, New York are required by law, regulation
or executive order to remain closed. If a payment date is a Legal Holiday,
payment may be made on the next succeeding day that is not a Legal Holiday.
"Permitted Transferee" shall mean, with respect to any
Existing Stockholder, (i) the Company or any other Existing Stockholder, (ii)
any Affiliate of such existing Stockholder (other than the Company or any of its
subsidiaries), (iii) any family member of such Existing Stockholder (not more
remote than first cousin and including any spouse or lineal descendant thereof),
(iv) any trust for the benefit of such Existing Stockholder and/or any family
members of such Existing Stockholder and (v) any heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of any Existing
Stockholder or Person described in clause (iii) above.
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"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.
"Physical Certificate" shall mean a certificate representing
Warrant Shares in definitive registered form, other than a Global Certificate.
"Piggy-Back Registration" shall have the meaning
set forth in Section 2.1.
"Purchase Agreement" shall have the meaning set
forth in the preamble.
"Registrable Securities" shall mean Warrant Shares. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of pursuant to such Registration Statement, (ii) such
securities have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii) such
securities shall have been otherwise transferred by such Holder and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(iv) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to
the Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees and
expenses of compliance with securities or blue sky laws (including in the case
of an underwritten offering, without limitation, reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), rating agency fees, printing
expenses, messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants
retained by the Company, the fees and disbursements of underwriters customarily
paid by issuers or sellers of securities (but not including any underwriting
discounts or
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commissions or transfer taxes, if any, attributable to the sale of Registrable
Securities by Holders of such Registrable Securities).
"Registration Statement" shall mean any registration statement
of the Company which covers any of the Warrant Shares pursuant to the provisions
of this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Restricted Security" shall have the meaning set forth in Rule
144(a)(3) under the Securities Act. "Rule 144" shall mean Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing
for offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an issuer of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from time
to time.
"Selling Holder" shall mean a Holder who is selling Warrant
Shares in accordance with the provisions of Section 2.1, 2.2, 3.3 or 3.4 hereof.
"Transfer Agent" means any transfer agent or registrar
appointed by the Company for the Common Stock.]
"Warrant Shares" means the shares of Common Stock issued and
issuable upon exercise of the Warrants.
2. Registration Rights.
2.1 Piggy-Back Registration. If at any time the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering by the Company for the account of any of its respective
securityholders of
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any class of its common equity securities (other than a Registration Statement
on Form S-8 (or any substitute form that may be adopted by the SEC), then the
Company shall give written notice of such proposed filing to the Holders of
Registrable Securities as soon as practicable (but in no event less than 20
Business Days before the anticipated filing date), and such notice shall offer
such Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
Registrable Securities intended to be disposed of by such Selling Holder and the
intended method of distribution thereof) (a "Piggy-Back Registration"). In the
case of any underwritten offering, the Company shall use its best efforts to
cause the managing Underwriter or Underwriters of such proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of any other securityholder included therein and to permit
the sale or other disposition of such Registrable Securities in accordance with
the intended method of distribution thereof. Any Selling Holder shall have the
right to withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.1 by giving written notice to
the Company of its request to withdraw prior to the time such Registration is
declared or becomes effective. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it is declared or becomes effective;
provided that the Company shall give prompt notice thereof to participating
Selling Holders. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2.1, and each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 2.1.
No failure to effect a registration under this Section 2.1 and
to complete the sale of shares of Common Stock in connection therewith shall
relieve the Company of any other obligation under this Agreement.
2.2 Reduction of Offering. (a) Piggy-Back
Registration. (i) If the Managing Underwriter or Under- writers of any
underwritten offering described in Section 2.1 have informed, in writing, the
Company or the Selling Holders of the Registrable Securities requesting
inclusion in such offering that it is their opinion that the total
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number of shares which the Company, the Selling Holders and any other Persons
desiring to participate in such registration intend to include in such offering
is such as to materially and adversely affect the success of such offering,
including the price at which such securities can be sold, then the number of
shares to be offered for the account of the Selling Holders and all such other
Persons (other than the Company) participating in such registration shall be
reduced or limited pro rata in proportion to the respective number of shares
requested to be registered to the extent necessary to reduce the total number of
shares requested to be included in such offering to the number of shares, if
any, recommended by such managing Underwriters; provided, however, that if such
offering is effected for the account of any securityholder of the Company other
than the Selling Holders, pursuant to the demand registration rights of any such
securityholder, then the number of shares to be offered for the account of the
Company (if any) and the Selling Holders (but not such securityholders who have
exercised their demand registration rights) shall be reduced or limited pro rata
in proportion to the respective number of shares requested to be registered to
the extent necessary to reduce the total number of shares requested to be
included in such offering to the number of shares, if any, recommended by such
managing Underwriters.
(ii) If the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.1 notify the Selling Holders
requesting inclusion of Registrable Securities in such offering, that the kind
of securities that the Selling Holders, the Company and any other Persons
desiring to participate in such registration intend to include in such offering
is such as to materially and adversely affect the success of such offering, (x)
the Registrable Securities to be included in such offering shall be reduced as
described in clause (i) above or (y) if a reduction in the Registrable
Securities pursuant to clause (i) above would, in the judgment of the managing
Underwriter or Underwriters, be insufficient to substantially eliminate the
adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering.
(b) If, as a result of the proration provisions of this
Section 2.2, any Selling Holder shall not be entitled to include all Registrable
Securities in a Piggy-Back Registration that such Selling Holder has requested
to be included, such Selling Holder may elect to withdraw his
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request to include Registrable Securities in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a Selling Holder shall no longer have
any right to include Registrable Securities in the registration as to which such
Withdrawal Election was made.
3. Transfers of Warrant Shares.
3.1 Generally. All Warrant Shares at any time and from time to
time outstanding that are Registrable Securities shall be held subject to the
conditions and restrictions set forth in this Section 3. All shares of Common
Stock now or hereafter held by a Stockholder shall be held subject to the
conditions and restrictions set forth in this Section 3. Each Holder of Warrant
Shares and each Stockholder by executing this Agreement or by accepting a
certificate representing Common Stock or other indicia of ownership therefor
from the Company agrees with the Company and with each other Stockholder to such
conditions and restrictions.
3.2 Restrictions on Transfer. (a) The Company agrees that it
shall not permit any Existing Stockholder to sell, assign, give, transfer,
exchange, convert, devise, bequeath, pledge or otherwise dispose of
(collectively, "Transfer") any Common Stock or any interest therein except (A)
in compliance with Section 3.3 or (B) pursuant to an Exempt Transfer. Each
certificate representing Warrants and/or Warrant Shares shall contain
conspicuous notation on such certificate indicating that the transfer of such
Warrant Shares is subject to the terms and restrictions of this Agreement, and
each Holder consents to the placement of such legend on the certificate or
certificates representing the Warrant Shares owned by such Holder.
(b) Each Holder agrees that it will not transfer any Warrant
Shares or any interest therein except in compliance with Sections 3.3 and 3.4.
3.3 Tag-Along Rights. (a) In the event of any proposed
Transfer of Common Stock by any of the Existing Stockholders (the "Selling
Stockholders") in a single transaction or a series of related transactions
involving shares of Common Stock aggregating at least 15% of the shares of
Common Stock collectively then owned by the Existing Stockholders to a person
(such other person being hereinafter referred to as the "proposed purchaser"),
other than pursuant to an Exempt Transfer or in a bona fide
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public distribution pursuant to an effective Registration Statement under the
Securities Act, each of the Holders of Warrants and Warrant Shares (the
"Non-Selling Stockholders") each shall have the irrevocable and exclusive right,
but not the obligation (the "Tag-Along Right"), to require the proposed
purchaser to purchase from each of them up to a number of Warrant Shares (and/or
Warrants exercisable for a number of Warrant Shares) owned by such Holder equal
to the total number of shares of Common Stock to be sold by the Selling
Stockholders to the proposed purchaser (collectively, the "Transfer Shares")
multiplied by a fraction, the numerator of which is the number of Warrant Shares
(including the number of Warrant Shares issuable upon the exercise of Warrants)
owned by such Holder, and the denominator of which is the total number of shares
of Common Stock and Warrant Shares (including the number of Warrant Shares
issuable upon the exercise of Warrants) owned by the Selling Stockholders and by
all of the Holders of Warrant Shares and Warrants (the number of Warrant Shares
that a Holder of Warrants or Warrant Shares may require to be so purchased being
referred to as such Holder's "Tag-Along Shares"). The Company shall give written
notice at least 15 days prior to the date of the proposed Transfer to the
Non-Selling Stockholders stating:
(i) the name and address of the proposed purchaser,
(ii) the proposed amount of consideration and terms and conditions
of payment offered by such proposed purchaser (if the proposed
consideration is not cash, the notice shall describe the terms of the
proposed consideration),
(iii) the number of shares of Common Stock proposed to be
transferred, and
(iv) that either the proposed purchaser has been informed of the
Tag-Along Right and has agreed to purchase Warrants and/or Warrant
Shares in accordance with the terms hereof or that the Existing
Stockholders participating in the transaction will make such purchase.
The Tag-Along Right shall be exercised by any or all of the
Non-Selling Stockholders by giving written notice to the Company ("Tag-Along
Notice") within five days following receipt of the notice specified in the
preceding
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sentence, indicating its election to exercise the Tag-Along Right (the
"Participating Stockholders"). The Tag-Along Notice shall state the amount of
Warrants and/or Warrant Shares that such Holder proposes to include in such
transfer to the proposed purchaser. Failure by any Non-Selling Stockholder to
give such notice within such five-day period shall be deemed an election by such
Non Selling Stockholder not to sell its Warrants and/or Warrant Shares pursuant
to that Tag-Along Notice. The closing with respect to any sale to a proposed
purchaser pursuant to this Section shall be held at the time and place specified
in the Tag-Along Notice but in any event within 60 days of the date the Tag-
Along Notice is given; provided that if through the exercise of reasonable
efforts the Selling Stockholders are unable to cause such transaction to close
within 60 days, such period may be extended for such reasonable period of time
as may be necessary to close such transaction. Consummation of the sale of
Common Stock by any Selling Stockholder to a proposed purchaser shall be
conditioned upon consummation of the sale by each Participating Stockholder to
such proposed purchaser of the Tag-Along Shares, if any. As used in this Section
3.3(a), the term "Transfer" shall be deemed to include all transactions or
series of transactions pursuant to which beneficial ownership of Common Stock is
transferred, directly or indirectly, to a proposed purchaser, regardless of the
number or type of intermediate entities or transactions between a Selling
Stockholder and such proposed purchaser.
(b) In the event that the proposed purchaser does not purchase
Tag-Along Shares from the Holders on the same terms and conditions as purchased
from the Selling Stockholders, then the Company shall cause the Selling
Stockholders making such Transfer to purchase on such terms and conditions such
Tag-Along Shares if the Transfer occurs.
(c) The Selling Stockholders who are parties to a sale to a
proposed purchaser shall arrange for payment directly by the proposed purchaser
to each Participating Stockholder, upon delivery of the certificate or
certificates representing the Warrants and/or Warrant Shares duly endorsed for
transfer, together with such other documents as the proposed purchaser may
reasonably request. The reasonable costs and expenses incurred by the Selling
Stockholders and Holders in connection with a Transfer subject to this Section
3.3 shall be allocated among the Selling Stockholders and Participating
Stockholders pro rata based upon the number of shares of Common Stock, the
number of
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Warrant Shares subject to Warrants and/or Warrant Shares sold by each Selling
Stockholder and each Participating Stockholder to a proposed purchaser (and may
be deducted from amounts distributed in the transaction); provided, that the
costs and expenses shall not include the fees and expenses of more than one law
firm, which firm shall be selected in writing by the Selling Stockholders,
unless representation of the Selling Stockholders by the same counsel, due to
actual or potential differing interests between them, shall create a conflict of
interest which shall be evidenced by an opinion of counsel, in which case the
costs and expenses of one additional law firm designated by Participating
Stockholders proposing to sell a majority of the Tag-Along Shares proposed to be
sold by all Participating Stockholders.
(d) If at the end of 60 days following the date on which a
Tag-Along Notice was given, or as otherwise extended pursuant to the provisions
of Section 3.3(a), the sale of Common Stock by the Stockholders and the sale of
the Tag-Along Shares have not been completed in accordance with the terms of the
proposed purchaser's offer, all certificates representing the Tag-Along Shares
shall be returned to the Participating Stockholders, and all the restrictions on
sale, transfer or assignment contained in this Agreement with respect to Common
Stock owned by the Stockholders shall again be in effect.
(e) Tag-Along Rights shall terminate upon the effectiveness of
any Registration Statement filed with the SEC with respect to shares of Common
Stock in an initial public offering or subsequent public offering if, after
giving effect to such Offering, at least 50% of the Company's Common Stock on a
fully-diluted basis would be held by persons unaffiliated with the Company and
without restriction on transfer under the Act.
3.4 Drag-Along Rights. (a) In the event of any proposed
Transfer of Common Stock by any of the Selling Stockholders (other than pursuant
to an Exempt Transfer or in a bona fide public distribution pursuant to an
effective Registration Statement under the Securities Act) in a single
transaction or a series of related transactions involving shares of Common Stock
aggregating at least 51% of the shares of Common Stock collectively then owned
by the Existing Stockholders to a proposed purchaser, such Selling Stockholders
shall have the right (the "Drag-Along Right"), to require each Holder to
Transfer to the proposed purchaser a number of Warrant Shares (and/or Warrants
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exercisable for a number of Warrant Shares) owned by such Holder equal to the
total number of Warrant Shares (including the number of Warrant Shares issuable
upon the exercise of Warrants) multiplied by a fraction, the numerator of which
is the number of shares of Common Stock to be sold by the Selling Stockholders
to the proposed purchaser and the denominator of which is the total number of
shares of Common Stock then owned by the Existing Stockholders (the number of
Warrant Shares that a Holder of Warrants or Warrant Shares may be required to so
Transfer being referred to as such Holder's "Drag-Along Shares"). The Selling
Stockholders shall give written notice (the "Drag- Along Notice") at least 15
days prior to the date of the proposed transfer to each Holder stating:
(i) the name and address of the proposed purchaser,
(ii) the proposed amount of consideration and terms and conditions
of payment offered by such proposed purchaser (if the proposed
consideration is not cash, the notice shall describe the terms of the
proposed consideration),
(iii) the number of shares of Common Stock proposed to be
transferred, and
(iv) that the proposed purchaser has been informed of the
Drag-Along Right and has agreed to purchase Warrants and/or Warrant
Shares in accordance with the terms hereof.
The closing with respect to any sale to a proposed purchaser
pursuant to this Section shall be held at the time and place specified in the
Drag-Along Notice but in any event within 60 days of the date the Drag-Along
Notice is given; provided that if through the exercise of reasonable efforts the
Selling Stockholders are unable to cause such transaction to close within 60
days, such period may be extended for such reasonable period of time as may be
necessary to close such transaction. Consummation of the sale of Common Stock by
any Holder to a proposed purchaser shall be conditioned upon consummation of the
sale by each Selling Stockholder to such proposed purchaser of the Shares of
Common Stock owned by such Selling Stockholders.
(b) In the event that the proposed purchaser does not
purchase the Drag-Along Shares from the Holders on
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the same terms and conditions as purchased from the Selling Stockholders, then
the Holders of the Drag-Along Shares shall have the right to require the Company
to cause the Selling Stockholders making such Transfer to purchase on such terms
and conditions such Drag-Along Shares if the Transfer occurs.
(c) The Selling Stockholders who are parties to a sale to a
proposed purchaser shall arrange for payment directly by the proposed purchaser
to each Holder, upon delivery of the certificate or certificates representing
the Warrants and/or Warrant Shares duly endorsed for transfer, together with
such other documents as the proposed purchaser may reasonably request. The
reasonable costs and expenses incurred by the Selling Stockholders and Holders
in connection with a sale of Common Stock, Warrants and/or Warrant Shares
subject to this Section 3.4 shall be allocated among the Selling Stockholders
and such Holders pro rata based upon the number of shares of Common Stock,
Warrants and/or Warrant Shares sold by each Selling Stockholder and each Holder
to a proposed purchaser (and may be deducted from the amounts distributed in the
transactions, provided, that the costs and expenses shall not include the fees
and expenses of more than one law firm, which firm shall be selected by the
Selling Stockholders, unless representation of the Selling Stockholders and the
Holders by the same counsel, due to actual or potential differing interests
between them, shall create a conflict of interest, in which case the costs and
expenses shall include the reasonable fees and expenses of one additional law
firm designated in writing by Holders proposing to sell a majority of the
Drag-Along Shares.
(d) If at the end of 30 days following the date on which a
Drag-Along Notice was given, or as otherwise extended pursuant to the provisions
of Section 3.3(a), the sale of Common Stock by the Selling Stockholders and the
sale of the Drag-Along Shares have not been completed in accordance with the
terms of the Drag-Along Notice offer, all certificates representing the
Drag-Along Shares shall be returned to the Holders, and all the restrictions on
sale, transfer or assignment contained in this Agreement with respect to Common
Stock owned by the Selling Stockholders shall again be in effect.
(e) Drag-Along Rights shall terminate upon the effectiveness
of any Registration Statement filed with the SEC with respect to shares of
Common Stock in an initial public offering or subsequent public offering if,
after
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giving effect to such Offering, at least 50% of the Company's Common Stock on a
fully-diluted basis would be held by persons unaffiliated with the Company and
without restriction on transfer under the Act.
3.5 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Certificates. When Physical
Certificates are presented to the Transfer Agent with a request:
(i) to register the transfer of the Physical Certificates; or
(ii) to exchange such Physical Certificates for an equal number of
Physical Certificates of other authorized denominations, the Transfer
Agent shall register the transfer or make the exchange as requested if
the requirements under this Agreement as set forth in this Section 3.5
for such transactions are met; provided, however, that the Physical
Certificates presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a
written Instrument of transfer in form satisfactory to the
Transfer Agent, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(II) in the case of Physical Certificates the offer
and sale of which have not been registered under the
Securities, such Physical Certificates shall be accompanied,
in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Certificates are being
delivered to the Transfer Agent by a holder for
registration in the name of such holder, without
transfer, a certification from such holder to that
effect (in substantially the form of Exhibit B
hereto); or
(B) if such Physical Certificates are being
transferred to a "qualified Institutional buyer" (as
defined in Rule 144A under the Securities Act (a
"Qualified Institutional Buyer")) in accordance with
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Rule 144A under the Securities Act, a certification
to that effect (in substantially the form of Exhibit
B hereto); or
(C) if such Physical Certificates are being
transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (an "Institutional Accredited
Investor")) delivery of a certification to that
effect (in substantially the form of Exhibit B
hereto) and a Transferee Certificate for
Institutional Accredited Investors in substantially
the form of Exhibit C hereto; or
(D) if such Physical Certificates are being
transferred in reliance on Regulation S under the
Securities Act ("Regulation S"), delivery of a
certification to that effect (in substantially the
form of Exhibit B hereto) and a Transferee
Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an
opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act; or
(E) if such Physical Certificates are being
transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to that
effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Physical Certificates are being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto) and an opinion of counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act.
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(b) Restrictions on Transfer of Physical Certificates for a
Beneficial Interest in a Global Certificate. A Physical Certificate may not be
exchanged for a beneficial interest in a Global Certificate except upon
satisfaction of the requirements set forth below. Upon receipt by the Transfer
Agent of a Physical Certificate, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Transfer Agent, together
with:
(A) a certification, in substantially the form of Exhibit B
hereto, that such Physical Certificate is being transferred to a
Qualified Institutional Buyer; and
(B) written instructions directing the Transfer Agent to make,
or to direct the Depositary to make, an endorsement on the Global
Certificate to reflect an increase in the aggregate amount of the
shares represented by the Global Certificate, then the Transfer Agent
shall cancel such Physical Certificate and cause or direct the
Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Transfer Agent, the
number of shares represented by the Global Certificate to be increased
accordingly. If no Global Certificate is then outstanding, the Company
shall issue a new Global Certificate in the appropriate amount.
(c) Transfer and Exchange of Global Certificates. The transfer
and exchange of Global Certificates or beneficial interests therein shall be
effected through the Depositary, in accordance with this Agreement (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global
Certificate for a Physical Certificate.
(i) Any person having a beneficial interest in a Global
Certificate may upon request exchange such beneficial interest for a
Physical Certificate. Upon receipt by the Transfer Agent of written
instructions or such other form of instructions as is customary for the
Depositary from the Depositary or its nominee on behalf of any person
having a beneficial interest in a Global Certificate and upon receipt
by the Transfer Agent of a written order or such other form of
instructions as is customary for the Depositary or the
-16-
person designated by the Depositary as having such a beneficial
interest containing registration instructions and, in the case of any
such transfer or exchange of a beneficial interest in a Global
Certificate the offer and sale of which gave not been registered under
the Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A under the Securities Act, a certification to that effect
(in substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor, deliver of a
certification to that effect (in substantially the form of
Exhibit B hereto) and a Certificate for Institutional
Accredited Investors in substantially the form of Exhibit C
hereto; or
(D) if such beneficial interest is being transferred
in reliance on Regulation S, delivery of a certification to
that effect (in substantially the form of Exhibit B hereto)
and a Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of
counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act;
or
(E) if such beneficial interest is being transferred
in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (in substantially the form of
Exhibit B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such beneficial interest is being
transferred in reliance on another exemption from
-17-
the registration requirements of the Securities Act, a
certification to that effect (in substantially the form of
Exhibit B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act, then the Transfer
Agent will cause, in accordance with the standing instructions
and procedures existing between the Depositary and the
Transfer Agent, the aggregate amount of the Global Certificate
to be reduced and, following such reduction, the Company will
execute and deliver to the transferee a Physical Certificate.
(ii) Physical Certificates issued in exchange for a beneficial
interest in a Global Certificate shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Transfer Agent in writing. The Transfer Agent shall
deliver such Physical Certificates to the persons in whose names such
Physical Certificates are so registered.
(e) Restrictions on Transfer and Exchange of Global
Certificates. Notwithstanding any other provisions of this Agreement, a Global
Certificate may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Certificates in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Certificates notifies the
Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Certificates and a successor Depositary for
the Global Certificates is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Transfer Agent in writing that it elects to cause the issuance of
Physical Certificates, then the Company will execute, and the Transfer
Agent, upon written instructions from the Company, will authenticate
and deliver Definitive Certificates, in an aggre-
-18-
gate number equal to the aggregate number of shares represented by the
Global Certificates, in exchange for such Global Certificates.
(g) Legends.
(i) Each Warrant Share (and all shares of Common Stock issued
in exchange therefor or substitution thereof) which is a Restricted
Security shall bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER
AGENT), (D) OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN U.S.
PERSONS IN OFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904
UNDER REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THIS
SECURITY IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN A COMMON
STOCK REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT DATED JUNE 25,
1997, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE
COMPANY.
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(h) Cancellation and/or Adjustment of a Global Certificate. At
such time as all beneficial interests in a Global Certificate have either been
exchanged for Physical Certificates, redeemed, repurchased or cancelled, such
Global Certificate shall be returned to or retained and cancelled by the
Transfer Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Physical Certificates,
redeemed, repurchased or cancelled, the number of shares of Common Stock
represented by such Global Certificate shall be reduced and an endorsement shall
be made on such Global Certificate, by the Transfer Agent to reflect such
reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Physical Certificates.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Transfer Agent's request, and the
Transfer Agent shall countersign and register Physical Certificates and
Global Certificates.
(ii) All Physical Certificates and Global Certificates issued
upon any Registration, transfer or exchange of Physical Certificates or
Global Certificates shall be validly issued, fully paid and
nonassessable.
4. Registration Procedures. In connection with
the obligations of the Company with respect to any Registration Statement
pursuant to Sections 2.1 hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the Securities Act, which form (i) shall be
selected by the Company and (ii) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith, and the Company shall use its commercially reasonable
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for such time
-20-
period may be required by any applicable underwriting agreement or, if
not so required, as determined by the Company in its sole discretion
(the "Applicable Period"), cause each Prospectus to be supplemented by
any required prospectus supplement during such Applicable Period and,
as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act;
(c) furnish to each Holder of Registrable Securities and to
each underwriter of an underwritten offering of Registrable Securities,
if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder or underwriter may reasonably
request, in order to facilitate the public sale or other disposition of
the Registrable Securities;
(d) use reasonable commercial best efforts to register or
qualify the Registrable Securities under all applicable state
securities or Blue Sky laws of such jurisdictions as any Holder thereof
covered by a Registration Statement shall reasonably request in writing
by the time the applicable Registration Statement is declared effective
by the SEC; provided, however, that the Company shall not be required
to
(i) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 4(d), or
(ii) file any general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction
if it is not so subject;
(e) notify each Holder of Registrable Securities promptly
and, if requested by such Holder, confirm such advice in writing
(i) when a Registration Statement has become
effective and when any post-effective amendments and
supplements thereto become effective;
(ii) of any request by the SEC or any state
securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional
information, in each
-21-
case after the Registration Statement has become
effective;
(iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose;
(iv) if, between the effective date of a
Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations
and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true
and correct in all material respects or if the Company
receives any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such
purpose; and
(v) of the happening of any event during the period
a Registration Statement is effective which makes any
statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires
the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not
misleading;
(f) use reasonable commercial efforts to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment;
(g) furnish to each Holder of Registrable Securities and to
the Initial Purchaser, without charge, at least one conformed copy of
each Registration Statement and any post-effective amendment thereto
(with documents incorporated therein by reference or exhibits thereto);
(h) cooperate with the Selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and registered in such names as
-22-
the selling Holders may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(i) upon the occurrence of any event contemplated by Section
4(e)(v) hereof during the Applicable Period, use reasonable efforts to
prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities,
such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company shall not be required
to amend or supplement a Registration Statement, any related Prospectus
or any document incorporated therein by reference in the event that,
and for so long as, an event occurs and is continuing as a result of
which the Registration Statement, any related Prospectus or any
document incorporates therein by reference as then amended or
supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances under which they are made. The Company
agrees to notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and each
Holder hereby agrees to suspend use of the Prospectus until the Company
has amended or supplemented the Prospectus to correct such misstatement
or omission. At such time as such public disclosure is otherwise made
or the Company determines in good faith that such disclosure is not
necessary, the Company agrees promptly to notify each Holder of such
determination, to amend or supplement the Prospectus if necessary to
correct any untrue statement or omission therein and to furnish each
Holder such numbers of copies of the Prospectus as so amended or
supplemented as each Holder may reasonably request;
(j) obtain a CUSIP number for the Common Stock;
-23-
(k) (i) make reasonably available for inspection by a
representative of, and counsel for, any underwriter participating in
any disposition pursuant to a Registration Statement, all relevant
financial and other records, pertinent corporate documents and
properties of the Company and
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by such
representative, counsel or any such underwriter in connection with any
such Registration Statement; and
(l) If requested by the Holders in connection with any
Registration Statement, shall use reasonably commercial efforts to
cause (w) counsel for the Company to deliver an opinion relating to the
Registration Statement and the Common Stock, in customary form, in the
event and to the extent the same is furnished to any other Stockholder
or Underwriter in connection with such Registration Statement (x) its
officers to execute and deliver all customary documents and
certificates requested by a representative of the Holders or any
underwriter, as applicable in the event and to the extent the same is
furnished to any other Stockholder or Underwriter in connection with
such Registration Statement and (y) its independent public accountants
to provide a comfort letter in customary form in the event and to the
extent the same is furnished to any other Stockholder or Underwriter in
connection with such Registration Statement. The Company may, as a
condition to such Holder's participation in any Registration Statement,
require each Holder of Registrable Securities to (i) furnish to the
Company such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Securities as the
Company may from time to time reasonably request in writing and (ii)
agree in writing to be bound by this Agreement.
5. Indemnification and Contribution. (a) The
Company agrees to indemnify and hold harmless each Holder and each person, if
any, who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Holder or any such controlling or affil-
-24-
iated person in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto) pursuant
to which Registrable Securities were registered under the Securities Act, or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Holder furnished to the Company in writing by such Holder
expressly for use in any such Registration Statement or Prospectus.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against which
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall have the right to retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
reasonable fees and disbursements of such counsel relating to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of
-25-
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed in
writing to the retention of such counsel or (ii) the indemnifying party fails
promptly to assume the defense of such proceeding or fails to employ counsel
reasonably satisfactory to such indemnified party or parties or (iii) the named
parties to any such proceeding (including any impleaded parties) include both
such indemnified party or parties and the indemnifying parties or an affiliate
of the indemnifying parties or such indemnified parties, and there may be one or
more defenses available to such indemnified party or parties that are different
from or additional to those available to the indemnifying parties, in which
case, if such indemnified party or parties notifies the indemnifying parties in
writing that it elects to employ separate counsel of its choice at the expense
of the indemnifying parties, the indemnifying parties shall not have the right
to assume the defense thereof and such counsel shall be at the expense of the
indemnifying parties, it being understood, however, that unless there exists a
conflict among indemnified parties, the indemnifying parties shall not, in
connection with any one such proceeding or separate but substantially similar or
related proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such indemnified party or parties. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but, if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is a party, and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute
-26-
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Holders on the other hand from the offering of such Registrable Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Holders on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Holders on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Holders and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The Company and each Holder agrees that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred (and not otherwise reimbursed) by such
indemnified party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 5 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
6. Miscellaneous. (a) No Inconsistent Agreements. The
Company has not entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The
-27-
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities, if any, under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority of the sum of the outstanding number of Warrant Shares
and number of Warrant Shares subject to Warrants affected by such amendment,
modification, supplement, waiver or consent; provided, however, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a registration statement and that does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by the
Holders of a majority of the Registrable Securities proposed to be sold.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to the Initial Purchaser, at its address set forth in the
Purchase Agreement; (ii) if to the Company or an Existing Stockholder, at the
Company's address set forth in the Purchase Agreement; (iii) if to a holder of
Warrants, as set forth in the register of the Warrants; and (iv) if to a holder
of Warrant Shares, at such holder's address as set forth in the stock books of
the Company. All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered, five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties. If any transferee of any Holder shall acquire Warrants and
Warrant Shares, in any manner, whether by operation of law or otherwise, such
Warrants and Warrant Shares shall be held subject to all of the terms of this
Agreement, and by
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taking and holding such Warrants and Warrant Shares such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Third Part Beneficiary. All Holders shall be a third party
beneficiary to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchaser, on the other hand, and the Initial Purchaser
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(f) 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.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impair thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
NORTH ATLANTIC TRADING COMPANY,
INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President and CEO
-00-
XXXXXXX XXXXXXX XXXXXXX LIMITED
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
-30-
