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Exhibit 4.3
WARRANT REGISTRATION RIGHTS AGREEMENT
between
XXXXX INTERNATIONAL, LTD.
and
THE BANK OF NEW YORK,
as Warrant Agent
Dated as of March 3, 1997
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WARRANT REGISTRATION RIGHTS AGREEMENT
WARRANT REGISTRATION RIGHTS AGREEMENT, dated as of March 3,
1997 (this "Agreement"), between XXXXX INTERNATIONAL, LTD., a Washington
corporation (the "Company"), and THE BANK OF NEW YORK, as warrant agent (the
"Warrant Agent").
Pursuant to the terms of a Placement Agreement dated March 3,
1997 (the "Placement Agreement"), among the Company and Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx"), as manager (the "Manager"), for itself and the
other placement agents named therein (collectively with the Manager, the
"Placement Agents"), the Company has agreed to issue and sell to the Placement
Agents an aggregate of 951,463 warrants (each, a "Warrant"), each Warrant
initially entitling the holder thereof to purchase 0.10616 shares of Common
Stock (as defined below) of the Company at an exercise price of $36.45 per
Common Share, as part of 951,463 units (the "Units"), each Unit consisting of
one 13% Senior Discount Note due 2007 of the Company (each a "Note" and
collectively, the "Notes") to be issued pursuant to the provisions of an
Indenture dated as of the date hereof (the "Indenture") between the Company, as
issuer, and The Bank of New York, as trustee, and one Warrant. The Note and the
Warrant included in each Unit will become separately transferable at the close
of business upon the earliest to occur of (i) the date that is six months after
the Closing Date (as defined below), (ii) the commencement of an exchange offer
with respect to the Notes undertaken pursuant to the Notes Registration Rights
Agreement (as defined below), (iii) the effectiveness of a shelf registration
statement with respect to resales of the Notes or (iv) the commencement of an
offer to purchase the Notes pursuant to the Indenture.
In consideration of the foregoing and of the mutual agreements
contained herein and in the Placement Agreement, the Company and the Warrant
Agent hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Auditors" means, at any time, the independent auditors of the
Company at such time.
"Board" means the board of directors of the Company from time
to time.
"Closing Date" means the date hereof.
"Comfort Letter" has the meaning specified in Section 3
hereof.
"Commission" means the United States Securities and Exchange
Commission.
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"Common Stock" means the common stock, without par value, of
the Company.
"Common Shares" means the shares of the Common Stock of the
Company.
"Company" means XxXxx International, Ltd., a Washington
corporation.
"Company IPO Shares" has the meaning specified in Section 2
hereof.
"Cutback Notice" has the meaning specified in Section 2
hereof.
"Expiration Date" means the tenth anniversary of the date
hereof.
"Holders" means the record holders of the Warrants and the
holders of Common Shares (or other securities) received upon exercise thereof.
"Includible Secondary Shares" has the meaning specified in
Section 2 hereof.
"Indenture" has the meaning specified in the recitals to this
Agreement.
"Manager" has the meaning specified in the recitals to this
Agreement.
"managing underwriter" has the meaning specified in Section 2
hereto.
"Xxxxxx Xxxxxxx" has the meaning specified in the recitals to
this Agreement.
"Notes" has the meaning specified in the recitals to this
Agreement.
"Opinion" has the meaning specified in Section 3 hereof.
"Other IPO Shares" has the meaning specified in Section 2
hereof.
"Piggy-back Registration Rights" has the meaning specified in
Section 2 hereof.
"Placement Agents" has the meaning specified in the recitals
to this Agreement.
"Placement Agreement" has the meaning specified in the
recitals to this Agreement.
"Registration Statement" has the meaning specified in Section
2 hereof.
"Resale Shelf" has the meaning specified in Section 3 hereof.
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"Securities Act" means the United States Securities Act of
1933, as amended.
"Underlying Securities" shall mean the Common Shares issuable
upon exercise of the Warrants or such other securities as shall be issuable upon
the exercise of the Warrants, pursuant to the Warrant Agreement.
"Units" has the meaning specified in the recitals to this
Agreement.
"Warrant" has the meaning specified in the recitals to this
Agreement.
"Warrant Agent" has the meaning specified in the preamble to
this Agreement.
"Warrant Agreement" means the Warrant Agreement dated the date
hereof between the Company and the Warrant Agent.
"Warrant Shares" has the meaning specified in Section 2
hereof.
"Warrant Registration Statement" has the meaning specified in
Section 3 hereof.
2. Piggy-Back Registration Rights.
(a) If the Company proposes to file a Registration Statement
with the Commission respecting an offering of any shares of Common Stock (or
other securities) issuable upon exercise of the Warrants (other than an offering
registered solely on Form S-4 or S-8 or any successor form thereto and other
than the initial public offering of shares of Common Stock (or other securities)
issuable upon exercise of the Warrants if no shareholder of the Company
participates therein), the Company shall give prompt written notice to all the
Holders of Warrants or Common Shares or such other securities received upon
exercise thereof at least 30 days prior to the initial filing of the
registration statement relating to such offering (the "Registration Statement").
Each such Holder shall have the right, within 20 days after delivery of such
notice, to request in writing that the Company include all or a portion of such
of the Common Shares issuable upon exercise of such Holder's Warrants, such
other securities as shall be issuable upon the exercise of the Warrants, or the
Common Shares or such other securities received upon the exercise thereof,
pursuant to the Warrant Agreement, ("Warrant Shares") in such Registration
Statement ("Piggy-back Registration Rights"). The Company shall include in the
public offering all of the Warrant Shares that a Holder has requested be
included, unless the underwriter for the public offering or the underwriter
managing the public offering (in either case, the "managing underwriter")
delivers a notice (a "Cutback Notice") pursuant to Section 2(b) or 2(c) hereof.
The managing underwriter may deliver one or more Cutback Notices at any time
prior to the execution of the underwriting agreement for the public offering.
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(b) If a proposed public offering includes both securities to
be offered for the account of the Company ("Company IPO Shares") and shares to
be sold by shareholders, the provisions of this Section 2(b) shall be applicable
if the managing underwriter delivers a Cutback Notice stating that, in its
opinion, the number of Common Shares that selling shareholders propose to sell
therein, whether or not such selling shareholders have the right to include
shares therein (the "Other IPO Shares"), plus the number of Warrant Shares that
the Holders have requested to be sold therein, plus the Company IPO Shares,
exceeds the maximum number of shares specified by the managing underwriter in
such Cutback Notice that may be distributed without adversely affecting the
price, timing or distribution of the Company IPO Shares. Such maximum number of
shares that may be so sold, excluding the Company IPO Shares, are referred to as
the "Includible Shares."
If the managing underwriter delivers such Cutback Notice, the
Company shall be entitled to include all of the Company IPO Shares in the public
offering and each requesting Holder shall be entitled to include in the public
offering up to its pro rata portion of the Includible Shares and in priority to
the inclusion of any Other IPO Shares that are proposed to be sold in such
public offering. No shareholder that proposes to sell Other IPO Shares in the
proposed initial public offering may sell any such shares therein unless all
Warrant Shares requested by the Holders to be sold therein are so included.
(c) If a proposed public offering is entirely a secondary
offering, the provisions of this Section 2(c) shall be applicable if the
managing underwriter delivers a Cutback Notice stating that, in its opinion, the
aggregate number of Warrant Shares and Other IPO Shares proposed to be sold
therein exceeds the maximum number of shares (the "Includible Secondary Shares")
specified by the managing underwriter in such Cutback Notice that may be
distributed without adversely affecting the price, timing or distribution of the
Common Shares being distributed. If the managing underwriter delivers such
Cutback Notice, each requesting Holder shall be entitled to include in the
public offering up to its pro rata portion of the Includible Secondary Shares
and in priority to the inclusion of any Other IPO Shares that are proposed to be
sold in such public offering. No shareholder that proposes to sell Other IPO
Shares in the proposed public offering may sell any such shares therein unless
all Warrant Shares requested by the Holders to be sold therein are so included.
(d) The underwriting agreement for such public offering shall
provide that each requesting Holder shall have the right to sell its Warrant
Shares to the underwriters and that the underwriters shall purchase the Warrant
Shares at the price paid by the underwriters for the Common Shares sold by the
Company and/or selling shareholders, as the case may be.
3. Shelf Registration.
(a) If only the Company sells Common Shares in an initial
public offering or all of the Warrant Shares have not been sold in a public
offering, the Company shall use its best
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efforts to cause to be filed pursuant to Rule 415 under the Securities Act a
shelf registration statement on the appropriate form (the "Warrant Registration
Statement") covering the issuance of the Warrant Shares upon exercise of the
Warrants and shall use its best efforts to cause the Warrant Registration
Statement to become effective under the Securities Act within 180 days after the
closing date of the initial public offering; provided, however, that (1) in no
event may the Warrant Registration Statement be declared effective prior to the
first anniversary of the Closing Date and (2) if the Commission shall request
that the Company register the resale of the Warrant Shares instead of the
issuance thereof, the Warrant Registration Statement shall register such resale
as opposed to such issuance. The Company shall use reasonable efforts to keep
the Warrant Registration Statement continuously effective until such time as all
Warrants have been exercised or in the case of clause (2), until such time as
all Warrant Shares have been resold. Prior to filing the Warrant Registration
Statement or any amendment thereto, the Company shall provide a copy thereof to
Xxxxxx Xxxxxxx and its counsel and afford them a reasonable time to comment
thereon.
(b) If the Warrant Registration Statement shall register the
sale of the Warrant Shares (a "Resale Shelf") as provided in Section 3(a)(2)
above, the Company agrees to:
(i) make available for inspection by a representative of the
Holders, any underwriter participating in any disposition pursuant to
such Resale Shelf and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, financial and
other records, documents and properties of the Company that are
pertinent to the conduct of due diligence customary for an underwritten
offering, and cause the officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with
a Resale Shelf; provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably and
in good faith designated by the Company in writing as confidential at
the time of delivery of such information shall be kept confidential by
such persons, unless and to the extent that disclosure of such
information is required by law or such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard such information by such person;
(ii) use its best efforts to cause all Warrant Shares sold
under a Resale Shelf to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the
Company are then listed if requested by the Holders of Warrant Shares
representing a majority of the Warrants originally issued, to the
extent such Warrant Shares satisfy applicable listing requirements;
(iii) provide a reasonable number of copies of the prospectus
included in such Resale Shelf to Holders that are selling Warrant
Shares pursuant to such Resale Shelf;
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(iv) cause to be provided to the Warrant Agent, on behalf of
the Holders and beneficial owners of Warrant Shares, upon the
effectiveness of such Resale Shelf, a customary "10b-5" opinion of
independent counsel (an "Opinion") and a customary "cold comfort"
letter of independent auditors (a "Comfort Letter");
(v) cause to be provided to Holders and beneficial owners of
Warrant Shares an Opinion and Comfort Letter with respect to each Form
10-K and Form 10- Q, including any amendments thereto, that is
incorporated by reference in such Resale Shelf; and
(vi) notify the Warrant Agent, for distribution to the
Holders, (A) when the Resale Shelf has become effective and when any
post-effective amendment thereto has been filed and becomes effective,
(B) of any request by the Commission or any state securities authority
for amendments and supplements to the Resale Shelf or of any material
request by the Commission or any state securities authority for
additional information after the Resale Shelf has become effective, (C)
of the issuance by the Commission or any state securities authority of
any stop order suspending the effectiveness of the Resale Shelf or the
initiation of any proceedings for that purpose, (D) if, between the
effective date of the Resale Shelf and the closing of any sale of
Warrant Shares covered thereby, the representations and warranties of
the Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, including this Agreement,
relating to disclosure 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 Warrant Shares for sale in
any jurisdiction or the initiation of any proceeding for such purpose,
(E) of the happening of any event during the period the Resale Shelf is
effective such that such Resale Shelf or the related prospectus
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make
statements therein not misleading and (F) of any determination by the
Company that a post-effective amendment to a Registration Statement
would be appropriate. The Holders hereby agree to suspend use of the
prospectus contained in a Resale Shelf upon receipt of such notice
under clause (E) or (F) above until the Company has amended or
supplemented such prospectus to correct such misstatement or omission.
4. Suspension.
Notwithstanding the foregoing, during any consecutive 365-day
period, the Company shall have the privilege to suspend availability of the
Warrant Registration Statement and the related prospectus for up to two
30-consecutive-day periods, except for the 30 days immediately prior to the
Expiration Date, if the Board determines in good faith that there is a valid
purpose for such suspension. Notice of such suspension shall be given promptly
to the Warrant Agent.
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5. Blue Sky.
The Company shall use its reasonable best efforts to register
or qualify the Underlying Securities proposed to be sold or issued pursuant to
the Registration Statement or the Warrant Registration Statement under all
applicable securities or "blue sky" laws of all jurisdictions in the United
States in which any Holder of Warrants may or may be deemed to purchase
Underlying Securities upon the exercise of Warrants or resale of the Warrant
Shares, as the case may be, and shall use its reasonable best efforts to
maintain such registration or qualification through the earlier of (A) the date
upon which all Warrants have been exercised or all Warrant Shares have been
resold, as the case may be, under the Warrant Shelf Registration Statement and
(B) the Expiration Date; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 5, (ii) file any general consent to service of
process or (iii) subject itself to taxation in any jurisdiction if it is not
otherwise so subject.
6. Accuracy of Disclosure.
The Company (and its successors) represents and warrants to
each Holder (and each beneficial owner of a Warrant or Warrant Share) and agrees
for the benefit of each Holder (and each beneficial owner of a Warrant or
Warrant Share) that, except during any period in which the availability of the
Warrant Registration Statement has been suspended, (i) the Warrant Registration
Statement and the documents incorporated by reference therein will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading; and (ii) the prospectus
delivered to such Holder upon its exercise of Warrants or pursuant to which such
Holder sells its Warrant Shares, as the case may be, and the documents
incorporated by reference therein 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.
7. Indemnity.
The Company hereby agrees to indemnify each beneficial owner
of a Warrant and each person, if any, who controls any beneficial owner of a
Warrant within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act of 1934 (the "Exchange Act"), or is under
common control with, or is controlled by, any beneficial owner of a Warrant
(whether or not it is, at the time the indemnity provided for in this Section 7
is sought, such a beneficial owner), from and against all losses, damages or
liabilities which such beneficial owner or any such controlling or affiliated
person suffers as a result of any breach, on the date of any exercise of a
Warrant by such beneficial owner or the resale of any Warrant Share by such
Holder, in either case pursuant to the Warrant Registration Statement, of the
representations, warranties or agreements contained in Section 6. Each
beneficial owner of a Warrant Share sold
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pursuant to a Resale Shelf, by accepting its beneficial ownership of a Warrant,
hereby (i) agrees to provide the Company with information with respect to it
that the Company reasonably requests in connection with any Resale Shelf and
(ii) agrees, severally and not jointly, to indemnify the Company, its directors
and 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 against any liability incurred by it or such controlling person as a result
of any misstatement of information provided by such beneficial owner to the
Company in writing expressly for inclusion in the Resale Shelf.
8. Expenses.
All expenses incident to the Company's performance of or
compliance with its obligations under this Agreement will be borne by the
Company, regardless of whether a Registration Statement or Warrant Registration
Statement becomes effective, including without limitation (i) all Commission or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all reasonable fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws, (iii) all reasonable expenses of any
persons incurred by or on behalf of the Company in preparing or assisting in
preparing, word processing, printing and distributing any registration
statement, any prospectus, any amendments or supplements thereto and other
documents relating to the performance of and compliance with this Agreement,
(iv) the reasonable fees (including legal fees and expenses) and disbursements
of the Warrant Agent, (v) the reasonable fees and disbursements of counsel for
the Company and (vi) the fees and disbursements, if any, of the Auditors but
excluding (x) fees and disbursements of counsel retained by the participating
Holders and (y) the Holder's share of underwriting discounts and commissions.
9. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Company and the
Warrant Agent represent to the other that it has not entered into, and agrees
that on or after the date of this Agreement it will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Warrants or Warrant Shares in this Agreement or otherwise conflicts with the
provisions hereof. The Company represents that the 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 under any 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 and the Warrant Agent have obtained the
written consent of Holders of at least a majority of the outstanding Warrants
affected by such amendment, modification, supplement, waiver or consent;
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provided that any amendment, modification or supplement to this Agreement which,
in the good faith opinion of the Board of Directors of the Company (and
evidenced by a resolution of such board), does not adversely affect any Holder,
shall not be subject to such requirement for written consent.
(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 a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 9(c); (ii) if to the Company, initially at the Company's address set
forth in the Indenture and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 9(c); and (iii) if to
the Warrant Agent, initially at the Warrant Agent address set forth in the
Indenture and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 9(c).
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, including, without limitation, subsequent Holders; provided that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Warrants in violation of the terms of the Placement Agreement or
the Warrant Agreement. If any transferee of any Holder shall acquire Warrants,
in any manner, whether by operation of law or otherwise, such Warrants shall be
held subject to all of the terms of this Agreement and the Warrant Agreement,
and by taking and holding such Warrants 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 or the Warrant Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Purchases and Sales of Warrants. The Company shall not,
and shall use its best efforts to cause its affiliates (as defined in Rule 405
under the Securities Act) not to, purchase and then resell or otherwise transfer
any Warrants other than Warrants acquired and cancelled.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Warrant Agent, and each Holder 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.
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(g) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. This Agreement shall be governed by the
laws of the State of New York.
(j) 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 impaired thereby.
(k) Waiver of Immunity. To the extent that the Company has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to judgement,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in respect of their
obligations under this Agreement to the fullest extent permitted by law.
(l) Initial Public Offering. Notwithstanding anything to the
contrary herein contained, if the Company conducts an initial public offering of
equity securities (other than nonconvertible preferred shares), the Company will
give the Holders the opportunity to convert such Warrants into warrants to
purchase such equity securities (other than nonconvertible preferred shares) and
such Warrant Shares into such equity securities (other than nonconvertible
preferred shares). Such conversion opportunity will be on terms and conditions
determined to be fair and reasonable by the Company's Board of Directors.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
XXXXX INTERNATIONAL, LTD.
By /s/ Xxxxx X. Xxxxxxxxx
______________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President & CEO
THE BANK OF NEW YORK
By /s/ Xxxxxx Xxxxxxx
______________________________
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
