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EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
between
PAXAR CORPORATION
and
ODYSSEY PARTNERS, L.P.
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Dated as of March 3, 1997
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of March
3, 1997, between Odyssey Partners, L.P., a Delaware limited partnership
("Odyssey"), and Paxar Corporation, a New York corporation (the "Company").
Capitalized terms used herein but not otherwise defined shall have the meanings
given to them in Section 1 of this Agreement.
WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of December 20, 1996, between the Company and
Odyssey, the Company is today purchasing from Odyssey all of the issued and
outstanding shares of Common Stock, par value $.01 per share, of Monarch
Holdings, Inc., a Delaware corporation, owned by Odyssey (the "Purchased
Shares"); and
WHEREAS, the Stock Purchase Agreement contemplates that, in
partial consideration for the purchase and sale of the Purchased Shares, the
Company will issue to Odyssey warrants (the "Warrants") representing the right
of the holder thereof to purchase from the Company shares of common stock, par
value $.10 per share, of the Company (including any other capital stock of the
Company into which such stock is reclassified or reconstituted, the "Common
Stock"), in accordance with the terms of separate Warrant Agreements, dated the
date hereof (the "Warrant Agreements") and annexed as Exhibits A and B to the
Stock Purchase Agreement; and
WHEREAS, the Company has agreed to grant to Odyssey and to the
Holders (as defined below) the registration rights set forth herein, and to file
a registration statement under the Securities Act of 1933, as amended, to
register the shares of Common Stock issuable upon exercise of the Warrants.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
"Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder.
"Approved Underwriter" has the meaning assigned such
term in Section 3.3.
"Approved Underwriter Amount" has the meaning
assigned such term in Section 3.4(c).
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
"Common Stock" has the meaning assigned such term in
the recitals to this Agreement.
"Company Underwriter" has the meaning assigned such
term in Section 4.3.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC thereunder.
"Holder" means each owner of the Warrants and each
person who, from time to time, owns (or has the right to receive) Registrable
Securities. The initial Holder as of the date hereof is Odyssey.
"Indemnified Party" has the meaning assigned such
term in Section 8.3.
"Indemnifying Party" has the meaning assigned such
term in Section 8.3.
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"Initiating Holders" has the meaning assigned such
term in Section 3.1.
"Inspector" has the meaning assigned such term in
Section 6.1(i)(iv).
"NASD" means the National Association of Securities
Dealers, Inc.
"Odyssey" has the meaning assigned such term in the
recitals to this Agreement.
"Person" means any individual, firm, corporation,
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of any such entity.
"Piggyback Registration Statement" has the meaning
assigned such term in Section 4.1.
"Registrable Securities" means each of the following:
(a) shares of Common Stock issuable upon exercise of the Warrants and (b)
securities issued or issuable in respect of shares of Common Stock issued,
issuable or held pursuant to clause (a) above by way of a dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Registrable Securities will
cease to be Registrable Securities when (i) a registration statement covering
such Registrable Securities has been declared effective under the Act by the SEC
and such Registrable Securities have been disposed of pursuant to such effective
registration statement or (ii) such Registrable Securities have been disposed of
pursuant to Rule 144 under the Act. For all purposes of this Agreement, a Holder
shall be deemed to hold Registrable Securities if it has the right to receive
such Registrable Securities upon the exercise of any option, right, warrant or
convertible security.
"Registration Expenses" has the meaning assigned such
term in Section 7.
"Registration Statement" means the Shelf Registration
or the S-1 Registration Statement, as the context may require.
"S-1 Registration Statement" has the meaning assigned
such term in Section 2.2.
"SEC" means the Securities and Exchange Commission or
such other governmental authority as is, from time to time, charged with similar
functions.
"Shelf Registration" has the meaning assigned to such
term in Section 2.1.
"Suspension Notice" has the meaning assigned such
term in Section 3.5(a).
"Total Securities" has the meaning assigned such term
in Section 4.3.
"Underwritten Offering" has the meaning assigned such
term in Section 3.1.
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"Valid Business Reason" has the meaning assigned such
term in Section 3.5.
"Warrants" has the meaning assigned such term in the
recitals to this Agreement.
"Warrant Agreements" has the meaning assigned such
term in the recitals to this Agreement.
2. Filing of Registration Statement.
2.1 Shelf Registration. The Company shall file, within one year
following the date hereof, a "shelf" registration statement
with respect to the offer and resale of the Registrable
Securities on Form S-3 under Rule 415 under the Act, if such
form is then available to the Company (the "Shelf
Registration"). The Company shall use its best efforts to have
the Shelf Registration declared effective as soon as
reasonably practicable after filing.
2.2 S-1 Registration Statement. In the event that Form S-3 is not
available to the Company as contemplated by Section 2.1, then
the Company will, promptly following each request for an
Underwritten Offering under Section 3 hereof, file, and use
its best efforts to have declared effective, a Registration
Statement on Form S-1, or such other form as shall then be
available (the "S-1 Registration Statement"), covering the
offer and resale of the Registrable Securities that are the
subject of such Underwritten Offering.
2.3 Limit on Sales Pursuant to Shelf Registration. All sales of
Registrable Securities under the Shelf Registration not made
in an Underwritten Offering in accordance with Section 3
hereof shall be subject to the following limitations:
(a) Any such sales shall be made in connection with an
offer by a Holder to sell the lesser of (i) 100,000
shares of Common Stock (for this purpose, the number
of shares shall be determined without regard to any
"cashless" exercise of warrants pursuant to clause
(iii) of Section 2.3 of the Warrant Agreements) and
(ii) all remaining Registrable Securities held by
such Holder; and
(b) Such Holder will give the Company three business
days' prior notice of its intention to make any such
sales, during which period the Company may offer to
purchase such securities, or introduce such Holder to
a third party interested in purchasing such
securities (provided that (i) in no event shall the
giving of such notice bind such Holder to effect any
sales of Registrable Securities and (ii)
notwithstanding any offer from the Company or a third
party to purchase such Holder's Registrable
Securities, such Holder will be free to sell such
Registrable Securities pursuant to the Shelf
Registration and not to the Company or such third
party).
3. Request for Underwritten Offering.
3.1 Underwritten Offering. Subject to the terms and conditions of
this Section 3, on and after the first anniversary of the date
of this Agreement, one or more Holders may request that the
Company use its best efforts to assist such Holders in
effecting an underwritten public offering of Registrable
Securities pursuant to the Registration Statement. Each such
underwritten public offering under this Section 3 shall be
referred to herein as an "Underwritten Offering," and the
Holder or Holders requesting such Underwritten Offering shall
be referred to herein as the "Initiating Holders"). Each
request for an Underwritten
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Offering shall specify the number or amount of Registrable
Securities proposed to be sold, the intended method of
disposition thereof and the jurisdictions in which the
Initiating Holders desire to offer and sell such Registrable
Securities. Upon a request by the Initiating Holders for an
Underwritten Offering, the Company shall, in consultation and
in cooperation with the Initiating Holders, promptly take such
steps as are reasonably necessary or appropriate to assist the
Initiating Holders in effecting such Underwritten Offering.
3.2 Offer to Holders. The Company shall give prompt written notice
to the Holders (other than the Initiating Holders) of each
request for an Underwritten Offering, and, on behalf of the
Initiating Holders, the Company shall offer to include in such
Underwritten Offering all or a portion of the Registrable
Securities held by such other Holders, subject to the
conditions and limitations set forth herein. The Initiating
Holders shall, subject to the conditions and limitations set
forth in this Section 3, include in such Underwritten Offering
all Registrable Securities that each such other Holder (by
written notice to the Company within 20 days of receipt by
such other Holder of the notice and offer from the Company)
elects to include in such Underwritten Offering. The Company
will notify the Initiating Holders of the identity of each
such other Holder that elects to include Registrable
Securities in such Underwritten Offering, and of the number or
amount of Registrable Securities that each such other Holder
has elected to include in such Underwritten Offering. Those
other Holders that elect to include Registrable Securities in
such Underwritten Offering shall be included within the
definition of "Initiating Holders" for purposes of this
Agreement.
3.3 Underwriter. The offer and sale of Registrable Securities in
an Underwritten Offering shall be in the form of a firm
commitment underwritten offering. The managing underwriter or
underwriters selected for such offering shall be an investment
banking firm of national reputation selected by the Company,
and reasonably acceptable to Initiating Holders representing a
majority of the Registrable Securities held by all Initiating
Holders to be included in the Underwritten Offering (the
"Approved Underwriter"). The Company and the Initiating
Holders shall enter into an underwriting agreement with the
Approved Underwriter in customary form reasonably satisfactory
to the Company and Initiating Holders holding a majority of
the Registrable Securities held by all Initiating Holders.
3.4 Conditions and Limitations on Underwritten Offerings. The
obligations of the Company with respect to each Underwritten
Offering are subject to the following conditions and
limitations:
(a) An Underwritten Offering may be requested by (i) in
the case of the first request for an Underwritten
Offering, Holders representing at least 50% of the
Registrable Securities held by all Holders at the
time of the request (but in no event less than
Registrable Securities that comprise or derive from
700,000 shares of Common Stock), and (ii) in the case
of the second such request, Holders of Registrable
Securities that comprise or derive from at least
300,000 shares of Common Stock.
(b) In no event shall the Company be required to effect
more than two Underwritten Offerings. If (i) an
Underwritten Offering shall be suspended or
terminated pursuant to Section 3.5 and following such
cancellation or delay a majority of the Initiating
Holders holding a majority of the Registrable
Securities held by all Initiating Holders elect not
to proceed with such offering as provided in Section
3.5(d)(i), (ii) during the pendency of such
Underwritten Offering, the Company shall deliver a
notice pursuant to Section 6.1(g) and such
Underwritten Offering is terminated or suspended, or
(iii) such Underwritten Offering is cancelled
pursuant to Section 3.4(e)(ii), then in each case
such offering will not count as a request for an
Underwritten Offering under this Section 3.4(b).
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(c) If the Approved Underwriter advises the Company and
the Initiating Holders in writing that, in its
opinion, the aggregate number or amount of
Registrable Securities requested to be included in
the Underwritten Offering is sufficiently large to
have an adverse effect on the success of such
Underwritten Offering, then the Initiating Holders
shall include in such offering only the aggregate
number or amount of Registrable Securities that, in
the opinion of the Approved Underwriter, may be sold
without any such effect on the success of such
Underwritten Offering (the "Approved Underwriter
Amount"), and each Initiating Holder shall be
entitled to have included in such Underwritten
Offering a number of Registrable Securities equal to
its pro rata share of the Approved Underwriter
Amount, determined on the basis of the number or
amount of Registrable Securities sought to be
registered each by such Initiating Holder in its
request for participation in the Underwritten
Offering.
(d) Any Initiating Holder may elect to withdraw its
request to include Registrable Securities in an
Underwritten Offering, or may reduce the number or
amount to be included; provided, however, that (i)
such request must be made prior to the earlier of the
execution of the underwriting agreement or the
execution of the custody agreement with respect to
such registration, (ii) such withdrawal or reduction
shall be irrevocable and (iii) notwithstanding such
withdrawal or reduction, except as otherwise provided
herein such offering shall nonetheless count as one
of the two Underwritten Offerings permitted under
this Section 3.
(e) The Company shall not be required to assist the
Holders with an Underwritten Offering (i) that would
take place during the "holdback" period applicable to
the Holders under Section 5.2 or (ii) in the event
that the Company elects (which election shall be
effective upon written notice thereof to the
Initiating Holders), following the delivery of a
request for an Underwritten Offering but prior to the
execution of the underwriting agreement or the
execution of the custody agreement with respect to
such Underwritten Offering, to effect a public
offering of equity securities for its own account,
provided that the Holders are afforded registration
rights with respect to such offering pursuant to
Section 4 hereof.
3.5 Suspension or Termination of Registration and Sales; Valid
Business Reason. In the event that the Board of Directors of
the Company, in its good faith judgment, determines that the
sale of Registrable Securities pursuant to the Registration
Statement would materially interfere with any material
financing, acquisition, corporate reorganization or merger or
other material transaction or otherwise would, as a result of
one or more material, nonpublic corporate developments with
respect to the Company, subject the Company to liability for
violation of applicable securities laws (a "Valid Business
Reason"), then the following provisions shall apply:
(a) At any time when a Valid Business Reason shall exist,
the Company may, by notice (a "Suspension Notice") to
the Holders:
(i) suspend any further efforts with respect to
any Underwritten Offering that is then in
process ;
(ii) instruct the Holders to cease any further
sales under the Registration Statement until
further notice; and/or
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(iii) suspend the effectiveness of the Registration
Statement until such Valid Business Reason no
longer exists.
The Company shall not be entitled to deliver a
Suspension Notice in the event that an Initiating
Holder has executed a binding underwriting agreement
with an Approved Underwriter (or similar
undertaking), and where compliance by such Initiating
Holder with the terms of the Suspension Notice would
cause such Initiating Holder to be in breach of its
obligations thereunder.
(b) Each Holder agrees that, upon receipt of a Suspension
Notice, or the happening of any event of the kind
described in Section 6.1(g), such Holder shall
forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement
covering such Registrable Securities until (as
applicable) the end of such suspension period (as
provided in Section 3.5(d) below) or such Holder's
receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.1(g) and, if so
directed by the Company, such Holder shall deliver to
the Company (at the Company's expense) all copies,
other than permanent file copies then in such
Holder's possession, of the prospectus covering such
Registrable Securities which is current at the time
of receipt of such notice.
(c) If the Company shall deliver a Suspension Notice, the
period during which such Registration Statement shall
be maintained effective pursuant to Section 6.1(a)
shall automatically be extended by the number of days
during the period (as applicable) in which such
Suspension Notice shall remain in effect, or from and
including the date of the giving of such notice
pursuant to Section 6.1(g) to and including the date
when the Holder shall have received the copies of the
supplemented or amended prospectus contemplated by
and meeting the requirements of Section 6.1(g).
(d) At such time as, following the delivery of a
Suspension Notice, a Valid Business Reason shall no
longer exist, the Company shall promptly inform the
Holders of such fact, whereupon, to the extent
applicable:
(i) the Company's obligations with respect to
any Underwritten Offering that was in
process at the time of the Suspension Notice
shall be restored, unless Initiating Holders
representing a majority of the Registrable
Securities held by all Initiating Holders
shall elect not to proceed with such
Underwritten Offering within 10 business
days after such Holders are so notified that
such valid Business Reasons shall no longer
exist (in which case the Company shall not
be considered to have effected an
Underwritten Offering for purposes of
Section 3.4(b) hereof), in which event such
Underwritten Offering shall be terminated as
to all Registrable securities covered by
such offering.
(ii) the Holders shall be entitled to resume
sales of Registrable Securities pursuant to
the Registration Statement; and
(iii) the Company shall use its best efforts to
cause the Registration Statement to once
again become effective.
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4. Piggy-Back Registration Rights.
4.1 Notice to Holders. Subject to the terms and conditions of this
Section 4, the Company shall give each Holder 30 days' prior
written notice of the filing of any registration statement
under the Act relating to an offering by the Company for its
own account or the account of any other Person of any class of
security comprising Registrable Securities (other than a
registration statement on Form S-4 or S-8 (or any successor
form thereto), or with respect to any offering to be made
prior to the first anniversary of the date of this Agreement).
(Any such registration statement is referred to herein as a
"Piggyback Registration Statement".) Such notice shall
describe in detail the proposed registration and the related
distribution of such securities, and offer each Holder the
opportunity to include in such Piggyback Registration
Statement all or a portion of those Registrable Securities
held by such Holder that are part of the class or classes of
securities to be registered pursuant to such Piggyback
Registration Statement. Each Holder may accept such offer by
giving written notice of acceptance (specifying the number or
amount of Registrable Securities that such Holder desires to
be registered and sold) within 15 days of receipt of the
Company's notice. The Company shall, subject to the terms and
conditions of this Section 4, include in such Piggyback
Registration Statement and related distribution those
Registrable Securities which the Holders indicated in their
notice of acceptance that they desire to include in such
Offering, on the same terms and conditions as the securities
of the Company included therein.
4.2 Limitation on Number of Piggyback Rights. The Holders shall be
entitled to exercise the rights set forth in this Section 4 on
no more than three occasions (and the Company's obligation to
notify the Holders of the filing of any Piggyback Registration
Statement pursuant to Section 4.1 shall expire once the
Holders shall have exercised such right on three occasions).
For purposes of this Section 4.2, the Holders shall be deemed
not to have exercised their rights with respect to any
Piggyback Registration Statement:
(a) in which the Holders are unable (as a result of the
provisions of Section 4.3 or otherwise) to include in
such Piggyback Registration Statement all Registrable
Securities with respect to which the Holders
requested registration;
(b) withdrawn by the Company pursuant to Section 4.4;
(c) in which at least a majority of the Registrable
Securities originally requested to be included in
such Piggyback Registration Statement are withdrawn
from such request following a delay in such
registration pursuant to Section 4.4(b) below; or
(d) in which the Company voluntarily registers fewer than
the minimum number of shares of Common Stock
specified in Section 4.6.
4.3 Cut-Back Provisions. Notwithstanding the foregoing, if any
Piggyback Registration Statement involves an underwritten
offering, and the managing underwriter or underwriters of such
offering (the "Company Underwriter") shall advise the Company
and the Holders in writing that, in its opinion, the total
number or amount of securities requested to be included in
such offering (the "Total Securities") is sufficiently large
so as to have an adverse effect on the success of the
distribution of the Total Securities, then the Company shall
include in such registration only that number of shares of
each class of securities comprising Registrable Securities
which the Company is so advised can be sold in (or during the
time of) such offering without having such adverse effect,
allocated pro rata among the Company, each Holder, and each
other Person that requested securities to be registered
pursuant to such Piggyback Registration Statement in
accordance with the ratio that the
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number or amount of Common Stock or such Registrable
Securities that the Company, such Holder or such other Person
sought to register as part of the Total Securities bears to
the Total Securities.
4.4 Withdrawal of Registration Statement. If, at any time after
giving written notice to the Holders of its intention to
register any securities pursuant to a Piggyback Registration
Statement, and prior to the effective date thereof, the
Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its
election, give written notice of such determination to all
Holders, whereupon:
(a) in the case of a determination not to register, the
Company shall be relieved of its obligation to
register the Registrable Securities in connection
with such abandoned registration; and
(b) in the case of a determination to delay the
registration of its securities, the Company shall be
permitted to delay the registration of such
Registrable Securities for the same period as the
delay in registering such other securities.
4.5 Withdrawal of Piggyback Request. Any Holder shall have the
right to withdraw its request for inclusion of its Registrable
Securities in any Piggyback Registration Statement pursuant to
this Section 4 by giving written notice to the Company of its
request to withdraw; provided, however, that (i) such request
must be made in writing prior to the earlier of the execution
of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (ii) such
withdrawal shall be irrevocable and, after making such
withdrawal, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such
withdrawal was made. Notwithstanding such withdrawal, a
request by the Holders for inclusion in such registration
shall count as one of the three available requests under
Section 4.2 above, except as provided in Section 4.2(c).
4.6 Minimum Piggyback Amount. The Company shall not be obligated
to register any Registrable Securities representing the lesser
of (a) Registrable Securities that comprise or derive from
100,000 shares of Common Stock and (b) all outstanding
Registrable Securities.
4.7 Certain Limitations on Registration Rights. No Person other
than the Company and the Holders may participate in any
registration and distribution in which the Holders are
participating pursuant to this Section 4, unless such Person
(a) agrees to sell such Person's securities on the basis
provided therein and (b) completes and executes all
questionnaires, powers of attorney, indemnities, lock-up
agreements, underwriting agreements and other documents
required by the Company Underwriter under the terms of such
underwriting agreements.
5. Holdback Agreement.
5.1 Restrictions on Public Sale by Holders. Each Holder agrees
that during the 90-day period commencing on the effective date
of a registration statement of the Company filed under the Act
(other than the Shelf Registration, a registration statement
on Form S-8 or any successor form, or a registration in which
the Holders are not afforded the opportunity to participate
pursuant to Section 4 hereof) covering securities of the same
class as any Registrable Securities, it will not effect any
public sale or distribution of such Registrable Securities (or
any securities convertible into or exchangeable or exercisable
for such Registrable Securities), including a sale pursuant to
the Shelf Registration or pursuant to Rule 144 under the Act,
except pursuant to such registration statement. Each Holder
will, upon request, execute a customary "lockup" agreement
consistent with the terms of this Section 5.1.
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5.2 Restrictions on Public Sale by the Company. Except as
permitted by Section 3.5, the Company agrees not to effect any
public sale or distribution of any of its securities for its
own account or for the account of any third party (except
pursuant to the Registration Statement or a registration on
Form S-4 or S-8 (or any successor form thereto) under the Act)
during the period commencing on the date on which the
Initiating Holders deliver any request for an Underwritten
Offering, and ending 90 days following the execution of the
underwriting agreement relating to such Underwritten Offering.
In connection with any Underwritten Offering, the Company
will, upon request by Initiating Holders representing a
majority of the Registrable Securities held by all Initiating
Holders, execute a customary "lockup" agreement consistent
with the terms of this Section 5.2.
6. Registration Procedures.
6.1 Obligations of the Company. In connection with any
Registration Statement (or any Underwritten Offering
thereunder) or Piggyback Registration Statement covering
Registrable Securities, the Company shall:
(a) subject to Section 3.5, prepare and file with the SEC
such amendments and supplements to such Registration
Statement and the prospectus used in connection
therewith (including, without limitation, any
post-effective amendment or pricing supplement
necessary to include a form of prospectus reasonably
requested by any Approved Underwriter) as may be
necessary to keep such Registration Statement
continuously effective and to comply with the
registration form used by the Company or by the
instructions applicable to such registration form or
by the Act (and use its best efforts to have such
amendments declared effective as soon as reasonably
practicable after such filing),
(i) in the case of the Shelf Registration, until
the earlier of (A) such time as all of such
Registrable Securities have been disposed of
in accordance with the intended methods of
disposition or otherwise by the sellers
thereof set forth in such Registration
Statement and (B) one year following the
date on which the Warrants shall cease to be
exercisable in accordance with their terms
under the Warrant Agreements; and
(ii) in the case of the S-1 Registration
Statement or the Piggyback Registration
Statement, until the earlier of (A) 90 days
following the effectiveness of such
Registration Statement and (B) such time as
all of such Registrable Securities have been
disposed of in accordance with the intended
methods of disposition or otherwise by the
sellers thereof set forth in such
Registration Statement;
(b) provide appropriate officers (including, if
requested, the Company's Chief Executive Officer and
Chief Financial Officer) for such reasonable periods
as are requested by an Approved Underwriter to
participate in a "road show" or similar marketing
effort being conducted by such underwriter with
respect to an Underwritten Offering;
(c) upon request, provide any Holder that is the owner of
10% or more of the outstanding Registrable Securities
with a list of Holders, their respective ownership
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of the Registrable Securities and contact
information, which shall be used solely for purposes
of this Agreement;
(d) as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a
registration statement or any supplement or amendment
thereto covering such Registrable Securities, copies
of such registration statement, supplement or
amendment as it is proposed to be filed, and
thereafter such number of copies of such registration
statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the
prospectus included in such registration statement
(including each preliminary prospectus) and such
other documents as each such seller may reasonably
request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(e) use its reasonable best efforts to register or
qualify such Registrable Securities under such
securities or blue sky laws of such jurisdictions as
any seller of Registrable Securities may request, and
to continue such qualification in effect in each such
jurisdiction for as long as is permissible pursuant
to the laws of such jurisdiction, or for as long as
any such seller requests or until all of such
Registrable Securities are sold, whichever is
shortest, and do any and all other acts and things
which may be reasonably necessary or advisable to
enable any such seller to consummate the disposition
in such jurisdictions of the Registrable Securities
owned by such seller; provided, however, that the
Company shall not be required to qualify in any state
which requires, as a condition of such qualification,
that the Company (A) qualify generally to do business
in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6.1(e), (B)
subject itself to taxation in any such jurisdiction
or (C) consent to general service of process in any
such jurisdiction;
(f) notify each seller of Registrable Securities pursuant
to any Registration Statement or Piggyback
Registration Statement of any stop order issued or
threatened by the SEC, and take all reasonable action
required to prevent the entry of such stop order or
to remove it if entered;
(g) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required
to be delivered under the Act, upon discovery that,
or upon the happening of any event as a result of
which, the prospectus included in such registration
statement contains an untrue statement of a material
fact or omits to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading in light of the circumstances
under which they were made, and, subject to Section
3.5, the Company shall promptly prepare a supplement
or amendment to such prospectus so that, after
delivery of such supplement or amendment to the
purchasers of such Registrable Securities, such
prospectus, as so amended or supplemented, shall not
contain an untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein
not misleading in light of the circumstances under
which they were made;
(h) use its best efforts to obtain all other approvals,
covenants, exemptions or authorizations from such
governmental agencies or authorities as may be
necessary to enable the sellers of such Registrable
Securities to consummate the disposition of such
Registrable Securities, and without limiting the
foregoing, cooperate with
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each seller of Registrable Securities and each
underwriter participating in the disposition of such
Registrable Securities and underwriters' counsel in
connection with any filings required to be made with
the NASD;
(i) enter into and perform customary agreements and take
such other actions as are reasonably required in
order to expedite or facilitate the disposition of
such Registrable Securities, and without limiting the
foregoing:
(i) obtain a "cold comfort" letter from the
Company's independent public accountants in
customary form and covering such matters of
the type customarily covered by "cold
comfort" letters, as the Approved
Underwriter may reasonably request;
(ii) furnish, at the request of any seller of
Registrable Securities on the date such
securities are delivered to the underwriters
for sale pursuant to an Underwritten
Offering or Piggyback Registration or, if
such securities are not being sold through
underwriters, on the date the registration
statement with respect to such securities
becomes effective, an opinion, dated such
date, of counsel representing the Company
for the purposes of such registration,
addressed to the underwriters, if any, and
to the seller making such request, covering
such legal matters with respect to the
registration in respect of which such
opinion is being given as such seller may
reasonably request and as are customarily
included in such opinions;
(iii) provide officers' certificates and other
customary closing documents;
(iv) make available for inspection the Approved
Underwriter participating in any disposition
pursuant to such registration statement, and
any attorney, accountant or other agent
retained by the Approved Underwriter (each,
an "Inspector" and, collectively, the
"Inspectors"), all financial and other
records, pertinent corporate documents and
properties of the Company and any
subsidiaries thereof as may be in existence
at such time as shall be reasonably
necessary to enable them to exercise their
due diligence responsibility, and cause the
Company's and any subsidiaries' officers,
directors and employees, and the independent
public accountants of the Company, to supply
all information reasonably requested by any
such Inspector in connection with such
registration statement; and
(v) otherwise use its reasonable best efforts to
comply with all applicable rules and
regulations of the SEC, including without
limitation Section 11(a) of the Act;
(j) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each
securities exchange on which similar securities
issued by the Company are then listed;
(k) include in the Registration Statement for any
Underwritten Offering subject to Section 3 hereof
such information as the Approved Underwriter shall
reasonably request; and
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(l) use its best efforts to take all other steps
necessary to effect the registration and sale of the
Registrable Securities contemplated hereby.
6.2 Seller Information. The Company may require as a condition
precedent to the Company's obligations under this Section 6
that each seller of Registrable Securities as to which any
registration is being effected furnish to the Company such
information regarding such seller and the distribution of such
securities as the Company may from time to time reasonably
request in writing.
7. Registration Expenses. The Company shall pay all of its expenses (other than
underwriting discounts and commissions payable with respect to the sale of the
Registable Securities) arising from or incident to the performance of, or
compliance with, this Agreement and any Registration Statement (including any
Underwritten Offering pursuant thereto) or Piggyback Registration Statement,
including, without limitation, (a) SEC, stock exchange and NASD registration and
filing fees, (b) all fees and expenses incurred in complying with securities or
blue sky laws (including, without limitation, reasonable fees, charges and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (c) all printing, messenger and customary delivery
expenses, (d) the fees, charges and disbursements of counsel to the Company and
of its independent public accountants and any other accounting and legal fees,
charges and expenses incurred by the Company (including, without limitation, any
expenses arising from any special audits required in connection with any
registration) and (e) the reasonable fees, charges and expenses of any special
experts retained by the Company in connection with any registration pursuant to
the terms of this Agreement, regardless of whether the registration statement
filed in connection with such registration is declared effective. All of the
expenses described in this Section 7 are referred to in this Agreement as
"Registration Expenses." The Holders of the Registrable Securities being offered
shall pay all underwriting discounts and commissions, all expenses of counsel
and other experts retained by Holders representing a majority of the Registrable
Securities being offered, transfer taxes, if any, attributable to the sale of
such Registrable Securities, in each case pro rata according to the number or
amount of Registrable Securities sold by each such Holder.
8. Indemnification; Contribution.
8.1 Indemnification by the Company. In the event of any proposed
registration of securities of the Company pursuant to Section
3 or 4, the Company agrees to indemnify and hold harmless each
Holder, its directors, officers, partners, employees, advisors
and agents, and each Person who controls (within the meaning
of the Act or the Exchange Act) such Holder, to the extent
permitted by law, from and against any and all losses, claims,
damages, expenses (including, without limitation, reasonable
costs of investigation and fees, disbursements and other
charges of counsel) or other liabilities resulting from or
arising out of or based upon any untrue, or alleged untrue,
statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or
notification or offering circular (as amended or supplemented
if the Company shall have furnished any amendments or
supplements thereto) or any document incorporated by reference
in any of the foregoing or arising out of or based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, except insofar as the same are
caused by or contained in any information furnished in writing
to the Company by or on behalf of such Holder expressly for
use therein. The Company shall also indemnify any underwriters
of the Registrable Securities, their officers, directors and
employees, and each Person who controls any such underwriter
(within the meaning of the Act and the Exchange Act) to the
same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities.
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8.2 Indemnification by Holders. In connection with any proposed
registration in which a Holder is participating pursuant to
Section 3 or 4 hereof, each such Holder shall furnish to the
Company in writing such information with respect to such
Holder as the Company may reasonably request or as may be
required by law for use in connection with any registration
statement or prospectus to be used in connection with such
registration and each Holder agrees to indemnify and hold
harmless the Company, any underwriter retained by the Company
and their respective directors, officers, employees and each
Person who controls (within the meaning of the Act and the
Exchange Act) the Company or such underwriter to the same
extent as the foregoing indemnity from the Company to the
Holders (subject to the proviso to this sentence and
applicable law), but only with respect to any such information
furnished in writing by or on behalf of such Holder expressly
for use therein; provided, however, that the liability of any
Holder under this Section 8.2 shall be limited to the amount
of the net proceeds received by such Holder in the offering
giving rise to such liability.
8.3 Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to
give prompt written notice to the indemnifying party (the
"Indemnifying Party") after the receipt by the Indemnified
Party of any written notice of the commencement of any action,
suit, proceeding or investigation or threat thereof made in
writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement;
provided, that, the failure so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party hereunder.
If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party
shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own
expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party shall have
the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses
of such counsel (other than reasonable costs of investigation)
shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the
Indemnifying Party fails to assume the defense of such action
with counsel satisfactory to the Indemnified Party in its
reasonable judgment, or (iii) the named parties to any such
action (including any impleaded parties) have been advised by
such counsel that representation of such Indemnified Party and
the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional
conduct; provided, however, that the Indemnifying Party shall
only have to pay the fees and expenses of one firm of counsel
for all Indemnified Parties in each jurisdiction. In either of
such cases the Indemnifying Party shall not have the right to
assume the defense of such action on behalf of such
Indemnified Party. No Indemnifying Party shall be liable for
any settlement entered into without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying
Party shall, without the written consent of the Indemnified
Party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such
action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the
Indemnified Party from all liability arising out of such
action or claim and (B) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or
on behalf of any Indemnified Party. The rights accorded to any
Indemnified Party hereunder shall be in addition to any rights
that such Indemnified Party may have at common law, by
separate agreement or otherwise.
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8.4 Contribution. If the indemnification provided for in Section
8.1 from the Indemnifying Party is unavailable to an
Indemnified Party in respect of any losses, claims, damages,
expenses or other liabilities referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages,
expenses or other liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, expenses or
other liabilities, as well as any other relevant equitable
considerations. The relative faults of such Indemnifying Party
and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, was
made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the Indemnifying
Party's and Indemnified Party's relative intent, knowledge,
access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result
of the losses, claims, damages, expenses or other liabilities
referred to above shall be deemed to include, subject to the
limitations set forth in Sections 8.1, 8.2 and 8.3, any legal
or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The
parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 8.4 were determined
by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in this Section 8.4. No Person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution pursuant
to this Section 8.4.
9. Rule 144; Other Exemptions. The Company covenants that it shall file any
reports required to be filed by it under the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and that it shall take such further
action as each Holder may reasonably request (including, but not limited to,
providing any information necessary to comply with Rules 144 and 144A (if
available with respect to resales of the Registrable Securities) under the Act),
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Act within the limitation
of the exemptions provided by (i) Rule 144 or Rule 144A (if available with
respect to resales of the Registrable Securities) under the Act, as such rules
may be amended from time to time, or (ii) any other rules or regulations now
existing or hereafter adopted by the SEC.
10. Miscellaneous.
10.1 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at
its election in writing delivered to the Company, be treated
as the Holder of such Registrable Securities for purposes of
any request, consent, waiver or other action by any Holder or
Holders of Registrable Securities pursuant to this Agreement
or any determination of any number or percentage of shares of
Registrable Securities held by any holder or holders of
Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it
of such owner's beneficial ownership of such Registrable
Securities, including a certificate from the record holder
that it is not the beneficial owner.
10.2 No Inconsistent Agreements; Other Registration Rights. The
Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the
Holders in this Agreement.
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10.3 Remedies. The Holders, in addition to being entitled to
exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their
rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be
adequate.
10.4 Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departures from
the provisions of such section may not be given unless the
Company has obtained the prior written consent of the Holders
holding at least a majority of the Registrable Securities held
by all of the Holders.
10.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail, return
receipt requested, to the following address (or at such other
address as shall be specified by like notice, provided, that
notice of a change of address shall be effective only upon
receipt thereof):
(a) If to the Company:
Paxar Corporation
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, X. Y. 10604
Attention: Xxxxxx Xxxxxxxx, Chairman and CEO
(b) If to a Holder:
As set forth on the books and records of the Company.
All notices delivered personally shall be deemed to have been
received by the recipient thereof if received during normal
business hours on a business day; otherwise, such notices
shall be deemed received on the next following business day.
All notices mailed shall be deemed to be received on the fifth
business day following deposit of such notice into the mail.
Notwithstanding anything to the contrary in this Agreement,
all notices hereunder to any partner or affiliate of Odyssey
to whom Odyssey distributes any Warrants or Registrable
Securities (or to any direct or indirect transferee of such
partner or affiliate), may be made directly to Odyssey, which
shall be solely and exclusively responsible for providing
notice to its partners and affiliates (and such transferees).
10.6 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of
the parties hereto, including any successor to the Company by
merger, sale of substantially all of the Company's assets or
otherwise; provided, however, that the registration rights of
the Holders and the other obligations of the Company contained
in this Agreement shall, with respect to any Registrable
Security, be automatically transferred from a Holder to any
subsequent holder of such Registrable Security.
Notwithstanding any transfer of such rights, all of the
obligations of the Company hereunder shall survive any such
transfer and shall continue to inure to the benefit of all
transferees.
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10.7 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.
10.8 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning hereof.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, without regard to the principles of conflicts of law of
such State.
10.10 Jurisdiction. Each party to this Agreement hereby irrevocably
agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in the courts of the State
of New York or of the United States of America for the
Southern District of New York and hereby expressly submits to
the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper
venue and any claim that such courts are an inconvenient
forum. Each party hereby irrevocably consents to the service
of process of any of the aforementioned courts in any such
suit, action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the address
set forth in Section 10.5.
10.11 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, it being
intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
10.12 Rules of Construction. References to sections or subsections
refer to sections or subsections of this Agreement.
10.13 Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings in respect of the subject matter
contained herein, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such
subject matter.
10.14 Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the
provisions of this Agreement.
10.15 No Third Party Beneficiaries. Nothing herein is intended or
shall be construed to confer upon or give to any Person other
than the parties hereto and their permitted successors or
assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered
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by their respective officers hereunto duly authorized on the date first above
written.
PAXAR CORPORATION ODYSSEY PARTNERS, L.P.
By: /s/ Xxxx Xxxxx By: /s/Xxxxxxx Xxxxxx
----------------------- -------------------------
Xxxx Xxxxx Xxxxxxx Xxxxxx
Chief Financial Officer A General Partner
