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EXHIBIT 99.4
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REGISTRATION RIGHTS AGREEMENT
by and among
XXXXXXX X. XXXXXX,
XXXXXXX X. XxXXXXXXX,
JENS HOHNEL
and
THE XXXX INVESTORS
and
XXXXXXX & XXXXXX CORPORATION
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Dated: July 3, 2001
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TABLE OF CONTENTS
ARTICLE I
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DEFINITIONS
1.1 Definitions........................................................... 2
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 Grant of Rights....................................................... 5
2.2 Registrable Securities................................................ 5
2.3 Holders of Registrable Securities..................................... 6
ARTICLE III
DEMAND REGISTRATION
3.1 Request for Demand Registration....................................... 6
3.2 Incidental or "Piggy-Back" Rights with Respect to a
Demand Registration................................................ 7
3.3 Effective Demand Registration......................................... 8
3.4 Expenses.............................................................. 9
3.5 Underwriting Procedures............................................... 9
3.6 Selection of Underwriters............................................. 10
3.7 Company Preemption Right; Other Registration Rights Agreement......... 10
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 Request for Incidental Registration................................... 10
4.2 Expenses.............................................................. 11
ARTICLE V
HOLDBACK AGREEMENTS
5.1 Restrictions on Public Sale by Designated Holders..................... 12
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5.2 Restrictions on Public Sale by the Company............................ 12
ARTICLE VI
REGISTRATION PROCEDURES
6.1 Obligations of the Company............................................ 13
6.2 Seller Information.................................................... 16
6.3 Notice to Discontinue................................................. 17
6.4 Registration Expenses................................................. 17
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 Indemnification by the Company........................................ 18
7.2 Indemnification by Designated Holders................................. 18
7.3 Conduct of Indemnification Proceedings................................ 19
7.4 Contribution.......................................................... 20
ARTICLE VIII
COVENANTS
8.1 Rule 144.............................................................. 20
8.2 Xxxxxxxxxxx and Blackstone Priority of Sale........................... 21
ARTICLE IX
MISCELLANEOUS
9.1 Recapitalizations, Exchanges, etc..................................... 21
9.2 No Inconsistent Agreements; Timing of Demand Notices.................. 21
9.3 Remedies.............................................................. 22
9.4 Notices............................................................... 22
9.5 Successors and Assigns; Third Party Beneficiaries..................... 23
9.6 Amendments and Waivers................................................ 24
9.7 Counterparts.......................................................... 24
9.8 Headings.............................................................. 24
9.9 GOVERNING LAW......................................................... 24
9.10 Severability.......................................................... 25
9.11 Rules of Construction................................................. 25
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9.12 Entire Agreement...................................................... 25
9.13 Further Assurances.................................................... 25
9.14 Other Agreements...................................................... 25
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated July 3, 2001, by and among
Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "COMPANY"), Xxxxxxx X.
Xxxxxx, Xxxxxxx X. XxXxxxxxx and Jens Hohnel (the "XXXXXX INVESTORS") and the
Xxxx Investors (as defined below), if any, added as parties hereto.
WHEREAS, pursuant to an Agreement and Plan of Merger, dated May 14,
2001 (the "MERGER AGREEMENT"), by and among the Company, Xxxxxxx & Xxxxxx
Products Co. and the Xxxxxx Investors, the Xxxxxx Investors will receive (x) an
aggregate of 17,000,000 shares of common stock, par value $0.01 per share (the
"COMMON STOCK"), of the Company and (y) warrants to purchase an aggregate of
500,000 shares (the "WARRANT SHARES") of Common Stock;
WHEREAS, concurrently herewith, the Company and the Xxxxxx Investors
are entering into the Stockholders Agreement (as hereinafter defined), pursuant
to which the parties thereto have agreed to, among other things, certain first
offer and tag-along rights;
WHEREAS, in order to induce each of the Xxxxxx Investors to purchase
its shares of Common Stock as provided in the Merger Agreement, the Company has
agreed to grant registration rights with respect to the Registrable Securities
(as hereinafter defined) as set forth in this Agreement; and
WHEREAS, the acquisition of Xxxx Automotive Industries, Inc. is under
consideration and remains subject to the negotiation of terms and definitive
documentation at the time that the Merger Agreement has been signed, and the
Xxxxxx Investors and the Company intend that, to the extent shares of Common
Stock are issued in connection with such acquisition, the recipients (the "XXXX
INVESTORS") of such shares receive the rights provided herein pursuant to the
same documentation to the extent agreed to by the Xxxx Investors by executing
the signature pages hereto (the "XXXX TRANSACTION").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AFFILIATE" has the meaning specified in the Stockholders Agreement;
PROVIDED that, for purposes of Section 5.1 hereof, a Person shall not be deemed
to be an Affiliate of a Designated Holder merely due to the fact that such
Designated Holder is a member of the board of directors or similar governing
body of the aforementioned Person.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"APPROVED UNDERWRITER" has the meaning set forth in Section 3.6.
"XXXXXX INVESTORS" has the meaning set forth in the preamble to this
Agreement.
"XXXXXX STOCKHOLDERS" means the Xxxxxx Investors and their Direct
Permitted Transferees to whom Registrable Securities are transferred in
accordance with Section 2.2 of the Stockholders Agreement and Section 9.5 of
this Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" has the meaning set forth in the preamble to this
Agreement or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"COMPANY" has the meaning set forth in the preamble to this Agreement
and shall mean any successor thereto that has issued common stock in exchange
for any Common Stock in connection with any merger or consolidation in which
Common Stock of the Company is converted or exchanged, in whole or in part, into
such common stock.
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"COMPANY OFFERING" has the meaning set forth in Section 4.1.
"COMPANY UNDERWRITER" has the meaning set forth in Section 4.1.
"DAY" means any calendar day.
"DEMAND REGISTRATION" has the meaning set forth in Section 3.1.
"DESIGNATED HOLDER" means each of the Xxxxxx Stockholders and the Xxxx
Stockholders and any transferee of any of them to whom Registrable Securities
have been transferred in accordance with Section 9.5, other than a transferee to
whom Registrable Securities have been transferred pursuant to a Registration
Statement under the Securities Act or Rule 144 under the Securities Act (or any
successor rule thereto).
"DIRECT PERMITTED TRANSFEREE" has the meaning ascribed to such term in
the Stockholders Agreement.
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
"EXISTING REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated February 23, 2001 among Blackstone Capital Company II, L.L.C.,
Heartland Industrial Partners, L.P. and the other named Heartland Entities,
Xxxxxxxxxxx/C&A Holdings, L.L.C. and the Company, as amended or modified in
accordance with its terms.
"FUTURE DESIGNATED HOLDER" means each of (i) Textron Inc. ("Textron"),
(ii) the New Private Equity Holders and (iii) any other Person that directly or
indirectly acquires shares of Common Stock of the Company from Textron or any
New Private Equity Holder and that is entitled to demand registration rights
pursuant to the terms of one or more registration rights agreements entered into
from time to time between the Company, on the one hand, and Textron or one or
more New Private Equity Holders, on the other hand.
"HOLDERS' COUNSEL" has the meaning set forth in Section 6.1(a).
"INCIDENTAL REGISTRATION" has the meaning set forth in Section 4.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.3.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.3.
"INITIATING XXXXXX HOLDERS" has the meaning set forth in Section 3.1.
"INITIATING HOLDERS" has the meaning set forth in Section 3.1.
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"INITIATING XXXX HOLDERS" has the meaning set forth in Section 3.1.
"INSPECTOR" has the meaning set forth in Section 6.1(g).
"XXXX TRANSACTION" has meaning set forth in the preamble to this
Agreement.
"XXXX INVESTORS" has the meaning set forth in the preamble to this
Agreement.
"XXXX STOCKHOLDERS" means each Xxxx Investor and any Direct Permitted
Transferee thereof to whom Registrable Securities are transferred in accordance
with Section 2.2 of the Stockholders Agreement and Section 9.5 of this
Agreement.
"LIABILITY" has the meaning set forth in Section 7.1.
"MAJORITY OF XXXXXX STOCKHOLDERS" means the Xxxxxx Stockholders
holding a majority of the Registrable Securities held by all Xxxxxx
Stockholders.
"MAJORITY OF THE XXXX STOCKHOLDERS" means the Xxxx Stockholders
holding a majority of the Registrable Securities held by all Xxxx Stockholders.
"MERGER AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"NEW PRIVATE EQUITY HOLDERS" means those Persons purchasing Common
Stock to finance, in part, the transactions contemplated by the proposed
transaction with Textron previously disclosed to each of the Xxxxxx Investors
and the Xxxx Investors.
"NON-DESIGNATED STOCKHOLDER" has the meaning set forth in Section 4.1.
"NON-DESIGNATED STOCKHOLDER OFFERING" has the meaning set forth in
Section 4.1.
"PERSON" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability 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 such entity.
"PRIORITY HOLDERS" has the meaning set forth in Section 3.2.
"RECORDS" has the meaning set forth in Section 6.1(g).
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"REGISTRABLE SECURITIES" means, subject to Section 2.2, each of the
following: (a) any and all shares of Common Stock acquired by the Designated
Holders, in the case of the Xxxxxx Investors pursuant to the Merger Agreement
and the documentation governing the transfer of shares on the date hereof of
Common Stock from Jens Hohnel to Xxxxxxx X. Xxxxxx, including the Warrant
Shares, and in the case of the Xxxx Investors pursuant to the Xxxx Transaction
(b) any shares of Common Stock issued or issuable to any of the Designated
Holders with respect to the Registrable Securities by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise and any shares of
Common Stock or voting common stock issuable upon conversion, exercise or
exchange thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section 6.4.
"REGISTRATION STATEMENT" means a registration statement filed pursuant
to the Securities Act.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"SHARES" means shares of Common Stock.
"VALID BUSINESS REASON" has the meaning set forth in Section 3.1.
Any terms not defined herein shall have the meanings ascribed thereto
in the Stockholders Agreement.
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 GRANT OF RIGHTS. The Company hereby grants registration rights to
the Designated Holders upon the terms and conditions set forth in this
Agreement.
2.2 REGISTRABLE SECURITIES. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such securities has been declared effective
under the Securities Act by the Commission and such securities have been
disposed of pursuant to such effective Registration Statement or (ii) with
respect to a Designated Holder, the entire amount of such Designated Holder's
Registrable Securities may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and the Designated Holder, each in their reasonable
judgment, without any limita-
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tion as to volume pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act.
2.3 HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
ARTICLE III
DEMAND REGISTRATION
3.1 REQUEST FOR DEMAND REGISTRATION.
(a) A Majority of the Xxxxxx Stockholders (the "INITIATING XXXXXX
HOLDERS"), and a Majority of the Xxxx Stockholders (the "INITIATING XXXX
HOLDERS," each of the Initiating Xxxxxx Holders and the Initiating Xxxx Holders
shall be known as the "INITIATING HOLDERS," depending on which of the Initiating
Xxxxxx Holders or the Initiating Xxxx Holders makes the subject demand), may
each make a written request to the Company to register, and the Company shall
register, under the Securities Act (other than pursuant to a Registration
Statement on Form S-4 or S-8 or any successor thereto) (a "DEMAND
REGISTRATION"), the number of Registrable Securities stated in such request;
PROVIDED, HOWEVER, that (1) the Company shall not be obligated to effect (x)
more than two (2) such Demand Registrations at the request of Initiating Xxxxxx
Holders, and (y) more than two (2) such Demand Registrations at the request of
Initiating Xxxx Holders and (2) the Company shall not be obligated to proceed
with a Demand Registration at any time prior to July 1, 2003. For purposes of
the preceding sentence, two or more Registration Statements filed in response to
one demand shall be counted as one Demand Registration; PROVIDED, HOWEVER, that
any such Registration Statement filed at the request of an Initiating Holder and
subsequently withdrawn at the request of that Initiating Holder shall be counted
as a Demand Registration with respect to such Initiating Holder unless the
withdrawing Initiating Holder pays the expenses associated with such
Registration Statement, in which case such Demand Registration shall not be so
counted.
(b) Notwithstanding anything to the contrary contained herein, no
Demand Registration need be effected by the Company within six (6) months after
the effectiveness of
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any Registration Statement pursuant to a Demand Registration hereunder or a
"demand registration" (whether under the Existing Registration Rights Agreement
or any future Common Stock registration rights agreements) or any Registration
Statement for any Company Offering. The Company shall not be obliged to include
more than 10 million shares (as equitably adjusted for stock splits, stock
combinations and similar events occurring after the date hereof) of Common Stock
in any Registration Statement pursuant to a Demand Registration, inclusive of
any Shares to be included pursuant to any incidental or piggy-back rights under
this Agreement, the Existing Registration Rights Agreement or any future Common
Stock registration rights agreements. If the Board of Directors, in its good
faith judgment, determines that any registration of Registrable Securities
should not be made or continued because it would materially interfere with any
material financing, acquisition, corporate reorganization or merger or other
material transaction involving the Company (a "VALID BUSINESS REASON"), the
Company may (x) postpone filing a Registration Statement relating to a Demand
Registration until such Valid Business Reason no longer exists, but in no event
for more than 135 days, and (y) in case a Registration Statement has been filed
relating to a Demand Registration, if the Valid Business Reason has not resulted
from actions taken by the Company, the Company, upon the approval of a majority
of the Board of Directors may cause such Registration Statement to be withdrawn
and its effectiveness terminated or may postpone amending or supplementing such
Registration Statement. For the purposes of certainty, the parties acknowledge
that in the event a Registration Statement is so withdrawn, it shall not count
as having been a Demand Registration for purposes of the limit on the number of
Demand Registrations set forth above. The Company shall give written notice of
its determination to postpone or withdraw a Registration Statement and of the
fact that the Valid Business Reason for such postponement or withdrawal no
longer exists, in each case, promptly after the occurrence thereof.
Notwithstanding anything to the contrary contained herein, the Company may not
postpone or withdraw a filing under this Section 3.1 more than once in any
twelve (12) month period. Each request for a Demand Registration by the
Initiating Holders shall state the number of the Registrable Securities proposed
to be sold and the intended method of disposition thereof.
3.2 INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND
REGISTRATION. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) and Future Designated
Holders may offer its or his Registrable Securities in connection with any
Demand Registration pursuant to this Section 3.2. Within five (5) Business Days
after the receipt of a request for a Demand Registration from an Initiating
Holder, the Company shall (i) give written notice thereof to all of the
Designated Holders (other than Initiating Holders which have requested a
registration under Section 3.1) and Future Designated Holders and (ii) subject
to Section 3.5, include in such registration all of the Registrable Securities
held by such Designated Holders and Future Designated Holders from whom the
Company has received a written request for inclusion therein within ten (10)
days of the receipt by such Designated Holders and Future Designated Holders of
such written no-
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xxxx referred to in clause (i) above. Each such request by such Designated
Holders and Future Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any such Designated Holder
or Future Designated Holder to respond within such 10-day period referred to in
clause (ii) above shall be deemed to be a waiver of such Designated Holder's or
Future Designated Holder's rights under this Section 3.2 with respect to such
Demand Registration. Any such Designated Holder or Future Designated Holder may
waive its rights under this Article III prior to the expiration of such 10-day
period by giving written notice to the Company, with a copy to the Initiating
Holders. If a Designated Holder or Future Designated Holder sends the Company a
written request for inclusion of part or all of such Designated Holder's or
Future Designated Holder's Registrable Securities in a Demand Registration, such
Designated Holder or Future Designated Holder shall not be entitled to withdraw
or revoke such request without the prior written consent of the Company in its
sole discretion unless, as a result of facts or circumstances arising after the
date on which such request was made relating to the Company or to market
conditions, such Designated Holder or Future Designated Holder reasonably
determines that participation in such registration would have a material adverse
effect on such Designated Holder or Future Designated Holder. Future Designated
Holders and Designated Holders (other than the Initiating Holders which have
requested a registration under Section 3.1) may participate in a Demand
Registration pursuant to the provisions of this Section 3.2 as "PRIORITY
HOLDERS" (without being deemed to have requested a Demand Registration under
Section 3.1), but their participation rights will be limited to one Demand
Registration initiated by the Initiating Xxxxxx Holders and one Demand
Registration initiated by the Initiating Xxxx Holders with such Initiating
Holders electing at the time of their first request under Section 3.1 whether or
not rights will be afforded to Priority Holders under this Section 3.2. It is
understood that Designated Holders and Future Designated Holders may be entitled
to rights under Section 4.1 even when they are not Priority Holders.
3.3 EFFECTIVE DEMAND REGISTRATION. Subject to Section 3.1, the
Company shall use its reasonable best efforts to cause any such Demand
Registration to become effective not later than 60 days after it receives a
request under Section 3.1. A registration shall not constitute a Demand
Registration until it has become effective and remains continuously effective
for the shorter of (i) 60 days and (ii) the period during which all Registrable
Securities registered in the Demand Registration are sold; PROVIDED, HOWEVER,
that a registration shall not constitute a Demand Registration if (x) after such
Demand Registration has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason not attributable
to the Initiating Holders and such interference is not thereafter eliminated or
(y) the conditions specified in the underwriting agreement, if any, entered into
in connection with such Demand Registration are not satisfied or waived by
reason of a breach by the Company or (z) the Company exercises its rights of
postponement, termination or withdrawal under Section 3.1.
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3.4 EXPENSES. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective, except as otherwise provided herein.
3.5 UNDERWRITING PROCEDURES. If the Company or the Initiating Holders
holding a majority of the Registrable Securities held by all of the Initiating
Holders so elect, the Company shall use its reasonable best efforts to cause
such Demand Registration to be in the form of a firm commitment underwritten
offering and the managing underwriter or underwriters selected for such offering
shall be the Approved Underwriter selected in accordance with Section 3.6. In
connection with any Demand Registration under this Article III involving an
underwritten offering, none of the Registrable Securities held by any Designated
Holder making a request for inclusion of such Registrable Securities pursuant to
Section 3.2 hereof shall be included in such underwritten offering unless such
Designated Holder accepts the terms of the offering as agreed upon by the
Company, the Initiating Holders and the Approved Underwriter (including
execution of an escrow agreement and/or a power of attorney with respect to the
disposition of the Registrable Securities), and then only in such quantity as
will not, in the opinion of the Approved Underwriter, jeopardize the success of
such offering by the Initiating Holders. If the Approved Underwriter advises the
Company that the aggregate amount of such Registrable Securities requested to be
included in such offering is sufficiently large to have a material adverse
effect on the success of such offering, then the Company shall include in such
registration only the aggregate amount of Registrable Securities that the
Approved Underwriter believes may be sold without any such material adverse
effect and shall reduce the amount of Registrable Securities to be included in
such registration to the extent of the amount of Registrable Securities that the
Approved Underwriter believes may be sold without causing such material adverse
effect. In such case Registrable Securities shall be included in the following
order of priority: (1) first, any securities to be sold for the account of the
Blackstone Holders and Xxxxxxxxxxx Holders (each as defined in the Existing
Registration Rights Agreement), as required by Section 4.1 of the Existing
Registration Rights Agreement or Section 8.2 of this Agreement; (2) second, any
Registrable Securities and other shares of Common Stock to be sold for the
account of the Initiating Holders and Priority Holders (if any), pro rata based
upon the number of Registrable Securities and other shares of Common Stock then
owned by them; (3) third, any securities to be sold for the account of any
Designated Holders (other than the Initiating Holders) and Future Designated
Holders that are not Priority Holders, pro rata based upon the number of
Registrable Securities and other shares of Common Stock then owned by them; and
(4) fourth, by the Company or any other Person exercising incidental or
piggyback registration rights. If, by reason of the application of clause (1) or
the Priority Holders' rights (if any) in clause (2) or by reason of the 10
million share limitation, less than 50% of the Registrable Securities which the
Initiating Holders of the subject Demand Registration requested be registered
are included in such registration, the registration shall not count as one of
the two Demand Registrations to which such Initiating
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Holders are entitled nor shall such registration count as a registration in
which a Priority Holder exercised its right to be treated as a Priority Holder
under Section 3.2.
3.6 SELECTION OF UNDERWRITERS. If any Demand Registration of
Registrable Securities is in the form of an underwritten offering, the Company
shall select and obtain an investment banking firm of national reputation to act
as the managing underwriter of the offering (the "APPROVED UNDERWRITER");
PROVIDED, HOWEVER, that the Approved Underwriter shall, in any case, also be
approved by the Initiating Holders holding a majority of the Registrable
Securities held by all Initiating Holders such approval not to be unreasonably
withheld.
3.7 COMPANY PREEMPTION RIGHT; EXISTING REGISTRATION RIGHTS AGREEMENT.
Notwithstanding anything herein to the contrary, to the extent that a Valid
Business Reason exists for deferring, postponing or suspending a Demand
Registration, the Company shall be entitled to elect to pursue a Company
Offering (as hereinafter defined) in furtherance of such Valid Business Reason
and to thereby preempt the Demand Registration and defer, postpone or suspend
the Demand Registration, in which case the applicable demand shall not count as
a Demand Registration. In the event of a conflict between this Agreement and the
Existing Registration Rights Agreement, the Existing Registration Rights
Agreement will govern.
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 REQUEST FOR INCIDENTAL REGISTRATION. If the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering of Common Stock by the Company for its own account (other than a
Registration Statement (i) on Form S-4 or S-8 or any successor thereto and (ii)
with respect to an offering of Common Stock by the Company exclusively to its
existing stockholders) (a "COMPANY OFFERING") or for the account of any
stockholder of the Company other than one in which all Designated Holders are
either Initiating Holders or Priority Holders under Article III (each such
Stockholder, a "NON-DESIGNATED STOCKHOLDER" and such offering, a "NON-DESIGNATED
STOCKHOLDER OFFERING"), then the Company shall give written notice of such
proposed filing to each of the Designated Holders at least ten (10) Business
Days before the anticipated filing date, and such notice shall describe the
proposed registration and distribution and offer such Designated Holders the
opportunity to register the number of Registrable Securities as each such
Designated Holder may request (an "INCIDENTAL REGISTRATION"). The Company shall
use its reasonable best efforts to cause the managing underwriter or
underwriters in the case of a proposed underwritten offering (the "COMPANY
UNDERWRITER") to permit each of the Designated Holders who have requested in
writing to participate in the Incidental Registration to include its or his
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company
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or the securities of such Non-Designated Stockholders, as the case may be,
included therein. In connection with any Incidental Registration under this
Section 4.1 involving an underwritten offering, the Company shall not be
required to include any Registrable Securities in such underwritten offering
unless the Designated Holders thereof accept the terms of the underwritten
offering as agreed upon between the Company, such Non-Designated Stockholders,
if any, and the Company Underwriter (including execution of an escrow agreement
and/or a power of attorney with respect to the disposition of the Registrable
Securities), and then only in such quantity as the Company Underwriter believes
will not jeopardize the success of such offering. If the Company Underwriter
determines that the registration of all or part of the Registrable Securities
which the Designated Holders have requested to be included would materially
adversely affect the success of such offering, then the Company shall be
required to include in such Incidental Registration the Registrable Securities
only to the extent of the amount of Registrable Securities that the Company
Underwriter believes may be sold without causing such material adverse effect,
(i) in the case of a Company Offering: first, all of the securities to be
offered for the account of the Company; second, any securities to be offered for
the account of Blackstone Holders and Xxxxxxxxxxx Holders, pro rata based on the
number of securities then owned by each; and third, any other Person (including
the Designated Holders) pro rata based on the number of Registrable Securities
and other shares of Common Stock of the Company then owned by each; and (ii) in
the case of a Non-Designated Stockholder Offering: first, the securities to be
offered for the account of Blackstone Holders and Xxxxxxxxxxx Holders pro rata
based on the number of Registrable Securities owned by each; second, all of the
securities to be offered by such Persons as are exercising demand registration
rights; third, all of the securities to be offered for the account of the
Company; fourth, any Persons exercising incidental or piggyback registration
rights under the Existing Registration Rights Agreement; and fifth, any
Registrable Securities and other shares of Common Stock requested to be included
in such offering by the Designated Holders or any other Person pro rata based on
the number of Registrable Securities and other shares of Common Stock then owned
by each. Nothing in this Section 4.1 shall create any liability on the part of
the Company or any other Person to the Designated Holders if the Company, for
any reason, decides not to file a Registration Statement proposed to be filed
pursuant to this Section 4.1 or to withdraw such Registration Statement
subsequent to its filing, regardless of any action whatsoever that a Designated
Holder may have taken, whether as a result of the issuance by the Company of any
notice under this Section 4.1 or otherwise.
4.2 EXPENSES. The Company shall bear all Registration Expenses in
connection with any Incidental Registration pursuant to this Article IV, whether
or not such Incidental Registration becomes effective.
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ARTICLE V
HOLDBACK AGREEMENTS
5.1 RESTRICTIONS ON PUBLIC SALE BY DESIGNATED HOLDERS. To the extent
requested (A) by the Company, in the case of a non-underwritten public offering
and (B) by the Approved Underwriter or the Company Underwriter, as the case may
be, in the case of an underwritten public offering, each Designated Holder of
Registrable Securities agrees (x) not to effect any sale or distribution of any
Registrable Securities or of any securities convertible into or exchangeable or
exercisable for such Registrable Securities, including a sale pursuant to Rule
144 under the Securities Act, or offer to sell, contract to sell (including
without limitation any short sale), grant any option to purchase or enter into
any hedging or similar transaction with the same economic effect as a sale of
Registrable Securities and (y) not to make any request for a Demand Registration
under this Agreement, during the 180 day period or such shorter period, if any,
agreed to by the requesting party beginning on the effective date of such
Registration Statement (except as part of such registration); PROVIDED, that, if
the Company or any Approved Underwriter or Company Underwriter requests that a
Designated Holder be subject to clauses (x) and/or (y), all Designated Holders
shall thereupon become subject to the same restrictions upon the same terms;
PROVIDED, HOWEVER, that, with respect to each Designated Holder, the provisions
of clause (x) shall terminate with respect to any Registration Statement in
which such Designated Holder is not a participant if such Designated Holder and
its Affiliates own less than 5% of the outstanding shares of Common Stock of the
Company before giving effect to any such offering pursuant to such Registration
Statement. No holder of 5% or more of the outstanding shares of Common Stock of
the Company (nor any person within the common control of any such person or a
family member of any such person) subject to a registration rights agreement
shall be released by the Company from any obligation similar to the foregoing
unless the Designated Holders are also offered such a release. No Designated
Holder of Registrable Securities subject to this Section 5.1 shall be released
from any obligation under any agreement, arrangement or understanding entered
into pursuant to this Section 5.1 except to the extent all other Designated
Holders of Registrable Securities subject to the same obligation are also
released.
5.2 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees
(a) not to effect any sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor thereto),
during the period beginning on the effective date of any Registration Statement
in which the Designated Holders of Registrable Securities are participating and
ending on the date on which all Registrable Securities registered on such
Registration Statement are sold (except as part of such registration) and (b) to
use commercially reasonable efforts to cause its directors and executive
officers to agree not to effect any public
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sale or distribution of any Common Stock (or securities convertible or
exchangeable therefor) of the Company owned or controlled by them or their
respective Affiliates at a time when the Company is restricted from selling or
distributing Common Stock under the preceding clause (a) .
ARTICLE VI
REGISTRATION PROCEDURES
6.1 OBLIGATIONS OF THE COMPANY. Whenever registration of Registrable
Securities has been requested pursuant to Article III or Article IV of this
Agreement, the Company shall use its reasonable best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(a) prepare and file with the Commission a Registration Statement on
any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the
sale of such Registrable Securities in accordance with the intended method
of distribution thereof, and use its reasonable best efforts to cause such
Registration Statement to become effective; PROVIDED, HOWEVER, that (x)
before filing a Registration Statement or prospectus or any amendments or
supplements thereto, the Company shall provide counsel selected by the
Designated Holders holding a majority of the Registrable Securities being
registered in such registration ("HOLDERS' COUNSEL") and any other
Inspector with a reasonably adequate and appropriate opportunity to review
and comment on such Registration Statement and each prospectus included
therein (and each amendment or supplement thereto) to be filed with the
Commission, subject to such documents being under the Company's control,
and (y) the Company shall notify the Holders' Counsel and each seller of
Registrable Securities of any stop order issued or threatened by the
Commission and take all action required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective for the lesser of (x) 90 days and (y) such shorter
period which will terminate when all Registrable Securities covered by such
Registration Statement have been sold, and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance
with the intended methods of disposition by the sellers thereof set forth
in such Registration Statement;
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(c) furnish to each seller of Registrable Securities, prior to filing
a Registration Statement, at least one copy of such Registration Statement
as 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), and the prospectus included in such
Registration Statement (including each preliminary prospectus) and any
prospectus filed under Rule 424 under the Securities Act as each such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(d) register or qualify such Registrable Securities under such other
securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may reasonably request, and to continue such
qualification in effect in such jurisdiction for as long as required
pursuant to the laws of such jurisdiction, or for as long as any such
seller reasonably 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 (x) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section
6.1(d), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
(e) notify each seller of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the
Securities 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, in light of the circumstances under which they were
made, not misleading, and the Company shall promptly prepare a supplement
or amendment to such prospectus and furnish to each seller of Registrable
Securities a reasonable number of copies of such supplement to or an
amendment of such prospectus as may be necessary so that, after delivery to
the purchasers of such Registrable Securities, such prospectus 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, in light of the circumstances under which they were
made, not misleading;
(f) enter into and perform customary agreements (including an
underwriting agreement in customary form with the Approved Underwriter or
Company Underwriter, if any, selected as provided in Article III or Article
IV, as the case may be) and take such other actions as are prudent and
reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
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(g) make available at reasonable times for inspection by any seller
of Registrable Securities, any managing underwriter participating in any
disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent
retained by any such seller or any managing underwriter (each, an
"INSPECTOR" and collectively, the "INSPECTORS"), all financial and other
records, pertinent corporate documents and properties of the Company and
its subsidiaries (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to exercise their due diligence responsibility,
and cause the Company's and its 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. Records that the Company determines, in
good faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors (and the Inspectors
shall confirm their agreement in writing in advance to the Company if the
Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the
information in such Records was known to the Inspectors on a
non-confidential basis prior to its disclosure by the Company or has been
made generally available to the public. Each seller of Registrable
Securities agrees that it shall, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records deemed
confidential;
(h) if such sale is pursuant to an underwritten offering, cause to be
delivered "cold comfort" letters dated the effective date of the
Registration Statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by "cold
comfort" letters as Holders' Counsel or the managing underwriter reasonably
requests;
(i) if such sale is pursuant to an underwritten offering, cause to be
furnished, at the request of any seller of Registrable Securities on the
date such securities are delivered to the underwriters for sale pursuant to
such 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 the un-
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derwriters, if any, and such seller may reasonably request and are
customarily included in such opinions;
(j) comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable but no later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement
covering a period of twelve (12) months beginning after the effective date
of the Registration Statement, in a manner which satisfies the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed, provided that the applicable listing requirements are
satisfied;
(l) keep Holders' Counsel advised in writing as to the initiation and
progress of any registration under Article III or Article IV hereunder;
(m) cooperate with each seller of Registrable Securities and each
underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be
made with the NASD;
(n) make officers available to participate in customary road shows
and other informational meetings as reasonably requested by any Approved
Underwriter or Company Underwriter (it being understood that the Company,
in its discretion, may require that there be "road shows" and other
informational meetings in connection with a Demand Registration); and
(o) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
6.2 SELLER INFORMATION. (a) It shall be a condition precedent to the
obligation of the Company to include any Registrable Securities of any
Designated Holder in a Registration Statement pursuant to this Agreement that
the Designated Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it, any other securities of the
Company held by it, and the intended method of disposition of such Registrable
Securities as shall be required to effect the registration of the Registrable
Securities held by such Designated Holder, including, without limitation, all
information required to be disclosed in order to make the information previously
furnished to the Company by such Designated Holder not materially misleading or
necessary to cause such Registration Statement not to omit a material fact with
respect to such Designated Holder necessary in order to make the statements
therein not misleading. Any such Information shall be provided to the Company
within any reasonable time period requested by the Company.
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(b) Each Designated Holder shall notify the Company, at any time when
a prospectus is required to be delivered under applicable law, of the happening
of any event as a result of which the prospectus included in the applicable
Registration Statement, as then in effect, in each case only with respect to
information provided by such Holder, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Such Designated Holder shall immediately upon the
happening of any such event cease using such prospectus.
6.3 NOTICE TO DISCONTINUE. Each Designated Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 6.1(e) or 6.2(b), such Designated Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Designated Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6.1(e) and, if so directed by the Company, such Designated Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Designated Holder's possession, of the
prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 6.1(b)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6.1(e) to and including the date when sellers of such Registrable
Securities under such Registration Statement shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 6.1(e).
6.4 REGISTRATION EXPENSES. The Company shall pay all expenses arising
from or incident to its performance of, or compliance with, this Agreement,
including, without limitation, (i) Commission, stock exchange and NASD
registration and filing fees, (ii) all fees and expenses incurred in complying
with securities or "blue sky" laws (including reasonable fees, charges and
disbursements of counsel to any underwriter incurred in connection with "blue
sky" qualifications of the Registrable Securities as may be set forth in any
underwriting agreement), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and disbursements of counsel to the Company and of its
independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification), (v) the reasonable fees, charges
and disbursements of Holders' Counsel not to exceed $35,000 and (vi) any
liability insurance or other premiums for insurance obtained in connection with
any Demand Registration or piggy-back registration thereon or Incidental
Registration pursuant to the terms of this Agreement, regardless of whether such
Registration Statement is declared effective. All of the expenses de-
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scribed in the preceding sentence of this Section 6.4 are referred to herein
as "Registration Expenses." The Designated Holders of Registrable Securities
sold pursuant to a Registration Statement shall bear the expense of any broker's
commission, underwriter's discount or commission or transfer taxes relating to
registration and sale of such Designated Holders Registrable Securities and,
subject to clause (v) above, shall bear the fees and expenses of their own
counsel.
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless each Designated Holder, its partners, directors, officers,
Affiliates and each Person who controls (within the meaning of Section 15 of the
Securities Act) such Designated Holder from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "LIABILITY" and collectively, "LIABILITIES"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) 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 not misleading under the
circumstances such statements were made or arising out of a violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any federal or
state securities law or any rule or regulation promulgated under any such
legislation, except insofar as such Liability (i) arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
contained in such Registration Statement, preliminary prospectus or final
prospectus in reliance and in conformity with information concerning such
Designated Holder furnished in writing to the Company by such Designated Holder
expressly for use therein, including, without limitation, the information
furnished to the Company pursuant to Section 6.2, or (ii) is caused by any
failure by the Designated Holder to deliver a prospectus or preliminary
prospectus (or amendment or supplement thereto) as and when required under the
Securities Act after such prospectus has been timely furnished by the Company .
The Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
7.2 INDEMNIFICATION BY DESIGNATED HOLDERS. Each Designated Holder
agrees to indemnify and hold harmless the Company, the other Designated Holders,
any underwriter retained by the Company, each of their respective officers,
directors and Affiliates and each
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Person who controls the Company, the other Designated Holders or such
underwriter (within the meaning of Section 15 of the Securities Act) to the same
extent as the foregoing indemnity from the Company to the Designated Holders,
but only if such statement or alleged statement or omission or alleged omission
was made in reliance upon and in conformity with information with respect to
such Designated Holder furnished in writing to the Company by such Designated
Holder expressly for use in such Registration Statement or prospectus,
including, without limitation, the information furnished to the Company pursuant
to Section 6.2; provided, however, that the total amount to be indemnified by
such Designated Holder pursuant to Section 6.2 shall be limited to the net
proceeds received by such Designated Holder in the offering to which the
Registration Statement or prospectus relates.
7.3 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
to the Indemnified Party for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, however,
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 (except to the extent that the Indemnifying Party is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). 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 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 reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the Indemnified Party
and such parties have been advised by such counsel that either (x)
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct or (y) there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party. In any of such cases, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Indemnified Parties. 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 consent of such Indemnified Party, which
consent shall
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not be unreasonably withheld, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Party is a party and indemnity
has been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all Liability
for claims that are the subject matter of such proceeding.
7.4 CONTRIBUTION. If the indemnification provided for in this Article
VII from the Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any Liabilities referred to herein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such 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 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, has been
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7.1, 7.2 and
7.3, any legal or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding; provided that the
total amount to be contributed by such Designated Holder shall be limited to the
net proceeds received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 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 the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
ARTICLE VIII
COVENANTS
8.1 RULE 144. The Company covenants that it shall (a) file any
reports required to be filed by it under the Exchange Act and (b) take such
further action as each Designated Holder of Registrable Securities may
reasonably request (including providing any information necessary to comply with
Rule 144 under the Securities Act), all to the extent
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required from time to time to enable such Designated Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, or Regulation S under the Securities Act
or (ii) any similar rules or regulations hereafter adopted by the Commission.
The Company shall, upon the request of any Designated Holder of Registrable
Securities, deliver to such Designated Holder a written statement as to whether
it has complied with such requirements.
8.2 XXXXXXXXXXX AND BLACKSTONE PRIORITY OF SALE. Notwithstanding
anything to the contrary set forth in this Agreement, in the event of any
offering of Common Stock, whether pursuant to a public offering, private
placement or other exempt sale in which Blackstone Holders and/or Xxxxxxxxxxx
Holders, on the one hand, and any other stockholder of the Company (including,
without limitation, any Xxxxxx Stockholder and any Xxxx Stockholder), on the
other hand, desire or intend to sell Common Stock, Blackstone Holders and
Xxxxxxxxxxx Holders, pro rata based on the number of shares of Common Stock then
owned by each, shall have an absolute right to sell prior to the right of any
other such holder.
ARTICLE IX
MISCELLANEOUS
9.1 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of common stock of the
Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to assume this Agreement with the Designated Holders on
terms substantially the same as this Agreement as a condition of any such
transaction.
9.2 NO INCONSISTENT AGREEMENTS; TIMING OF DEMAND NOTICES. (a) The
Company represents and warrants that it has not granted to any Person, other
than the Blackstone Holders and the Xxxxxxxxxxx Holders, the right to request or
require the Company to register any securities issued by the Company, other than
the rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement.
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(b) Each of the parties hereto agrees that in the event of an
exercise by more than one party of a right to a "demand" registration whether
pursuant to Section 3.1 of this Agreement or pursuant to any other registration
rights agreement to which the Company may be a party from time to time, the
registration rights agreement (including, without limitation, this Agreement)
under which the first request shall have been made for "demand" registration
rights shall determine whether the provisions of Article III or Article IV of
this Agreement shall govern the applicable rights of the parties.
9.3 REMEDIES. The Designated 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.
9.4 NOTICES. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be made by
telecopier, courier service or personal delivery:
(a) if to the Company:
Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq., General Counsel
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
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(b) if to the Xxxxxx Stockholders:
Xxxxxx Ventures LLC
0000 X. 00 Xxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. XxXxxxxxx, Esq.
with a copy to:
Xxxxx Xxxx PLC
000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: D. Xxxxx Xxxxxxxx, Esq.
(c) if to any Xxxx Stockholders:
c/o Xxxx Fabrics Corporation
100 Vesper Executive Park
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx XxXxxxxx, CEO
Facsimile No.: (000) 000-0000
with a copy to:
Goulston & Storrs, A Professional Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; the next
Business Day after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 9.4 designate another address or
Person for receipt of notices hereunder, and the Company shall update its record
books accordingly.
9.5 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties
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hereto as hereinafter provided. The Demand Registration rights and related
rights contained in Article III hereof shall be, with respect to any Registrable
Security that is transferred to a Direct Permitted Transferee of a Xxxxxx
Stockholder or a Xxxx Stockholder, automatically transferred to such transferee
who agrees in writing to be bound hereby, but only if transferred in compliance
with the Stockholders Agreement. The incidental or "piggy-back" registration
rights of the Designated Holders contained in Article IV hereof and the other
rights of each of the Designated Holders with respect thereto shall be, with
respect to any Registrable Security, automatically transferred to any Person who
is the transferee of such Registrable Security, but only if transferred in
compliance with the Stockholders Agreement. All of the obligations of the
Company hereunder shall survive any such transfer. Any assignment in violation
of this Agreement shall be null and void. Except as provided in Article VII, no
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of this Agreement.
9.6 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 hereof may not be given,
unless consented to in writing by (i) the Company, (ii) a Majority of the Xxxxxx
Stockholders and (iii) a Majority of the Xxxx Stockholders; PROVIDED, HOWEVER,
that consent of the Xxxxxx Stockholders or the Xxxx Stockholders need not be
obtained in the case of any amendment, modification, supplement, waiver or
consent that is not adverse to the Xxxxxx Stockholders or the Xxxx Stockholders,
as the case may be. Any such written consent (or amendment, modification,
supplement, consent or waiver for which written consent of a party is not
required in accordance with this Section 9.6) shall be binding upon the Company
and all of the Designated Holders who receive notice of it in accordance with
the provisions of this Agreement, which notice shall specify the effect of such
consent, amendment, modification, supplement or waiver, as the case may be.
9.7 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.
9.8 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
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9.10 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, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
9.11 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.12 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,
representations, warranties or undertakings, other than those set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
9.13 FURTHER ASSURANCES. Each of the parties shall, and shall cause
their respective Affiliates to, 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.
9.14 OTHER AGREEMENTS. Nothing contained in this Agreement shall be
deemed to be a waiver of, or release from, any obligations any party hereto may
have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement including, but
not limited to, the Merger Agreement or the Stockholders Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed, or have caused to
be executed this Agreement on the date first written above.
XXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name:
Title:
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxxx X. XxXxxxxxx
----------------------------------------
JENS HOHNEL
/s/ Jens Hohnel
----------------------------------------
31
XXXX FABRICS CORPORATION
By: /s/ Xxxxx XxXxxxxx
------------------------------------
Name: Xxxxx XxXxxxxx
Title: Chairman of the Board; Chief
Executive Officer
JFC HOLDINGS TRUST
By: /s/ Xxxxx XxXxxxxx
------------------------------------
Xxxxx XxXxxxxx, as Trustee and not
individually
XXXXX XXXXXXXX, a Xxxx Investor
/s/ Xxxxx XxXxxxxx
----------------------------------------
XXXXX XXXXXXXX, a Xxxx Investor
/s/ Xxxxx XxXxxxxx
----------------------------------------
