EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") made as of
December 18, 2003, from Lexington Precision Corporation, a Delaware corporation
(the "Company"), to and for the benefit of Holders of Registrable Securities (as
defined below) of the Company listed on Exhibit A hereto (each a "Holder" and,
collectively, the "Holders").
WITNESSETH:
WHEREAS, the Holders, pursuant to an exchange offer made under the
Company's Amended Offering Circular, dated as of March 7, 2003, as amended on
September 18, 2003, and as otherwise extended, amended or supplemented (the
"Amended Offering Circular"), exchanged their 12 3/4% Senior Subordinated Notes
due February 1, 2000 (the "Old Notes"), for units (the "Units"), consisting of
new 12% Senior Subordinated Notes due August 1, 2009, and warrants (the
"Warrants") to purchase common stock of the Company, par value $0.25 per share,
at a price of $3.50 per share (the "Common Stock") during the period from August
1, 2005, through August 1, 2009; and
WHEREAS, the Company desires to provide the Holders with certain
registration rights as provided herein;
NOW, THEREFORE, in consideration of the recitals, mutual covenants, and
agreements herein contained, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto do
hereby covenant and agree as follows:
SECTION 1. DEFINITIONS.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any registration form under the Securities Act subsequently
adopted by the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
"registered" and "registration" refer to a registration effected by
preparing and filing a registration statement or similar document (a
"Registration Statement") in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such Registration Statement or
document.
"Registrable Securities" means all shares of Common Stock issued or
issuable upon exercise of the Warrants until, with respect to such shares of
Common Stock, (i) a registration statement covering such shares of Common Stock
has been declared effective by the SEC and such shares of Common Stock have been
disposed of pursuant to such effective registration statement, (ii) such shares
of Common Stock are sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met permitting resale without subsequent registration under
the Securities Act, or (iii) such shares of Common Stock have been otherwise
transferred, sold, or otherwise conveyed to any other person or entity, the
Company has delivered a new certificate or other evidence of
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ownership for such Common Stock not bearing the legend required pursuant to this
Agreement, and such Common Stock may be resold without subsequent registration
under the Securities Act.
"Rule 144" means Rule 144 under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Underwritten Offering" means an offering to the public of Common Stock
pursuant to an effective Registration Statement that is firmly underwritten by a
nationally recognized United States underwriter or underwriters selected or
approved by the Company in accordance with this Agreement.
SECTION 2 REGISTRATION RIGHTS.
(a) Request for Registration. (i) Upon the written
request to the Company from Holders of Registrable Securities and/or Holders of
unexercised Warrants holding in the aggregate more than 50% of the total of (x)
the number of outstanding shares of Common Stock that constitute Registrable
Securities, and (y) the number of shares of Common Stock issuable upon the
exercise of then-outstanding Warrants, (the "Initiating Holders"), that the
Company file a Registration Statement under the Securities Act, with respect to
at least 200,000 shares of Common Stock constituting Registrable Securities (as
adjusted for stock splits, stock dividends, recapitalizations and similar
events), the Company shall give written notice of such requested registration to
all other Holders and shall, subject to the limitations of this Section 2, use
commercially reasonable efforts to effect the registration under the Securities
Act of:
(1) the Registrable Securities that the
Company has been so requested to register by the Initiating Holders; and
(2) all other Registrable Securities
that the Company has been requested to register by any other Holder thereof by
written request received by the Company within 15 days after the giving of such
written notice by the Company, all to the extent necessary to permit the
disposition of the Registrable Securities so to be registered.
(ii) Notwithstanding the foregoing, the Company
shall not be obligated to take any action to effect any such registration
pursuant to this Section 2(a) if the Initiating Holders shall have previously
initiated one registration pursuant to this Section 2(a) that has been declared
or ordered effective pursuant to which securities have been sold or have been
withdrawn by the Initiating Holders other than as a result of a material adverse
change to the Company.
(iii) If any requested registration pursuant to
this Section 2(a) is in the form of an Underwritten Offering, the underwriting
shall be managed by an underwriter or underwriters of national reputation
selected by the Company. The Company shall (together with all Holders proposing
to distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected as
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above provided. The rights of any Holder to registration pursuant to this
Section 2(a) shall be conditioned on such Holder's participation in an
Underwritten Offering and the inclusion of such Holder's Registrable Securities
to be registered in the Underwritten Offering. If any Holder does not agree to
the terms of such underwriting, he or she shall be excluded therefrom by written
notice from the Company or the underwriter.
(iv) Subject to the provisions of this Agreement,
the Company shall use commercially reasonable efforts to file a Registration
Statement as soon as possible after receipt of the request or requests of the
Initiating Holders under this Section 2(a), but in any event within 60 days
after receipt of such request or requests.
(v) All expenses incurred in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to this Section 2(a) shall be borne by the Company,
including (without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or apportionable thereto and the
reasonable fees and disbursements of counsel for the Company and the reasonable
fees and disbursements, not to exceed $12,500 in the aggregate, of one separate
counsel for the selling Holders hereunder (selected by the Holders of a majority
of the Registrable Securities that are included in the corresponding
registration); provided, however, that (i) the Company shall have no liability
for such expenses if such registration does not become effective due solely to
the action or failure to act of any Holder requesting such registration and (ii)
the Holders shall bear underwriting and selling discounts and commissions
attributable to their Registrable Securities being registered and transfer taxes
on shares being sold by such Holders.
(b) Company Registration. If (but without the obligation
to do so) the Company proposes to register any of its Common Stock under the
Securities Act (other than a registration on Form S-8 or S-4 or any successor or
similar form that does not permit secondary sales) in connection with the public
offering of such securities, the Company shall, at such time, give each Holder
written notice of such registration. On written request of each Holder given
within 10 days after the giving of such notice by the Company in accordance with
Section 7(e), the Company shall, subject to the provisions of Section 2(b)(ii),
cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has requested to be registered.
(i) In connection with any offering involving an
underwriting of shares of Common Stock, the
Company shall not be required under this Section 2(b) to include any Registrable
Securities in such underwriting unless the Holders accept the terms of the
underwriting as agreed on between the Company and the underwriters selected by
it, and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company.
(ii) If the total amount of securities, including
the Registrable Securities, to be included in an Underwritten Offering exceeds
the amount of securities that the underwriters determine in good faith is
compatible with the success of the offering, the Company shall so advise the
Holders and the number of shares of Common Stock to be included in the
registration shall be allocated pro rata among all Holders requesting inclusion
(Initiating and
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non-Initiating) and holders of other registration rights granted by the Company
in such manner as the managing underwriter in such offering may determine.
(iii) All expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
the registrations pursuant to this Section 2(b) shall be borne by the Company,
except that the selling Holders shall bear underwriting and selling discounts
and commissions attributable to their Registrable Securities being registered
and transfer taxes on shares being sold by such Holders.
SECTION 3. REGISTRATION PROCEDURE.
(a) Company's Obligation. The Company, in connection with
any registration pursuant to Section 2, shall use its commercially reasonably
efforts to, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a Registration
Statement and such amendments and supplements to said Registration Statement and
the prospectus used in connection therewith as may be necessary to cause such
Registration Statement to become effective, and keep such Registration Statement
effective for a period of up to 120 days. Notwithstanding anything to the
contrary in this Agreement, the Company may withhold efforts to cause a
Registration Statement to become effective, for a period not to exceed 120 days,
if there exists material nonpublic information about the Company that would be
required to be disclosed in such Registration Statement pursuant to federal
securities laws, and the Board of Directors of the Company determines in good
faith that such disclosure would not be in the best interest of the Company,
provided that the Company uses commercially reasonable efforts to minimize the
period of such delay.
(ii) Furnish to the selling Holders such numbers
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(iii) Enter into any reasonable underwriting
agreement required by the proposed underwriter, if any. Each selling Holder
participating in such underwriting shall also enter into and perform its
obligations under such agreement.
(iv) Register and qualify the securities covered
by such Registration Statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or file a general consent to service of
process in any such state or jurisdiction or subject itself to taxation therein.
(v) Notify each selling Holder covered by such
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such Registration Statement, as
then in effect, 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.
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(vi) Cause all such Registrable Securities
registered pursuant hereto to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
(vii) Comply with all applicable rules and
regulations of the SEC and make generally available to its security holders, in
each case as soon as practicable, an earnings statement of the Company that will
satisfy the provisions of Section 11(a) of the Securities Act.
(viii) Obtain and furnish to each selling Holder,
immediately prior to the effectiveness of the Registration Statement (and, in
the case of an Underwritten Offering, at the time of execution of an
underwriting agreement for the sale of any Registrable Securities pursuant
thereto) 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 Holders of a majority of the Registrable Securities
being sold reasonably request.
(ix) Choose the underwriters, auditors, Company
legal counsel, and financial printer to be engaged by the Company in any such
registration, and provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto.
(b) Holder's Compliance. The Company's obligations under
this Agreement with respect to a selling Holder shall be conditioned upon such
Holder's compliance with the following:
(i) Such Holder shall cooperate with the Company
in connection with the preparation of the Registration Statement, and such
Holder will provide to the Company, the proposed underwriters, agents, or
seller-dealers of the offering or other distribution and their respective
representatives and agents, in writing, for use in the Registration Statement,
all information regarding such Holder and such other information as may be
necessary to enable the Company to prepare the Registration Statement and
Prospectus covering the Registrable Securities and to maintain the currency and
effectiveness thereof.
(ii) Such Holder shall enter into such agreements
with the Company and any underwriter, seller-dealer, or similar securities
industry professional containing such representations, warranties, indemnities,
and agreements as are in each case customarily entered into and made by selling
stockholders, and will cause its counsel to give any legal opinion customarily
given in secondary distributions under similar circumstances.
(iii) During such time as such Holder may be
engaged in a distribution of the Registrable Securities, such Holder will comply
with all applicable laws, and pursuant thereto will, among other things: (i) not
engage in any stabilization activity in connection with the securities of the
Company in contravention of such rules; (ii) distribute the Registrable
Securities owned by such Holder solely in the manner described in the
Registration Statement; (iii) cause to be furnished to each underwriter, agent,
or seller-dealer to or through whom the Registrable Securities owned by such
Holder may be offered, or to the offeree if an offer is made directly by the
Holder, such copies of the prospectus (as amended and
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supplemented to such date) and documents incorporated by reference therein as
may be required by such underwriter, agent, seller-dealer or offeree; and (iv)
not bid for or purchase any securities of the Company other than as permitted
under the Exchange Act.
(iv) On notice from the Company that it has
delayed, suspended, abandoned or withdrawn any Registration Statement or any
related offering or other distribution or it otherwise requires the suspension
by such Holder of the distribution of any of the Registrable Securities, such
Holder shall cease offering or distributing the Registrable Securities until
such time, if any, as the Company notifies such Holder that offering and
distribution of the Registrable Securities may recommence.
(c) Condition Precedent. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
SECTION 4. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Section 4:
(a) Indemnification by the Company. To the extent
permitted by law, the Company will indemnify and hold harmless each Holder, and
each person, if any, who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, or
liability (joint or several) to which they may become subject under the
Securities Act, the Exchange Act, or other federal or state law, insofar as such
loss, claim, damage, or liability (or action in respect thereof) arises out of
is are based on any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; the Company will pay to each such
Holder, or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
Company will not be liable for amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), and
to the extent that such loss, claim, damage, or liability (or action in respect
thereof) (x) arises out of and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information furnished in writing to the Company by or on behalf of such Holder
or controlling person expressly for use in such registration statement or, (y)
provided that the Company has theretofore timely prepared all necessary
prospectus supplements or amendments and provided them to the Holder or its
representatives, arises from the failure of any Holder to comply with such
prospectus delivery requirements as are applicable to it.
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(b) Indemnification by Holders. To the extent permitted
by law, each selling Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, any
underwriter, any other Holder selling securities in such Registration Statement
and any controlling person of any such underwriter or other Holder, against any
loss, claim, damage or liability (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange
Act, or other federal or state law, insofar as such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based on any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance on and in conformity with written information
furnished by such Holder expressly for use in connection with such registration
or a Violation of any federal or state securities laws, rules or regulations by
that Holder; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this Section 4(b), in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, that, in no event shall any
indemnity under this Section 4(b) exceed the net proceeds received by such
Holder from the offering.
(c) Conduct of Indemnification Proceedings. Promptly
after receipt by an indemnified party under this Section 4 of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 4, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties that may
be represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 4, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 4.
(d) Contribution. If the indemnification provided for in
this Section 4 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue
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statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(e) Conflict; Survival.
(i) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with an Underwritten Offering
are in conflict with the foregoing provisions, the provisions of the
underwriting agreement shall control.
(ii) The obligations of the Company and the
Holders under this Section 4 shall survive the completion of any offering of
Registrable Securities pursuant to a Registration Statement under this
Agreement, and otherwise.
SECTION 5. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view
to making available to the Holders the benefits of Rule 144 and any other rule
or regulation of the SEC that may at any time permit a Holder to sell securities
of the Company to the public without registration or pursuant to a registration
on Form S-3, the Company agrees to use its commercially reasonable efforts to:
(a) make and keep available public information, as those
terms are understood and defined in Rule 144; and
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act.
SECTION 6. TERMINATION OF REGISTRATION RIGHTS. This Agreement shall
terminate on August 1, 2011; provided, however, the rights of any Holder to
request registration or inclusion in any registration with respect to any
Registrable Securities held by such Holder shall terminate on the second
anniversary of the original issuance of such Registrable Securities as a result
of the exercise of a Warrant.
SECTION 7. MISCELLANEOUS.
(a) Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding on the respective
heirs, representatives, successors, and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer on any party, other than the parties
hereto or their respective heirs, representatives, successors, and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(b) Governing Law. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of New
York, without regard to that state's conflict of laws principles.
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(c) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
(d) Titles and Subtitles. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) Notices. Any notice, consent, authorization, or other
communication to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally or transmitted by facsimile
transmission with receipt acknowledged by the addressee, or three days after
being mailed by first class mail, or the next business day after being deposited
for next-day delivery with a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such
notice at the following address for such party (or at such other address as
shall be specified by like notice):
if to the Company, to:
Lexington Precision Company
000 Xxxxx XXX
Xxx Xxxx, XX 00000-0000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx XXX
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Holders, to the addresses indicated on Exhibit A or
such other address or addresses as a Holder may notify the Company from time to
time.
(f) Amendments and Waivers. For purposes of this
Agreement and all agreements, documents, and instruments executed pursuant
hereto, except as otherwise specifically set forth herein or therein, no course
of dealing between the Company and any Holder and no delay on the part of any
party hereto in exercising any right hereunder or thereunder shall operate as a
waiver of any of such rights. No covenant or other provision hereof or thereof
may be waived or amended other than by a written instrument signed by the party
so waiving or amending such covenant or other provision; provided, however, that
except as otherwise provided herein or therein, waivers or amendments or
additions to, and any consents required by, this Agreement may be made, and
compliance with any term, covenant, condition,
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or provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) by a consent or
consents in writing signed by Holders of a majority of the Registrable
Securities and (in the case of any such amendment, change, or addition) the
Company. Any amendment or waiver effected in accordance with this Section 7(f)
shall be binding on each Holder of any Registrable Securities at the time such
waiver or amendment is effected and the Company.
(g) Severability. If any provision of this Agreement, or
the application of such provision to any person or circumstance, shall be held
invalid or unenforceable, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
to be invalid or unenforceable, shall not be affected thereby.
(h) Entire Agreement. This Agreement is the entire
agreement of the parties and supersedes all prior negotiations, correspondence,
agreements, and understandings, written or oral, between or among the parties,
regarding the subject matter hereof.
(i) Further Assurances. Each party shall execute such
other and further certificates, instruments, and other documents as may be
necessary and proper to implement, complete, and perfect the transactions
contemplated by this Agreement. If requested by the Company, each Holder
including Registrable Securities in a registration effected pursuant to this
Agreement shall execute such agreement or instrument as may be reasonably
requested by the Company to confirm that such Holder is bound by and subject to
the terms of this Agreement.
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IN WITNESS WHEREOF, the Company has executed this Agreement as of the
date first above written.
LEXINGTON PRECISION CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chairman
Exhibit A to Registration Rights Agreement
HOLDERS
Name Address
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Xxxxxxx Xxxxxxxx and 518 Susquehanna Road
Xxxxxxx Xxxxxxxx Xxxxxxxxxxxx, XX 00000
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Executive Life Insurance x/x XXXxxxxx Xxxxx Xxxx
Xx. xx Xxx Xxxx Corporate Actions Department
Four Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
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Cede & Co. 00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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