EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of July 27, 1987 by and among
▇▇▇▇-▇▇▇▇▇▇ Holdings Corporation, a Delaware corporation ("Holdings"); ▇▇▇▇▇▇▇
▇▇▇▇▇ Interfunding Inc., a Delaware corporation ("Interfunding"), ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital Appreciation Partnership No. VIII, L.P., a Delaware limited partnership
("ML Domestic Partnership"), ML Offshore LBO Partnership No. VIII, a Cayman
Islands limited partnership ("ML Offshore Partnership"), ML Employees LBO
Partnership No. I, L.P., a Delaware limited partnership ("ML Employees
Partnership" and, collectively with ML Domestic Partnership, ML Offshore
Partnership and Interfunding, the "ML Entities"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Venture Capital
Inc., a Delaware corporation ("ML Venture Partners") and KECALP Inc., a
Delaware corporation ("KECALP" and, collectively with ML Venture Partners and
the ML Entities, the "ML Affiliates"); the Institutional Investors (as defined
herein); the Management Investors and The Northern Trust Company, as Trustee,
under the Trust Agreement dated as of July 27, 1987 by and among Holdings, the
Trustee and Noble, Lowndes, Inc.
1. Background. Holdings is a party to (i) a Management Stock Subscription
Agreement dated as of July 27, 1987 (the "Management Subscription Agreement") ,
by and among Holdings and the Management Investors pursuant to which Holdings
has agreed, among other things, to issue to the Management Investors 2,000,000
shares of Class A Common Stock, par value $0.01 per share, of Holdings (the
"Shares"), (ii) the Institutional Investor Stock Subscription Agreement dated
as of July 27, 1987 (the "Institutional Investor Subscription Agreement") by
and between Holdings and each of the Institutional Investors, pursuant to which
Holdings has agreed, among other things, to issue an aggregate of 7,800,000
Shares and Series I Non-Voting Common Stock, par value $.01 per share, of
Holdings ("Series I Non-Voting Shares") to the Institutional Investors, (iii) a
Stock Purchase Agreement dated as of May 18, 1987 by and among Holdings and the
ML Entities (the "ML Entities Stock Purchase Agreement") pursuant to which
Holdings issued an aggregate of 10,000 Shares to the ML Entities (which Shares
will, due to a dividend of 999 Shares to be declared for each Share
outstanding, be increased to 10,000,000 prior to the Closing) and (iv) a Stock
Subscription Agreement dated as of July 27, 1987 (the "ML Investor Subscription
Agreement") by and between Holdings and the ML Affiliates pursuant to which (i)
Holdings has agreed, among other things, to issue an aggregate of 200,000
Shares to the ML Affiliates, and (ii) certain of the ML Affiliates will sell
Shares to other ML Affiliates.
2. Definitions. As used in this Agreement, the following capitalized terms
shall have the meanings ascribed to them below:
Acquiring - AV Acquiring Corporation, a Delaware corporation and a wholly
owned indirect subsidiary of Holdings.
Common Stock - Shares, Series I Non-Voting Shares and shares of the Series
II Non-Voting Common Stock, par value $.01 per share, of Holdings ("Series II
Non-Voting Shares").
Effective Time - The effective time of the merger of Acquiring with and
into the Company pursuant to the Merger Agreement.
Exchange Act - The Securities Exchange Act of 1934, as amended, or any
similar federal statute then in effect, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable section, if
any, of any such similar federal statute.
Institutional Holders - The Institutional Investors, any of their
subsidiaries, affiliates and associates (as such terms are defined in the rules
and regulations under the Exchange Act) and each of their successors, assigns
and transferees who agree in writing, in form and substance satisfactory to
Holdings, to become bound, and do become bound, hereby.
Institutional Investors - The institutional investors listed in Schedule I
to the Institutional Investor Agreement, excluding their successors, assigns
and transferees.
Management Investors - The persons listed in Schedule I to the Management
Subscription Agreement, excluding their successors, assigns and transferees.
Management Holders - The Management Investors and their Permitted
Transferees (as such term is defined in the Management Subscription Agreement).
Merger Agreement - The Agreement and Plan of Merger dated as of April 10,
1987, by and among Holdings (formerly AV Holdings Corporation), Acquiring and
the Company.
▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc., a Delaware corporation.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holders - The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investors, any of their
subsidiaries, affiliates and associates (as such terms are defined in the rules
and
2
regulations under the Exchange Act) and any of their partners (general or
limited) and each of their successors, assigns and transferees who agrees in
writing, in form and substance satisfactory to Holdings, to become bound, and
does become bound, hereby.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Investors - The ML Affiliates, excluding their successors,
assigns and transferees.
Non-Voting Shares - Series I Non-Voting Shares and Series II Non-Voting
Shares.
Person - An individual, partnership, joint venture, corporation, trust,
unincorporated organization or government or any department or agency thereof.
Registrable Securities - Any Shares purchased pursuant to the Stock
Subscription Agreements (as hereinafter defined) and any Shares issued upon the
conversion of, or after a series of conversions of, Shares or Non-Voting Shares
purchased pursuant to the Stock Subscription Agreements. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) such securities shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act (as hereinafter
defined), (iii) such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by Holdings, (iv) such securities shall have
ceased to be outstanding or (v) in the case of Shares issued pursuant to the
Management Subscription Agreement to the Management Holders, such securities
shall have been transferred to any Person other than a Management Holder.
Registration Expenses - Any and all expenses incident to performance of or
compliance with this Agreement, including without limitation, (i) all SEC (as
hereinafter defined) and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses of
complying with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger
and delivery expenses, (iv) the fees and disbursements of counsel for Holdings
and of Holdings's independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to such
performance and compliance, (v)
3
the reasonable fees and disbursements of one counsel retained by each of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holders, the Institutional Holders and the Management Holders in
connection with each such registration and (vi) any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities and the
reasonable fees and expenses of any special experts retained in connection with
the requested registration, but excluding underwriting discounts and
commissions and transfer taxes, if any.
Requisite Share Number - With respect to (a) the initial registration of
Shares under the Securities Act, at least thirty-five percent (35%) of the
Registrable Securities then outstanding (assuming, for purposes of determining
the Requisite Share Number only, that all then outstanding Non-Voting Shares
have been converted into Shares); and (b) any other registration of Shares
under the Securities Act, at least fifteen percent (15%)- of the Registrable
Securities then outstanding, but in no event less than 1,000,000 Shares.
Securities Act - The Securities Act of 1933, as amended, or any similar
federal statute then in effect, and a reference to a particular section thereof
shall be deemed to include a reference to the comparable section, if any, of
any such similar federal statute.
SEC - The Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act or the Exchange Act.
Stockholders - The ▇▇▇▇▇▇▇ ▇▇▇▇▇, Holders, the Institutional Holders and
the Management Holders.
Stock Subscription Agreements - The Management Subscription Agreement, the
Institutional Investor Subscription Agreement, the ML Entities Stock Purchase
Agreement, the ML Investor Subscription Agreement and the ML Affiliates Stock
Purchase Agreement.
3. Registration on Request of the Stockholders.
(a) Request by the Stockholders. Upon the written request (the "Section 3
Request") of Stockholders who hold of record Holdings Common Stock representing
(assuming the conversion of all Non-Voting Shares into Shares) in the aggregate
at least the Requisite Share Number that Holdings effect the registration under
the Securities Act of all or part of such Stockholders' Registrable Securities,
Holdings will promptly give written notice of such requested registration (a
"Section 3 Notice") to all other Stockholders of record who hold any
Registrable Securities or Non-Voting Shares, and thereupon will use its best
efforts to effect, as promptly as practicable (but in no event later than
4
120 days after Holdings receives such request), the registration under the
Securities Act of:
(i) the Registrable Securities that Holdings has been requested to
register by the Section 3 Request, and
(ii) all other Registrable Securities that Holdings has been requested to
register by any other Stockholder by written request given to Holdings within
15 days after the giving of the Section 3 Notice,
all to the extent necessary to permit the disposition of the Registrable
Securities so to be registered pursuant to an underwritten public offering;
provided, however, that (A) Holdings shall not be obligated to file a
registration statement relating to any registration request under this Section
3 prior to three years after of the Effective Time, (B) Holdings shall not be
obligated to file a registration statement relating to a registration request
under this Section 3 within a period of six months after the effective date of
any other registration statement of Holdings (other than registration
statements on Form S-4 or Form S-8, or any successor or similar forms), (C)
Holdings shall not be obligated to effect more than four registration
statements pursuant to this Section 3 and (D) Holdings may postpone filing a
registration statement relating to a registration request under this Section 3
for a reasonable period (not in excess of 90 days) if in its judgment such
filing would require the disclosure of material information that Holdings has a
bona fide business purpose for preserving as confidential.
(b) Registration Statement Form. Registrations under this Section 3 shall
be on such appropriate registration form of the SEC for the disposition of the
Registrable Securities in an underwritten public offering as shall be selected
by Holdings and shall be reasonably acceptable to Stockholders who are the
registered holders of Holdings Common Stock representing (assuming the
conversion of all then outstanding Non-voting Shares into Shares) in the
aggregate at least the Requisite Share Number.
(c) Expenses. Holdings shall pay all Registration Expenses in connection
with a registration requested pursuant to this Section 3; provided, however,
that each Stockholder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Stockholder's Registrable Securities pursuant to a registration statement
requested pursuant to this Section 3.
(d) Effective Registration Statement. A registration requested pursuant to
this Section 3 will not be deemed to have been effected unless it has become
effective; provided, however, that if, after a registration has become
effective, the
5
offering of Registrable Securities pursuant to such registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such registration will be deemed not to
have been effected.
(e) Underwriters. ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated, a
Delaware corporation ("MLPF&S"), shall act as the underwriter in the public
underwritten offering of Registrable Securities requested to be registered
pursuant to this Section 3. If MLPF&S is unwilling or unable to so act,
Holdings shall have the right to select any nationally recognized investment
banker(s) to administer the offering. Holdings shall use its best efforts to
ensure that the Shares sold in any underwritten public offering pursuant to
this Agreement shall be widely disseminated.
(f) Priority in Requested Registrations. If the managing underwriter for a
requested registration pursuant to this Section 3 shall advise Holdings in
writing that, in its opinion, the number of Registrable Securities requested to
be included in such registration exceeds the number that can be sold in an
orderly manner in such offering within a price range acceptable to Stockholders
who are the regis tered holders of Holdings Common Stock representing (assuming
the conversion of all Non-Voting Shares into Shares) in the aggregate at least
the Requisite Share Number, then the number of such Registrable Securities to
be included in such registration shall be allocated pro rata among all
Stockholders requesting that Registrable Securities be included in such
registration on the basis of the relative number of shares of such Registrable
Securities each such Stockholder has requested to be included in such
registration. If, as a result of the proration provisions of this Section 3(f),
any Stockholder shall not be entitled to include all Registrable Securities in
a registration that such Stockholder has requested be included, such
Stockholder may elect to withdraw his request to include Registrable Securities
in such registration (a "Withdrawal Election"); provided, however, that a
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Stockholder shall no longer have any right to include Registrable
Securities in the registration as to which such Withdrawal Election was made.
(g) Termination by Holdings. If as a result of Withdrawal Elections (but
after Holdings shall have included in such registration in place of such
withdrawn Registrable Securities such additional Registrable Securities held by
other Stockholders whose Registrable Securities were excluded as a result of
the proration provisions of Section 3(f)), less than the Requisite Share Number
of Registrable Securities are requested to be included in a registration,
Holdings may, at its election, give written notice to all Stockholders who have
requested that Registrable Securities be included in a registration and who
have not made a
6
Withdrawal Election that Holdings has determined not to proceed with such
registration and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such abandoned registration,
without prejudice, however, to the Stockholders' rights to have Registrable
Securities registered pursuant to this Section 3 in the future.
4. Incidental Registration.
(a) Right to Include Registrable Securities. If Holdings at any time
proposes to register any of its equity securities under the Securities Act,
whether or not for sale for its own account (other than a registration on Form
S-4 or Form S-8, or any successor or similar forms and other than pursuant to a
registration under Section 3 hereof), in a manner that would permit
registration of Registrable Securities for sale to the public under the
Securities Act, it will each such time promptly give written notice to all
Stockholders who hold of record any Registrable Securities or Non-Voting Shares
of its intention to do so, of the registration form of the SEC that has been
selected by Holdings and of such holders' rights under this Section 4 (the
"Section 4 Notice"). Holdings will use its best efforts to include in the
proposed registration all Registrable Securities that Holdings is requested in
writing, within 15 days after the Section 4 Notice is given, to register by the
Stockholders thereof; provided, however, that (i) if, at any time after giving
written notice of its intention to register any equity securities and prior to
the effective date of the registration statement filed in connection with such
registration, Holdings shall determine for any reason not to register such
equity securities, Holdings may, at its election, give written notice of such
determination to all Stockholders who hold of record any Registrable Securities
or Non-Voting Shares and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, without prejudice, however, to the rights of Stockholders under
Section 3 hereof and (ii) in case of a determination by Holdings to delay
registration of its equity securities, Holdings shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities. No registration effected under this
Section 4 shall relieve Holdings of its obligations to effect registrations
upon request under Section 3 and, notwithstanding anything to the contrary in
Section 3, no Stockholder shall have the right to require Holdings to register
any Registrable Securities pursuant to Section 3 during each six month-period
commencing on the date each registration statement effected under this Section
4 is declared effective.
(b) Expenses. Holdings shall pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 4; provided, however, that each Stockholder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of
7
such Stockholder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 4.
(c) Priority in Incidental Registrations. If the managing underwriter for
a registration pursuant to this Section 4 that involves an underwritten
offering shall advise Holdings in writing that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
(the "Section 4 Sale Number") that can be sold in an orderly manner in such
offering within a price range acceptable to Holdings, Holdings shall include in
such offering (i) first, all the securities Holdings proposes to register, and
(ii) second, to the extent that the Registrable Securities to be included by
Holdings are less than the Section 4 Sale Number, all Registrable Securities
requested to be included by all Stockholders, provided, however, that if the
number of such Registrable Securities exceeds the Section 4 Sale Number less
the number of securities included pursuant to clause (i) hereof, then the
number of such Registrable Securities included in such registration shall be
allocated pro rata among all requesting Stockholders, on the basis of the
relative number of shares of such Registrable Securities each such Stockholder
has requested to be included in such registration. If, as a result of the
proration provisions of this Section 4(c), any Stockholder shall not be
entitled to include all Registrable Securities in a registration pursuant to
this Section 4 that such Stockholder has requested be included, such
Stockholder may make a Withdrawal Election; provided, however, that such
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Stockholder shall no longer have any right to include Registrable
Securities in the registration as to which such Withdrawal Election was made.
5. Registration Procedures. If and whenever Holdings is required to use
its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, Holdings
will, as soon as practicable:
(a) promptly prepare and file with the SEC (in any event within 60 days
after the end of the period within which requests for registration may be given
to Holdings), the requisite registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become and remain effective, provided, however, that Holdings may
discontinue any registration of its securities that is being effected pursuant
to Section 4 herein at any time prior to the effective date of the registration
statement relating thereto;
(b) prepare and file with the SEC 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 such period
(which in no event shall exceed 120 days) as any seller of such Registrable
8
Securities shall request and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by such
registration statement during such period;
(c) furnish to each seller of such Registrable Securities and each
underwriter, if any, of the securities being sold by such seller such number of
copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller and underwriter may
reasonably request in order to facilitate the public sale of the Registrable
Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities
or "blue sky" laws of such jurisdictions as any sellers of Registrable
Securities representing more than 15% of the total number of securities covered
by such registration statement or any managing underwriter shall reasonably
request, and do any and all other acts and things that may be necessary or
advisable to enable such seller and each managing underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable Securities
owned by such seller, provided, however, that Holdings shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements
of this clause (d) be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process
in any such jurisdiction;
(e) notify each seller of any such Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of Holdings's becoming aware
that the prospectus, 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 in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and at the request of
any such seller promptly prepare and furnish to such seller a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
9
(f) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
rea sonably practicable, an earning statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the first day
of Holdings's first calendar quarter after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) use its best efforts to cause all such Registrable Securities covered
by such registration statement to be listed on the principal securities
exchange on which similar equity securities issued by Holdings are then listed
or eligible for listing, if the listing of such securities is then permitted
under the rules of such exchange;
(h) provide a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(i) in connection with any underwritten offering, enter into an
underwriting agreement with the underwriter of such offering in the form
customary for such underwriter for similar offerings, including such
representations and warranties by Holdings, provisions regarding the delivery
of opinions of counsel for Holdings and accountants' letters, provisions
regarding indemnification and contribution, and such other terms and conditions
as are at the time customarily contained in such underwriter's underwriting
agreements for similar offerings (the sellers of Registrable Securities which
are to be distributed by such underwriter(s) may, at their option, require that
any or all of the representations and warranties by, and the other agreements
on the part of, Holdings to and for the benefit of such underwriter(s) shall
also be made to and for the benefit of such sellers of Registrable Securities.
Such sellers of Registrable Securities shall not be required to make any
representations or warranties to or agreements with Holdings or the
underwriters other than representations, warranties or agreements regarding
such sellers and such sellers' intended methods of distribution);
(j) upon receipt of such confidentiality agreements as Holdings may
reasonably request, make available for inspection by any seller of such
Registrable Securities covered by such registration statement and by any
attorney, accountant or other agent retained by any such seller, all pertinent
financial and other records, pertinent corporate documents and properties of
Holdings and its subsidiaries, and cause all of Holdings's and its
subsidiaries' officers, directors and employees to supply all information
reasonably requested by any such seller, attorney, accountant or agent in
connection with such registration statement; and
10
(k) permit any holder of Registrable Securities who, in the sole judgment,
exercised in good faith, of such holder, might be deemed to be a controlling
person of Holdings, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material,
furnished to Holdings in writing, that in the judgment of such holder, as
aforesaid, should be included.
Holdings may require each seller of Registrable Securities as to which any
registration is being effected to furnish Holdings such information regarding
such seller and the distribution of such securities as Holdings may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees that upon receipt of any
notice from Holdings of the happening of any event of the kind described in
clause (e) of this Section 5, such holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by clause (e) of this
Section 5, and, if so directed by Holdings, such holder will deliver to
Holdings (at Holdings's expense) all copies, other than permanent file copies
then in such holder's possession, of the prospectus covering such Registrable
Securities that was in effect prior to such amendment or supplement. In the
event Holdings shall give any such notice, the period set forth in clause (b)
of this Section 5 shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to clause (e)
of this Section 5 to and including the date when each seller of Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by clause (e) of
this Section 5.
6. Indemnification.
(a) Indemnification by Holdings. In the event of any registration of any
securities of Holdings under the Securities Act pursuant to Section 3 or 4
hereof, Holdings will, and hereby does, indemnify and hold harmless, to the
extent permitted by law, the seller of any Registrable Securities covered by
such registration statement, its directors and officers or general and limited
partners (and the directors and officers thereof), each other Person who
participates as an underwriter, if any, in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with Holdings' consent,
which consent shall not be unreasonably withheld) to which such seller, any
such director of officer or general or limited partner or any such
11
underwriter or controlling Person may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act or 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, (b) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if Holdings shall have filed with the SEC any amendment thereof or
supplement thereto), if used prior to the effective date of such registration
statement, or contained in the prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if Holdings shall
have filed with the SEC any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (c)
any violation by Holdings of any federal, state or common law rule or
regulation applicable to Holdings and relating to action required of or
inaction by Holdings in connection with any such registration, and Holdings
will reimburse such seller and each such director, officer, general or limited
partner, underwriter and controlling Person for any legal or any other expenses
reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
Holdings shall not be liable to any such seller or any such director, officer,
general or limited partner, underwriter or controlling Person in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to Holdings by or on behalf of
any such seller or any such director, officer, general or limited partner,
underwriter or controlling Person, specifically stating that it is for use in
the preparation thereof; and provided further, that Holdings will not be liable
to any Person who participates as an underwriter in the offering or sale of
Registrable Securities, if any, or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, under the indemnity
agreement in this Section 6(a) with respect to any preliminary prospectus or
the final prospectus or the final prospectus as amended or supplemented as the
case may be, to the extent that any such loss, claim, damage or liability of
such underwriter or controlling Person results from the fact that such
underwriter sold Registrable Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
12
final prospectus or of the final prospectus as then amended or supplemented,
whichever is most recent, if Holdings has previously furnished copies thereof
to such underwriter and such final prospectus, as then amended or supplemented,
has corrected any such misstatement or omission. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such seller or any director, officer, general or limited partner, underwriter
or controlling Person and shall survive the transfer of such securities by such
seller.
(b) Indemnification by the Sellers. Holdings may require, as a condition
to including any Registrable Securities in any registration statement filed in
accordance with Section 3 or 4 hereof, that Holdings shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities and any underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of this
Section 6) Holdings and its directors and officers and each person controlling
Holdings within the meaning of the Securities Act and all other prospective
sellers and their directors, officers, general and limited partners and
respective controlling Persons with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final or summary prospectus contained therein, or any
amendment or supplement, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Holdings or its representatives by or on behalf of
such seller or underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
Holdings or any of the prospective sellers or any of their respective
directors, officers, general or limited partners or controlling Persons and
shall survive the transfer or such securities by such seller.
(c) Notices of Claims, Etc. As soon as possible after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the
13
defense thereof with counsel reasonably satisfactory to the indemnified party;
provided that the indemnifying party shall not be entitled to so participate or
so assume the defense if, in the indemnified party's reasonable judgment, a
conflict of interest between the indemnified party and the indemnifying party
exists in respect of such claim. After notice from the indemnifying party to
such indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof; and provided
further that the sellers and their respective officers, directors, general and
limited partners and controlling Persons or Holdings and its officers,
directors and controlling Persons, as the case may be, shall have the right to
employ one counsel to represent such indemnified parties if, in such
indemnified parties' reasonable judgment, a conflict of interest between the
indemnified parties and the indemnifying parties exists in respect of such
claim, and in that event the fees and expenses of such separate counsel shall
be paid by the indemnifying party; and provided further that if, in the
reasonable judgment of any of the indemnified parties, a conflict of interest
between such indemnified parties and any other indemnified parties exists in
respect of such claim, such indemnified parties shall be entitled to additional
counsel or counsels and the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels. No indemnifying party
will consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 6 (with appropriate modifications)
shall be given by Holdings and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(e) Contribution. If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or (b) of this Agreement, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in Section 6(a) or (b) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other hand in connection
with statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the indemnifying party or the indemnified
14
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statements or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 6(e) were to be 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 first sentence of this Section 6(e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this Section 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim (which shall be limited as provided in Section 6(c) if the indemnifying
party has assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section 6(e). 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. Promptly after receipt by an
indemnified party under this Section 6(e) of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 6(e), such indemnified
party shall notify the indemnifying party in writing of the commencement
thereof if the notice specified in Section 6(c) has not been given with respect
to such action; provided that the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have
to any indemnified party otherwise under this Section 6(e), except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. Notwithstanding anything in this Section 6(e) to the contrary, no
indemnifying party (other than Holdings) shall be required pursuant to this
Section 6(e) to contribute any amount in excess of the proceeds received by
such indemnifying party from the sale of Registrable Securities in the offering
to which the losses, claims, damages or liabilities of the indemnified parties
relate.
7. Miscellaneous.
(a) Holdback Agreement. If requested in writing by Holdings or the
underwriter, if any, of any offering effected pursuant to Section 3 or 4, each
Stockholder owning securities of Holdings representing or convertible into or
exchangeable or exercisable for, in the aggregate, more than 1% of the Shares
then outstanding (assuming all then outstanding Non-Voting Shares have been
converted into Shares) agrees not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities or any other equity security of Holdings or of any
security convertible into or exchangeable or exercisable for any equity
security of Holdings (in each case, other than as part of such underwritten
public offering) within 7 days before or 120 days after the effective date of a
registration statement
15
filed pursuant to Section 3 or 4, and Holdings hereby also so agrees and agrees
to cause other holders of any equity security, or of any security convertible
into or exchangeable or exercisable for any equity security, of Holdings
purchased from Holdings (at any time other than in a public offering) to so
agree.
(b) Amendments and Waivers. This Agreement may be amended and Holdings may
take any action herein prohibited, or omit to perform any act herein required
to be performed by it, only if Holdings shall have obtained the written consent
to such amendment, action or omission to act, of the Stockholders owning at
least seventy-five percent of the then outstanding shares of Holdings Common
Stock (and, in the case of any amendment, action or omission to act that
adversely affects any Stockholder or group of Stockholders differently from any
of the other Stockholders, the written consent of such Stockholder or group of
Stockholders). Stockholders shall be bound from and after the date of the
receipt of a written notice from Holdings setting forth such amendment or
waiver by any consent authorized by this Section 7(b), whether or not such
shares of Holdings Common Stock shall have been marked to indicate such
consent.
(c) Successors, Assigns and Transferees. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns and transferees, provided, however, that the Management
Holders may not transfer, by operation of law or otherwise, any of their rights
hereunder to any Person other than a Management Holder.
(d) Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto that form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.
(e) Notices. All notices and other communications provided for hereunder
shall be in writing and shall be sent by first class mail, telex, telecopier or
hand delivery:
(i) if to Holdings, to:
▇▇▇▇-▇▇▇▇▇▇ Holdings
c/o Merrill ▇▇▇▇▇ Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
16
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(ii) if to any of the Management Holders, to the address of such
Management Holder, as shown in the stock record book of Holdings, or to such
other address as any of the Management Holders shall have designated in writing
to Holdings.
(iii) if to any of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Holders, to the address of such
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ as shown in the stock record book of Holdings, or to such
other address as any of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Holders shall have designated in
writing to Holdings.
with copies to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
(iv) if to any of the Institutional Holders, to the address of such
Institutional Holder, as shown in the stock record book of Holdings, or to such
other address as any of the Institutional Holders shall have designated in
writing to Holdings.
17
All such notices and communications shall be deemed to have been given or made
(1) when delivered by hand, (2) five business days after being deposited in the
mail, postage prepaid, (3) when telexed answer-back received or (4) when
telecopied, receipt acknowledged.
(f) Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit, expand or otherwise affect
the meaning of the terms contained herein.
(g) Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired,
it being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
(i) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
(j) Recapitalizations, Exchanges, Etc. Affecting Shares. The provisions of
this Agreement regarding Holdings Common Stock shall apply to any and all
shares of capital stock of Holdings or any successor or assign of Holdings
(whether by merger, consolidation, sale of assets or otherwise) that may be
issued in respect of, in exchange for, or in substitution of the Holdings
Common Stock, by reason of any stock dividend, stock split, stock issuance,
reverse stock split, combination, recapitalization, reclassification, merger,
consolidation or otherwise. Upon the occurrence of any of such events, the
definitions of Holdings Common Stock, Shares, Non-Voting Shares, Registrable
Securities and Requisite Share Number shall be appropriately modified.
(k) Termination. This Agreement shall terminate, and thereby become null
and void, on the fifteenth anniversary of the date hereof; provided, however,
that the provisions of Section 6 shall survive the termination of this
Agreement.
18
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
▇▇▇▇-▇▇▇▇▇▇ HOLDINGS
CORPORATION
By:________________________________
By:________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL ML EMPLOYEES LBO PARTNERSHIP
APPRECIATION PARTNERSHIP NO. I, L.P.
NO. VIII, L.P.
by: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO by: ML Employees LBO
Partners No. II, L.P., Managers, Inc.
as General Partner General Partner
by: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital By:________________________________
Partners, Inc.
General Partner
By:____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇
▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERFUNDING
PARTNERSHIP NO. VIII INC.
by: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO By:_______________________________
Partners No. II, L.P.,
as General Partner
by: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital KECALP, INC.
Partners, Inc.
General Partner
By:_________________________________ By:_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
President
▇▇▇▇▇▇▇ ▇▇▇▇▇ VENTURE
CAPITAL INC.
By:_______________________________
20