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WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of August 24, 1998
by and between
▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC.
CAPRICORN INVESTORS II, ▇.▇.
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
and
BT ALEX. ▇▇▇▇▇ INCORPORATED
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This Warrant Registration Rights Agreement (the "AGREEMENT") is made
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and entered into as of August 24, 1998, by and between ▇▇▇. ▇▇▇▇▇▇' Holding
Company, Inc., a Delaware corporation (the "COMPANY"), Capricorn Investors II,
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L.P. ("CAPRICORN") (only with respect to Sections 11 and 12 of this Agreement)
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and ▇▇▇▇▇▇▇▇▇ & Company, Inc. and BT. ▇▇▇▇ ▇▇▇▇▇ Incorporated (the "INITIAL
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PURCHASERS"), who have agreed to purchase an aggregate of 55,000 Units each
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consisting of $1,000 in aggregate principal amount at maturity of the Company's
14% Senior Discount Note due 2005 (the "NOTES") and warrants (the "WARRANTS") to
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purchase 3.14411 shares of the Company's Common Stock (the "WARRANT SHARES"),
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pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of August 13, 1998, by and between the Company
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and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Units, the Company and Capricorn have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 3 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Indenture
(as defined below).
The parties hereby agree as follows:
SECTION 1.DEFINITIONS.
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
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AFFILIATE: As defined in Rule 144 of the Act.
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BUSINESS DAY: Any day except a Saturday, Sunday or other day in the
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City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
CLOSING DATE: The date hereof.
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COMMISSION: The Securities and Exchange Commission.
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COMMON STOCK: The common stock, par value $0.001 per share, of the
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Company.
DEMAND REGISTRATION: As defined in Section 5 of this Agreement.
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EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
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EXCHANGE OFFER: As defined in the Registration Rights Agreement,
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dated the Closing Date, between the Company and the Initial Purchaser with
respect to the Notes.
HOLDERS: As defined in Section 2 hereof.
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INDENTURE: The Indenture, dated the Closing Date, between the Company
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and The Bank of New York, as trustee (the "TRUSTEE"), relating to the Notes, as
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such Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
INITIATING HOLDERS: One or more Holders owning individually or in the
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aggregate not less than the Requisite Securities.
PERSON: Any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
PIGGY-BACK REGISTRATION. As defined in Section 6 of this Agreement.
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PROSPECTUS: The prospectus included in a Registration Statement at
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the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such prospectus.
PRO RATA PORTION: With reference to any Holder at any time, a
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fraction, the numerator of which is the number of Warrant Shares then issued and
outstanding and held by such Holder or issuable to such Holder upon exercise of
the Warrants and which such Holder commits to exercise in connection with the
transaction giving rise to the determination of "Pro Rata Portion", and the
denominator of which is the aggregate number of Warrant Shares then issued and
outstanding held by the Holder taken together or issuable upon exercise of the
Warrants and which the Holders commit to exercise in connection with the
transaction giving rise to the determination of "Pro Rata Portion" taken
together.
PUBLIC EQUITY OFFERING: A public offering registered under the
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Securities Act (except for any registration pursuant to Form S-8) of common
stock of MFH.
REGISTRABLE SECURITIES: Any of (i) the Warrant Shares (whether or not
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the related Warrants have been exercised) and (ii) any other securities issued
or issuable with respect to any Warrant Shares by way of stock dividends or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to the offering of such
securities by the Warrant Share Holder thereof shall have been declared
effective under the Securities Act and such securities shall have been disposed
of by such Warrant Shares Holder pursuant to such Registration Statement, (ii)
such securities are eligible for sale to the public pursuant to Rule 144(k) (or
any similar provisions then in force, but not Rule 144A) promulgated under the
Securities Act, (iii) such securities shall have been otherwise transferred by
such Warrant Share Holder thereof and new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered by the
Company or its transfer agent and subsequent disposition of such securities
shall not require registration or qualification under the Securities Act or any
similar state law then in force or (iv) such securities shall have ceased to be
outstanding.
REGISTRATION EXPENSES: All expenses incident to the Company's
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performance of or compliance with this Agreement, including, without limitation,
all Commission and stock exchange or National Association of Securities Dealers,
Inc. registration and filing fees and expenses, fees and expenses of compliance
with securities or blue sky laws (including, without limitation, reasonable fees
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), preparing, printing, filing,
duplicating and distributing the Registration Statement and the related
prospectus, the cost of printing stock certificates, the cost and charges of any
transfer agent, rating agency fees, printing expenses, messenger, telephone and
delivery expenses, reasonable fees
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and disbursements of counsel for the Company and all independent certified
public accountants, the fees and disbursements of underwriters customarily paid
by issuers or sellers of securities (but not including any underwriting
discounts or commissions or transfer taxes, if any, attributable to the sale of
Registrable Securities by Selling Holders), reasonable fees and expenses of one
counsel for the Holders.
REGISTRATION STATEMENT: Any registration statement, including,
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without limitation, the Shelf Registration Statement described in Section 4
hereof, of the Company relating to the registration for resale of Transfer
Restricted Securities that is filed pursuant to the provisions of this Agreement
and including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and all material
incorporated by reference therein.
REQUISITE SECURITIES: A number of Registrable Securities equal to not
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less than 25% of the then Registrable Securities held in aggregate by all
Holders.
SEC: The Securities and Exchange Commission.
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SELLING HOLDER: A Holder who is selling Registrable Securities in
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accordance with the provisions of this Agreement.
STOCKHOLDERS' AGREEMENT: The Stockholders' Agreement, dated as of
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July 17, 1998, among ▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc. and its Stockholders, a
copy of which is attached as Annex A hereto.
SPECIAL COUNSEL: Any special counsel to the Holders, for which
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Holders will be reimbursed pursuant to this Agreement.
TRANSFER RESTRICTED SECURITIES: Each Warrant or Warrant Share, until
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the earliest to occur of: (i) the date on which such Warrant or Warrant Share
has been effectively registered under the Act and disposed of in accordance with
the Registration Statement covering it (and the purchasers thereof have been
issued a registered freely tradable security) and (ii) the date on which such
Warrant or Warrant Share is distributed to the public pursuant to Rule 144 under
the Act.
WARRANTS: The warrants of the Company issued and sold pursuant to the
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Purchase Agreement and the Warrant Agreement, together with any warrants issued
in substitution or replacement therefor.
WARRANT AGREEMENT: The Warrant Agreement dated the Closing Date by
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and between the Company and The Bank of New York, as Warrant Agent.
WARRANT SHARES: The Common Stock or other securities which any Holder
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may acquire upon exercise of a Warrant, together with any other securities which
such Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split-up of such Common Stock as provided for in the Warrant Agreement.
SECTION 2.SECURITIES SUBJECT TO THIS AGREEMENT.
Holders of Registrable Securities. A Person is deemed to be a Holder
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of Registrable Securities (a "HOLDER") whenever such Person owns Registrable
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Securities or has the right to acquire such Registrable Securities, whether or
not such acquisition has actually been effected.
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SECTION 3. INTENTIONALLY OMMITED
SECTION 4. REGISTRATION PROCEDURES.
In connection with any Demand Registration or Piggy-Back Registration,
the Company shall (provided that it will not be required to take any action
pursuant to this Section 4 that would, in the written opinion of counsel for the
Company, violate applicable law):
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (including any document
that would be incorporated or deemed to be incorporated therein by reference),
if requested, furnish to the Holders, their Special Counsel and the managing
underwriters, if any, copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders, their Special Counsel
and such underwriters, if any, and cause the officers and directors of the
Company, counsel to the Company and independent certified public accountants to
the Company to respond to such inquiries as shall be necessary, in the opinion
of respective counsel to such Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act, and shall use
reasonable efforts to reflect in each such document filed pursuant to a Demand
Registration, when so filed with the SEC, such reasonable comments as the
Holders, their Special Counsel and the managing underwriters, if any, may
propose in writing; provided, however, that the Company shall not be deemed to
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have kept a Registration Statement effective during the applicable period if it
voluntarily takes or fails to take any action that results in Selling Holders
covered thereby not being able to sell such Registrable Securities pursuant to
Federal securities laws during that period; provided, further, the Company shall
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not file any such Registration Statement or related Prospectus or any amendments
or supplements thereto in connection with a Demand Registration to which the
Holders of a majority of the Registrable Securities, their Special Counsel, or
the managing underwriters, if any, shall reasonably object on a timely basis;
(b) Take such action as may be necessary so that (i) any Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated herein by reference in each case) complies in all material respects
with the Securities Act and the Exchange Act and the respective rules and
regulations thereunder, (ii) any Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any Prospectus
forming part of any Registration Statement, and any amendment or supplement to
such Prospectus, does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading;
(c) Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the applicable time
period; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act and the Exchange 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
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sellers thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented;
(d) Notify the Selling Holders, their Special Counsel and the managing
underwriters, if any, promptly (and in any case within 2 Business Days), and (if
requested by any such Person), confirm such notice in writing, (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, (B) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any other Federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order or injunction suspending or
enjoining the use or the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if at any time any of the
representations and warranties of either the Company contained in any agreement
(including any underwriting agreement) contemplated hereby cease to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event that makes any statement made in
such Registration Statement or related Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and that in the case of the Prospectus, it will not
contain any 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 and
(vii) of the Company's reasonable determination that a post-effective amendment
to such Registration Statement would be appropriate;
(e) Use its reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment;
(f) If requested by the managing underwriters, if any, or the Holders
of a majority in aggregate number of the Registrable Securities being sold in
connection with such offering reasonably in advance of the filing thereof, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such Holders reasonably
agree should be included therein, (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment and (iii) supplement or
make amendments to such Registration Statement;
(g) Furnish to Special Counsel and each managing underwriter, if any,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by reference, and
all exhibits to the extent requested as soon as practicable after the filing of
such documents with the SEC;
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(h) Deliver to each Selling Holder, their Special Counsel, and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons reasonably request; and the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the Selling Holders and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto;
(i) Prior to any public offering of Registrable Securities, use its
reasonable efforts to register or qualify or cooperate with the Holders of
Registrable Securities to be sold or tendered for, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as any Holder or underwriter reasonably
requests in writing; provided, however, that where Registrable Securities are
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offered other than through an underwritten offering, the Company agrees to cause
its counsel to perform "blue sky" investigations and file registrations and
qualifications required to be filed pursuant to this Section 4(i); to use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and to use its reasonable best efforts do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by such Registration
Statement; provided, however, that the Company shall not be required to qualify
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generally to do business in any jurisdiction where they are not then so
qualified or to take any action that would subject them to general service of
process in any such jurisdiction where they are not then so subject or subject
the Company to any tax in any such jurisdiction where it is not then so subject;
(j) In connection with any sale or transfer of Registrable Securities
that will result in such securities no longer being Registrable Securities,
cooperate with the Holders and the managing underwriters, if any, to facilitate
the timely preparation and delivery of certificates (with appropriate CUSIP
numbers) representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit with the DTC, and to enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters, if any,
or Holders many request at least two Business Days prior to any sale of
Registrable Securities;
(k) Use its best efforts to cause the offering of the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities within the United
States, except as may be required as a consequence of the nature of such Selling
Holder's business, in which case the Company will cooperate in all reasonable
respects at the expense of such Selling Holder with the filing of such
Registration Statement and the granting of such approvals as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities; provided, however, that the
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Company shall not be required to register the Registrable Securities in any
jurisdiction that would subject them to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject or to require the
Company to qualify to do business in any jurisdiction where it is not then so
qualified;
(l) Upon the occurrence of any event contemplated by Section 4(d)(vi)
or 4(d)(vii), as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each Registration
Statement or a supplement to the related Prospectus or any
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document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders of the occurrence of any
event contemplated by paragraph 4(d)(vi) or 4(d)(vii) above, the Holders shall
suspend the use of the Prospectus until the requisite changes to the Prospectus
have been made;
(m) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority in aggregate number of the Registrable Securities being sold) in order
to expedite or facilitate the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make such
representations and warranties to the Holders of such Registrable Securities and
the underwriters, if any, with respect to the business of the Company (including
with respect to businesses or assets acquired or to be acquired by it), and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing or sole
underwriters, if any, addressed to the underwriters, if any, covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such underwriters; (iii)
obtain customary "comfort" letters and updates thereof (including, if such
registration includes an underwritten public offering, a "bring down" comfort
letter dated the date of the closing under the underwriting agreement) from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any business which may
hereafter be acquired by the Company for which financial statements and
financial data are required to be included in the Registration Statement),
addressed to each of the underwriters, if any, such letters to be in customary
form and covering matters of the type customarily covered in "comfort" letters
in connection with underwritten offerings and such other matters as reasonably
required by the managing underwriter or underwriters and as permitted by the
Statement of Auditing Standards No. 72; (iv) in an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable to the Selling Holders and the underwriters, if any, than
those set forth in Section 9 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate number of Registrable
Securities covered by such Registration Statement and the managing
underwriters); and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in aggregate number of the
Registrable Securities being sold, their Special Counsel and the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause 4(n)(i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company;
(n) Make available for inspection by one representative of the Selling
Holders, the managing underwriter participating in any such disposition of
Registrable Securities, if any, and any attorney, consultant or accountant
retained by such Selling Holders or underwriter (collectively, the
"INSPECTORS"), at the offices where normally kept, during reasonable business
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hours, all financial and other records, pertinent corporate documents and
properties of the Company (including with respect to
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business and assets acquired or to be acquired to the extent that such
information is available to the Company), and cause the officers, directors,
agents and employees of the Company (including with respect to business and
assets acquired or to be acquired to the extent that such information is
available to the Company) to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration; provided,
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however, the Company may first require that such Persons agree to keep
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confidential any non-public information relating to the Company received by such
Person and not disclose such information (other than to an Affiliate or
prospective purchaser who agrees to respect the confidentiality provisions of
this Section 4(n)) until such information has been made generally available to
the public (other than as a result of a disclosure or failure to safeguard by
such Inspector) unless the release of such information is required by law or
necessary to respond to inquiries of regulatory authorities (including the
National Association of Insurance Commissioners, or similar organizations or
their successors); without limiting the foregoing, no such information shall be
used by such Inspector as the basis for any market transactions in securities of
the Company or its subsidiaries in violation of law;
(o) Use its best efforts to cause the Warrant Shares issuable upon
exercise of the Warrants to be quoted or listed on any exchange upon which the
Company's Common Stock is then quoted or listed;
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to their security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act), no later than 45
days after the end of any 12-month period (or 90 days after the end of any 12-
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or reasonable efforts underwritten offering and (ii) if not sold
to underwriters in such an offering commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and
(q) Use its best efforts to take all other steps reasonably necessary
to effect the registration, offering and sale of the Registrable Securities
covered by the Registration Statement.
The Company may require each Selling Holder as to which any
registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as is required by law
to be disclosed in the applicable Registration Statement and the Company may
exclude from such registration the Registrable Securities of any Selling Holder
who unreasonably fails to furnish such information promptly after receiving such
request.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder or any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
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Each Holder agrees by acquisition of such Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 4(d)(ii), 4(d)(iii), 4(d)(v) or 4(d)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by Section
4(l) hereof, or until it is advised in writing (the "ADVICE") by the Company
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that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus. If
the Company shall give any such notice, the 90-day period referred to in Section
5(d) shall be extended by the number of days during such period from and
including the date of giving of such notice to and including the date when each
seller of Registrable Securities covered by such Registration Statement shall
have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 4(l) hereof or (y) the Advice, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus.
SECTION 5. DEMAND REGISTRATION.
(a) One or more Initiating Holders owning individually or in the
aggregate not less than the Requisite Securities may request in writing that the
Company effect the registration under the Securities Act of all or part of such
Initiating Holders' Registrable Securities and shall specify the number of
Registrable Securities proposed to be sold and the intended method of
disposition thereof (the "DEMAND REQUEST"). The Company will give written
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notice of the Demand Request to all registered holders of Registrable Securities
within fifteen (15) days of receipt thereof. Within 120 days of receipt of the
Demand Request the Company will, subject to the terms of this Agreement, file a
Registration Statement and use its best efforts to effect the registration under
the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such request;
(ii) all other Registrable Securities, the Holders of which
shall have made a written request to the Company for registration thereof
within 20 days after the giving of such written notice by the Company
(which request shall specify the number of Registrable Securities proposed
to be sold and the intended method of disposition of such Registrable
Securities); and
(iii) all shares of securities which the Company may elect to
register in connection with the offering of Registrable Securities pursuant
to this Section 5.
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional securities so to be registered.
(b) Registrations under this Section 5 (each, a "DEMAND
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REGISTRATION") shall be on such appropriate registration form of the SEC (i) as
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shall be selected by the Company and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration.
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(c) The Company will pay all Registration Expenses in connection with
any registration requested pursuant to this Section 5. The Selling Holders
shall pay the underwriting discounts, commissions, and transfer taxes, if any,
in connection with each Registration Statement requested under this Section 5,
which costs shall be allocated pro rata among all Selling Holders on whose
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behalf Registrable Securities of the Company are included in such registration
on the basis of the respective amounts of the Registrable Securities then being
registered on their behalf.
(d) The Holders shall be entitled to request two (2) registrations
pursuant to this Section 5. A Registration Statement requested pursuant to this
Section 5 shall not be deemed to have been effected (i) unless a Registration
Statement with respect thereto has been declared effective by the SEC and (ii)
the Company has complied in a timely manner and in all material respects with
all of its obligations under this Agreement; provided, (i) if, after such
--------
Registration Statement has become effective, the offering of Warrant Shares
pursuant to such Registration Statement is or becomes subject to any stop order,
injunction or other order or requirement of the SEC or other governmental or
administrative agency or court that prevents, restrains or otherwise limits the
sale of Warrant Shares under such Registration Statement for any reason, other
than by reason of some act or omission by any Holder participating in such
registration, and does not become effective within a reasonable period of time
thereafter, such period not to exceed 60 days from the date of such stop order,
injunction, or other governmental order or requirement, (ii) the Registration
Statement does not remain effective under the Securities Act until at least the
earlier of (A) an aggregate of 90 days after the effective date thereof or (B)
the consummation of the distribution by the Selling Holders of all of the
Registrable Securities covered thereby or (iii) if the Selling Holders are not
able to sell at least 70% of the Registrable Securities to be included therein,
less any Registrable Securities withdrawn or excluded from such Demand
Registration in accordance with the provisions hereof, then, in each case, such
Registration Statement shall be deemed not to have been effected. For purposes
of calculation the 90-day period referred to in the preceding sentence, any
period of time during which such Registration Statement was not in effect shall
be excluded. The Holders shall be permitted to withdraw all or any part of the
Registrable Securities from a Demand Registration at any time prior to the
effective date of such Demand Registration.
(e) If a requested registration pursuant to this Section 5 involves an
underwritten offering, and the managing underwriter or underwriters shall advise
the Company in writing (with a copy to each Holder requesting registration)
that, in such managing underwriter's or underwriters' opinion, the number of
securities requested to be included in such registration (including securities
of the Company which are not Registrable Securities) is such as to adversely
affect the success of such offering, including the price at which such
securities can be sold, then the Company will include in such registration, to
the extent of the number which the Company is so advised can be sold in such
offering, (i) first, Registrable Securities requested to be included in such
registration by the Holders, pro rata among such holders requesting such
--- ----
registration on the basis of the number of such securities requested to be
included by such Holders and (ii) second, securities held by other Persons,
including the Company.
SECTION 6. PIGGY-BACK REGISTRATION.
(a) If the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering by the Company for its own account or
for the account of any of the holders of any class of its Common Stock in a
firmly underwritten Public Equity Offering (other than (i) a Registration
Statement on Form S-4 or S-8 (or any substitute form that may be adopted by the
SEC) or (ii) a Registration Statement filed in connection with an exchange offer
or offering of securities solely to
10
the Company's existing security holders), then the Company shall give written
notice of such proposed filing to the Holders as soon as practicable (but in no
event fewer than 10 days before the anticipated filing date), and such notice
shall offer such Holders the opportunity to register such number of Warrant
Shares as each such Holder may request in writing within 20 days after receipt
of such written notice from the Company (which request shall specify the Warrant
Shares intended to be disposed of by such Selling Holder) (a "PIGGY-BACK
----------
REGISTRATION"). Upon the written request of any such Holder made within 20 days
------------
after the receipt of any such notice (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), the Company will, subject to the terms
of this Agreement, effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement that covers the securities which the Company proposes
to register, provided that, if at any time after giving written notice of its
--------
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to each Holder and, thereupon, (i) in the case of a
determination not to register shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith),
without prejudice, however, to the rights of any holder or holders of
Registrable Securities entitled to do so to request that such registration be
effected as a registration under Section 5, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. No registration effected under this Section 6 shall relieve
the Company of its obligation to effect any registration upon request under
Section 5, nor shall any such registration hereunder be deemed to have been
effected pursuant to Section 5. The Company shall use its best efforts to keep
such Piggy-Back Registration continuously effective under the Securities Act
until the earlier of (A) an aggregate of 90 days after the effective date
thereof or (B) the consummation of the distribution by the Holders of all of the
Warrant Shares covered thereby.
(b) The Company shall use its reasonable efforts to cause the managing
underwriter or underwriters of such proposed offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
in the same terms and conditions as any similar securities of the Company or any
other security holder included therein and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to these provisions by giving written notice to
the Company of its request to withdraw prior to the effective date of such
registration statement. The Company may withdraw a Piggy-Back Registration at
any time prior to the time it becomes effective or the Company may elect to
delay the registration; provided, however, that the Company shall give prompt
-------- -------
written notice thereof to participating Holders.
(c) The Company will pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this Section 6 and
the Selling Holders shall pay the underwriting discounts, commissions, and
transfer taxes, if any, relating to the sale of such Selling Holders'
Registrable Securities pursuant to this Section 6, such costs being allocated
pro rata among all Selling Holders on whose behalf Registrable Securities of the
--- ----
Company are included in such registration on the basis of the respective amounts
of Registrable Securities then being registered on their behalf.
11
(d) Priority in Piggy-Back Registrations. If a registration pursuant
------------------------------------
to this Section 6 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, the Company
will, if requested by any Holder and subject to the provisions of this Section
6, use its reasonable efforts to arrange for such underwriters to include all
the Registrable Securities to be offered and sold by such Holder among the
securities to be distributed by such underwriters. Notwithstanding anything to
the contrary, if the managing underwriter of such underwritten offering shall,
in writing, inform the Holders requesting such registration and the holders of
any of the Company's other securities which shall have exercised registration
rights in respect of such underwritten offering of its belief that the number of
securities requested to be included in such registration exceeds the number
which can be sold in (or during the time of) such offering, then the Company
will be required to include in such registration statement only the amount of
securities that it is so advised should be included in such registration. In
such event, (x) in cases initially involving the registration for sale of
securities for the Company's own account, securities shall be registered in such
offering in the following order of priority: (i) first, the securities that the
Company proposes to register, and (ii) second, the securities that have been
requested to be included in such registration by Holders and by Persons entitled
to exercise "piggy-back" registration rights pursuant to contractual commitments
of the Company (pro rata on the amount of securities sought to be registered by
--- ----
such Holders and Persons) and (y) in cases not initially involving the
registration for sale of securities for the Company's own account, securities
shall be registered in such offering as follows: (i) first, the securities of
any person whose exercise of a "demand" registration right pursuant to a
contractual commitment of the Company is the basis for the registration
(provided that if such person is a Holder, there shall be no priority as among
Holders and Warrant Shares sought to be included by Holders shall be included
pro rata based on the amount of securities sought to be registered by such
--- ----
persons), (ii) second, the securities that have been requested to be included in
such registration by Holders and other persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments (pro rata based on the
--- ----
amount of securities sought to be registered by such Holders and persons) and
(iii) third, the securities which the Company proposes to register.
SECTION 7. LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS.
The obligations of the Company described in Sections 5 and 6 of this
Agreement are subject to each of the following limitations, conditions and
qualifications:
(a) The Company shall not be required to file a Registration Statement
pursuant to a request for a Demand Registration if the Company has in effect a
shelf registration statement which is available to the Holders.
(b) Subject to the next sentence of this paragraph, the Company shall
be entitled to postpone, for a reasonable period of time, the filing of
effectiveness of, or suspend the rights of any Holder to make sales pursuant to,
any Registration Statement otherwise required to be prepared, filed and made and
kept effective by it under the registration covenants described in Section 5
hereof; provided, however, that the duration of such postponement or suspension
may not exceed the earlier to occur of (A) 30 days after the cessation of the
circumstances described in the next sentence of this paragraph on which such
postponement or suspension is based or (B) 120 days after the date of the
determination of the Board of Directors of the Company referred to in the next
sentence, and the duration of such postponement or suspension shall be excluded
from the calculation of the 90-day period described in Section 5(d) hereof. Such
postponement or suspension may only be effected if the Board of Directors of
12
the Company determines in good faith that the filing or effectiveness of, or
sales pursuant to, such registration statement would materially impede, delay or
interfere with any financing, offer or sale of securities, acquisition,
corporate reorganization or other significant transaction involving the Company
or any of its affiliates (whether or not planned, proposed or authorized prior
to the exercise of demand registration rights hereunder or any other
registration rights agreement) or require disclosure of material information
which the Company has a bona fide business purpose for preserving as
confidential. If the Company shall so postpone the filing or effectiveness of,
or suspend the rights of any Holders to make sales pursuant to, a Registration
Statement it shall, as promptly as possible, notify any Selling Holders of such
determination, and the Selling Holders shall (y) have the right, in the case of
a postponement of the filing or effectiveness of a Registration Statement, upon
the affirmation vote of the Selling Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement, to
withdraw the request for registration by giving written notice to the Company
within 10 days after receipt of such notice, or (z) in the case of a suspension
of the right to make sales, receive an extension of the registration period
equal to the number of days of the suspension. Any Demand Registration as to
which the withdrawal election referred to in the preceding sentence has been
effected shall not be counted for purposes of the two Demand Registrations
referred to in Section 5(d) hereof.
(c) The Company shall not be required by this Agreement to include
securities in a Registration Statement relating to a Piggy-back Registration
above if (i) in the written opinion of counsel to the Company, addressed to the
Holders seeking registration and delivered to them, the Holders of such
securities seeking registration would be free to sell all such securities within
the succeeding three-month period, without registration, under Rule 144 under
the Securities Act, which opinion may be based in part upon the representation
by the Holders of such securities seeking registration, which registration shall
not be unreasonably withheld, that each such Holder is not an affiliate of the
Company within the meaning of the Securities Act, and (ii) all requirements
under the Securities Act for effecting such sales are satisfied at such time.
(d) The Company's obligations shall be subject to the obligations of
the Selling Holders to furnish all information and materials and not to take any
and all actions as may be required under Federal and state securities laws and
regulations to permit the Company to comply with all applicable requirements of
the SEC and to obtain any acceleration of the effective date of such
Registration Statement.
(e) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant to this Agreement
unless such audit is requested by the underwriters with respect to such
registration.
SECTION 8. REGISTRATION EXPENSES.
The Company shall pay all Registration Expenses.
SECTION 9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims,
13
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder or any prospective purchaser of
Registrable Securities, or caused by 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, except (i) insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the Holders
or (ii) to the extent that any such losses, claims, damages, liabilities or
judgments result solely from an untrue statement of a material fact contained
in, or the omission of a material fact from the Registration Statement or
Prospectus, which untrue statement or omission was corrected in an amended or
supplemented Registration Statement or Prospectus, if the person alleging such
loss, claim, damage, liability or judgment was not sent or given, at or prior to
the written confirmation of such sale, a copy of the amended or supplemented
Registration Statement or Prospectus if the Company had previously furnished
copies thereof to such indemnified party and if delivery of a prospectus was
required by the Securities Act and was not so made.
(b) Each Holder of Registrable Securities agrees, severally and not
jointly, to indemnify and hold harmless the Company, and its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company set forth in section (a) above, but
only with reference to information relating to such Holder furnished in writing
to the Company by such Holder expressly for use in any Registration Statement.
In no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Registrable Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Registrable Securities and (ii) the amount
of any damages that such Holder, its directors, officers or any Person who
controls such Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a) or 9(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
-----------------
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
-------------------
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 9(a) and 9(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 9(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any 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 at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the
14
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, 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 and all such fees and expenses shall be
reimbursed as they are incurred upon written request and presentation of
reasonably satisfactory invoices. Such firm shall be designated in writing by
all indemnified Holders, in the case of the parties indemnified pursuant to
Section 9(a), and by the Company, in the case of parties indemnified pursuant to
Section 9(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty Business Days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 9 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Holders, on the other hand, from their sale of Registrable
Securities or (ii) if the allocation provided by clause 9(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 9(d)(i) above but also the relative
fault of the Company, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holder, on the other hand, 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 Company, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include, subject
to the limitations set forth in the second paragraph of Section 9(a), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments
15
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any matter, including any action that could have given rise to such
losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 9, no Holder, its directors, its officers or any
Person, if any, who controls such Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of Registrable Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Registrable Securities and (ii) the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 9(c) are several in proportion to the respective principal amount of
Registrable Securities held by each Holder hereunder and not joint.
SECTION 10. RULE 144A AND RULE 144.
The Company agrees with each Holder, for so long as any Registrable
Securities remain outstanding and during any period in which the Company (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Registrable
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.
SECTION 11. DRAG-ALONG RIGHTS.
(a) If Capricorn approves or authorizes a sale or exchange, whether
directly or pursuant to a merger, consolidation or otherwise (the "COMPANY
-------
SALE"), of at least a majority of the then outstanding Common Stock in a bona
fide arm's-length transaction to a third party that is not an Affiliate of
Capricorn or of the Company (an "INDEPENDENT THIRD PARTY"), then Capricorn shall
-----------------------
have the right, subject to all the provisions of this Section 11 (the "DRAG-
----
ALONG RIGHT"), to require each of the Holders to (i) if such Company Sale is
-----------
structured as a sale of stock, sell, transfer and deliver or cause to be sold,
transferred and delivered to such Independent Third Party all Warrants and
Warrant Shares owned by them; provided, however, that if Capricorn agrees to
-------- -------
sell less than all (the "AMOUNT") of its shares of Common Stock to such
------
Independent Third Party, each of the other Holders shall only be required to
sell, transfer and deliver to such Independent Third Party an amount of Warrants
and Warrant Shares equal to the Warrants and Warrant Shares owned by it
multiplied by a fraction the numerator of which is the Amount and the
denominator of which is the total amount of shares of Common Stock owned by
Capricorn or (ii) if such Company Sale is structured as a merger, consolidation
or other transaction requiring the consent or approval of the Company's
shareholders, vote such Holder's Warrant Shares in favor thereof, and otherwise
consent to and raise no objection to such transaction, and waive any dissenters'
rights, appraisal rights or similar rights that such Holder may have in
connection therewith; and, in any such event, except to the extent otherwise
provided in subsection (c) of this Section 11, each such Holder shall agree to
and shall be bound by the same terms, provisions and conditions (including,
16
without limitation, provisions in respect of indemnification) in respect of the
Company Sale as are applicable to Capricorn.
(b) If Capricorn desires to exercise Drag-Along Rights, it shall give
written notice to the Holders (the "DRAG-ALONG NOTICE") of the Company Sale,
-----------------
setting forth the name and address of the transferee, the date on which such
transaction is proposed to be consummated (which shall be not less than 30 days
after the date such Drag-Along Notice is given), and the proposed amount and
form of consideration and terms and conditions of payment offered by such
transferee, including, without limitation, the material terms of any debt or
equity securities proposed to be included as part of such consideration,
identifying the issuer or issuers thereof. If such consideration includes any
non-cash consideration, such notice shall also state the fair market value of
such non-cash consideration and shall describe in reasonable detail the method
by which such value shall have been determined.
(c) The obligations of the Holders in respect of a Company Sale under
this Section 11 are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Company Sale, the same form of consideration
and the same portion of the aggregate consideration realized upon such Company
Sale shall be paid or distributed in respect of each share of Common Stock then
issued and outstanding (except as contemplated by the proviso to Section 11 (a)
hereof); (ii) if any Holder is given an option as to the form and amount of
consideration to be received, each Holder will be given the same option; (iii)
each Holder will be given a reasonable opportunity to exercise its Warrants
prior to the consummation of the Company Sale and thereby to participate in the
sale as a holder of such Common Stock; (iv) the maximum liability of any Holder
for indemnification in respect of all matters arising pursuant to or in
connection with the Company Sale shall not exceed the net proceeds received by
such Holder from such Company Sale; and (v) no Holder shall be required to make
general representations or warranties regarding the financial condition,
business, assets or affairs of the Company and its Subsidiaries.
SECTION 12. TAG-ALONG RIGHTS.
(a) Notwithstanding anything in this Agreement to the contrary, except
in the case of (i) transfers by Capricorn to a Permitted Transferee referred to
in Section 3.3(a) of the Stockholders' Agreement, (ii) transactions where Drag-
Along Rights are exercised pursuant to Section 11 hereof and (iii) sales
pursuant to Section 5 of the Stockholders' Agreement, Capricorn shall refrain
from effecting any transfer or sale of the Common Stock unless, prior to the
consummation thereof, the Holders shall have been afforded the opportunity to
join in such sale on the basis provided for in this Section 12.
(b) Prior to consummation of the proposed transfer by Capricorn
referred to in Section 12(a) above, Capricorn shall cause the person or group
that proposes to acquire such shares (the "PROPOSED PURCHASER") to offer in
------------------
writing (the "PURCHASE OFFER") to purchase shares of Common Stock owned by the
--------------
Holders, such that the number of Warrants and Warrant Shares so offered to be
purchased from the Holders shall be equal to the product obtained by multiplying
the aggregate number of shares of Common Stock proposed to be purchased by the
Proposed Purchaser by such Holder's Pro Rata Portion. If the Purchase Offer is
accepted by any Holder, then the number of shares of Common Stock to be sold to
the Proposed Purchaser by Capricorn, shall be reduced by the aggregate number of
shares of Common Stock to be purchased by the Proposed Purchaser from such
Holders pursuant thereto. Such purchase shall be made on the same terms and
conditions as the Proposed Purchaser shall have offered to purchase shares of
Common Stock to be sold by Capricorn (net, in the case of any options, warrants
or rights, of any amounts required to be paid by the Holder upon exercise
thereof). The Holders shall have 20 days
17
from the date of receipt of the Purchase Offer during which to accept such
Purchase Offer, and the closing of such purchase shall occur within 30 days
after such acceptance or at such other time as the Holders and the Proposed
Purchaser may agree.
SECTION 13. MISCELLANEOUS.
(a) Remedies. The Company acknowledges and agrees that any failure by
--------
the Company to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the any Holder may obtain
such relief as may be required to specifically enforce the Company's obligations
under Section 3 hereof. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
--------------------------
date of this Agreement enter into or amend any agreement with respect to its
securities that conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company has not previously entered into any agreement granting any
registration rights of its securities to any Person except for the Registration
Rights Agreement relating to the Notes by and between the Company and the
Initial Purchaser. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any other agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
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be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless (i) in the case of Section 4
hereof and this Section 11(c)(i), the Company has obtained the written consent
of Holders of all of the outstanding Registrable Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
Holders of a majority of the outstanding principal amount of Registrable
Securities (excluding Registrable Securities held by the Company or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not affect directly or indirectly the
rights of other Holders whose Registrable Securities are not being sold pursuant
to a Registration Statement may be given by the Holders of at least a majority
of the Registrable Securities being sold.
(d) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
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(ii) if to the Company:
▇▇▇. ▇▇▇▇▇▇' Holding Company, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in the Warrant Agreement.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms hereof or of the Purchase Agreement or the Warrant Agreement. If
any transferee of any Holder shall acquire Registrable Securities in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity,
19
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
[Signature Page Follows]
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC.
By: ______________________________
Name:
Title:
CAPRICORN INVESTORS II, L.P.,
with respect to Sections 11 and 12 of this
Agreement
By Capricorn Holdings L.L.C.,
General Partner
By: _______________________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By: ___________________________
Name:
Title:
BT ALEX. ▇▇▇▇▇ INCORPORATED
By: ___________________________
Name:
Title:
ANNEX A
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STOCKHOLDERS' AGREEMENT