Exhibit 10.9
Execution Copy
REGISTRATION RIGHTS AGREEMENT FOR COMMON STOCK
This Registration Rights Agreement for Common Stock (the "Agreement")
is made and entered into March 14, 2001, by and among Delco Remy International,
Inc., a Delaware corporation (the "Company"), Court Square Capital Limited, a
Delaware corporation ("Court Square"), World Equity Partners, L.P., a Delaware
limited partnership ("WEP"), DRI Group LLC, a Delaware limited liability company
("DRI Group"), and the management investors (the "Management Investors") and the
continuing investors ("Continuing Investors" and together with the Management
Investors, the "Individual Investors") listed on the signature pages hereto.
Court Square, DRI Group, WEP and the Individual Investors are sometimes referred
to herein collectively as the "Investors" and each individually as the
"Investor".
This Agreement is made pursuant to the Securities Transfer,
Recapitalization and Holders Agreement (as hereinafter defined). In order to
induce the Investors to enter into the Securities Transfer, Recapitalization and
Holders Agreement, the Company has agreed to provide the registration rights set
forth in this Agreement.
The parties hereby agree as follows:
1. Definitions.
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As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Class A Common Stock" means the shares of Class A Common Stock, par
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value $.001 per share, of the Company in existence at or after the Effective
Time.
"Class B Common Stock" means the shares of Class B Common Stock, par
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value $.001 per share, of the Company in existence at or after the Effective
Time.
"Class C Common Stock" means the shares of Class C Common Stock, par
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value $.001 per share, of the Company in existence at or after the Effective
Time.
"Commission" means the Securities and Exchange Commission.
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"Closing Date" means the date of this Agreement.
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"Common Stock" means the Class B Common Stock, including shares of
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Class B Common Stock issuable (i) upon the conversion of (A) shares of Class A
Common Stock, (B) shares of Class C Common Stock and (C) shares of Series A
Preferred Stock and (ii) upon the exercise of the Warrant, and as adjusted for
any stock dividend or distribution payable thereon or stock split, reverse stock
split, recapitalization, reclassification, reorganization, exchange, subdivision
or combination thereof.
"Court Square Associate" means any Permitted Transferee (as defined in
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the Securities Transfer, Recapitalization and Holders Agreement) of Court
Square.
"Demand Registration" has the meaning set forth in Section 4(a) of
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this Agreement.
"Effective Time" means the time upon which the Merger shall become
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effective under the terms of the Merger Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
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from time to time.
"Merger" means the merger of DRI Acquisition Corporation, a Delaware
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corporation, with and into the Company pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
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February 7, 2001, as amended, by and among Court Square, the Company and DRI
Acquisition LLC, a Delaware limited liability company.
"Person" means an individual, partnership, corporation, trust or
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unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Registration
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Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
"Registration Expenses" means the costs and expenses of all
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registrations and qualifications under the Securities Act, and of all other
actions the Company is required to take to effect the registration of
Registrable Securities under the Securities Act pursuant to this Agreement
(including all federal and state registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company and the fees and
expenses of the Company's independent public accountants (including the expenses
of any special audit and "cold comfort" letters required by or incident to such
registration)) other than the costs and expenses of any Investors whose
Registrable Securities are to be registered pursuant to this Agreement
comprising underwriters' commissions, brokerage fees, transfer taxes or the fees
and expenses of any accountants or other representatives retained by any
Investor.
"Registration Statement" means any registration statement of the
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Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"Registrable Securities" has the meaning set forth in Section 2 of
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this Agreement.
"Securities Act" means the Securities Act of 1933, as amended from
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time to time.
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"Securities Transfer, Recapitalization and Holders Agreement" means
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the Securities Transfer, Recapitalization and Holders Agreement dated March 14,
2001 among the Company, Court Square, WEP, DRI Group and the Individual
Investors.
"Series A Preferred Stock" means the shares of 12% Series A Cumulative
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Compounding Preferred Stock, par value $.01 per share, of the Company in
existence at or after the Effective Time.
"Special Registration Statement" means (i) a registration statement on
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Forms S-8 or S-4 or any similar or successor form or any other registration
statement relating to an exchange offer or an offering of securities solely to
the Company's employees or security holders or (ii) a registration statement
registering a Unit Offering.
"Unit Offering" means a public offering of a combination of debt and
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equity securities of the Company in which (i) not more than 10% of the gross
proceeds received for the sale of such securities is attributed to such equity
securities, and (ii) after giving effect to such offering, the Company does not
have a class of equity securities required to be registered under the Exchange
Act.
"underwritten registration or underwritten offering" means a
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registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
"Warrant" means the warrant exercisable for shares of Class B Common
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Stock and Series A Preferred Stock of the Company, issued pursuant to the
Warrant Agreement dated the date hereof between WEP and the Company (as
successor to DRI Acquisition Corporation).
2. Registrable Securities. The securities entitled to the benefits
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of this Agreement are the Registrable Securities. As used herein, "Registrable
Securities" means the shares of Common Stock that shall be issued (or issuable)
and outstanding at the Effective Time and the shares of Common Stock that become
issued and outstanding after the Effective Time upon the conversion or exchange
of any or all shares of Class A Common Stock, Class C Common Stock or Series A
Preferred Stock of the Company that shall be issued and outstanding at the
Effective Time, or upon the exercise of the Warrant; provided, however, that
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shares of Common Stock issued to Management Investors shall be deemed to be
Registrable Securities except to the extent that any such shares are then
subject to repurchase by the Company at the Adjusted Cost Price (as defined in
the Securities Transfer, Recapitalization and Holders Agreement) pursuant to
Section 6.3 of the Securities Transfer, Recapitalization and Holders Agreement;
and provided, further, that each such share of Common Stock shall cease to be a
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Registrable Security when (i) it has been effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering it; (ii) it is distributed to the public pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act; or (iii) it has
otherwise been transferred and a new certificate or other evidence of ownership
for it not bearing a legend as set forth in Section 3.2 of the Securities
Transfer, Recapitalization and Holders Agreement (or other legend of similar
import) and not subject to any stop transfer order has been delivered by or on
behalf of the Company and no other restriction on transfer exists under the
Securities Act.
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3. Incidental Registration.
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(a) Right to Include Common Stock. If at any time or from time to
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time following the date which is six months after the Company has registered its
Common Stock pursuant to Section 12 of the Exchange Act, the Company at any time
proposes to register any of its Common Stock under the Securities Act (other
than on a Special Registration Statement), whether or not for sale for its own
account, it will each such time give prompt written notice to holders of
Registrable Securities of such proposed registration and of such holders' rights
under this Section 3. Upon the written request of any such holders of
Registrable Securities made within fifteen (15) days after the receipt of the
Company's notice (which request shall specify the intended method of disposition
thereof), the Company will effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the holders thereof (an "Incidental Registration"), to the extent required to
permit the public disposition (in accordance with such intended methods thereof)
of the Registrable Securities to be so registered; provided, that (i) if, any
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time after giving written notice of its intention to register shares of Common
Stock and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register the Company's Common Stock, the Company shall give written
notice of such determination to each holder of Registrable Securities and,
thereupon, 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); (ii) if a registration
requested pursuant to this Section 3 shall involve an underwritten public
offering, any holder of Registrable Securities requesting to be included in such
registration may elect, in writing at least 30 days prior to the effective date
of the registration statement filed in connection with such registration, not to
register such securities in connection with such registration; and (iii) if, at
any time after the 180-day or shorter period specified in Section 5(b), the sale
of the securities has not been completed, the Company may withdraw from the
registration on a pro rata basis (based on the number of Registrable Securities
requested by each holder of Registrable Securities to be so registered) the
Registrable Securities which the Company has been requested to register and
which have not been sold.
(b) Priority in Incidental Registrations. If a registration pursuant
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to Section 3(a) involves an underwritten offering and the managing underwriter
(or underwriters) advises the Company in writing that, in its opinion, the total
number of shares of Common Stock to be included in such registration, including
the Registrable Securities requested to be included pursuant to this Section 3,
exceeds the maximum number of shares of Common Stock specified by the managing
underwriter that may be distributed without adversely affecting the price,
timing or distribution of such shares of Common Stock, then the Company shall
include in such registration only such maximum number of Registrable Securities
which, in the opinion of such underwriter or underwriters, can be sold in the
following order of priority: (i) first, all of the shares of Common Stock that
the Company proposes to sell for its own account, if any, (ii) second, all of
the shares of Common Stock being registered by holder(s) of Registrable
Securities pursuant to a Demand Registration (as hereinafter defined), and (iii)
third, the Registrable Securities of the holder(s) of Registrable Securities
requested to be included in such Incidental Registration. To the extent that
shares of Common Stock to be included in the Incidental Registration must be
allocated among the holder(s) of Registrable Securities pursuant to clause (iii)
above, such shares shall be allocated pro rata among the holder(s) of
Registrable
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Securities based on the number of shares of Common Stock that such holder(s) of
Registrable Securities shall have requested to be included therein; provided,
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however, that (other than with respect to holders of Registrable Securities that
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are entitled to make a Demand Registration Request (as hereinafter defined)) if
an Incidental Registration is an underwritten offering, the managing underwriter
or underwriters may select shares for inclusion in such Incidental Registration
on a basis other than a pro rata basis if, in the reasonable opinion of such
underwriter or underwriters, selection on such other basis would be material to
the success of the offering.
(c) Expenses. The Company will pay all Registration Expenses in
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connection with any registration of Registrable Securities requested pursuant to
this Section 3.
(d) Liability for Delay. The Company shall not be held
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responsible for any delay in the filing or processing of a registration
statement which includes any Registrable Securities due to requests by holders
of Registrable Securities pursuant to this Section 3 nor for any delay in
requesting the effectiveness of such registration statement if the Company
advises the holders of Registrable Securities participating in such registration
in writing that, in the opinion of its Board of Directors, such delay is
warranted by market conditions or business considerations.
(e) Participation in Underwritten Registrations. No holder of
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Registrable Securities may participate in any underwritten registration
hereunder unless such holder (i) agrees to sell his or its Common Stock on the
basis provided in any underwriting arrangements approved by the persons who have
selected the underwriter and (ii) accurately completes in a timely manner and
executes all questionnaires, powers of attorney, escrow agreements, underwriting
agreements and other documents customarily required under the terms of such
underwriting arrangements.
4. Demand Registration.
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(a) Right to Demand Registration. Subject to Section 4(b) below,
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Court Square, any Court Square Associate (so long as such Court Square Associate
holds at least 10% of the Common Stock) and WEP shall be entitled to make a
written request ("Demand Registration Request") to the Company for registration
with the Commission under and in accordance with the provisions of the
Securities Act of all or part of the Registrable Securities owned by it (a
"Demand Registration") (which Demand Registration Request shall specify the
intended number of Registrable Securities to be disposed of by such holder and
the intended method of disposition thereof); provided, that (i) the Company may,
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if the Board of Directors so determines in the exercise of its reasonable
judgment that due to a pending or contemplated acquisition or disposition or
public offering it would be inadvisable to effect such Demand Registration at
such time, defer such Demand Registration for a single period not to exceed 180
days, and (ii) if the Company elects not to effect the Demand Registration
pursuant to the terms of this sentence, no Demand Registration shall be deemed
to have occurred for purposes of this Agreement. The Company will serve written
notice (the "Notice") of such Demand Registration Request to all holders of
Registrable Securities promptly upon the filing of a registration statement
pursuant to a Demand Registration Request and, subject to paragraph (c) below,
the Company will include in such registration all Registrable Securities of such
holders with respect
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to which the Company has received written requests for inclusion therein from
such holders within fifteen (15) business days after the receipt by the
applicable holder of the Notice. All requests made pursuant to this paragraph
4(a) will specify the aggregate number of the Registrable Securities to be
registered and will also specify the intended methods of disposition thereof.
(b) Number of Demand Registrations. Court Square and any Court
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Square Associate shall be entitled to make one or more Demand Registration
Requests at any time and from time to time. WEP shall be entitled to make one
Demand Registration Request at any time after the fifth anniversary of the date
of this Agreement; provided that WEP shall have exercised the Warrant, in whole
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or in part, held by it and shall have purchased the shares of Common Stock for
which such Warrant was exercised in accordance with the terms thereof. A Demand
Registration shall not be counted as a Demand Registration hereunder until such
Demand Registration has been declared effective and maintained continuously
effective for a period of at least six months or such shorter period when all
Registrable Securities included therein have been sold in accordance with such
Demand Registration.
(c) Priority on Demand Registration. If any of the Registrable
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Securities proposed to be registered pursuant to a Demand Registration are to be
sold in a firm commitment underwritten offering and the managing underwriter or
underwriters of a Demand Registration advise the Company and the holders of such
Registrable Securities in writing that in its or their reasonable opinion the
number of shares of Common Stock proposed to be sold in such Demand Registration
exceeds the maximum number of shares specified by the managing underwriter that
may be distributed without adversely affecting the price, timing or distribution
of the Common Stock, the Company shall include in such registration only such
maximum number of Registrable Securities which, in the reasonable opinion of
such underwriter or underwriters can be sold in the following order of priority:
(i) first, the Registrable Securities requested to be included in such Demand
Registration held by the party requesting such Demand Registration; (ii) second,
shares of Common Stock to be offered by the Company in such Demand Registration;
and (iii) third, shares of Common Stock held by other holders requested to be
included in such Demand Registration, provided that such amount shall be
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allocated among such other holders on a pro rata basis based upon their
respective percentage of ownership of the total number of shares of Common Stock
then outstanding.
(d) Expenses. The Company will pay all Registration Expenses in
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connection with any registration of Registrable Securities requested pursuant to
this Section 4.
5. Registration Procedures. If and whenever the Company is required
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to effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously
as possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities, and use its best efforts
to cause such registration statement to become effective, provided, however,
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that the Company may discontinue any registration of its securities which is
being effected pursuant to Sections 3 or 4 herein at any time prior to the
effective date of the registration statement relating thereto;
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than 180 days or such shorter period which will terminate
when all Registrable Securities covered by such registration statement have been
sold (but not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) furnish to each seller of such Registrable Securities such
number of copies of such registration statement and of each such amendment and
supplement thereof (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 may
reasonably request in order to facilitate the disposition of the Registrable
Securities 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 each seller shall request, and do any and
all other acts and things which may be necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company shall not
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be required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject itself to general taxation in any jurisdiction where it is not then so
subject;
(e) immediately notify each seller of any Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act within the appropriate period
mentioned in clause (b) of this Section 5, of the Company becoming aware that
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and within ten
days prepare and furnish to all sellers a reasonable number of copies of an
amended or supplemental prospectus as may be necessary 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 to make the statements
therein not misleading in the light of the circumstances then existing;
(f) use its best efforts to list such Registrable Securities on
any securities exchange on which the Common Stock is then listed, if such
Registrable Securities are not already so listed and if such listing is then
permitted under the rules of such exchange, and provide an independent transfer
agent and registrar for such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
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(g) furnish to each seller of Registrable Securities covered by
such registration statement a signed counterpart, addressed to such seller (and
the underwriters, if any) of:
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if such
registration involves an underwritten public offering, dated the date
of the closing under the underwriting agreement), reasonably
satisfactory in form and substance to the sellers of not less than 50%
of such Registrable Securities (and the managing underwriter, if any);
and
(ii) a "comfort" letter, dated the effective date of such
registration statement (or, if such registration involves an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, covering such matters with respect to such
registration statement as are customarily covered in accountants'
letters delivered to the underwriters in underwritten offerings of
securities as may reasonably be requested by the sellers of not less
than 50% of such Registrable Securities (and the managing underwriter,
if any); and
(h) make available for inspection by any seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such seller or any such underwriter (individually, an "Inspector" and
collectively, the "Inspectors"), all pertinent financial and other records,
pertinent corporate documents and properties of the Company as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility (collectively, the "Records"), and cause all of the Company's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement; provided that any Records that are designated
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by the Company in writing as confidential shall be kept confidential by the
Inspectors unless (A) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such registration statement or (B) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or by any regulatory authority having
jurisdiction. Each Investor agrees that non-public information obtained by it as
a result of such Inspections shall be deemed confidential and acknowledges its
obligations under the Federal securities laws not to trade any securities of the
Company on the basis of material non-public information.
The Company may require each seller of Registrable Securities as to
which any registration is being effected promptly to furnish to the Company such
information regarding the distribution of such Registrable Securities as may be
legally required. Such information shall be furnished in writing and shall
state that it is being furnished for use in the registration statement.
Each holder of Registrable Securities 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 clause (e) of this Section 5,
such holder will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such
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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 the Company, such holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of the Company's notice. In the event the Company
shall give any such notice, the period mentioned 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 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.
To the extent not inconsistent with applicable law, each holder of
Registrable Securities whose Common Stock is included in a registration
statement hereunder, if requested by the managing underwriter or underwriters
for such registration, agrees not to effect any public sale or distribution of
Registrable Securities, including a sale pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, during the fifteen business
days prior to, and during the 180-day period (or such shorter period as may be
agreed to by such holders) beginning on, the effective date of a demand
registration statement.
6. Indemnification.
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(a) Indemnification by the Company. The Company hereby agrees to
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indemnify and hold harmless each holder of Registrable Securities which shall
have been registered under the Securities Act, and such holder's officers,
directors and agents and each other Person, if any, who controls such holder
within the meaning of the Securities Act and each other Person (including
underwriters) who participates in the offering of such Registrable Securities
against any losses, claims, damages, liabilities, reasonable attorneys' fees,
costs or expenses (collectively, the "Damages"), joint or several, to which such
holder or controlling Person or participating Person may become subject under
the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact made by the Company or its agents
contained in any registration statement under which such Registrable Securities
are registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereof, or
arise out of or are based upon 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, and will reimburse such holder of Registrable
Securities or such controlling Person or participating Person in connection with
investigating or defending any such Damages or proceeding; provided, however,
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that the Company will not be liable in any such case to the extent that any such
Damages arise out of or are based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by such
holder or such controlling or participating Person, as the case may be,
specifically for use in the preparation thereof; or (ii) an untrue statement or
alleged untrue statement, omission or alleged omission in a prospectus if such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the prospectus which amendment or
supplement is delivered to such holder in a timely manner and such holder
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thereafter fails to deliver such prospectus as so amended or supplemented prior
to or concurrently with the sale of such Registrable Securities to the Person
asserting such Damages.
(b) Indemnification by the Holders of Registrable Securities
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Which Are Registered. It shall be a condition of the Company's obligations under
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this Agreement to effect any registration under the Securities Act that there
shall have been delivered to the Company an agreement or agreements duly
executed by each holder of Registrable Securities to be so registered, whereby
such holder agrees to indemnify and hold harmless the Company, its directors,
officers and agents and each other Person, if any, which controls the Company
within the meaning of the Securities Act against any Damages, joint or several,
to which the Company, or such other Person or such Person controlling the
Company may become subject under the Securities Act or otherwise, but only to
the extent that such Damages (or proceedings in respect thereof) arise out of or
are based upon any untrue statements or alleged untrue statement of any material
fact contained, on the effective date thereof, in any registration statement
under which such Registrable Securities are registered under the Securities Act,
in any preliminary prospectus or final prospectus contained therein or in any
amendment or supplement thereto, or arise out of or are based upon 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, which, in
each such case, has been made in or omitted from such registration statement,
said preliminary or final prospectus or said amendment or supplement in reliance
upon, and in conformity with, written information furnished to the Company by
such holder of Registrable Securities specifically for use in the preparation
thereof. The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above, with
respect to information with to such Persons so furnished in writing by such
Persons specifically for inclusion in any prospectus or registration statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled
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to indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 6; and (ii) unless
the indemnified party has been advised by its counsel that a conflict of
interest may exist between such indemnified and indemnifying parties under
applicable standards of professional responsibility with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be subject to
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). No indemnifying party will consent to the 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 of such claim or
litigation; provided, however, that no indemnifying party will consent to the
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entry of any judgment or enter into any settlement (other than for the payment
of money only) without the consent of the indemnified party (which consent will
not be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of the claim, will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other such indemnified parties with respect to such
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claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification provided for
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in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in
respect of any Damages referred to therein, the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Damages in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action; provided, however, that in no event shall the liability of any
-------- -------
selling holder of Registrable Securities hereunder be greater in amount than the
difference between the dollar amount of the proceeds received by such holder
upon the sale of the Registrable Securities giving rise to such contribution
obligation and all amounts previously contributed by such holder with respect to
such Damages. 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 fraudulent misrepresentation.
7. Hold-Back Agreements.
--------------------
(a) Restrictions on Public Sale by Holder of Registrable
----------------------------------------------------
Securities. Each holder of Registrable Securities whose Registrable Securities
----------
are eligible for inclusion in a Registration Statement filed pursuant to
Sections 3 or 4 agrees, if requested by the managing underwriter or underwriters
in an underwritten offering of any Registrable Securities, not to effect any
public sale or distribution of Registrable Securities, including a sale pursuant
to Rule 144 (or any similar provision then in force) under the Securities Act
(except as part of such underwritten registration), during the 10-day period
prior to, and during the 180-day period (or such shorter period as may be agreed
to by the parties hereto) beginning on the effective date of such Registration
Statement, to the extent timely notified in writing by the Company or the
managing underwriter or underwriters.
The foregoing provisions shall not apply to any holder of Registrable
Securities if such holder is prevented by applicable statute or regulation from
entering into any such agreement; provided, however, that any such holder shall
undertake, in its request to participate in any such underwritten offering, not
to effect any public sale or distribution of Registrable Securities (except as
part of such underwritten registration) during such period unless it has
provided 45 days prior written notice of such sale or distribution to the
managing underwriter or underwriter.
(b) Restrictions on Public Sale by the Company and Others. The
-----------------------------------------------------
Company agrees (i) not to effect any public sale or distribution of any of its
Common Stock for its own account during the 10-day period prior to, and during
the 180-day period beginning on, the effective date of a Registration Statement
filed pursuant to Sections 3 or 4 (except as part of a
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Special Registration Statement), and (ii) use reasonable efforts to cause each
holder of Common Stock purchased from the Company at any time after the date of
this Agreement (other than in a registered public offering) to agree not to
effect any public sale or distribution of any such securities during such
period, including a sale pursuant to Rule 144 under the Securities Act (except
as part of such underwritten registration, if permitted).
8. Underwritten Registration.
-------------------------
If any of the Registrable Securities covered by any Incidental
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Company and, in the case of a Demand Registration,
approved by Court Square.
Notwithstanding anything herein to the contrary, no Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwritten arrangements approved by the Persons entitled hereunder to approve
such arrangement and (b) accurately completes and executes all questionnaires,
powers of attorney, indemnities, custody agreements, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
9. Termination of Prior Agreement. Upon consummation of the Merger,
------------------------------
each of the parties hereto agree and acknowledge that the Registration Rights
Agreement dated July 29, 1994 by and among the Company and the investors named
therein shall terminate and be of no further force and effect.
10. Miscellaneous.
-------------
(a) Amendment and Modification. This Agreement may be amended or
--------------------------
modified, or any provision hereof may be waived, provided that such amendment or
waiver is set forth in a writing executed by (i) the Company, (ii) the holders
of a majority of the Common Stock held by Court Square and its Permitted
Transferees (so long as Court Square and its Permitted Transferees own in the
aggregate at least 25% of the outstanding Common Stock on a fully diluted basis)
and (iii) in the case of any amendment which materially and adversely affects
any Investor differently from any other Investor, such Investor. No course of
dealing between or among any persons having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.
(b) Survival of Representations and Warranties. All
------------------------------------------
representations, warranties, covenants and agreements set forth in this
Agreement will survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by an Investor or on its behalf.
(c) Successors and Assigns; Entire Agreement. This Agreement and
----------------------------------------
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including a holder's Permitted Transferees in accordance with the Securities
Purchase and Holders Agreement) and executors, administrators and heirs. This
Agreement sets forth the entire agreement and understandings
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among the parties as to the subject matter hereof and merges and supersedes all
prior discussions and understandings of any and every nature among them.
(d) Separability. In the event that any provision of this
------------
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
(e) Notices. All notices provided for or permitted hereunder
-------
shall be made in writing by hand-delivery, registered or certified first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery to the
other party at the following addresses (or at such other address as shall be
given in writing by any party to the others):
If to the Company to:
Delco Remy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
Delco Remy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Court Square or DRI Group to:
Court Square Capital Limited
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to WEP, to:
World Equity Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to an Individual Investor, at the most current address given by
such Individual Investor to the Company in accordance with this
Section 10(e), which address initially is, with respect to each
Individual Investor, the address set forth under such Individual
Investor's name on the signature pages hereto.
All such notices shall be deemed to have been duly given: when
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.
(f) Governing Law. The validity, performance, construction and
-------------
effect of this Agreement shall be governed by and construed in accordance with
the internal law of Delaware, without giving effect to principles of conflicts
of law.
(g) Headings. The headings in this Agreement are for convenience
--------
of reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.
(h) Counterparts. This Agreement may be executed in two or more
------------
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 instrument.
(i) Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
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(j) Termination. Unless sooner terminated in accordance with its
-----------
terms, this Agreement shall terminate on the fifteenth anniversary of the date
of this Agreement; provided that the indemnification rights and obligations set
forth in Section 6 hereof shall survive the termination of this Agreement.
(k) Remedies. In the event of a breach or a threatened breach by
--------
any party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement, it being
agreed by the parties that the remedy at law, including monetary damages, for
breach of such provision will be inadequate compensation for any loss and that
any defense in any action for specific performance that a remedy at law would be
adequate is waived.
(l) Party No Longer Owning Securities. If a party hereto ceases
---------------------------------
to own any Securities, such party will no longer be deemed to be an Investor for
purposes of this Agreement; provided that the indemnification rights and
obligations set forth in Section 6 hereof shall survive any such cessation of
ownership.
(m) Pronouns. Whenever the context may require, any pronouns
--------
used herein shall be deemed also to include the corresponding neuter, masculine
or feminine forms.
(n) No Effect on Employment. Nothing herein contained shall
-----------------------
confer on any investor the right to remain in the employ of the Company or any
of its subsidiaries or Affiliates.
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DELCO REMY INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
COURT SQUARE CAPITAL LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
DRI GROUP LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Sole Manager and Member
WORLD EQUITY PARTNERS, L.P.
By:____________________________________
Its:___________________________________
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MANAGEMENT INVESTORS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ English
__________________________________________
▇▇▇▇▇▇▇▇ English
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
MANAGEMENT INVESTORS:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________________________
DAISY FARM LIMITED PARTNERSHIP
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
CONTINUING INVESTORS:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST DATED
MARCH 6, 1990
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇ ▇▇▇▇▇▇▇ LIVING TRUST DATED MARCH 6, 1990
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By:____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trustee