REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 21, 1996, between
Consolidated Cigar Holdings Inc., a Delaware corporation (the "Company"), and
Mafco Consolidated Group Inc., a Delaware corporation ("MCG").
WHEREAS, as of the date of this Agreement, MCG owns 24,600,000
shares of the Company's Class B Common Stock, par value $0.01 per share (the
"Class B Common Stock");
WHEREAS, the Company is consummating on the date hereof underwritten
public offerings (the "Offerings") of 6,075,000 shares of the Company's Class A
Common Stock, par value $0.01 per share (the "Class A Common Stock" and together
with the Company's Class B Common Stock, the "Common Stock"); and
WHEREAS, the Board of Directors of the Company has authorized the
officers of the Company to execute and deliver this Agreement in the name and on
behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties to this Agreement hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Holder" means MCG and any other person that owns Registrable
Securities, including their respective successors and assigns who acquire
Registrable Securities, directly or indirectly, from MCG or such other person.
For purposes of this Agreement, the Company may deem and treat the registered
holder of a Registrable Security as the Holder and absolute owner thereof, and
the Company shall not be affected by any notice to the contrary.
"Registrable Securities" means (a) the Class A Common Stock issuable
upon the conversion of the Class B Common Stock owned by MCG upon the completion
of the Offerings, (b) any Class A Common Stock acquired by MCG in the open
market at a time when MCG is deemed to be an Affiliate (as such term is defined
under Rule 144 under the Securities Act) of the Company so long as (i) such
Common Stock has not been transferred by MCG to a person that is not a Permitted
Transferee (as such term is defined in the Certificate of Incorporation of the
Company) and (ii) MCG or such Permitted Transferee continues to be deemed an
Affiliate of the Company, and (c) any securities issued or issuable in respect
of the Class A Common Stock or Class B Common Stock referred to in clauses (a)
and (b) above, by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, reclassification, merger or
consolidation, and any other securities issued pursuant to any other pro rata
distribution with respect to such Common Stock. For purposes of this Agreement,
a Registrable Security ceases to be a Registrable Security when (x) it has been
effectively registered under the Securities Act and sold or distributed to the
public in accordance with an effective registration statement covering it (and
has not been reacquired in the manner described in clause (b) above), or (y) it
is sold or distributed to the public pursuant to Rule 144 (or any successor or
similar provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
2. Demand Registration. (a) Subject to Section 5 hereof, if at any
time any Holder shall request the Company in writing to register under the
Securities Act all or a part of the Registrable Securities held by such Holder
(a "Demand Registration"), the Company shall use all reasonable efforts to cause
to be filed and declared effective as soon as reasonably practicable (but in no
event later than the 45th day after such Holder's request is made) a
registration statement, on such appropriate form as the Company in its
discretion shall determine, providing for the sale of all such Registrable
Securities by such Holder. The Company agrees to use its
2
reasonable efforts to keep any such registration statement continuously
effective and usable for resale of Registrable Securities for so long as the
Holder whose Registrable Securities are included therein shall request. The
Company shall be obligated to file registration statements pursuant to this
Section 2(a) until all Registrable Securities have ceased to be Registrable
Securities. Each registration statement filed pursuant to this Section 2(a) is
hereinafter referred to as a "Demand Registration Statement."
(b) The Company agrees (i) not to effect any public or private sale,
distribution or purchase of any of its securities which are the same as or
similar to the Registrable Securities, including a sale pursuant to Regulation D
under the Securities Act, during the 15-day period prior to, and during the
45-day period beginning on, the closing date of each underwritten offering under
any Demand Registration Statement, and (ii) to use reasonable efforts to cause
each holder of its securities purchased from the Company, at any time on or
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.
(c) The Company may postpone for a reasonable period of time, not to
exceed 30 days, the filing or the effectiveness of any Demand Registration
Statement if the Board of Directors of the Company in good faith determines that
(A) such registration might have a material adverse effect on any plan or
proposal by the Company with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction, or (B) the
Company is in possession of material non-public information that, if publicly
disclosed, could result in a material disruption of a major corporate
development or transaction then pending or in progress or in other material
adverse consequences to the Company.
(d) If at any time any Holder of Registrable Securities to be
covered by a Demand Registration Statement desires to sell Registrable
Securities in an underwritten offering, such Holder shall have the right to
select any nationally recognized investment banking firm(s) to administer the
offering, subject to the ap-
3
proval of the Company, which approval shall not be unreasonably withheld, and
the Company shall enter into underwriting agreements with the underwriter(s) of
such offering, which agreements shall contain such representations and
warranties by the Company, and such other terms, conditions and indemnities as
are at the time customarily contained in underwriting agreements for similar
offerings.
3. Incidental Registration. Subject to Section 5 hereof and the
other terms and conditions set forth in this Section 3, if the Company proposes
at any time to register any shares of Class A Common Stock (the "Initially
Proposed Shares") under the Securities Act for sale, whether or not for its own
account, pursuant to an underwritten offering, the Company will promptly give
written notice to the Holders of its intention to effect such registration (such
notice to specify, among other things, the proposed offering price, the kind and
number of securities proposed to be registered and the distribution
arrangements, including identification of the underwriter(s)), and the Holders
shall be entitled to include in such registration statement, as a part of such
underwritten offering, such number of shares (the "Holder Shares") to be sold
for the account of the Holders (on the same terms and conditions as the
Initially Proposed Shares) as shall be specified in a request in writing
delivered to the Company within 15 days after the date upon which the Company
gave the aforementioned notice.
The Company's obligations to include Holder Shares in a registration
statement pursuant to this Section 3 is subject to each of the following
limitations, conditions and qualifications:
i) If, at any time after giving written notice of its
intention to effect a registration of any of its shares of Common Stock
and prior to the effective date of any registration statement filed in
connection with such registration, the Company shall determine for any
reason not to register all of such shares, the Company may, at its
election, give written notice of such determination to the Holders and
thereupon it shall be relieved of its obligation to use any efforts to
register any Holder Shares in connection with such aborted registration.
4
ii) If, in the opinion of the managing underwriter(s) of such
offering, the distribution of all or a specified portion of the Holder
Shares would materially interfere with the registration and sale, in
accordance with the intended method thereof, of the Initially Proposed
Shares, then the number of Holder Shares to be included in such
registration statement shall be reduced to such number, if any, that, in
the opinion of such managing underwriter(s), can be included without such
interference. If, as a result of the cutback provisions of the preceding
sentence, the Holders are not entitled to include all of the Holder Shares
in such registration, such Holders may elect to withdraw their request to
include Holder Shares in such registration (a "Withdrawal Election").
If the Company shall so request in writing, each Holder agrees not
to effect any public or private sale or distribution of any Registrable
Securities (other than the Holder Shares) during the 15-day period prior to and
during the 45-day period beginning on, the closing date of any underwritten
public offering of shares of Common Stock made for the Company's own account.
4. Registration Procedures. (a) Whenever the Company is required to
use all reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to the terms and conditions of
Section 2(a) or 3 (such Registrable Securities being hereinafter referred to as
"Subject Shares"), the Company will use all reasonable efforts to effect the
registration and sale of the Subject Shares in accordance with the intended
method of disposition thereof. Without limiting the generality of the foregoing,
the Company will as soon as practicable:
i) prepare and file with the SEC a registration statement with
respect to the Subject Shares in form and substance satisfactory to the
Holders of the Subject Shares, and use all reasonable efforts to cause
such registration statement to become effective as soon as possible;
5
ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the applicable period and to comply with the
provisions of the Securities Act with respect to the disposition of all
Subject Shares and other securities covered by such registration
statement;
iii) furnish the Holders covered by such registration
statement, without charge, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus), such documents incorporated by reference in such
registration statement or prospectus, and such other documents, as such
Holders may reasonably request;
iv) use all reasonable efforts to register or qualify the
Subject Shares covered by such registration statement under the securities
or blue sky laws of such jurisdictions as the managing underwriter(s)
shall reasonably recommend, and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of the Subject Shares
covered by such registration statement, except that the Company shall not
for any such purpose be required to (A) qualify generally to do business
as a foreign corporation in any jurisdiction wherein it is not so
qualified, (B) subject itself to taxation in any jurisdiction wherein it
is not so subject, or (C) consent to general service of process in any
such jurisdiction or otherwise take any action that would subject it to
the general jurisdiction of the courts of any jurisdiction in which it is
not so subject;
v) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC;
6
vi) furnish, at the Company's expense, unlegended certificates
representing ownership of the securities being sold in such denominations
as shall be requested and instruct the transfer agent to release any stop
transfer orders with respect to the Subject Shares being sold;
vii) notify each Holder at any time when a prospectus relating
to the Subject Shares is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included
in such registration statement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein (in the case of the prospectus or any preliminary prospectus, in
light of the circumstances under which they were made) not misleading, and
the Company will, as promptly as practicable thereafter, prepare and file
with the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of Subject Shares such
prospectus will not contain any 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;
viii) enter into customary agreements (including an
underwriting agreement in customary form in the case of an underwritten
offering) and make such representations and warranties to the sellers and
underwriter(s) as in form and substance and scope are customarily made by
issuers to underwriters in underwritten offerings and take such other
actions as the Holders or the managing underwriter(s) or agent, if any,
reasonably require in order to expedite or facilitate the disposition of
such Subject Shares;
ix) make available for inspection by the Holders, any
underwriter or agent participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other similar
professional advisor retained by any such holders or underwriter
(collectively the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the Company
7
(collectively, the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such
registration statement. The Holders agree that Records and other
information which the Company determines, in good faith, to be
confidential and of which determination the Inspectors are so notified
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement, (ii) the release of such Records is ordered
pursuant to a subpoena, court order or regulatory or agency request or
(iii) the information in such Records has been generally disseminated to
the public. Each Holder agrees that it will, upon learning that disclosure
of such Record is sought in a court of competent jurisdiction or by a
governmental agency, give notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
x) obtain for delivery to the Company, the underwriter(s) or
their agent, with copies to the Holders, a "cold comfort" letter from the
Company's independent public accountants in customary form and covering
such matters of the type customarily covered by "cold comfort" letters as
the Holders or the managing underwriter(s) reasonably request;
xi) obtain for delivery to the Holders and the underwriter(s)
or their agent an opinion or opinions from counsel for the Company in
customary form and reasonably satisfactory to the Holder, underwriters or
agents and their counsel;
xii) make available to its security holders earnings
statements, which need not be audited, satisfying the provisions of
Section 11(a) of the Securities Act no later than 90 days after the end of
the 12-month period beginning with the first month of the Company's
first quarter commencing after the effective date of the registration
state-
8
ment, which earnings statements shall cover said 12-month period;
xiii) make every reasonable effort to prevent the issuance of
any stop order suspending the effectiveness of the registration statement
or of any order preventing or suspending the effectiveness of such
registration statement at the earliest possible moment;
xiv) cause the Subject Shares to be registered with or
approved by such other governmental agencies or authorities within the
United States as may be necessary to enable the sellers thereof or the
underwriters(s), if any, to consummate the disposition of such Subject
Shares;
xv) cooperate with the Holders and the managing
underwriter(s), if any, or any other interested party (including any
interested broker-dealer) in making any filings or submission required to
be made, and the furnishing of all appropriate information in connection
therewith, with the National Association of Securities Dealers, Inc.
("NASD");
xvi) cause its subsidiaries to take action necessary to effect
the registration of the Subject Shares contemplated hereby, including
filing any required financial information;
xvii) effect the listing of the Subject Shares on the New York
Stock Exchange or such other national securities exchange or
over-the-counter market on which shares of the Class A Common Stock shall
then be listed; and
(xviii) take all other steps necessary to effect the
registration of the Subject Shares contemplated hereby.
(b) The Holders shall provide (in writing and signed by the
Holders and stated to be specifically for use in the related registration
statement, preliminary prospectus, prospectus or other document incident
thereto) all such information and materials and take all such action as may be
required in order to permit the Company to comply with all applicable
requirements of the
9
SEC and any applicable state securities laws and to obtain any desired
acceleration of the effective date of any registration statement prepared and
filed by the Company pursuant to this Agreement.
(c) The Holders shall, if requested by the Company or the
managing underwriter(s) in connection with any proposed registration and
distribution pursuant to this Agreement, (i) agree to sell the Subject Shares on
the basis provided in any underwriting arrangements entered into in connection
therewith and (ii) complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents customary in similar
offerings.
(d) Upon receipt of any notice from the Company that the
Company has become aware that the prospectus (including any preliminary
prospectus) included in any registration statement filed pursuant to Section
2(a) or Section 3, as then in effect, contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, the Holders shall
forthwith discontinue disposition of Subject Shares pursuant to the registration
statement covering the same until the Holders' receipt of copies of a
supplemented or amended prospectus and, if so directed by the Company, deliver
to the Company (at the Company's expense) all copies other than permanent file
copies then in the Holder's possession, of the prospectus covering the Subject
Shares that was in effect prior to such amendment or supplement.
(e) The Company shall pay all out-of-pocket expenses incurred
in connection with any registration statement filed pursuant to Section 2(a) or
Section 3 of this Agreement, including, without limitation, all SEC and blue sky
registration and filing fees (including NASD fees), printing expenses, transfer
agents and registrars' fees, fees and disbursements of the Company's counsel and
accountants and fees and disbursements of experts used by the Company in
connection with such registration statement. Notwithstanding the foregoing, the
Holders shall pay all underwriting discounts, commissions and expenses
attributable to the Subject Shares sold pursuant to any such registration
statement.
10
(f) In connection with any sale of Subject Shares that are
registered pursuant to this Agreement, the Company and the Holders shall enter
into an agreement providing for indemnification of the Holders by the Company,
and indemnification of the Company by the Holders, on terms customary for such
agreements at that time (it being understood that any disputes arising as to
what is customary shall be resolved by counsel to the underwriter(s)).
5. Condition to Company's Obligations. Notwithstanding any other
provision in this Agreement to the contrary, the Company shall have no
obligation to effect any registration of Registrable Securities pursuant to this
Agreement within 180 days of the date of the prospectus for the Offerings,
unless ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall have given its prior written consent to such
filing.
6. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or delivery by telex (with correct answerback received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the third business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications
shall be:
If to the Company, to:
Consolidated Cigar Holdings Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11
If to MCG, to:
General Counsel
MacAndrews & Forbes Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other Holder, to such name at such address as such Holder
shall have indicated in a written notice delivered to the other
parties to this Agreement.
Any party hereto may from time to time change its address for notices under this
Section 6 by giving at least 10 days' notice of such changes to the other
parties hereto.
7. Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement hereof shall be deemed to be a
continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
8. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
9. Successors and Assigns; Amendments. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns, including without limitation and without the need for an express
assignment each subsequent Holder of any Registrable Securities. Except as
provided in this Section 9, neither the Company nor any Holder shall assign this
Agreement or any rights hereunder without the prior written consent of the other
parties hereto. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party hereunder. This
Agreement may not be amended except by a written instrument executed by the
parties hereto.
12
10. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
without regard to the principles of conflicts of laws.
12. Entire Agreement. This Agreement contains the entire agreement
of the parties hereto in respect of the subject matter hereof and supersedes all
prior agreements and understandings between the parties with respect to the
subject matter hereof.
13. Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date hereof.
CONSOLIDATED CIGAR HOLDINGS INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and
Secretary
MAFCO CONSOLIDATED GROUP INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
14
