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Exhibit 10.43
WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement") dated as of February 5, 1997,
Anchor Glass Acquisition Corporation, a corporation incorporated under the laws
of the State of Delaware (with its successors, the "Company") and Bankers Trust
Company (the "Initial Holder").
W I T N E S S E T H:
WHEREAS, the Company, certain lenders from time to time party
thereto, and Bankers Trust Company, as agent for such lenders, are parties to a
Credit Agreement dated as of February 5, 1997 (as the same shall be modified,
amended and supplemented and in effect from time to time, the "Credit
Agreement");
WHEREAS, as an inducement to Bankers Trust Company to have entered
into the Credit Agreement, the Company had agreed to issue the Warrants (as
hereinafter defined) to the Initial Holder upon the occurrence of certain
events;
WHEREAS, the Company has authorized the issuance of the Warrants
which are exercisable, pursuant to the terms and conditions thereof, for Class C
Common Stock (as hereinafter defined) of the Company during the Initial Period
and Class A Common Stock (as hereinafter defined) thereafter; and
WHEREAS, the Initial Holder now desires to subscribe for, and the
Company now desires to issue to the Initial Holder, upon the terms and
conditions set forth herein, the Warrants substantially in the form of Exhibit A
hereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
1.01 Definitions. Capitalized terms not otherwise defined herein are
used as defined in the Credit Agreement. The following terms, as used herein,
shall have the following respective meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
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possession, directly or indirectly, of power to direct or cause the direction of
the management and policies of such Person (whether through ownership of
securities or partnership or other ownership interests, contract or otherwise),
provided that, in any event, any Person which owns, directly or indirectly, more
than 10% of the securities having ordinary voting power for the election of
directors or other governing body of a corporation or more than 10% of the
partnership or other ownership interests of any Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person. Notwithstanding the foregoing, none of the Initial Holder, any
Lender or any of their respective Affiliates shall be deemed to be an Affiliate
of the Company.
"Bank Holder" shall mean the Initial Holder and any other Holder
that is, or becomes, a "Lender," as such term is defined in the Credit Agreement
or is an Affiliate of a Lender.
"Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which commercial banks are required by law or authorized to
close in New York City.
"Class A Common Stock" shall mean and include the Company's
authorized Class A Common Stock, $.10 par value, as constituted on the date
hereof.
"Class B Common Stock" shall mean and include the Company's
authorized Class B Common Stock, $.10 par value, as constituted on the date
hereof.
"Class C Common Stock" shall mean and include the Company's
authorized Class C Common Stock, $.1O par value, as constituted on the date
hereof during the Initial Period (as defined in the Company's Amended and
Restated Certificate of Incorporation ("Charter")) and thereafter, shall mean
and include the Company's Class A Common Stock in accordance with the terms of
the Charter.
"Commission" shall have the meaning provided in Section
4.07 hereof.
"Common Stock" shall mean and include (i) the Class A Common Stock,
the Class B Common Stock and the Class C Common Stock, (ii) all other classes of
the Company's authorized common stock of any class and (iii) any other class of
capital stock of the Company which is not by its terms restricted in amount or
timing to the entitlement to dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
"Company" shall have the meaning provided in the introductory
paragraph hereof.
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"Credit Agreement" shall have the meaning provided in the first
recital hereof.
"Demand Registration" shall have the meaning provided in Section
5.01(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder, all as the same
shall be in effect from time to time.
"Fully Diluted Common Stock" means, at any time, the then
outstanding Common Stock plus (without duplication) all shares of Common Stock
issuable, whether at such time or upon the passage of time or the occurrence of
future events, upon the exercise, conversion or exchange of all rights,
warrants, options, convertible securities or exchangeable securities or
indebtedness, or other rights exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock or securities exercisable for or
convertible or exchangeable into Common Stock then outstanding.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States.
"Holder" initially shall mean the Initial Holder and each other
holder of any Warrant or Warrant Share that is a direct or indirect transferee
of the Initial Holder or any other Holder unless, with respect to any such
Warrant or Warrant Share, such Warrant or Warrant Share is acquired in a public
distribution pursuant to a registration statement under the Securities Act or
pursuant to a transaction exempt from registration under the Securities Act if
securities sold in such transaction may be resold without subsequent
registration under the Securities Act.
"Initial Holder" shall have the meaning provided in the first
paragraph hereof.
"Participating Third Party Holders" has the meaning ascribed to such
term in Section 6.
"Person" shall mean any individual, firm, limited liability company
or partnership, joint venture, corporation, joint stock company, trust or
trustee, incorporated or unincorporated association, union, business
association, government (or any department, agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of such entity.
"Piggy-Back Registration" shall have the meaning provided in Section
5.02 hereof.
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"Preferred Stock" means the Series A 10% Convertible Preferred Stock
and the Series B 8% Convertible Preferred Stock of the Company.
"Prospectus" means the prospectus included in any registration
statement filed with the Commission pursuant to the terms hereof 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 any such
registration statement and all other amendments and supplements to the
prospectus, including post-effective amendments and all other material
incorporated by reference in such prospectus.
"Registrable Securities" shall mean any Warrants or Warrant Shares
except for Warrants or Warrant Shares (i) for which one or more registration
statements covering such Warrants or Warrant Shares has become effective under
the Securities Act and such Warrants or Warrant Shares have been disposed of
pursuant to such effective registration statement, (ii) which have been sold
under circumstances in which all of the applicable conditions of Rule 144 (or
any similar provisions then in force) under the Securities Act are met or (iii)
which may be sold pursuant to Rule 144(k) by the Holder thereof, (iv) the
Company has delivered a new certificate or other evidence of ownership for such
Warrants or Warrant Shares not bearing any legend relating to restrictions on
transfer and such Warrant Shares may be resold without subsequent registration
under the Securities Act without compliance with Rule 144 thereunder (or any
similar provisions then in force) or (v) such Warrants or Warrant Shares are no
longer outstanding, provided that for purposes of Piggy-Back Registration,
clauses (iii) and (iv) shall not apply to the definition of Registrable
Securities.
"Registration Expenses" shall have the meaning provided in Section
5.05 hereof.
"Regulation Y" shall mean the Regulation Y promulgated by the Board
of Governors of the Federal Reserve System or any successor regulation.
"Required Holders" shall mean the holders of more than 50% of all
Warrant Shares (assuming the full exercise of all Warrants).
"Sale" shall mean, as to any Security, any sale or other direct or
indirect transfer, assignment, distribution, encumbrance or other disposition,
either voluntary or involuntary, of such Security and shall include, without
limitation, any conversion of such Security if securities are to be issued in
such conversion for such Security in the name of any Person other than the
holder of such Security, and any disposition of such Security or of any interest
therein which would constitute a sale thereof within the meaning of the
Securities Act, other than any such disposition pursuant to an
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effective registration statement under the Securities Act or pursuant to Rule
144 thereunder and otherwise complying with all applicable state securities and
"blue sky" laws and "Sell" and "Sold" shall have corollary meanings.
"Satisfaction" means (a) the repayment in full of all Loans made
under the Credit Agreement and interest payable thereon (other than the
Conversion of the Bridge Loan), (b) the payment in full of all fees due and
payable to any Lender under the Credit Agreement and to BTCo under the
Commitment Letter and (c) the payment of all other amounts payable under the
Credit Agreement.
"Section 6 Notice" has the meaning ascribed to such term in Section 6.
"Section 6 Offer" has the meaning ascribed to such term in Section 6.
"Section 6 Offeree" has the meaning ascribed to such term in Section 6.
"Section 6 Offeror" has the meaning ascribed to such term in Section 6.
"Securities" means (a) the Common Stock, (b) the Warrants to be
issued hereunder, (c) the Warrant Shares issuable upon exercise of the Warrants,
(d) the Preferred Stock, and (e) any capital stock of the Company into which any
of the foregoing securities may be reclassified or for which they may be
exchanged.
"Securities Act" shall mean the Securities Act of 1933, as amended
and the rules and regulations promulgated thereunder, all as the same shall be
in effect from time to time.
"Securityholders" means, at any time, the Holders or any of the Section
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"Shelf Registration" shall mean (i) a registration statement filed on
any appropriate form under Rule 415 promulgated under the Securities Act or any
successor rule or regulation or (ii) an amendment or supplement to any
then-effective shelf registration.
"Suspension Period" shall have the meaning provided in Section
5.01(b)(iii) hereof.
"Third Party" means a prospective purchaser of Securities in an
arms-length transaction from a Securityholder where such purchaser is not an
Affiliate of such Securityholder.
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"Underwritten Offering" means a Registration in which securities of
the Company are sold to an underwriter for reoffering to the public.
"Warrant" shall mean a Warrant substantially in the form of Exhibit
A hereto and issued pursuant to this Agreement, and any Warrant or Warrants
issued upon transfer thereof or in substitution therefor.
"Warrantholder" shall mean the holder of any Warrant.
"Warrant Share" shall mean any share of Class C Common Stock issued
or issuable upon exercise of any Warrant or any share of Common Stock into which
shares of Class C Common Stock are converted. For purposes of this Agreement, a
Warrant Share shall be "outstanding" from and after the date hereof until the
redemption or cancellation of such Warrant Share (or, if the related Warrant has
not been exercised, the expiration, repurchase or cancellation of such Warrant)
by the Company.
1.02 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
Section 2. Terms and Conditions of Issuance of Warrants.
2.01 Issuance of the Warrants. (a) In consideration of the premises
and other good and valuable consideration, the Company agrees to issue (i) on
the date hereof to the Initial Holder Warrants exercisable for the purchase of
1,405,229 shares of Class C Common Stock, (ii) on April 30, 1997, unless
Satisfaction has occurred prior to such date, to the Initial Holder Warrants
exercisable for the purchase of shares of Class C Common Stock representing 2.5%
of the Fully-Diluted Common Equity as of such date, (iii) on July 30, 1997,
unless Satisfaction has occurred prior to such date, to the Initial Holder
Warrants exercisable for the purchase of shares of Class C Common Stock
representing 2.5% of the Fully-Diluted Common Equity as of such date and (iv)
concurrently with the closing of any offering of Take-Out Securities, to the
Initial Holder Warrants exercisable for the purchase of shares of Class C Common
Stock representing a percentage of the Fully-Diluted Common Equity (not less
than zero) on such closing date equal to 50% of the difference between (l) 5% of
the Fully-Diluted Common Equity as of such closing date and (2) the percentage
of the Fully-Diluted Common Equity issued to purchasers of Demand Take-Out Notes
pursuant to Section 5.10(ii) of the Credit Agreement on or prior to such closing
date. The Company shall also issue to U.S. Holdco on any closing date referred
to in clause (a)(iv) above Class B Common Stock
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equal to the percentage of the Fully-Diluted Common Equity determined pursuant
to such clause (a)(iv).
(b) Notwithstanding anything to the contrary in Section 2.01(a) and
Section 5.10(ii) of the Credit Agreement, (i) in no event shall the Company be
required to issue shares of Common Stock or warrants exercisable for the
purchase Common Stock representing in the aggregate more than 10% of its
Fully-Diluted Common Equity pursuant to this Section 2.01 and Section 5.10(ii)
of the Credit Agreement and (ii) in the event that an issuance of Demand
Take-Out Notes occurs on or prior to July 30, 1997, which does not result in
Satisfaction, no Warrants to purchase Class C Common Stock shall be issued to
the Initial Holder and no Class B Common Stock shall be issued to U.S. Holdco,
in each case in connection with the closing for such issuance until the earlier
of (x) Satisfaction and (y) July 30, 1997, on which date additional Warrants
exercisable for the purchase of Class C Common Stock shall be issued (if
required) to the Initial Holder and shares of Class B Common Stock shall be
issued (if required) to U.S. Holdco pursuant to Section 2.01(a)(iv) only after
issuance in full of the Warrants to be issued pursuant to clauses Section
2.01(a)(ii) and (iii).
(c) The number of shares of Class C Common Shares for which any
Warrants are exercisable are subject to adjustment after the date of issuance of
any such Warrants in accordance with Section 4.1 of the Warrant.
Section 3. Representations and Warranties of the Company. The
Company represents and warrants to each Holder as follows:
3.01 Authorization. The Company has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement
and the Warrants and to issue and deliver the Warrants and Warrant Shares; the
execution, delivery and performance by the Company of this Agreement and the
Warrants have been duly authorized by all necessary action; each of this
Agreement and the Warrants has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights generally and to
general equitable principles.
3.02 Valid Issuances. The Warrants, when issued and delivered
pursuant hereto, and the Warrant Shares when issued and delivered pursuant to
the Warrants, will be validly issued, fully paid and non-assessable, with no
liability on the part of the holders thereof, and are not subject to any
preemptive rights, rights of first refusal or rights of first offer.
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3.03 No Breach. None of the execution and delivery by the Company of
this Agreement and the Warrants, the consummation of the transactions herein or
therein contemplated, including the issuance and delivery of the Warrants and,
upon the exercise of the Warrants, the Warrant Shares, or compliance with the
terms and provisions hereof or thereof will conflict with or result in a breach
of or require any consent under, the Certificate of Incorporation or By-Laws of
the Company, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency (although the Company
will need to comply with the applicable provisions of the Securities Act, the
Exchange Act and state securities law in connection with the exercise by the
Holders of their rights under Sections 5.01 and 5.02 hereof), or any agreement
or instrument to which the Company is a party or by which it is bound or to
which any of its properties or assets is subject, or constitute a default under
any such agreement or instrument or result in the creation or imposition of any
lien upon any of the revenues or assets of the Company pursuant to the terms of
any such agreement or instrument.
3.04 Approvals. Assuming the truth and accuracy of the Initial
Holder's representations and warranties contained in Section 7.01, no
authorizations, approvals or consents of, and no filings or registrations with,
any governmental or regulatory authority or agency, which have not already been
made or obtained, are necessary for the execution, delivery or performance by
the Company of this Agreement and the Warrants, the consummation of the
transactions contemplated herein and therein or the validity or enforceability
hereof or thereof, except for compliance by the Company with the applicable
provisions of the Securities Act, the Exchange Act and state securities laws in
connection with the exercise by the Holders of their rights under Sections 5.01
and 5.02 hereof.
3.05 Capitalization. The capitalization of the Company is as set
forth in Section 4.1 of the Credit Agreement. As of the date hereof, there are
no outstanding options or warrants to acquire, or any securities convertible
into, any shares of capital stock of the Company, except for the Preferred
Stock.
3.06 Offer of Warrants. Neither the Company nor any Person acting on
its behalf has directly or indirectly offered the Warrants or any part thereof
or any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than a Holder so as to cause the registration provisions of the
Securities Act to apply to the issuance and sale of the Warrants. Neither the
Company nor any Person acting on its behalf has taken or will take any action
which would subject the issuance and sale of the Warrants to the provisions of
Section 5 of the Securities Act, or to the provisions of any state securities
law requiring registration of securities, notification of the issuance or sale
thereof or confirmation of
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the availability of any exemption from such registration except pursuant to this
Agreement.
3.07 Approval under Section 203 of the General Corporation Law. The
issuance, exercise and sale of the Warrants and the issuance and sale of the
Warrant Shares have been approved prior to the date hereof by the Board of
Directors of the Company pursuant to the resolutions attached hereto as Exhibit
B which are in full force and effect, and no further action is required for the
issuance, exercise or sale of the Warrants or the Warrant Shares pursuant to
Section 203 of the General Corporation Law of the State of Delaware.
Section 4. Covenants.
4.01 Notice of Merger. Prior to the exercise of all of the Warrants,
the Company will give each Holder at least 30 days' prior written notice of any
merger or similar transaction in which the Company shall not be the surviving
corporation.
4.02 Inspection. The Company covenants and agrees that it will
permit each Holder and its representatives to examine and make extracts and
copies from the books and records of the Company during normal business hours to
the same extent that any stockholder of the Company has the right to do so under
the General Corporation Law of the State of Delaware.
4.03 Information. The Company covenants and agrees that it will
deliver to each Holder such financial statements and other information regarding
the Company or any of its subsidiaries that the Company is obligated to prepare
and deliver to its stockholders generally, in each case at the same time such
financial statements and other information are delivered to such stockholders.
4.04 Repurchase of Common Stock. The Company covenants and agrees
that it will not, without 30 days' prior notice to each affected Bank Holder, to
the extent that such Bank Holder is subject to the provisions of the Bank
Holding Company Act of 1956, as amended (including Regulation Y promulgated
thereunder), directly or indirectly, purchase, redeem, retire or otherwise
acquire any shares of capital stock of the Company if, as a result of such
purchase, redemption, retirement or other acquisition, any Bank Holder, together
with its Affiliates, will own, or be deemed to own, Warrant Shares representing
aggregate shares of any class of the Company then outstanding (assuming the full
exercise of all Warrants then held by such Bank Holder and its Affiliates) in
excess of those permitted for such Bank Holder or Affiliate under the Bank
Holding Company Act of 1956, as amended (including Regulation Y). In the event
that this Section 4.05 becomes applicable because of a transaction that the
Company proposes to enter into, each affected Bank Holder and the Company agree
to cooperate with one another to find a mutually acceptable alternative so that
such affected Bank Holder maintains the
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benefits of its equity interest in the Company on substantially the same basis
as set forth in this Agreement and the Warrant or Warrants held by such affected
Bank Holder. If such Bank Holder has provided the Company with a prior written
request not less than 10 days prior to any such transaction, such Bank Holder
shall be entitled to receive shares of non-voting stock of the Company having
identical terms, provisions and priorities as the Class C Common Stock (other
than as to voting), which shares shall be convertible into Class C Common Stock
on terms reasonably acceptable to such Bank Holder.
4.05 Regulatory Matters. Subject in all cases to applicable
requirements of law, the Company agrees to cooperate in good faith with and
assist any Bank Holder or any of the Bank Holder's Affiliates (at such Bank
Holder's or Affiliate's own cost and expense) as such Bank Holder may reasonably
request in connection with any United States regulatory issues that may arise
with respect to the Company. Anything herein or in the Warrants to the contrary
notwithstanding, in the event that any Bank Holder or any of such Bank Holder's
Affiliates shall determine that it is illegal or unduly burdensome, by reason of
regulatory restriction, for such Bank Holder or such Affiliate to continue to
hold some or all of the Warrants or its Warrant Shares or any other securities
of the Company held by it, such Bank Holder or such Affiliate, as the case may
be, may sell or otherwise dispose of that portion of its Warrants or Warrant
Shares, as the case may be, that such Bank Holder or such Affiliate determines
to be appropriate in light of such regulatory restrictions in as prompt and
orderly a manner as is reasonably necessary. Subject in all cases to applicable
requirements of law, the Company shall cooperate with and assist such Bank
Holder or such Affiliate, as the case may be, in disposing of such Warrants or
Warrant Shares, and (without limiting the foregoing) at the request of such Bank
Holder or such Affiliate, as the case may be, the Company shall provide (and
authorize such Bank Holder or such Affiliate, as the case may be, to provide)
financial and other information concerning the Company to any prospective
purchaser of the Warrants or Warrant Shares owned by such Bank Holder or such
Affiliate, as the case may be, subject to appropriate confidentiality
arrangements; provided, however, that the Company shall not be required to
provide non-public information to any prospective purchaser that the Company
reasonably determines may be inimical to the interests of the Company. The
provisions of this Section 4.06 shall inure solely to the benefit of such Bank
Holders and their Affiliates which are subject to the provisions of the Bank
Holding Company Act of 1956, as amended (including Regulation Y promulgated
thereunder) or any other law, rule or regulation governing the affairs of banks,
bank holding companies or their affiliates.
4.06 Rules 144 and 144A. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such
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further action as the Initial Holder or the Required Holders may reasonably
request, all to the extent required from time to time to enable the Holders to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rules or regulations or regulations hereafter adopted by the Securities
and Exchange Commission or any successor entity (the "Commission"). Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
Section 5. Demand Registration Rights.
5.01 Demand Registrations. (a) The Initial Holder, any Holder which
is an Affiliate of the Initial Holder or the Required Holders of Warrants or
Warrant Shares representing at least 600,000 Warrant Shares may make a written
request to the Company for registration of such Registrable Securities under the
Securities Act with the Commission for a public offering of Registrable
Securities (a "Demand Registration"), provided, however, that the Holders shall
have the right to only two Demand Registrations of all or any part of their
Registrable Securities. Whenever the Company shall receive a request for a
Demand Registration, the Company will promptly give written notice of such
registration to all Holders, use its reasonable best efforts to effect the
registration under the Securities Act of the Registrable Securities with respect
to which the Company has received written requests for inclusion therein within
25 Business Days after such notice is given; provided, however, that the Company
will not be required to take any action pursuant to this Section 5.01:
(i) if the Company has effected a registration pursuant to Sections
5.01 or 5.02 within the 180-day period preceding such request which permitted
Holders of Registrable Securities to register Registrable Securities;
(ii) if the Company shall at the time have effective a Shelf
Registration pursuant to which the Holder or Holders that requested registration
could effect the disposition of such Holder's or Holders' Registrable Securities
in the manner requested; or
(iii) during the pendency of any Suspension Period permitted under
Section 5.01(b);
provided further, however, that the Company will be permitted to satisfy its
obligations under this Section 5.01 by amending (to the extent permitted by
applicable law) any registration statement previously filed by the Company under
the Securities Act so that such registration statement (as amended) will permit
the disposition (in accordance with the intended methods of disposition
specified as aforesaid) of all of the Registrable
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Securities for which a demand for registration has been made under this Section
5.01. If the Company so amends a previously filed registration statement, it
will be deemed to have effected a registration for purposes of this Section
5.01. All requests made pursuant to this Section 5.01(a) will specify the number
of shares of Registrable Securities to be registered and will also specify the
intended methods of disposition thereof.
(b) Effective Registration. (i) A registration initiated as a Demand
Registration shall not be deemed a Demand Registration until such registration
has become effective and (except in the case of a Shelf Registration) until the
Registrable Securities included in such registration have actually been sold;
provided, however, that a registration that does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal to proceed by the Holders shall be deemed to have been effected
by the Company unless the Holders shall have elected (without any obligation) to
pay, and in fact pay (within 30 days after the Company receives notice of such
refusal to proceed of the Holders), all reasonable Registration Expenses in
connection with such registration.
(ii) The Company may delay the filing of a registration statement
required hereunder if at the time of a request for registration under Section
5.01(a) above, the Company is a party to a transaction involving the purchase,
sale, conversion or issuance of securities of the Company which would be
prohibited pursuant to Regulation M promulgated by the Commission under the
Exchange Act during a distribution of the Registrable Securities to be
registered under such registration statement.
(iii) The Company may (x) delay the filing of a registration
statement required hereunder or (y) suspend the effectiveness of any
registration statement filed pursuant to a Demand Registration or, without
suspending such effectiveness, instruct the Holders that no sales of Registrable
Securities included in such registration statement may be made (and the Holders
shall forthwith discontinue disposition of any such Registrable Securities) if,
in the reasonable opinion of the Board of Directors of the Company, such
registration and offering would require public disclosure of any undisclosed
information regarding a material financing, acquisition, corporate
reorganization or other significant transaction involving the Company or any
Subsidiary of the Company, which disclosure would interfere with such
transaction.
(iv) Any delay in the filing of a registration statement pursuant to
clause (ii) or (iii) above or any period of suspension in the effectiveness of a
registration statement or during which any instruction to Holders that no sales
of Registrable Securities may be made pursuant to clause (iii) above shall be a
"Suspension Period". The Company shall promptly notify the Holders in writing of
any Suspension Period, the
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reasons therefor and the proposed length thereof. The Company shall use its
reasonable best efforts to provide such notice a reasonable number of days prior
to the commencement of a Suspension Period, provided that in any event the
Company shall provide such notice no later than the commencement of such
Suspension Period. The aggregate number of days covered by Suspension Periods
during the term of this Agreement shall not exceed 60 days and no more than two
Suspension Periods may be commenced in any 365 day period. The Company shall
give prompt written notice to the Holders of the termination of any Suspension
Period.
(c) No Right of Company or Other Person to Piggyback on Demand
Registrations. If any Person owning any securities of the Company (other than
any Holder) registers securities of the Company in a Demand Registration (in
accordance with the provisions of this Section 5.01(c)), such Person shall pay
the fees and expenses of counsel to such Person and its pro rata share of the
Registration Expenses if the Registration Expenses for such registration are not
paid by the Company for any reason. The Company covenants that it shall not
grant any registration rights to any Person which rights would, in the
reasonable judgment of the Initial Holder, conflict or be inconsistent with the
provisions of this Section 5.01(c), and in the event of such a conflict or
inconsistency, the terms of this Section 5.01(c) shall prevail.
(d) Selection of Underwriters and Counsel, Etc. The Company shall
not be required to provide an underwritten offering of the Registrable
Securities. If the Initial Holder, any Affiliate of the Initial Holder or the
Required Holders so elect, as the case may be, and the Company agrees to
participate in its sole discretion, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an Underwritten
Offering. If a Demand Registration involves an Underwritten Offering, (i) the
Company shall have the right to select the investment banker or bankers and
manager or managers to administer the offering (provided that such investment
bankers and managers must be reasonably satisfactory to the Initial Holder, such
Affiliate thereof or the Required Holders, as the case may be,) and (ii) the
Initial Holder, such Affiliate thereof or the Required Holders, as the case may
be, shall have the right to select one counsel to represent the Holders
reasonably acceptable to the Company.
5.02 Piggy-Back Registration. If, at any time or from time to time
while any Warrants or Registrable Securities are outstanding, the Company
proposes to register any of its securities (whether for its own or others'
account) under the Securities Act (other than by a registration statement on
Form S-8 or Form S-4 or other form that does not include substantially the same
information as would be required in a form for the general registration of
securities or that would not be available for registration of Registrable
Securities), the Company shall
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promptly give written notice to the Holders of the Company's intention to effect
such registration. If, within 20 days after receipt of such notice, any Holder
submits a written request to the Company specifying the Registrable Securities
such Holder proposes to sell or otherwise dispose of(a "Piggy-Back
Registration"), the Company shall include the number of shares of Registrable
Securities specified in such Holder's request in such registration statement and
the Company shall use its reasonable best efforts to keep each such registration
statement in effect and to maintain compliance with each Federal and state law
and regulation for the period necessary for such Holder to effect the proposed
sale or other disposition. Any Holder participating in an underwritten offering
pursuant to this Section 5.02 shall, if required by the managing underwriter or
underwriters of such offering, enter into an underwriting agreement in a form
customary for underwritten offerings of the same general type as such offering.
Unless a Holder, or a person acting on behalf of a Holder, has
commenced a distribution thereunder, nothing in this Section 5.02 will create
any liability on the part of the Company to the Holders of Registrable
Securities if the Company for any reason should decide not to file a
registration statement proposed to be filed under the preceding paragraph or to
withdraw such registration statement subsequent to its filing, regardless of any
action whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.
5.03 Reduction of Offering. Notwithstanding anything contained
herein, if the managing underwriter or underwriters of an offering described in
Section 5.01 or 5.02 hereof delivers a written opinion to the Holders that the
size of the offering that the Holders, the Company or any other Person intends
to make or the kind or combination of securities that the Holders, the Company
and any other Persons intend to include in such offering are such that the
success of the offering would be materially and adversely affected by inclusion
of the Registrable Securities requested to be included, then the amount of any
securities proposed to be offered shall be reduced or excluded from the offering
as follows:
(i) in the case of a Demand Registration, (x) all securities
proposed to be included in such offering by Persons other than the Holders
shall be reduced or excluded from such offering on a pro rata basis (or on
another basis agreed to by such other Persons) before any Registrable
Securities of the Holders are reduced or excluded from such offering, and
(y) in the event that any Registrable Securities of the Holders are
required to be reduced or excluded from such offering (which will only be
required after all securities of Persons other than the Holders have been
excluded entirely as provided in immediately preceding clause (x)), then
the number of Registrable Securities of
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the Holders shall be reduced or excluded from such offering on a pro rata
basis;
(ii) in the case of a Piggy-Back Registration initiated by a Person
other than the Company, all securities (including Registrable Securities)
to be included in such offering by the Company, the Holders and the
holders of similar "piggyback" registration rights shall be reduced or
excluded from such offering on a pro rata basis before any securities of
the Persons initiating the Piggy-Back Registration are reduced or
excluded; and
(iii) in the case of a Piggy-Back Registration initiated by the
Company, all securities (including Registrable Securities) to be included
in such offering by the Holders and any other holders of similar
"piggy-back" registration rights shall be reduced or excluded from such
offering on a pro rata basis before any securities of the Company are
reduced or excluded.
5.04 Registration Procedures. Whenever any Holder or Holders request
that any Registrable Securities be registered pursuant to this Section 5, the
Company will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as practicable, and in connection with any such
request:
(a) The Company will prepare and file with the Commission a
registration statement (including all exhibits and financial statements
required by the SEC to be filed therewith) on any form for which the
Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and prepare and file with the
Commission such amendments, post-effective amendments and supplements to
such Registration Statement as may be requested by the holders of a
majority of the Registrable Securities or as may be necessary to keep the
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 or
withdrawn), or, if such Registration Statement relates to an Underwritten
Offering, or such longer period as in the opinion of counsel for the
underwriters a Prospectus is required by law to be delivered in connection
with sales of Registrable Securities by an underwriter or dealer; cause
the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder with
respect to
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the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus; provided that, if
the Holders specify that such registration shall be a Shelf Registration
and the Company is eligible to use a registration statement on Form S-3,
the Company shall use its reasonable best efforts to effect such Shelf
Registration and to keep such Shelf Registration effective for a period of
not less than two years (or such shorter period which will terminate when
all Registrable Shares covered by such Shelf Registration have been sold
or may be resold without registration under the Securities Act pursuant to
Rule 144(k) or the equivalent thereunder).
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
the Holders requesting registration of Registrable Securities and each
underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as proposed
to be filed, and thereafter furnish to the Holders requesting registration
of Registrable Securities and the underwriters, if any, such number of
copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the Prospectus included in such
registration statement (including each preliminary prospectus) and such
other documents as the Holders requesting registration of Registrable
Securities or underwriter may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Holders;
(c) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, and (if requested) confirm such advice in
writing, as soon as practicable after notice thereof is received by the
Company (i) when the Registration Statement or any amendment thereto has
been filed or becomes effective, when the Prospectus or any amendment or
supplement to the Prospectus has been filed, and, to furnish such selling
holders and managing underwriters with copies thereof, (ii) of any request
by the Commission or any other federal or state governmental authority for
amendments or supplements to the Registration Statement or the Prospectus
or for additional information, (iii) if, at any time, the representations
and warranties of the Company contemplated by paragraph (n) below cease to
be true and correct in any material respect and (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for offering or sale in any
jurisdiction or the
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initiation or threatening of any proceeding for such purpose;
(d) After the filing of the registration statement, the Company will
promptly notify the Holders of any stop order issued or threatened by the
Commission suspending the effectiveness of the Registration Statement or
any order preventing or suspending the use of any preliminary or final
Prospectus or the initiation or threatening of any proceedings for such
purpose, and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;
(e) The Company will use its reasonable best efforts to (i) register
or qualify the Registrable Securities under such other securities or blue
sky laws of such jurisdictions in the United States as the Holders
requesting registration of Registrable Securities reasonably (in light of
such Holders' intended plan of distribution) requests and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable the Holders
to consummate the disposition of the Registrable Securities owned by the
Holders, provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph (d), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(f) if requested by the managing underwriter or underwriters or a
holder of Registrable Securities being sold in connection with an
Underwritten Offering, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and
the holders of a majority of the Registrable Securities being sold agree
should be included therein relating to the plan of distribution with
respect to such Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being
sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or
best efforts underwritten) offering of the Registrable Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after being
notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
(g) The Company will promptly notify the Holders, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of
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an event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an 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 promptly make available to the Holders any such supplement
or amendment.
(h) The Company will make available for inspection by the Holders
requesting registration of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other professional retained by such
Holders or underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause appropriate
officers, directors and employees of the Company to make available all
information reasonably requested by any Inspectors in connection with such
registration statement. Records which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are
confidential 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 such registration statement or (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Each Holder agrees that information obtained by it
as a result of such inspections shall be deemed confidential and, upon the
reasonable request of the Company, shall execute a confidentiality
agreement with the Company in form and substance reasonably satisfactory
to the Company and the Holder, and shall not be used by it as the basis
for any market transactions in the securities of the Company or its
Affiliates unless and until such is made generally available to the
public.
(i) furnish to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, one executed copy and
as many conformed copies as they may reasonably request, of the
Registration Statement and any amendment or post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(j) deliver to each selling holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons may reasonably request (it being understood that
the Company consents to the use of the Prospectus or any
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amendment or supplement thereto by each of the selling holders of
Registrable Securities and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto) and such other
documents as such selling holder may reasonably request in order to
facilitate the disposition of the Registrable Securities by such holder;
(k) cooperate with the selling holders of Registrable Securities and
the managing underwriter or agent, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable
such Registrable Securities to be in such denominations and registered in
such names as the managing underwriters may request;
(l) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriters, if any, to consummate the disposition of such
Registrable Securities;
(m) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities and
provide the applicable transfer agent with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;
(n) make such representations and warranties to the holders of
Registrable Securities being registered, and the underwriters or agents,
if any, in form, substance and scope as are customarily made by issuers in
primary underwritten public offerings;
(o) enter into such customary agreements (including underwriting
agreements) and take all such other appropriate actions as the holders of
at least a majority of any Registrable Securities being sold or the
managing underwriter or agent, if any, reasonably request in order to
expedite or facilitate the registration and disposition of such
Registrable Securities;
(p) obtain for delivery to the holders of Registrable Securities
being registered and to the underwriter or agent, if any, an opinion or
opinions from counsel for the Company in customary form, scope and
substance covered in opinions in comparable offerings, which counsel and
opinions shall be reasonably satisfactory to such holders, underwriters or
agents and their respective counsel;
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(q) obtain for delivery to the Company and the underwriter or agent,
if any, with copies to the holders of Registrable Securities, a cold
comfort letter from the Company's independent certified public accountants
in customary form and covering such matters of the type customarily
covered by cold comfort letters as the managing underwriter or the holders
of at least a majority of the Registrable Securities being sold reasonably
request, dated the effective date of the Registration Statement and
brought down to the Closing Date;
(r) cooperate with each seller of Registrable Securities and each
underwriter or agent, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD");
(s) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and make generally available to its
security holders, as soon as reasonably practicable (but not more than
fifteen months) after the effective date of the Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and the rules and regulations promulgated thereunder;
(t) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(u) use reasonable best efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each securities
exchange on which any of the Company's securities are then listed or
quoted and on each inter-dealer quotation system on which any of the
Company's securities are then quoted;
(v) make available for inspection by representatives of the sellers
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 such sellers or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties
of the Company, and cause the appropriate officers, directors and
employees of the Company and the independent public accountants who have
certified its financial statements to make themselves during normal
business hours available to discuss the business of the Company and to
make available all information reasonably requested by any such seller,
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underwriter, attorney, accountant or agent in connection with such
Registration Statement (subject to each party referred to in this clause
(v) entering into customary confidentiality agreements in a form
reasonably acceptable to the Company);
(w) use reasonable efforts to make available the senior executive
officers of the Company to participate in the customary "road show"
presentations that may be reasonably requested by the holders and the
managing underwriter in any Underwritten Offering; provided that the
participation of such senior executive officers shall not unreasonably
interfere with the conduct of their duties to the Company;
(x) The Company shall promptly, after the issuance of an earnings
release or upon the request of a holder, prepare a current report on Form
8-K with respect to such earnings release or a matter of disclosure as
requested by such holder and file with the SEC such Form 8-K.
The Company may require the Holders requesting registration of
Registrable Securities to promptly furnish in writing to the Company such
information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.
The Holders agree that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 5.04(g) hereof,
the Holders will forthwith discontinue disposition of any Registrable Securities
registered pursuant to this Section 5 pursuant to the registration statement
covering such Registrable Securities until the Holders' receipt of the copies of
the supplemented or amended prospectus contemplated by Section 5.04(g) hereof,
and, if so directed by the Company, the Holders will deliver to the Company all
copies, other than permanent file copies then in such Holders' possession, of
the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event the Company shall give such notice, the
Company shall extend the period during which such registration statement shall
be maintained effective (including the period referred to in Section 5.04(a)
hereof) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 5.04(e) hereof to the date when the
Company shall make available to the Holder a prospectus supplemented or amended
to conform with the requirements of Section 5.04(g) hereof.
5.05 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement will be paid by the Company,
regardless of whether the Registration Statement becomes effective, including
without limitation (i) all registration and filing fees, and any other
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fees and expenses associated with filings required to be made with the SEC or
the NASD (including, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel as may be required by the rules and
regulations of the NASD), (ii) all fees and expenses of compliance with state
securities or blue sky laws (including fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky qualifications of
the Registrable Securities and determination of their eligibility for investment
under the laws of such jurisdictions as the managing underwriters or holders of
a majority of the Registrable Securities being sold may designate), (iii) all
printing, messenger, telephone and delivery expenses (including expenses of
printing certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses), (iv)
all fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and cold comfort letters required by or incident to such
performance), (v) Securities Act liability insurance if the Company so desires
or the underwriters so require in accordance with then customary underwriting
practice, (vi) all fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange or quotation of the
Registrable Securities on any inter-dealer quotation system, including all
rating agency fees, (vii) all reasonable fees and disbursements of one counsel
selected by the holders of a majority of the Registrable Securities being
registered, (viii) all fees and disbursements of underwriters customarily paid
by the issuers or sellers of securities, excluding underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of Registrable
Securities and the fees and expenses of counsel to the underwriters other than
as provided in clause (ii) above, (ix) all fees and expenses of accountants to
the holders of Registrable Securities being sold and (x) fees and expenses of
other Persons retained by the Company without limitation (all such expenses
being herein called "Registration Expenses"). The Company will, in any event,
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any audit and the fees and expenses of any Person, including
special experts, retained by the Company.
5.06 Indemnification and Contribution. (a) In connection with each
registration statement relating to the disposition of Registrable Securities,
the Company shall indemnify and hold harmless each of the Holders, each
underwriter of Registrable Securities, each partner, officer, director or
employee of each of the Holders or any such underwriter and each Person, if any,
who controls (within the meaning of either the Securities Act or the Exchange
Act) any of the Holders or any such underwriter against all losses, claims,
damages or liabilities, joint or several, to which any of the Holders, such
underwriter or any such Person may be subject arising out of or
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based upon (A) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement or the prospectus included therein
(or any supplement or amendment thereto) or a preliminary prospectus, or (B) 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, and
the Company shall reimburse each of the Holders and each of such other Persons
for any reasonable legal or other expenses incurred in connection with the
investigation or defense thereof (any such reimbursement to be made as such
expenses are incurred upon presentation of any requested documentation);
provided, however, that the Company shall not be liable in any such instance to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged untrue statement or
omission made in any such registration statement, preliminary prospectus, or
prospectus (or amendment or supplement) in reliance upon and in conformity with
information relating to any Person referred to above who would be indemnified by
the Company pursuant to this Section 5.06(a) furnished in writing to the Company
by such Person expressly for use therein. Notwithstanding the foregoing
provisions of this Section 5.06(a), the Company will not be liable to any Holder
of Registrable Securities (or any partner, officer, director or employee
thereof), any underwriter or any other Person, if any, who controls (within the
meaning of the Securities Act or the Exchange Act) any of the Holders or any
such underwriter, under the indemnification obligations in this Section 5.06(a)
for any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense that arises out of such Holder's or other Person's failure
to send or deliver a copy of the final Prospectus to the person asserting an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of the Registrable Securities
to such person if such statement or omission was corrected in such final
Prospectus and the Company had previously furnished copies thereof to such
Holder or such other Person in accordance with this Agreement.
(b) In connection with each registration relating to the disposition
of Registrable Securities, each Holder shall furnish to the Company in writing
such information, including the name and address of, and the amount of
Registrable Securities held by, such Holder, as the Company reasonably requests
for use in such Registration Statement or the related Prospectus shall severally
indemnify the Company, each director of the Company, each officer of the Company
who signs the registration statement and any Person who controls the Company
(within the meaning of either the Securities Act or the Exchange Act) to the
same extent as the indemnity from the Company provided in Section 5.06(a)
hereof, but only with respect to information relating to such Holder furnished
in writing to the Company by such Holder expressly for use in any such
registration statement, preliminary prospectus or prospectus (or amendment or
supplement). The maximum liability of any Holder under this Section 5.06(b)
shall
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be limited to the aggregate amount of all sales proceeds actually received by
such Holder upon the sale of such Holder's Registrable Securities in connection
with such registration.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to subsections (a) or (b) of this Section 5.06,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it wishes, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof, unless in the reasonable judgment of any
indemnified party a conflict of interest is likely to exist, based on the
written opinion of counsel, between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party will be obligated to pay the reasonable fees and expenses of such
additional counsel. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its prior written consent (which
shall not be unreasonably withheld) but if settled with such consent, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent (which shall not be unreasonably withheld) of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 5.06 is
unavailable to the indemnified parties in respect of any losses, claims, damages
or liabilities referred to herein, then each such 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 or
liabilities as between the Company on the one hand and the respective Holder on
the other, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and such Holder on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one
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hand and of the respective Holder on the other 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 such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 5.06(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities 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 such action or claim.
Notwithstanding the provisions of this Section 5.06(d), (i) no Holder shall be
required to contribute any amount in excess of the amount of all sales proceeds
actually received by such Holder upon the sale of such Holder's Registrable
Securities in connection with such registration and (ii) no underwriter shall be
required to contribute any amount in excess of the amount of the underwriting
discount or commission applicable to the Registrable Securities underwritten by
it. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
5.07 Participation in Underwritten Registrations. 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
underwriting arrangements approved by the Company and the Holders and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and these registration rights.
5.08 Holdback Agreement. The Company and its Affiliates agree (i)
not to effect any public sale or distribution of any Registrable Securities or
any securities similar to the Registrable Securities, or any securities
convertible into or exchangeable or exercisable for Registrable Securities or
any securities similar to the Registrable Securities, during the 14 days prior
to, and during the 90-day period beginning on, the effective date of any
registration statement filed pursuant to Section 5.01 or 5.02 of this Agreement
with respect to an underwritten public offering of any such securities (except
as part of such registration statement where the Holders consents) or the
commencement of a public
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distribution of Registrable Securities; and (ii) that any agreement entered into
after the date of the agreement pursuant to which the Company issues or agrees
to issue any privately placed securities shall contain a provision under which
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in (i) above, in each case
including a sale pursuant to Rule 144 under the Securities Act (except as part
of any such registration, if permitted); provided, however, that the provisions
of this paragraph shall not prevent the (x) conversion or exchange of any
securities pursuant to their terms into or for other securities, (y) the
issuance of securities pursuant to the Company's employee benefit plans, (z)
sale or distribution of securities in connection with any merger or
consolidation by the Company, or the acquisition by the Company of the capital
stock or substantially all of the assets of any other Person.
5.09 Specific Enforcement. The Company and each of the Holders
acknowledge that remedies at law for the enforcement of this Section 5 may be
inadequate and intend that this Section 5 shall be specifically enforceable in
accordance with Section 8.04 hereof.
Section 6. Co-Sale.
6.01 Co-Sale. (a) Until five years from the Closing Date in respect
of Warrants and Warrant Shares held by Lenders and their Affiliates and three
years from the Closing Date in respect of Warrants and Warrant Shares held by
all other Persons, if any of Consumers Packaging, U.S. Holdco or any of their
Affiliates (all of the foregoing, the "Section 6 Offerees", and each of the
foregoing a party to this Agreement only for the purposes of this Section 6)
intend to sell, subject to Section 6.01(c), any of their Securities to, or
receive a bona fide offer for their Securities from, a Third Party (hereinafter
called the "Section 6 Offeror") which such Section 6 Offerees intend to
consummate or accept for a specified price payable in cash or otherwise and on
specified terms and conditions (hereinafter called the "Section 6 Offer"), then
such Section 6 Offerees shall promptly forward a notice (a "Section 6 Notice")
complying with Section 6(b) hereof to the Company and the Holders. Subject to
Section 6(c) hereof, the Section 6 Offerees shall not sell any of their
Securities to the Section 6 Offeror unless (i) the terms of the Section 6 Offer
are extended to the Holders with respect to the Warrants and the Warrant Shares,
(ii) if the Section 6 Offer, as extended, relates to less than all of the
Securities proposed to be sold by the Section 6 Offerees and the Holders and any
other Securityholders exercising a right to participate in such Section 6 Offer
(any "Participating Third Party Holders"), the Sale shall include a pro rata
portion of the Securities proposed to be Sold by each of such Securityholders
based on the same proportion that the Securities proposed to be Sold by the
Section 6 Offerees bears to the aggregate Securities owned by the Section 6
Offerees and (iii) the Section 6 Offerees shall bear all costs
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and expenses incurred in connection with the consummation of the Sale of
Securities to the Section 6 Offeror (other than the costs and expenses
(including legal costs and expenses) directly incurred by each such Holder in
connection with its evaluation and review of such Sale of Securities).
(b) The Section 6 Notice shall set forth (i) the aggregate
percentage (and number) of the shares of Common Stock or other capital stock of
the Company represented by the Securities to which the Section 6 Offer relates
and the name or names of the Section 6 Offerees and any Participating Third
Party Holders to the extent the Company has knowledge; (ii) the name and address
of the Section 6 Offeror; (iii) the proposed amount and type of consideration
(including, if the consideration consists in whole or in part of non-cash
consideration, such information available to the Section 6 Offerees as may be
reasonably necessary for the Holders to properly analyze the economic value and
investment risk of such non-cash consideration) and the terms and conditions of
payment offered by the Section 6 Offeror; (iv) the percentage (and number) of
the shares of Common Stock or other capital stock of the Company held by each
Securityholder as of the close of business on the date of such Section 6 Notice;
and (v) that the Section 6 Offeror has been informed of the co-sale rights
provided for in this Section 6 and has agreed to purchase the Warrants or the
Warrant Shares (at each Holder's election) in accordance with the terms of this
Section 6. No Holder shall be required to make any representations and
warranties to any Person in connection with the exercise by such Holder of its
co-sale rights as provided in this Section 6 except as to (i) good title and the
absence of liens with respect to such Holder's Warrants or Warrant Shares, (ii)
the corporate or other existence of such Holder and (iii) the authority for and
the validity and binding effect of, and the absence of any conflicts under the
charter documents and material agreements of such Holder as to, any agreements
entered into by such Holder in connection with such co-sale rights. No Holder
shall be required to provide any indemnities in connection with the exercise of
such co-sale rights except for a breach of such representations and warranties
made by such Holder; provided that, notwithstanding the foregoing, each Holder
shall be obligated to join on a pro rata basis (based on such Holder's share of
the aggregate proceeds received in any such sale) in any indemnification that
all Section 6 Offerees and Participating Third Party Holders agree to provide in
connection with any such sale (other than any such obligations that relate
specifically to any representation or warranty made by a particular Section 6
Offeree or Participating Third Party Holder regarding such Person's title to and
ownership of Securities and such Person's authority, power and right (legally
and contractually) to enter into and consummate any such sale), provided that no
Holder shall be obligated in connection with any such sale to agree to indemnify
or hold harmless the Section 6 Offerors (taken together) with respect to an
amount in excess of the net cash proceeds paid to such Holder in connection with
any such sale.
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(c) This Section 6 right of co-sale shall only apply to a Sale of
Securities in a single or related series of transactions by Section 6 Offerees
which either (i) result in Consumer Packaging and its Affiliates owning less
than 50.1% of the Fully-Diluted Common Stock or (ii) represents 10% or more of
the Fully-Diluted Common Stock and shall not apply to any Warrants or Warrant
Shares previously sold pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 thereunder.
Section 7. Compliance with the Securities Act.
7.01 Representations and Warranties. Each Holder by its acceptance
of the Warrants represents and warrants as of the date hereof and as of the date
of any exercise of the Warrants held by such Holder as follows:
(a) Such Holder understands that the Company has not registered the
Warrants or the Warrant Shares under the Securities Act, is acquiring the
Warrants and the related Warrant Shares for its own account and not as
nominee or agent for any other Person and not for offer or sale in any
manner that would be in violation of the securities laws of the United
States of America or any state thereof, without prejudice, however, to its
right at all times to sell or otherwise dispose of all or any part of said
Warrants or Warrant Shares under a registration under the Securities Act
or any applicable state securities laws or under an exemption from such
registration available under such Act or any applicable state securities
laws.
(b) Such Holder is an "accredited" investor within the meaning of
Regulation D promulgated under the Securities Act.
7.02 Transfer Restriction, Legend. No Holder will sell, transfer or
otherwise dispose of any Warrant or Warrant Share other than to an Affiliate of
such Holders or in a transaction that complies with the registration
requirements of Section 5 of the Securities Act or pursuant to an exemption
(including, without limitation, sales under Rules 144 and 144A promulgated under
the Securities Act) therefrom. If any Holder desires to transfer any Warrant or
Warrant Shares other than pursuant to an effective registration statement under
the Securities Act or pursuant to Rule 144 or l44A, then such Holder shall
deliver, at such Holder's transfer, together with an opinion of counsel
reasonably satisfactory to the Company, to the effect that an exemption from
registration under the Securities Act is available. Each Warrant or certificate
or instrument (if any) representing the Warrant Shares issued upon exercise of
the Warrants (and each Warrant or certificate or instrument (if any)
representing the Warrant Shares issued to transferees of such Warrant or
certificate or instrument (if any)), unless at such time as the same is no
longer required under the applicable
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requirements of the Securities Act, shall bear the following
legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SAID ACT."
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN A CERTAIN WARRANT AGREEMENT DATED
AS OF FEBRUARY 5, 1997, AS THE SAME MAY BE MODIFIED, AND NO TRANSFER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE FORM OF THE
WARRANT AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE COMPANY. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF
THE WARRANT AGREEMENT."
The foregoing legends will be removed by the Company (a) upon any sale of
Warrants or Warrant Shares in accordance with Rule 144 (or any successor
provision thereof) or pursuant to an effective registration statement, (b) at
any time after three years (or such shorter period specified in Rule 144(k) or
any successor provision thereof) from the Date of Issuance of any Warrant (as
defined in the Warrant) upon certification from the Holder that such Holder is
not an affiliate of the Company (as defined for purposes of such Rule 144 or any
such successor provision) and that, to the best of such Holder's knowledge, the
relevant Warrant or Warrant Shares were not acquired for purposes of Rule 144
from the Company or any affiliate of the Company within the past three years (or
such shorter period) or (c) upon receipt by the Company from the relevant Holder
of such certifications or legal opinions as it may reasonably request to enable
it to determine that such legend is no longer required in order to satisfy the
requirements of the Securities Act.
Section 8. Miscellaneous
8.01 Expenses. The Company agrees to pay all fees and disbursements
of the Initial Holder (including the reasonable fees and expenses of its
counsel) in connection with the purchase and sale of the Warrants as
contemplated by this Agreement or any amendments thereto and the fees and
disbursements of the Initial Holder (including the reasonable fees and expenses
of its counsel) in connection with the negotiation, execution, delivery and
enforcement of this Agreement, the Warrants or the Warrant Shares or any waiver
or consent hereunder or thereunder or any amendment hereof or thereof. In
addition, the Company agrees to pay any and all stamp, transfer and other
similar taxes payable or determined to be payable by any Bank Holder in
connection with the execution and delivery of this Agreement, any Warrants or
the
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issuance or transfer of the Warrants or Warrant Shares (other than any such
taxes in connection with a transfer of the Warrants to another Holder).
9.02 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy, cable or other writing and telexed, telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof, or, as to any party, at
such other address as shall be designated by such party in a notice to the
Company given in accordance with this Section 9.02. All such communications
shall be deemed to have been duly given when transmitted by telex or telecopier,
delivered to the telegraph or cable office or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
9.03 Exclusion. This Agreement and the Warrants shall be binding
upon, and inure solely to the benefit of the Company and the Holders, and no
other Person shall acquire or have any right under or by virtue of this
Agreement or the Warrants (other than any such Person to whom such Holders have
transferred an interest in the Warrants or the Warrant Shares pursuant to the
terms thereof and hereof).
9.04 Specific Performance. The Company acknowledges and agrees that
in the event of any breach of this Agreement or the Warrants by the Company, the
Holders would be irreparably harmed and could not be made whole by monetary
damages. The Company accordingly agrees (i) to waive the defense in any action
for specific performance that a remedy at law would be adequate, and (ii) that
the Holders, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement or the Warrants in any action instituted in the United States District
Court for the Southern District of New York, or, in the event such Court would
not have jurisdiction for such action, in any court of the United States or any
state thereof having subject matter jurisdiction for such action.
9.05 Warrantholder Not a Stockholder. Prior to the exercise of any
of its Warrants, no Warrantholder shall, except as specifically provided herein,
be entitled to any of the rights of, or be deemed to be, a stockholder in the
Company.
9.06 No Waivers. No failure or delay by any party in exercising any
rights, power or privilege hereunder or under the Warrants shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided herein shall be
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cumulative and not exclusive of any rights or remedies provided
by law.
9.07 Amendments and Waivers. Any provision of this Agreement or the
Warrants may be amended or waived if, but only if, such amendment or waiver is
in writing and signed by the Company, the Required Holders and, until such time
as the Initial Holder (or any Affiliate thereof) no longer holds any Warrants or
Warrant Shares, the Initial Holder (or such Affiliates).
9.08 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
This Agreement and the Warrants shall be governed by and construed in accordance
with the laws of the State of New York. If any action or proceeding shall be
brought by the Holder in order to enforce any right or obligation in respect of
this Warrant, the Company hereby consents and will submit to the jurisdiction of
any state or federal court of competent jurisdiction in the State of New York,
and agrees that venue will be proper in any such court. THE PARTIES HERETO EACH
HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT
OF THIS WARRANT AGREEMENT OR THE WARRANTS OR ANY OTHER AGREEMENTS OR
TRANSACTIONS RELATED HERETO OR THERETO.
9.09 Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
ANCHOR GLASS ACQUISITION
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer
Address for Notices:
One Anchor Plaza
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No. : (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
BANKERS TRUST COMPANY
By: /s/
---------------------------------
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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