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EXHIBIT 4.1
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REGISTRATION RIGHTS AGREEMENT
by and between
HANOVER DIRECT, INC.
and
RICHEMONT FINANCE S.A.
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Dated as of August 23, 2000
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TABLE OF CONTENTS
1. Certain Definitions...............................................................1
2. Demand Registrations..............................................................2
(a) Right to Request Registration.....................................2
(b) Number of Demand Registrations....................................3
(c) Priority on Demand Registrations..................................3
(d) Restrictions on Demand Registrations..............................3
(e) Selection of Underwriters.........................................4
(f) Other Registration Rights.........................................4
(g) Effective Period of Demand Registrations..........................4
3. Piggyback Registrations...........................................................5
(a) Right to Piggyback................................................5
(b) Priority on Primary Registrations.................................5
(c) Priority on Secondary Registrations...............................5
(d) Selection of Underwriters.........................................6
(e) Other Registrations...............................................6
4. S-3 Registrations.................................................................6
5. Holdback Agreements...............................................................7
6. Registration Procedures...........................................................7
7. Registration Expenses............................................................11
8. Indemnification..................................................................12
9. Rule 144.........................................................................15
10. Miscellaneous...................................................................15
(a) Notices..........................................................15
(b) No Waivers.......................................................16
(c) Successors and Assigns...........................................17
(d) Governing Law....................................................17
(e) Jurisdiction.....................................................17
(f) Waiver of Jury Trial.............................................17
(g) Counterparts; Effectiveness......................................17
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(h) Entire Agreement.................................................18
(i) Captions.........................................................18
(j) Severability.....................................................18
(k) Amendments.......................................................18
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REGISTRATION RIGHTS AGREEMENT, dated as of August 23, 2000, between
Hanover Direct, Inc., a Delaware corporation (the "Company"), and Richemont
Finance S.A., a societe anonyme organized under the laws of the Grand Duchy of
Luxembourg (the "Stockholder").
In consideration of the mutual covenants and agreements herein
contained and other good and valid consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. CERTAIN DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
"Agreement" means this Registration Rights Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Registration Rights Agreement as the
same may be in effect at the time such reference becomes operative.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Common Stock" means common stock, par value $0.66-2/3 per share, of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means the Stockholder, and any successors or assigns of the
Stockholder pursuant to Section 10(c) hereof who acquires Registrable
Securities, directly or indirectly, from the Stockholder, or such transferee or
assignee. For purposes of this Agreement, the Company may deem and treat the
registered holder of Registrable Securities as the Holder and absolute owner
thereof, and the Company shall not be affected by any notice to the contrary.
"Person" means an individual, partnership, corporation, trust, limited
liability company, or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus,
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including post-effective amendments and all material incorporated by reference
in such prospectus or prospectuses.
"Purchase Agreement" means the Securities Purchase Agreement, dated as
of the date hereof, between the Company and the Stockholder.
"Registrable Securities" means (a) any of the Common Stock or (b) any of
the Series A Preferred Stock, in each case, held by the Holders from time to
time as to which registration pursuant to the Securities Act is required for a
public sale.
"Registration Statement" means any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all materials incorporated by reference in such Registration Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Cumulative Participating
Preferred Stock, par value $.01 per share, of the Company issued and sold to the
Stockholder pursuant to the Purchase Agreement.
"underwritten registration or underwritten offering" means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.
2. DEMAND REGISTRATIONS.
(a) Right to Request Registration. Any time after the date hereof, any
Holder or Holders ("Initiating Holders") may, subject to the provisions of
Section 2(b) hereof, request registration under the Securities Act of all or
part, of the Registrable Securities ("Demand Registration"); provided, that each
Demand Registration shall be for not less than $5 million of Registrable
Securities unless such Demand Registration is the last permitted Demand
Registration pursuant to Section 2(b) hereof.
Within 10 days after receipt of any such request for Demand
Registration, the Company shall give written notice of such request to all other
Holders of Registrable Securities and shall, subject to the provisions of
Section 2(d) hereof, include in such registration all such Registrable
Securities with respect to which the Company has
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received written requests for inclusion therein within 15 days after the
receipt of the Company's notice.
(b) Number of Demand Registrations. The Holders of Registrable
Securities shall be entitled to request an aggregate of four (4) Demand
Registrations. A registration shall not count as one of the permitted Demand
Registrations (i) until it has become effective, (ii) if the Initiating Holder
requesting such registration is not able to register and sell (other than as a
result of market conditions or any other events not within the Company's
control) at least 50% of the Registrable Securities requested by such
Initiating Holder to be included in such registration or (iii) in the case of a
Demand Registration that would be the last permitted Demand Registration
requested hereunder, if the Initiating Holder requesting such registration is
not able to register and sell all of the Registrable Securities requested to be
included by such Initiating Holder in such registration.
(c) Priority on Demand Registrations. The Company shall not include in
any Demand Registration any securities which are not Registrable Securities
without the written consent of the Holders of a majority of the Registrable
Securities to be included in such registration, or, if such Demand Registration
is an underwritten offering, without the written consent of the managing
underwriters. If the managing underwriters of the requested Demand Registration
advise the Company in writing that in their opinion the number of Registrable
Securities proposed to be included in any such registration exceeds the number
of securities which can be sold in such offering, the Company shall include in
such registration only the number of Registrable Securities which in the
opinion of such managing underwriters can be sold. If the number of shares
which can be sold is less than the number of Registrable Securities proposed to
be registered, the amount of Registrable Securities to be so sold shall be
allocated pro rata among the Holders of Registrable Securities desiring to
participate in such registration on the basis of the amount of such Registrable
Securities proposed to be registered by such Holders. If the number of shares
which can be sold exceeds the number of Registrable Securities proposed to be
sold, such excess shall be allocated pro rata among the other holders of
securities, if any, desiring to participate in such registration based on the
amount of such securities initially requested to be registered by such holders
or as such holders may otherwise agree.
(d) Restrictions on Demand Registrations. The Company shall not be
obligated to effect any Demand Registration within three months after the
effective date of a previous Demand Registration, a previous S-3 Registration
(as hereinafter defined) or a previous registration under which the Initiating
Holders had piggyback rights pursuant to Section 3 hereof wherein the
Initiating Holders were permitted to register, and sold, at least 50% of the
Registrable Securities requested to be included therein. The Company
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may (i) postpone for up to thirty (30) days the filing or the effectiveness of
a registration statement for a Demand Registration if, based on the good faith
judgment of the Company's board of directors, such postponement is necessary in
order to avoid premature disclosure of a matter the board has determined would
not be in the best interest of the Company to be disclosed at such time or (ii)
postpone the filing of a Demand Registration in the event the Company shall be
required to prepare audited financial statements as of a date other than its
fiscal year end (unless the stockholders requesting such registration agree to
pay the expenses of such an audit); provided, however, that in any of the
events described in clause (i) or (ii) above, the Initiating Holders requesting
such Demand Registration shall be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration shall not count as one of
the permitted Demand Registrations. The Company shall provide written notice to
the Initiating Holders requesting such Demand Registration of (x) any
postponement or withdrawal of the filing or effectiveness of a registration
statement pursuant to this paragraph (d), (y) the Company's decision to file or
seek effectiveness of such registration statement following such withdrawal or
postponement and (z) the effectiveness of such registration statement.
(e) Selection of Underwriters. If any of the Registrable Securities
covered by a Demand Registration or an S-3 Registration pursuant to Section 4
hereof is to be sold in an underwritten offering, the Initiating Holders shall
have the right to select the managing underwriter(s) to administer the offering
subject to the approval of the Company, which will not be unreasonably
withheld.
(f) Other Registration Rights. The Company shall not grant to any
Person the right, other than as set forth herein and except to employees or
directors of the Company with respect to registrations on Form S-8 (or any
successor form thereto), to request the Company to register any securities of
the Company except such rights as are not more favorable than or inconsistent
with the rights granted to the Holders herein.
(g) Effective Period of Demand Registrations. After any Demand
Registration filed pursuant to this Agreement has become effective, the Company
shall use its best efforts to keep such Demand Registration effective for a
period equal to 180 days from the date on which the SEC declares such Demand
Registration effective (or if such Demand Registration is not effective during
any period within such 180 days, such 180-day period shall be extended by the
number of days during such period when such Demand Registration is not
effective), or such shorter period which shall terminate when all of the
Registrable Securities covered by such Demand Registration have been sold
pursuant to such Demand Registration.
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3. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Company proposes to register any
of its common equity securities (other than Registrable Securities) under the
Securities Act (other than a registration statement on Form S-8 or on Form S-4
or any similar successor forms thereto), whether for its own account or for the
account of one or more shareholders of the Company, and the registration form
to be used may be used for any registration of Registrable Securities (a
"Piggyback Registration"), the Company shall give prompt written notice (in any
event within 10 business days after its receipt of notice of any exercise of
other demand registration rights) to all Holders of its intention to effect
such a registration and, subject to Sections 3(b) and 3(c), shall include in
such registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company's notice. The Company may postpone or withdraw the
filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering and/or that the number of securities
requested to be included in such registration would adversely affect the price
per share of the Company's securities to be sold in such offering, the Company
shall include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Registrable Securities requested to be
included therein by the Holders, pro rata among the Holders of such Registrable
Securities on the basis of the number of shares requested to be registered by
such Holders, and (iii) third, other securities requested to be included in
such registration pro rata among the holders of such securities on the basis of
the number of shares requested to be registered by such holders or as such
holders may otherwise agree.
(c) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of a holder of the Company's
securities other than Registrable Securities, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering and/or that the number of securities requested to be
included in such registration would adversely affect the price per share of the
Company's securities to be sold in such offering, the Company shall include in
such registration (i) first the securities requested to be included therein by
the holders requesting such registration and the Registrable Securities
requested to be included in such registration, pro rata among the holders of
such securities on the basis of the number of shares requested to be registered
by such holders, provided, that in the
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case of the one demand registration right exercised by ▇▇▇▇▇▇ ▇. ▇▇▇▇ pursuant
to the Registration Rights Agreement, dated as of April 3, 2000, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇, the Company shall include in such registration,
first, the securities requested to be registered by ▇▇▇▇▇▇ ▇. ▇▇▇▇ and, then,
the Registrable Securities and (ii) second, other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the number of shares requested to be registered by such holders or
as such holders may otherwise agree.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten primary offering or secondary offering by holders other than the
Holders, the Company shall have the right to select the managing underwriter or
underwriters to administer any such offering.
(e) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Sections 2 or 4 hereof or pursuant to this Section 3, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at least
nine months has elapsed from the effective date of such previous registration.
4. S-3 REGISTRATIONS.
If at any time that the Company is eligible to use Form S-3 or any
successor thereto, any Holder or Holders requests that the Company file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion but not less than $1 million of the Registrable
Securities held by such Holders, then the Company shall use its best efforts to
register under the Securities Act on Form S-3 (an "S-3 Registration") or any
successor thereto, for public sale in accordance with the method of disposition
specified in such notice, the number of Registrable Securities specified in
such notice. The Holders shall indicate in their request whether they are
exercising a Demand Registration or their right to request a registration on
Form S-3 pursuant to this Section 4. Whenever the Company is required by this
Section 4 to use its best efforts to effect the registration of Registrable
Securities, each of the procedures and requirements of Section 2 (including but
not limited to the requirement that the Company notify all Holders from whom
notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration. There is no
limitation on the number of registrations pursuant to this Section 4 that the
Company is obligated to effect.
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5. HOLDBACK AGREEMENTS.
The Company agrees not to effect any sale or distribution of any of its
equity securities during the 10 days prior to and during the 180 days beginning
on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration or any underwritten S-3 Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or S-4 or any successor forms thereto or pursuant to the exercise
of options by employees) unless the underwriters managing the offering
otherwise agree.
6. REGISTRATION PROCEDURES.
Whenever the Holders request that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its best efforts
to effect the registration and the sale of such Registrable Securities in
accordance with the intended methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with respect
to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective as soon as practicable thereafter;
and before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, furnish to the Holders of Registrable Securities covered
by such Registration Statement and the underwriter or underwriters, if any,
copies of all such documents proposed to be filed, including documents
incorporated by reference in the Prospectus and, if requested by such Holders,
the exhibits incorporated by reference, and such Holders shall have the
opportunity to object to any information pertaining to such Holders that is
contained therein and the Company will make the corrections reasonably
requested by such Holders with respect to such information prior to filing any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 days, in the case of a Demand Registration or an S-3
Registration, or such shorter period as is necessary to complete the
distribution of the securities covered by such Registration Statement and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement;
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(c) furnish to each seller of Registrable Securities such number of
copies of such Registration Statement, each amendment and supplement thereto,
the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such U.S.
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such U.S. jurisdictions of the Registrable
Securities owned by such seller (provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading, and, at the request of any such seller, the Company shall prepare a
supplement or amendment to such Prospectus (and if an amendment to the
Registration Statement is required, promptly file and cause such amendment to
become effective) so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus and Registration Statement shall not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(f) in the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form) and take all
such other actions as the Holders of a majority of number of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, exercising its best efforts to obtain the
requisite corporate approvals to effect a stock split or a combination of
shares and using its best efforts to cause members of management of the Company
to participate in customary "road-show" activities to the extent required by
the underwriters with a view to maximizing the price of the Common Stock sold
in such offering) and cause to be delivered to the underwriters and the
sellers, if any, opinions of counsel to the Company in customary form, covering
such matters as are customarily covered by opinions for an underwritten public
offering as the underwriters may reasonably request and addressed to the
underwriters and the sellers;
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(g) make available, for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement, subject to
the execution of customary confidentiality agreements;
(h) use its best efforts to cause all such Registrable Securities to be
listed on each securities exchange on which securities of the same class issued
by the Company are then listed or, if no such similar securities are then
listed, on Nasdaq or a national securities exchange selected by the Company;
(i) provide a transfer agent and registrar selected by the Company for
all such Registrable Securities not later than the effective date of such
Registration Statement;
(j) if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable Securities
sold pursuant thereto), letters from the Company's independent certified public
accountants addressed to each selling Holder (unless such selling Holder does
not provide to such accountants the appropriate representation letter required
by rules governing the accounting profession) and each underwriter, if any,
stating that such accountants are independent public accountants within the
meaning of the Securities Act and the applicable rules and regulations adopted
by the SEC thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by letters of the
independent certified public accountants delivered in connection with primary
or secondary underwritten public offerings, as the case may be;
(k) make generally available to its shareholders a consolidated
earnings statement (which need not be audited) for the 12 months beginning
after the effective date of a registration statement as soon as reasonably
practicable after the end of such period, which earnings statement shall
satisfy the requirements of an earning statement under Section 11(a) of the
Securities Act;
(l) promptly notify each seller of Registrable Securities and the
underwriter or underwriters, if any:
(i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement has been
filed and, with respect
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to the Registration Statement or any post-effective amendment,
when the same has become effective;
(ii) of any written request by the SEC for amendments
or supplements to the Registration Statement or Prospectus;
(iii) of the notification to the Company by the SEC of
its initiation of any proceeding with respect to the issuance by
the SEC of any stop order suspending the effectiveness of the
Registration Statement; and
(iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities
or blue sky laws of any U.S. jurisdiction.
At all times after the Company has filed a registration statement with
the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Securities pursuant to Rule 144 (or any similar
rule then in effect).
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company any other
information regarding such seller and the distribution of such securities as
the Company may from time to time reasonably request in writing. The Holders
covenant and agree to timely and truthfully provide such information upon
request.
Each seller of Registrable Securities agrees by having its stock
treated as Registrable Securities hereunder that, upon notice of the happening
of any event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any material
fact necessary to make the statements therein not misleading, such seller will
forthwith discontinue disposition of Registrable Securities until such seller
is advised in writing by the Company that the use of the Prospectus may be
resumed and, if applicable, is furnished with a supplemented or amended
Prospectus as contemplated by Section 6(e) hereof, and, if so directed by the
Company, such seller will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such seller's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. If the Company shall give any notice to suspend the
disposition of Registrable Securities
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pursuant to a Prospectus, the Company shall extend the period of time during
which the Company is required to maintain the Registration Statement effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date such
seller either is advised by the Company that the use of the Prospectus may be
resumed or receives the copies of the supplemented or amended Prospectus
contemplated by Section 6(e).
7. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, listing
application fees, printing expenses, transfer agent's and registrar's fees,
cost of distributing prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company and
all independent certified public accountants and other Persons retained by the
Company (all such expenses being herein called "Registration Expenses") (but
not including any underwriting discounts or commissions attributable to the
sale of Registrable Securities or reasonable fees and expenses of more than one
counsel representing the Holders of Registrable Securities (in accordance with
Section 7(b) hereof), shall be borne by the Company. In addition, the Company
shall 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 annual audit or quarterly review, the expense of
any liability insurance and the expenses and fees for listing the securities to
be registered on each securities exchange on which they are to be listed.
(b) In connection with each registration initiated hereunder (whether a
Demand Registration, S-3 Registration or a Piggyback Registration), the Company
shall reimburse the Holders covered by such registration or sale for the
reasonable fees and disbursements up to $50,000 of one law firm chosen by the
Holders of a majority of the number of Registrable Securities included in such
registration or sale.
(c) The obligation of the Company to bear the expenses described in
Section 7(a) and to reimburse the Holders for the expenses described in Section
7(b) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the
foregoing shall occur.
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8. INDEMNIFICATION.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Holder, the directors,
officers, partners, employees, agents, representatives of, and each Person, if
any, who controls any Holder within the meaning of the Securities Act or the
Exchange Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys' fees, amounts paid in settlement or expenses, joint or several,
(collectively, "Claims") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from
the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("Indemnified Damages"),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement (unless superceded by a final prospectus), or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading or (iii) any violation or alleged violation by the Company
of the Securities Act or the Exchange Act or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"); provided, however, that the foregoing
indemnity agreement shall not apply to any Claim to the extent that such Claim
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with information relating to such Indemnified Person furnished in
writing to the Company by such Indemnified Person expressly for inclusion in
the Registration Statement or any such amendment thereof or supplement thereto
or for failure to provide required information. Subject to Section 8(c), the
Company shall reimburse the Indemnified Persons, for any reasonable legal fees
or other reasonable expenses reasonably incurred by them in connection with
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investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 8(a) and the agreement with
respect to contribution contained in this Section 8 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall
survive any transfer of the Registrable Securities by the Holders.
b. In connection with any Registration Statement in which a
Holder is participating, each such Holder agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in Section 8(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each Person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (each an "Indemnified Party"), against any Claim or Indemnified Damages to
which any of them may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or
are based upon any Violation, in each case to the extent, and only to the
extent, that such Violation occurs in reliance upon and in conformity with
written information relating to such Holder furnished to the Company by such
Holder expressly for inclusion in such Registration Statement; and, subject to
Section 8(c), such Holder will reimburse any reasonable legal fees or other
reasonable expenses reasonably incurred by an Indemnified Party in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 8(b) and the agreement with
respect to contribution contained in this Section 8 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of such Holder, which consent shall not be unreasonably
withheld; provided, further, however, that the Holders shall be liable under
this Section 8(b) for only that amount of a Claim or Indemnified Damages as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of such Indemnified Party and shall survive any transfer of the
Registrable Securities by the Holders.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 8 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under
this Section 8, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof
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with counsel mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right
to retain its own counsel with the fees and expenses of not more than one
counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Holders holding at
least two-thirds (2/3) in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprized as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 8, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
d. The indemnification required by this Section 8 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
e. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person
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against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
f. To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 8 to the fullest extent permitted by law; provided, however,
that: (i) no person involved in the sale of Registrable Securities which person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) in connection with such sale, shall be entitled to
contribution from any person involved in such sale of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (ii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities pursuant to such Registration Statement.
9. RULE 144.
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further action
as any Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act, to the extent required to
enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
10. MISCELLANEOUS.
(a) Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing)
and shall be given,
If to the Company:
Hanover Direct, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ Raysman ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder:
Richemont Finance S.A.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: 011-4141-711-7138
If to a transferee Holder, to the address of such Holder set
forth in the transfer documentation provided to the Company;
in each case with copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as such party (or transferee) may
hereafter specify for the purpose by notice to the other parties in the manner
specified herein. Each such notice, request or other communication shall be
effective (a) if given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section and the appropriate facsimile
confirmation is received or (b) if given by mail, at the earliest of its
receipt or five days after the same has been deposited in a regularly
maintained receptacle for the deposit of U.S. mail, addressed and postage paid
as aforesaid or (c) if given by any other means, when delivered at the address
specified in this Section.
(b) No Waivers. No failure or delay by any party in exercising any
right, power or privilege hereunder or seeking any remedy with respect to a
breach hereof shall operate as a waiver thereof or of any other right, power or
privilege nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of
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any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
(c) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, it being understood that subsequent Holders
of the Registrable Securities are intended third party beneficiaries hereof.
The Stockholder shall provide written notice to the Company pursuant to Section
10(a) hereof, of any transfers or assignments of Registrable Securities,
promptly after such transfer or assignment. Such notice shall include the name
and other contact information relating to such transferee or assignee.
(d) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York, without regard to principles
of conflicts of law (other than Section 5-1401 of the General Obligations Law
of the State of New York).
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the State of New York, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum. Process
in any such suit, action or proceeding may be served on any party anywhere in
the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on
such party as provided in Section 10(a) shall be deemed effective service of
process on such party.
(f) Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument
provided no party shall be bound unless and until the Stockholder and the
Company have each signed a counterpart hereof.
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(h) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the transactions contemplated herein. No
provision of this Agreement or any other agreement contemplated hereby is
intended to confer on any Person other than the parties hereto any rights or
remedies.
(i) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable (a "Determination"), the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a Determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
(k) Amendments. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the prior written consent of the holders of a majority of the
Registrable Securities outstanding at the time; provided, however, that the
consent or agreement of the Company shall be required with regard to any
termination, amendment, modification or supplement of, or waivers or consents
to departures from, the terms hereof, which affect the Company's obligations
hereunder.
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IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed by each of the parties hereto as of the date first written above.
Richemont Finance S.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
By: /s/ A GRIEVE
--------------------------------------
Name: ▇. ▇▇▇▇▇▇
Title: DIRECTOR
Hanover Direct, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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