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Exhibit 10.21
EXECUTION COPY
AVTEAM, INC.
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of December 6, 1996 (this
"Agreement"), by and among AVTEAM, INC., a Florida corporation (the "Company"),
and the Persons listed on Exhibit A hereto (the "Investors").
The parties to this Agreement are parties to a Stock Purchase
Agreement dated as of December 6, 1996 (the "Purchase Agreement"). In order to
induce the Investors to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Initial Closing
under the Purchase Agreement. Unless otherwise provided in this Agreement,
capitalized terms used herein shall have the meanings set forth in paragraph 8
hereof.
The parties hereto agree as follows:
1. Demand Registrations.
(a) Requests for Registration. At any time from and
after the earlier of (i) the IPO Date and (ii) the expiration of the three (3)
year period commencing on the date hereof, the holders of the Registrable
Securities may request registration under the Securities Act of all or any
portion of the Registrable Securities on Form ▇-▇, ▇-▇ or S-3, or any similar
registration statements ("Registrations"). The Company shall determine, in its
reasonable discretion, the Form to be used for each Registration. All
registrations requested pursuant to this paragraph l(a) are referred to herein
as "Demand Registrations". The Company only shall be obligated to effect a
Demand Registration if the aggregate number of Registrable Securities requested
to be registered is 750,000 or more. Each request for a Demand Registration
shall specify the approximate number of Registrable Securities requested to be
registered and the intended method or methods of distribution thereof. Within
20 days after receipt of any such request, the Company shall give written
notice of such requested registration to all other holders of Registrable
Securities and shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within 10 days after the receipt of the Company's notice.
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(b) Registrations. The holders of Registrable Securities
shall be entitled to request two (2) (or, if the Investors shall have
purchased any of the Additional Securities (as defined in the Purchase
Agreement) under the Purchase Agreement, three (3)) Registrations; provided,
however, that any Registration requested pursuant to this Section 1 shall not
be deemed to have been effected (and, therefore, not exercised for purposes of
Section l(a)) if (i) it was not declared effective by the Commission pursuant
to the Securities Act, (ii) it is declared effective but is subsequently
withdrawn by the Company (prior to the completion of the distribution of the
Registrable Securities covered thereby), (iii) it is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court such that the Registrable Securities requested to
be registered cannot be completely distributed in accordance with the plan of
distribution set forth in the related registration statement, unless the sole
reason for such interference is a misrepresentation or an omission by any
participating holder of Registrable Securities, or (iv) the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied or waived, unless
such failure is caused solely by default by any participating holder of
Registrable Securities in carrying out its obligations thereunder.
(c) Demand Registration Expenses. Subject to Section 6
hereof, the Company shall pay all Registration Expenses (as defined in Section
6(a) hereof) incurred in connection with each Demand Registration hereunder.
(d) Selection of Underwriters. The holders of a majority
of the Registrable Securities shall have the right to select the investment
banker(s) and manager(s) (the "Managing Underwriter(s)") to administer the
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld (provided that such investment banker(s) or Managing
Underwriter(s) are of nationally recognized standing).
(e) Registration of Additional Securities. The Company
shall have the right to cause the registration of additional securities for
sale for the account of any person (including the Company) in any Registration
of Registrable Securities requested pursuant to Section 1(a), provided, that
the Company shall not have the right to cause the registration of such
additional securities if the requesting holders are advised in writing (with
a copy to the Company) by the Managing Underwriter(s), that, in its or their
opinion, the number of additional securities that the Company desires to
include in such Registration exceeds the number which can be sold in such
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Offering without materially and adversely affecting the offering, in which
event, the Company shall include in such Registration, (A) first, the
Registrable Securities requested to be included in such Registration by the
holders of Registrable Securities, (B) second, the additional securities the
Company proposes to sell; (C) third, the additional securities held by the
shareholders of the Company (other than the holders of Registrable Securities)
the proceeds from the sale of which such shareholders propose to transfer to an
organization or foundation qualified as a 501(c)(3) organization (a "501(c)
Organization") under the Internal Revenue Code of 1986, as amended, or, in the
event such securities have been transferred to a 501(c)(3) Organization, the
securities held by such 501(c)(3) Organization; and (D) fourth, the additional
securities (other than those referred to in clause (C) immediately above) held
by any shareholder of the Company other than the holders of Registrable
Securities. The holders of a majority of the Registrable Securities held by
participating holders may require that any such additional securities be
included in the Registration on the same terms and conditions as the
Registrable Securities included therein.
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register on its behalf and/or on behalf of any of its security holders any of
its securities under the Securities Act (other than pursant to a Demand
Registration or registrations on Form S-4 or Form S-8, or any successor forms)
involving any of its equity securities (or any security with respect to which
equity securities may be issuable upon exercise, conversion or exchange of any
options, rights thereto or thereunder) to be offered for cash or cash
equivalents, and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company shall give, at least 25 days prior to the anticipated filing date of
the registration statement relating to such transaction, written notice to the
holders of Registrable Securities of its intention to effect such a
registration (which notice shall set forth the intended method of disposition
of the securities proposed to be registered by the Company). Upon the written
request of any holder of Registrable Securities delivered to the Company within
25 days after such notice shall have been given by the Company to the holders
of Registrable Securities (which request shall specify the Registrable
Securities intended to be disposed of by such holder of Registrable Securities
and the intended method of disposition thereof), the Company shall use its
reasonable best efforts to effect the Piggyback Registration under the
Securities Act within 30 days after receipt by the Company of such request by
the holders of the Registrable Securities and the Company shall include in such
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registration all Registrable Securities that the Company has been so requested
to register by the holders of Registrable Securities; provided, that if at any
time after giving such written notice of its intention to register any offering
of such securities and prior to the effective date of the registration
statement filed in connection with such Piggyback Registration, the Company
shall determine in its reasonable judgment not to register or to delay the
registration of such offering of securities, the Company shall give written
notice of such determination to the participating holders of Registrable
Securities in connection with such Piggyback Registration.
(b) Priority on Registrations. If a Piggyback
Registration is an underwritten Primary registration on behalf of the Company,
and the Managing Underwriter(s) 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 without materially and
adversely affecting the 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 in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares requested to be registered by each such holder or
such other proportions as such holders may determine, (iii) third, the
securities held by the shareholders of the Company (other than the holders of
Registrable Securities) the proceeds from the sale of which such shareholders
propose to transfer to a 501(c)(3) Organization or, in the event such
securities have been transferred to a 501(c)(3) Organization, the securities
held by such 501(c)(3) Organization and (iv) fourth, other securities requested
to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the Managing Underwriter(s) 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 without materially and adversely affecting the offering, the Company
shall include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares requested to be registered by each such holder or such other proportions
as such holders may determine, (iii) third, the securities held by the
shareholders of the Company (other than the holders of Registrable Securities)
the proceeds from the sale of which such shareholders propose to transfer to a
501(c)(3) Organization or, in the event such securities have been transferred
to a 501(c)(3)
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Organization, the securities held by such 501(c)(3) Organization and (iv)
fourth, other securities requested to be included in such registration.
(d) Piggyback Registration Expenses. Subject to Section
6 hereof, and except as otherwise agreed to between the Company and the
security holders on whose behalf a Piggyback Registration is filed, the Company
shall pay all Registration Expenses in connection with each Piggyback
Registration.
3. Holdback Agreements.
(a) Each holder of Registrable Securities shall
not effect any public sale or distribution (including sales pursuant to Rule
144) of equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to
and the 90-day period (or such greater period as the Managing Underwriter(s)
require) beginning on the effective date of any applicable registration
statement for any underwritten registration (except as part of such
underwritten registration), unless the Managing Underwriter(s) otherwise agree.
(b) The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to
and during the 90-day period beginning on the effective date of any applicable
registration statement for any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any
successor form), unless the underwriters managing the registered public
offering otherwise agree, and (ii) shall use its reasonable best efforts to
cause each holder of at least five percent (5%) of its Common Stock, or any
securities convertible into or exchangeable or exercisable for Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
4. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of
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disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its reasonable
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed, which
documents shall be subject to the reasonable review and comment of such
counsel);
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for a period of not less than
120 days (except as provided in Section 5 hereof) 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;
(c) furnish to each seller of Registrable Securities a
copy of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such copies of the prospectus as such seller may
reasonably request in order to facilitate the disposition of the Registable
Securities owned by such seller.
(d) use its reasonable best efforts to register or
qualify such Registrable Securities under such state securities or blue sky
laws of such 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 jurisdictions of the
Registrable Securities owned by such seller (provided that the Company shall
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,
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction);
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(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 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 fact necessary to make the statements therein
not misleading, other than any such untrue statement or omission made therein
in reliance upon and conformity with written information furnished to the
Company by or on behalf of such seller of Registrable Securities specifically
for inclusion in such registration statement, and, at the request of any such
seller, the Company shall prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(f) cause all such Registrable Securities to be listed
on each securities exchange on which similar securities issued by the Company
are then listed and, if not so listed, to be listed on the NASD automated
quotation system and, if listed on the NASD automated quotation system, use its
best efforts to secure designation of all such Registrable Securities covered
by such registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with
the NASD;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority 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 effecting a stock
split or a combination of shares);
(i) make available for inspection during normal business
hours of the Company 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 reasonably relevant financial and other records, pertinent
corporate documents and properties of the
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Company, and cause the Company's officers, directors, employees and independent
accountants to supply all reasonably relevant information requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
Company as confidential at the time of delivery of such information shall be
kept confidential by the shareholders of the Company or any such underwriter,
attorney, accountant, agent or representative, unless (x) disclosure is, in the
opinion of counsel to the disclosing party, required to be made in connection
with a court proceeding or required by law or (y) such information is or
becomes generally available to the public;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full month after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company, to participate in the
preparation of such registration statement and to require the insertion therein
of material, furnished to the Company in writing, which in the reasonable
judgment of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, the Company shall use its reasonable best efforts
promptly to obtain the withdrawal of such order;
(m) furnish, at the request of any holder requesting
registration of Registrable Securities pursuant to Section 1 or 2, on the date
that such shares of Registrable Securities are delivered to the underwriters
for sale pursuant to such registration or, if such Registrable Securities are
not being sold through underwriters, on the date that the registration
statement with respect to such shares of Registrable Securities becomes
effective, (1) an opinion, dated such date, of the independent counsel
representing Company for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the holders making such request, in customary
form and
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covering matters of the type customarily covered in such legal opinions; and
(2) a "cold comfort" letter dated such date, from the independent certified
public accountants of Company, addressed to the underwriters, if any, and if
such Registrable Securities are not being sold through underwriters, then to
the holder making such request and, if such accountants refuse to deliver such
letter to such holder, then to Company in a customary form and covering matters
of the type customarily covered by such "cold comfort" letter and as the
underwriters or such holder shall reasonably request. Such opinion of counsel
shall additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as such holders of
Registrable Securities may reasonably request.
5. Suspension of Offerings in Certain Circumstances. The
Company shall be entitled for the period referred to below to postpone the
filing of any registration statement filed by it pursuant to Sections 1 or 2
hereof and/or to direct the suspension of any public offering, sale or
distribution of Registrable Securities if the Board of Directors of the Company
(the "Board") determines in good faith based on an opinion of outside counsel
to the Company that any disclosure that would be required in connection
therewith would have a material adverse effect on the Company or any financing,
acquisition, disposition, merger, business combination, corporate
reorganization, or other transaction or development involving the Company or
any subsidiary of the Company (a "Business Development Determination"). Such
postponement or direction shall continue until such time as the Board
determines that the preparation and/or filing of such Registration Statement or
the taking of any such action and/or such public offering, sale or distribution
would no longer have a material adverse effect on the Company or any such
transaction but shall not, in any event, exceed 30 days for any particular
Business Development Determination or 60 days for all Business Development
Determinations during any twelve month period. No Business Development
Determination shall occur within 90 days of the expiration of a postponement or
suspension caused by another Business Development Determination. The Board
shall, as promptly as practicable, give the holders of the Registrable
Securities written notice of any Business Development Determination.
6. Registration Expenses.
(a) All expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation all
registration and Commission, New York Stock Exchange or NASDAQ filing fees,
fees and expenses of compliance with state securities or blue sky laws,
printing expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements
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of counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Persons retained
by the Company (all such expenses being herein called "Registration Expenses")
shall be borne as provided in this Agreement, including the Company paying 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 similar securities issued by the Company are then
listed or on the NASDAQ, provided, that each holder of Registrable Securities
shall bear and pay its pro rata portion of any brokerage fees or underwriting
discounts and fees applicable to the Registrable Securities sold by such
holder.
(b) In connection with each Demand Registration
and each Piggyback Registration, the Company shall reimburse the holders of
Registrable Securities included in such registration for the reasonable fees
and disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities included in such registration.
7. Indemnification and Contribution.
(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company
shall indemnify and hold harmless the holder of such Registrable Securities,
such holder's directors, officers and partners (and the directors and officers
of such partners), and each other Person (including each underwriter and
broker dealer, if required by such broker dealer as a condition to its
participation in such offering of Registrable Securities) who participated in
the offering of such Registerable Securities and each other Person, if any,
who controls such holder or such participating Person within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such holder or any such director, officer, partner (and
the directors and officers of such partner) or participating Person or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the
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statements therein not misleading, and shall reimburse such holder or such
director, officer, partner (and the directors and officers of such partner) or
participating Person or controlling Person for any legal or any other expenses
reasonably incurred by such holder or such director, officer, partner (and the
directors and officers of such partner) or participating Person or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or
alleged omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to Company by such holder specifically for use
therein or (in the case of any registration pursuant to Section 1 or 2) so
furnished for such purposes by any underwriter. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such holder or such director, officer or participating Person or controlling
Person, and shall survive the transfer of such securities by such holder.
(b) Each holder of any Registrable Securities, by
acceptance thereof, agrees to indemnify and hold harmless the Company, its
directors and officers and each other Person, if any, who controls Company
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which Company or any such director or officer
or any such Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information in writing provided to the Company by such holder of such
Registrable Securities specifically for use in the following documents and
contained, on the effective date thereof, in any registration statement under
which securities were registered under the Securities Act at the request of
such holder, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereto; provided that the obligation to
indemnify shall be individual, not joint and several, for each holder and shall
be limited to the net amount of proceeds received by such holder from the sale
of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's
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reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not
be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.
(d) If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(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. 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.
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8. Participation in Underwritten Registrations. No
Person may participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting arrangements;
provided that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties
regarding such holder and such holder's intended method of distribution) or to
undertake any indemnification obligations to the Company or the underwriters
with respect thereto, except as otherwise provided in paragraph 7 hereof.
9. Definitions.
"Commission" means the Securities and Exchange Commission or
any agency succeeding to the functions thereof.
"Common Stock" means the Company's Class A Common Stock, $.0l
par value per share, and the Company's Class B Common Stock, $.01 per value
per share; provided, however, that it is acknowledged that pursuant to Article
IV, Section D.4(c) of the Company's Second Amended and Restated Articles of
Incorporation, such Class B Common Stock automatically will convert into Class
A Common Stock upon a sale pursuant to a public offering.
"IPO Date" means the first date on which any class of common
stock of the Company shall have been registered and sold pursuant to an
effective registration statement under the Securities Act.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof,
"Preferred Stock" means the shares of convertible preferred
stock, par value $.01 per share, of the Company.
"Purchaser Representative" means Clipper Capital Partners,
L.P. or a person designated by the holders of a majority of the Registrable
Securities.
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"Registrable Securities" means any shares of Common Stock (i)
acquired by the Investors upon conversion of the shares of Preferred Stock
purchased by the Investors pursuant to the Purchase Agreement or (ii) purchased
by the Investors pursuant to the Shareholders Agreement. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when they have been distributed to the public pursuant to a offering
registered under the Securities Act or sold to the public through a broker,
dealer or market maker in compliance with Rule 144 under the Securities Act
(or any similar rule then in force) or repurchased by the Company. For
purposes of this Agreement, a Person shall be deemed to be a holder of
Registrable Securities, and the Registrable Securities shall be deemed to be
in existence, whenever such Person has the right to acquire directly or
indirectly such Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected, and such Person shall be entitled
to exercise the rights of a holder of Registrable Securities hereunder.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Shareholders Agreement" means the Shareholders Agreement
dated as of December 6, 1996 by and among the Company, the Investors the other
shareholders of the Company and the Purchaser Representative.
Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Shareholders Agreement.
10. Miscellaneous.
(a) Termination of Agreement. The parties hereto agree
that this Agreement shall terminate 10 years from the date hereof.
(b) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(c) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to its securities which reasonably could be expected to adversely affect the
ability of the holders of
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Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which reasonably could be expected to
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares unless the Managing Underwriter(s) in connection with a
registration undertaken pursuant to this Agreement recommend(s) such an action
and such action could not reasonably be expected to adversely affect the rights
of the holders of Registrable Securities in any manner).
(d) Remedies. Any Person having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon
the prior written consent of the Company and holders of at least 51% of the
Registrable Securities.
(f) Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.
(g) Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
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(h) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
(i) Descriptive Headings. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
(j) Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be construed in accordance with the laws
of the State of New York, without regard to principles of conflict of laws.
(b) Each party hereto agrees that all judicial proceedings
arising out of or relating to this Agreement or the breach hereof may be
brought in any state of federal court of competent jurisdiction in the State
of New York or Florida.
(k) Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to each Investor at the address
indicated on the Schedule of Investors and to the Company at the address
indicated below:
AVTEAM, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(l) Entire Agreement. Except as otherwise expressly set
forth herein, this Agreement embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understanding, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
AVTEAM, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
INVESTORS
---------
Clipper Capital Associates, L.P. Clipper Equity Partners I, L.P.
By: Clipper Capital Associates, Inc. By: Clipper Capital Associates, L.P.
its general partner its general partner
By: Clipper Capital Associates, Inc.
it's general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------- ----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer and Secretary Title: Treasurer and Secretary
Clipper/Merban, L.P. Clipper/European Re, L.P.
By: Clipper Capital Associates, L.P. By: Clipper Capital Associates, L.P.
its general partner its general partner
By: Clipper Capital Associates, Inc. By: Clipper Capital Associates, Inc.
its general partner its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Callihane By: /s/ ▇▇▇▇▇▇ ▇. Callihane
--------------------------------------- ----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer and Secretary Title: Treasurer and Secretary
Clipper/Merban, L.P.
By: Clipper Capital Associates, L.P.
its general partner
By: Clipper Capital Associates, Inc.
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Callihane
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer and Secretary
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EXHIBIT A
LIST OF INVESTORS
-----------------
Clipper Capital Associates, L.P.
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Clipper/Merchant Partners, L.P.
Eleven Madison Aveune
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Clipper/Merban, L.P.
▇/▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Clipper Equity Partners I, L.P.
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Clipper/European Re, L.P.
▇/▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
19