EXHIBIT 10.37
REGISTRATION RIGHTS AGREEMENT
among
PAMECO CORPORATION
▇▇▇▇▇▇▇▇▇▇ FUND II, L.P.
and
QUILVEST AMERICAN EQUITY, LTD.
and
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
Dated as of February 18, 2000
TABLE OF CONTENTS
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Page
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1. Definitions........................................... 1
2. Demand Registrations.................................. 4
3. Piggyback Registrations............................... 5
4. Registration Pursuant to Rule 415..................... 6
5. Obligations of the Company............................ 7
6. Furnish Information................................... 10
7. Suspension of Disposition of Registrable Securities... 10
8. Expenses of Registration.............................. 10
9. Underwriting Requirements; Priorities................. 11
10. Rule 144.............................................. 14
11. Lockup Agreement...................................... 14
12. Transfer of Registration Rights....................... 15
13. Indemnification and Contribution...................... 15
14. Remedies.............................................. 18
15. Amendments and Waivers................................ 18
16. Filing Notices and Copies............................. 18
17. Notices............................................... 18
18. Counterparts and Facsimile Signatures................. 21
19. Interpretation........................................ 21
20. Governing Law; Consent to Jurisdiction................ 22
21. Severability.......................................... 22
22. Entire Agreement; Other Registration Rights........... 22
23. No Third Parties Benefited............................ 22
24. Successors and Assigns................................ 22
25. Effectiveness......................................... 22
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the 18th
day of February, 2000, by and among Pameco Corporation, a company organized
under the laws of the State of Georgia, ▇▇▇▇▇▇▇▇▇▇ Fund II, L.P., a Delaware
limited partnership ("▇▇▇▇▇▇▇▇▇▇"), Quilvest American Equity Ltd., a British
Virgin Islands international company ("Quilvest"), and International Comfort
Products Corporation (USA) ("ICPC").
BACKGROUND
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WHEREAS, pursuant to the terms of that certain Securities Purchase
Agreement (the "Purchase Agreement") dated as of February 18, 2000, each of
▇▇▇▇▇▇▇▇▇▇ and Quilvest have purchased shares of Series A Preferred Shares (as
defined herein);
WHEREAS, each of ▇▇▇▇▇▇▇▇▇▇ and Quilvest have entered into a shareholders
agreement dated today's date in connection with the Series A Preferred Shares,
Additional Preferred Shares (as defined herein) and the Common Stock (as defined
herein) underlying them, which sets forth certain rights and obligations of the
shareholders (the "Shareholders Agreement");
WHEREAS, pursuant to a Warrant Agreement dated as of February 16, 2000 (the
"ICPC Warrant Agreement"), the Company has agreed to issue to ICPC certain
warrants to purchase Class A Common Stock (as defined herein); and
WHEREAS, the Company (as defined herein) has agreed to provide certain
registration rights to each of ▇▇▇▇▇▇▇▇▇▇, Quilvest and ICPC, in each case in
accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
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shall have the following respective meanings:
(a) "Act" means the Securities Act of 1933, as amended, or any
similar federal statute enacted hereafter, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
(b) "Additional Preferred Shares" means (i) any series of
preferred stock issued pursuant to the Purchase Agreement, as the same may be
amended or modified from time to time, other than the Series A Preferred Shares,
and (ii) any other securities into which or for which any of the securities
described in clause (i) above may be converted or exchanged pursuant to or
arising from a plan of recapitalization, merger, sale of assets or otherwise.
(c) "Affiliate" has the meaning set forth in the Purchase
Agreement.
(d) "Applicable Percentage" has the meaning set forth in the
Purchase Agreement.
(e) "Class A Common Stock" means (i) the Class A Common Stock,
par value $0.01 per share, of the Company and (ii) securities which were issued
or received in respect of, or in exchange or substitution for the securities
described in clause (i) above, including, but not limited to, those arising from
a stock dividend, distribution, stock split, reclassification, reorganization,
merger, consolidation, sale or transfer of assets or other exchange of
securities (including the conversion of Series A Preferred Shares or Class B
Common Stock into shares of Class A Common Stock).
(f) "Class B Common Stock" means (i) the Class B Common Stock,
par value $0.01 per share, of the Company and (ii) securities which were issued
or received in respect of, or in exchange or substitution for any of the
foregoing, including, but not limited to, those arising from a stock dividend,
distribution, stock split, reclassification, reorganization, merger,
consolidation, sale or transfer of assets or other exchange of securities.
(g) "Commission" means the Securities and Exchange Commission,
or any other federal agency at the time administering the Act.
(h) "Common Stock" means collectively the Class A Common Stock
and the Class B Common Stock.
(i) "Company" means Pameco Corporation, or any successor by
merger, consolidation or other transaction, and shall include any subsidiaries
thereof.
(j) "Counterpart" means a counterpart to this Agreement in the
form of Exhibit A hereto, pursuant to the execution of which a Person shall
become bound by all of the terms and conditions of this Agreement; it being
understood that any Person who shall become a Holder shall be required to
execute and become bound by all of the terms and conditions to this Agreement to
the same extent as its transferor.
(k) "Holder" means each of ▇▇▇▇▇▇▇▇▇▇, Quilvest and ICPC to the
extent it holds Registrable Securities, and any other Person holding Registrable
Securities to whom registration rights granted under and pursuant to this
Agreement have been transferred pursuant to Section 12 hereof.
(l) "ICPC Warrants" means the warrants to be issued pursuant to
the ICPC Warrant Agreement to purchase Class A Common Stock.
(m) "Person" means an individual, a sole proprietorship, a
company, a partnership, a limited liability company, a limited liability
partnership, a joint venture, an association, a trust, or any other entity or
organization, including a government or a political subdivision, agency or
instrumentality thereof.
(n) "Preferred Stock" means (i) the preferred stock, par value
$1.00 per share, of the Company, and (ii) securities which were issued or
received in respect of, or in exchange or substitution for the securities
described in clause (i) above, including, but not
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limited to, those arising from a stock dividend, distribution, stock split,
reclassification, reorganization, merger, consolidation, sale or transfer of
assets or other exchange of securities.
(o) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement
("Registration Statement") in compliance with the Act and the declaration or
ordering of effectiveness of such Registration Statement by the Commission.
(p) "Registered Holder" means, with respect to a particular
Registration Statement, each Holder which is including or has included
Registrable Securities in such Registration Statement.
(q) "Registered Securities" means, the Registrable Securities
included in a particular Registration Statement which has been declared
effective by the Commission and which has remained effective for the minimum
period required under and pursuant to the terms and conditions of this
Agreement.
(r) "Registrable Securities" means (i) any shares of Class A
Common Stock beneficially owned (which, for purposes of this Agreement, shall be
determined in accordance with Rule 13d-3 of the ▇▇▇▇ ▇▇▇) by any Holder
including, those to be received upon conversion of Series A Preferred Shares,
Additional Preferred Shares or Class B Common Stock, to the extent such
securities are from time to time hereafter convertible into Class A Common Stock
and those to be received upon exercise of the ICPC Warrants, and (ii) securities
which were issued or received in respect of, or in exchange or in substitution
for any of the foregoing, including, but not limited to, those arising from a
stock dividend, distribution, stock split, reclassification, reorganization,
merger, consolidation, sale or transfer of assets or other exchange of
securities; it being understood that, as to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (x) a Registration Statement with respect to the sale of such
securities shall have become effective under the Act and such securities shall
have been disposed of in accordance with such Registration Statement, (y) such
securities shall have ceased to be outstanding or (z) such securities shall have
been transferred as permitted by, and in compliance with, Rule 144 (or any
successor provision) promulgated under the Act.
(s) "Required Approval" has the meaning set forth in the
Purchase Agreement.
(t) "Series A Preferred Shares" means Series A Cumulative
Pay-in-Kind Preferred Stock of the Company, par value $1.00 per share, as the
same may be amended or modified from time to time, and (ii) any other securities
into which or for which any of the securities described in clause (i) above may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(u) "1934 Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
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(v) "Warrants" has the meaning set forth in the Purchase
Agreement.
2. Demand Registrations.
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(a) At any time after the Required Approval is received, and
from time to time thereafter, upon the receipt of a written request from the
Holders of a majority of the Registrable Securities beneficially owned by
▇▇▇▇▇▇▇▇▇▇ and its Affiliates that the Company file a Registration Statement
under the Act covering the registration for the offer and sale of all or part of
such ▇▇▇▇▇▇▇▇▇▇'▇ Registrable Securities (a "▇▇▇▇▇▇▇▇▇▇ Demand Registration"),
as soon as practicable, the Company shall give written notice to all other
Holders of such ▇▇▇▇▇▇▇▇▇▇ Demand Registration and shall cause all such
Registrable Securities that ▇▇▇▇▇▇▇▇▇▇ and such other Holders have requested,
which written request must be received by the Company no later than 30 days
after the Company shall have given the aforesaid notice, to be registered under
the Act, subject to and in accordance with the terms, conditions, procedures and
limitations contained in this Agreement, including as set forth in Section 9
below. Three ▇▇▇▇▇▇▇▇▇▇ Demand Registrations are entitled to be effected
pursuant to this Section 2 and a registration requested pursuant to this Section
2 shall not be deemed to have been effected unless a Registration Statement with
respect thereto has become effective, and remained continuously effective
without interruption in accordance with the provisions of Section 5(a) hereof,
or not withdrawn as permitted in accordance with the terms and conditions of
this Agreement. The Holders initiating a ▇▇▇▇▇▇▇▇▇▇ Demand Registration may
terminate such ▇▇▇▇▇▇▇▇▇▇ Demand Registration prior to the filing of a
Registration Statement relating thereto, or require the Company to withdraw
promptly any Registration Statement which has been filed pursuant to this
Section 2 but which has not become effective under the Act, and such
registration shall not be deemed to be a ▇▇▇▇▇▇▇▇▇▇ Demand Registration if
either (i) the Holders of the Registrable Securities sought to be included in
such registration agree to pay the costs and expenses of such registration as
set forth in Section 8 below, pro rata in accordance with the number of
Registrable Securities sought to be sold by each of them in such registration,
subject to the provisions of Section 9 below, or (ii) such withdrawal is
accompanied by notice from ▇▇▇▇▇▇▇▇▇▇ that, in the good faith exercise of its
reasonable judgment, there has occurred either (A) a material adverse change in
the business, results of operations, financial condition or prospects of the
Company or (B) a misstatement or omission in any preliminary prospectus (other
than with respect to such information supplied in writing by or on behalf of
such Holder expressly for use in such preliminary prospectus) which makes it
inadvisable to proceed with the registration.
(b) At any time and from time to time after the date which is
five years after the date hereof, upon the receipt of a written request from the
Holders of a majority of the Registrable Securities beneficially owned by
Quilvest and its Affiliates that the Company file a Registration Statement under
the Act covering the registration for the offer and sale of all or part of such
Registrable Securities (the "Quilvest Demand Registration"), as soon as
practicable, the Company shall give written notice to all other Holders of such
Quilvest Demand Registration and shall cause all such Registrable Securities
that Quilvest and such other Holders have requested, which written request must
be received by the Company no later than 30 days after the Company shall have
given the aforesaid notice, to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including as set forth in Section 9 below. One Quilvest Demand
Registration is entitled to be effected pursuant to this Section 2 and a
registration requested pursuant to this
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Section 2 shall not be deemed to have been effected unless a Registration
Statement with respect thereto has become effective, remained continuously
effective without interruption in accordance with the provisions of Section 5(a)
hereof, or not withdrawn as permitted in accordance with the terms and
conditions of this Agreement. The Holders initiating a Quilvest Demand
Registration may terminate its Quilvest Demand Registration prior to the filing
of a Registration Statement relating thereto, or require the Company to withdraw
promptly any Registration Statement which has been filed pursuant to this
Section 2 but which has not become effective under the Act, and such
registration shall not be deemed to be a Quilvest Demand Registration if either
(i) the Holders of the Registrable Securities sought to be included in such
registration agree to pay the costs and expenses of such registration as set
forth in Section 8 below, pro rata in accordance with the number of Registrable
Securities sought to be sold by each of them in such registration, subject to
the provisions of Section 9 below, or (ii) such withdrawal is accompanied by
notice from Quilvest that, in the good faith exercise of its reasonable
judgment, there has occurred either (A) a material adverse change in the
business, results of operations, financial condition or prospects of the
Company, or (B) a misstatement or omission in any preliminary prospectus (other
than with respect to such information supplied in writing by or on behalf of
such Holder expressly for use in such preliminary prospectus) which makes it
inadvisable to proceed with the registration.
(c) If at the time of any request to register Registrable
Securities pursuant to this Section 2, the Company is preparing or within 30
days thereafter engages a managing underwriter and commences to prepare a
Registration Statement for a public offering (other than a registration effected
solely to implement an employee benefit plan) which in fact is filed and becomes
effective within 120 days after the date the Holders initiating a Demand
Registration notify the Company of its intention to effect a Demand
Registration, respectively (any of which is herein a "Demand Registration"), or
is engaged in any material acquisition or divestiture or other business
transaction with a third party which would be adversely affected by the Demand
Registration to the material detriment of the Company, then the Company may at
its option direct that such request for a Demand Registration be delayed for a
period not in excess of 120 days from the date of such request, such right to
delay a request pursuant to this Section 2(c) or in Section 4 below to be
exercised by the Company not more than once in any one year period.
3. Piggyback Registrations.
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(a) If at any time after the Required Approval is received, and
from time to time thereafter, the Company proposes to register its Common Stock
under the Act, either for its own account or for the account of others
(including and to the extent any such registrations are effected pursuant to
Section 2 hereof), in connection with the public offering of such Common Stock
solely for cash, on a registration form that would also permit the registration
of Registrable Securities (other than registration statement on Form S-8 or any
successor form, or a registration on Form S-4 for the purpose of offering such
securities to another business entity or the shareholders of such entity in
connection with the acquisition of assets or shares of capital stock,
respectively, of such entity), the Company shall, each such time, promptly give
each Holder written notice of such proposal (a "Piggyback Registration Notice").
Within 30 days after the Piggyback Registration Notice is given, the Holders may
give notice as to the number of shares of Registrable Securities, if any, which
such Holders request to be registered simultaneously with such registration by
the Company ("Piggyback Registration").
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The Company shall include any Registrable Securities in such Registration
Statement (or in a separate Registration Statement concurrently filed) which the
Holders thereof request to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including the provisions of Section 9 below.
(b) Notwithstanding the foregoing, if the Piggyback Registration
was initiated by the Company to effect a primary public offering of its
securities and, if at any time the Company decides after giving written notice
of its intention to so register securities and before the effectiveness of the
Registration Statement filed in connection with such registration, the Company
determines for any reason either not to effect such registration or to delay
such registration, the Company may, at its election, by prior written notice to
each Holder, (i) in the case of a determination not to effect such registration,
relieve itself of its obligation to register the Registrable Securities in
connection with such registration or (ii) in the case of a determination to
delay registration, delay the registration of such Registrable Securities for
the same period as the delay in the registration of such other securities. Each
Holder requesting inclusion in a registration pursuant to this Section 3 may, at
any time before the effective date of the Registration Statement relating to
such registration, revoke such request by written notice of such revocation to
the Company, in which case the Company shall cause such Holder's Registrable
Securities to be withdrawn from such Registration Statement.
4. Registration Pursuant to Rule 415. At such time as the Company
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shall have qualified for the use of Form S-3 or any similar form promulgated by
the Commission, ▇▇▇▇▇▇▇▇▇▇ shall have the right to require, subject to the last
sentence of this Section 4, on one occasion during each calendar year that the
Company file a Registration Statement on Form S-3 pursuant to Rule 415 under the
Act (a "Rule 415 Request"). Notwithstanding the foregoing, the Company shall not
be obligated to effect the filing of a registration pursuant to this Section 4
if, at the time of any request to register Registrable Securities pursuant to
Section 4, the Company is preparing, or within 30 days thereafter engages a
managing underwriter and commences to prepare, a Registration Statement for a
public offering (other than a registration effected solely to implement an
employee benefit plan) which in fact is filed and becomes effective within 120
days after the date ▇▇▇▇▇▇▇▇▇▇ makes the Rule 415 Request, or is engaged in any
material acquisition or divestiture or other business transaction with a third
party which would be adversely affected by the Rule 415 Request to the material
detriment of the Company, then the Company may at its option direct that such
Rule 415 Request be delayed for a period not in excess of 120 days from the date
of such request, such right to delay a request pursuant to this Section 4 or in
Section 2(c) above to be exercised by the Company not more than once in any one
year period. Upon receipt of a Rule 415 Request, as soon as practicable, the
Company shall give written notice thereof to all other Holders and shall cause
all such Registrable Securities that ▇▇▇▇▇▇▇▇▇▇ and such other Holders have
requested to be registered, no later than 30 days after the Company shall have
given the aforesaid notice, to be registered under the Act, subject to and in
accordance with the terms, conditions, procedures and limitations contained in
this Agreement, including as set forth in Section 9 below. No registration
pursuant to this Section 4 shall count as a Demand Registration pursuant to
Section 2. Three registrations are entitled to be effected pursuant to this
Section 4 and a registration requested pursuant to this Section 4 shall not be
deemed to have been effected unless a Registration Statement with respect
thereto has become effective, and remained continuously effective without
interruption in accordance with the provisions of Section 5(a) hereof, or not
withdrawn as permitted in accordance with the terms
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and conditions of this Agreement.
5. Obligations of the Company. Whenever required under this
--------------------------
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the Commission a Registration
Statement covering such Registrable Securities and use its best efforts to cause
such Registration Statement to be declared effective by the Commission, and keep
such registration effective, until the date when all Registrable Securities
covered by the Registration Statement have been sold; provided, however, unless
the Company and the Holders of a majority of the Registrable Securities covered
by a particular Registration Statement otherwise agree, the foregoing
effectiveness period shall not exceed, (x) in the case of registration under
Section 2 or 3 hereof, 180 days after the effective date of the Registration
Statement or any amendments thereto, and (y) in the case of a registration under
Section 4 hereof, 365 days after the effective date of the Registration
Statement, or any amendments thereto.
(b) furnish to each Holder of Registrable Securities covered by
such Registration Statement and the underwriters, if any, within a reasonable
period of time prior to the making of any filing thereof, copies of all such
documents proposed to be filed (excluding exhibits, unless any such person shall
specifically request exhibits), which documents will be subject to the review of
each Holder and the underwriters, and the Company will not file such
Registration Statement or any amendment thereto or any prospectus or any
supplement thereto including any documents incorporated by reference therein)
with the Commission if (i) the Holders of a majority of the Registrable
Securities covered by such Registration Statement or the underwriters, if any,
shall reasonably object to such filing or (ii) information in such Registration
Statement or prospectus concerning a particular Registered Holder is inaccurate;
(c) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective until the applicable date referred to
in Section 5(a) hereof and to comply with the provisions of the Act with respect
to the disposition of all securities covered by such Registration Statement, and
cause the prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed with the Commission pursuant to Rule 424
under the Act;
(d) furnish to the Registered Holders such number of copies of
such Registration Statement, each amendment thereto, the prospectus included in
such Registration Statement (including each preliminary prospectus), each
supplement thereto and such other documents, as they may reasonably request in
order to facilitate the disposition of Registered Securities owned by them;
(e) use its best efforts to register and qualify the Registered
Securities under such other securities laws of such jurisdictions as shall be
reasonably requested by any Registered Holder and do any and all other acts and
things which may be reasonably necessary or advisable to enable each Registered
Holder to consummate the disposition of the Registered Securities owned by such
Holder in such jurisdictions; provided, however, the Company shall
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not be required in connection therewith or as a condition thereto to qualify
generally to transact business in any such states or jurisdictions;
(f) promptly notify each Registered Holder at any time when a
prospectus is required to be delivered under the Act of the happening of any
event (including a reasonably detailed description of such 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 Holder, the Company will
promptly prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registered Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(g) make available for inspection by any Registered Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by any such
Registered Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company to supply all
information reasonably requested by any such Registered Holder, underwriter,
attorney, accountant or agent in connection with such Registration Statement;
(h) promptly notify the Registered Holders and the underwriters,
if any, of the following events and, if requested by any such Person, confirm
such notification in writing and provide copies of any relevant documents
relating to: (i) the filing of the prospectus or any prospectus supplement and
the Registration Statement and any amendment or post-effective amendment thereto
and, with respect to the Registration Statement and any amendment or post-
effective amendment thereto, the declaration of the effectiveness of such
documents, (ii) any comment letters from or requests by the Commission for
amendments or supplements to the Registration Statement or the prospectus or for
additional information, (iii) the issuance or threat of issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registered Securities for sale in any jurisdiction or the
initiation or threat of initiation of any proceeding for such purpose;
(i) use its best efforts to prevent the entry of any order
suspending the effectiveness of the Registration Statement, or the
qualification, or exemption from qualification, of such securities included
therein for sales in any jurisdiction, and to obtain the withdrawal of any such
order, if entered;
(j) if reasonably requested by any underwriter or a Registered
Holder in connection with any underwritten offering, incorporate in a prospectus
supplement or post-effective amendment such information as the underwriters and
the Holders of a majority of the Registrable Securities covered by the
particular Registration Statement agree should be included therein relating to
the sale of such Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and any other terms of the
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underwritten offering of such Registrable Securities to be sold in such
offering, and make all required filings of such prospectus supplement or post-
effective amendment after being notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(k) cooperate with the Registered Holders and the underwriters,
if any, to facilitate the timely preparation and delivery of certificates
evidencing Registered Securities and not bearing any restrictive legends, and
enable such Registered Securities to be in such lots and registered in such
names as the underwriters may request at least two business days prior to any
delivery of Registered Securities to the underwriters;
(l) provide a transfer agent, registrar and CUSIP number for all
Registrable Securities not later than the effective date of the Registration
Statement;
(m) prior to the effectiveness of the Registration Statement and
any post-effective amendment thereto and at each closing of any underwritten
offering, (i) make such representations and warranties to the Registered Holders
and the underwriters, if any, with respect to the Registered Securities and the
Registration Statement as are customarily made by issuers to underwriters in
primary underwritten public offerings and such other matters as may be
reasonably requested by such Registered Holders and underwriters or their
counsel, (ii) obtain opinions of counsel to the Company and updates thereof
(which opinions shall be reasonably satisfactory to the underwriters, if any,
and to the Holders of a majority of the Registered Securities) addressed to each
Registered Holder and the underwriters, if any, covering the matters customarily
covered in opinions requested in primary underwritten public offerings of
securities and such other matters as may be reasonably requested by such Holders
and underwriters or their counsel, (iii) obtain "cold comfort" letters and
updates thereof from the Company's independent certified public accountants
addressed to the Company's board of Directors, each Registered Holder and the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters required by
underwriters in connection with primary underwritten public offerings of
securities (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registered Securities being sold
and by the underwriters, if any, to evidence compliance with clause (i) above
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company;
(n) enter into such agreements and take all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of such Registered Securities and in such connection, in the
case of an underwritten offering, enter into an underwriting agreement or other
similar agreement in form, scope and substance as is customary in primary
underwritten public offerings which underwriting agreement shall set forth in
full the indemnification provisions and procedures of Section 13 hereof with
respect to all parties to be indemnified pursuant to said Section; it being
understood that the foregoing shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
(o) use its best efforts to cause all Registered Securities
included in such Registration Statement to be listed, by the date of first sale
of Registered Securities pursuant to such registration statement, on the New
York Stock Exchange and on each other securities
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exchange on which shares of Common Stock are then listed or proposed by the
Company to be listed, if any.
(p) provide such reasonable assistance in the marketing of the
Registered Securities as is customary of issuers in primary underwritten public
offerings (including participation by its senior management in "road shows");
and
(q) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders earnings statements satisfying the provisions of Section 11(a)
of the Act no later than 45 days after the end of any 12-month period (i)
commencing at the end of any fiscal quarter in which Registered Securities are
sold to underwriters in a firm or best efforts underwritten offering or (ii) if
not sold to underwriters in such an offering, beginning with the first day of
the first fiscal quarter of the Company commencing after the effective date of
the Registration Statement, which earnings statement will cover such 12-month
period.
6. Furnish Information. The Registered Holders shall furnish to the
-------------------
Company such information regarding them, the Registrable Securities held by
them, and the intended method of disposition by them of such Registrable
Securities as is customarily provided by selling security holders and as any
underwriters shall reasonably request.
7. Suspension of Disposition of Registrable Securities. Each
---------------------------------------------------
Registered Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5(f) or 5(h)(3) or
(4) hereof, such Registered Holder will forthwith discontinue disposition of
Registered Securities until such Registered Holder's receipt of copies of a
supplemented or amended prospectus contemplated by Section 5(f) hereof, or until
it is advised in writing (the "Advice") by the Company that the use of the
prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, and,
if so directed by the Company, such Registered Holder will deliver to the
Company (at the expense of the Company) all copies, other than permanent file
copies then in such Registered Holder's possession, of the prospectus covering
such Registered Securities at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period mentioned in Section
5(a) hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(f) or
5(h)(3) or (4) hereof to and including the date when each Registered Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 5(f) hereof or the Advice.
8. Expenses of Registration.
------------------------
(a) Except as provided in Section 8(b) through 8(d) hereof, all
expenses incurred in connection with a registration pursuant to this Agreement,
whether or not a registration is consummated, including expenses, fees and taxes
in connection with (i) the preparation and filing of any Registration Statement,
each preliminary prospectus, the final prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to any underwriters and to dealers (including costs of mailing and shipment),
(ii) the preparation, issuance and delivery of the certificates for the
Registrable
-10-
Securities to offered and sold hereunder, including any stock or other transfer
taxes or duties payable upon the sale thereof, (iii) the printing of any
underwriting agreement and any dealer agreements and furnishing of copies of
each to the underwriters and to dealers (including costs of mailing and
shipment) participating in any registration, (iv) the qualification of the
Registrable Securities for offering and sale under state laws (including the
legal fees and filing fees and other disbursements of counsel in connection
therewith) and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) the filing for
listing or approval for quotation of the Registrable Securities on the New York
Stock Exchange and on any national securities exchange (including the legal fees
and filing fees and other disbursements of counsel in connection therewith),
(vi) filing for review of the public offering of the Registrable Securities by
the National Association of Securities Dealers, Inc. (including the legal fees
and filing fees and other disbursements of counsel in connection therewith),
(vii) the fees and expenses of any transfer agent or registrar for the
Registrable Securities, (viii) making road show presentations with respect to
the offering of the Registrable Securities, (ix) the legal fees and
disbursements charged by counsel to the Company and by counsel to the
underwriters, if any, (x) the fees and disbursements charged by the accountants
to the Company, and (xi) fees and disbursements charged by one counsel either
(A) chosen by ▇▇▇▇▇▇▇▇▇▇ in the case of a ▇▇▇▇▇▇▇▇▇▇ Demand Registration, (B)
chosen by Quilvest in a Quilvest Demand Registration, or (C) chosen by the
Holders of a majority of the Registrable Securities being offered and sold in
any other registration pursuant to which Registrable Securities are being
offered.
(b) Each Holder agrees to pay all underwriting discounts and
commissions and the fees and disbursements of any legal counsel retained by it,
other than the legal counsel referred to in clause (xi) of Section 8(a) above.
Additionally, the Company agrees to use its best efforts to cause its transfer
agent or its counsel to serve as a custodian, to the extent any underwriters
participating in any such registration shall require the participation of a
custodian for any selling security holders and, in such event, the Company shall
be responsible for the fees and disbursements of its transfer agent or its
counsel acting in such custodial capacity.
(c) All expenses incurred in connection with a registration
which are, under this Section 8, to be borne by Registered Holders shall be
borne pro rata by the Registered Holders on the basis of the number of such
Holder's Registered Securities (or Registrable Securities proposed to be
registered, as the case may be); provided, however, that if any such cost or
expense is attributable solely to one Registered Holder and does not constitute
a normal cost or expense of such a registration, such cost or expense shall be
allocated to and borne by that Registered Holder.
9. Underwriting Requirements; Priorities.
-------------------------------------
(a) With respect to a ▇▇▇▇▇▇▇▇▇▇ Demand Registration pursuant to
Section 2, the investment banker(s), book runner(s) and managing underwriter(s)
to administer such registration shall be selected by the Holders of Registrable
Securities initiating such ▇▇▇▇▇▇▇▇▇▇ Demand Registration, subject to the
approval of the Company, which approval will not be unreasonably withheld,
delayed or conditioned. With respect to a Quilvest Demand Registration pursuant
to Section 2, the investment banker(s) book runner(s) and managing
-11-
underwriter(s) to administer such registration shall be selected by the Holders
of Registrable Securities initiating such Quilvest Demand Registration, subject
to the approval of the Company, which approval will not be unreasonably
withheld, delayed or conditioned. The Company will have the right to select the
investment banker(s), book runners(s) and manager(s), if any, to administer any
offering which is initiated by the Company.
(b) (i) If a registration under Section 2 hereof is an
underwritten offering and the managing underwriters advise the Company that in
their opinion the number of Registrable Securities and shares of Common Stock
requested to be registered exceeds the number of shares which can be sold in
such offering without materially and adversely affecting the marketability of
the offering, then the Company will include in such registration, such
Registrable Securities and other shares of Common Stock, until ▇▇▇▇▇▇▇▇▇▇ shall
have received Aggregate Proceeds (as determined pursuant to subsection (h)
below) equal to the amount invested by ▇▇▇▇▇▇▇▇▇▇ and its Affiliates to purchase
Series A Preferred Shares, Additional Preferred Shares and Warrants, plus the
amount of accrued and unpaid dividends thereon, in each case, through the date
of the filing of the applicable Registration Statement (determined from time to
time, the "Return Amount"), determined as follows: first, Registrable Securities
owned by ▇▇▇▇▇▇▇▇▇▇ (and its Affiliates), on the one hand, and Quilvest (and its
Affiliates), on the other hand, allocated between the two groups pro rata based
upon the Applicable Percentages of ▇▇▇▇▇▇▇▇▇▇ and Quilvest, respectively;
second, to any other Persons having a contractual right to cause the Company to
register shares of Common Stock, pro rata among them based upon the number of
shares of Common Stock which they have requested be registered; and thereafter,
to the Company.
(ii) If a registration under Section 2 hereof is an
underwritten offering and the managing underwriters advise the Company that in
their opinion the number of Registrable Securities and shares of Common Stock
requested to be registered exceeds the number of shares which can be sold in
such offering without materially and adversely affecting the marketability of
the offering, then the Company will include in such registration, such
Registrable Securities and other shares of Common Stock, after ▇▇▇▇▇▇▇▇▇▇ shall
have received the Return Amount, determined as follows: first, Registrable
Securities owned by ▇▇▇▇▇▇▇▇▇▇ (and its Affiliates), on the one hand, and
Quilvest (and its Affiliates), on the other hand, allocated between the two
groups pro rata based upon the number of Registrable Securities which they have
requested be registered; second, to any other Persons having a contractual right
to cause the Company to register shares of Common Stock, pro rata among them
based upon the number of shares of Common Stock which they have requested be
registered; and thereafter, to the Company.
(c) If a registration under Section 3 hereof is an underwritten
offering initiated by the Company and the managing underwriters advise the
Company that in their opinion the number of Registrable Securities and shares of
Common Stock requested to be included in such registration exceeds the number of
shares which can be sold in such offering without materially and adversely
affecting the marketability of the offering, then the Company will include in
such registration, such Registrable Securities and other shares of Common Stock
based on the allocations set forth in subsection (b) above, except that the
Company shall be permitted to include all shares of Common Stock proposed to be
registered and sold by it for its
-12-
own account before any Registrable Securities or shares of Common Stock are
included by any other Person, including ▇▇▇▇▇▇▇▇▇▇, Quilvest, and their
respective Affiliates.
(d) If a registration under Section 3 hereof is an underwritten
offering initiated pursuant to contractual rights of shareholders of the Company
not party to this Agreement (the "Other Shareholders") and the managing
underwriters advise the Company that in their opinion the number of Registrable
Securities and shares of Common Stock requested to be included in such
registration exceeds the number of shares which can be sold in such offering
without materially and adversely affecting the marketability of the offering,
then the Company will include in such registration, such Registrable Securities
and other shares of Common Stock based on the allocations set forth in
subsection (b) above, except that the Other Shareholders shall be permitted to
include all shares of Common Stock proposed to be registered and sold by them
for their own account before any Registrable Securities or shares of Common
Stock are included by any other Person, including the Company, ▇▇▇▇▇▇▇▇▇▇,
Quilvest, and their respective Affiliates.
(e) Notwithstanding anything to the contrary herein, in
connection with any registration as to which this Agreement applies, ▇▇▇▇▇▇▇▇▇▇
(and its Affiliates), on the one hand, and Quilvest (and its Affiliates), on the
other hand, shall allocate between the two groups all Registrable Securities to
be sold by them as follows: until ▇▇▇▇▇▇▇▇▇▇ shall have received the Return
Amount, pro rata based upon the Applicable Percentages of ▇▇▇▇▇▇▇▇▇▇ and
Quilvest, respectively; and after ▇▇▇▇▇▇▇▇▇▇ has received the Return Amount, pro
rata based upon the number of shares of Common Stock which they have requested
be registered.
(f) No Holder may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
(g) The Company shall not grant registration rights to any
Person which impair in any way the priorities for inclusion in a registration
set forth in this Section 9, including, without limitation, by providing any
such Person with higher priority than or equal priority to that provided to the
parties herein with regard to any Registration Statement filed by be Company,
whether upon such Person's demand or otherwise.
(h) For purposes of this Agreement, "Aggregate Proceeds" shall
be determined as of the original date of the filing of a particular Registration
Statement, and shall equal the gross proceeds received as of the date of
determination by ▇▇▇▇▇▇▇▇▇▇ or its Affiliates from sales, if any, of Registered
Securities, or from sales of Series A Preferred Shares, Additional Preferred
Shares or Common Stock in transactions which are otherwise exempt from the
registration requirements of the Act.
(i) The Company represents and warrants to the Holders that, as
of the date hereof, it is not a party to any binding agreement or understanding,
whether written or oral,
-13-
which provides for an obligation on the part of the Company to register any of
its Securities under or pursuant to the Securities Act.
10. Rule 144. The Company will timely file the reports required to be
--------
filed by it under the Act and the 1934 Act and the rules and regulations adopted
by the Commission thereunder, and will use its best efforts to take such further
action as any Holder of Registrable Securities may reasonably deem to be
necessary, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (i) Rule 144 under the Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
11. Lockup Agreement.
----------------
(a) Each Holder agrees that, upon the request of and to the
extent required by the managing underwriter(s) or book runner(s) for a
registration of the Common Stock at the time of which such Holder is either a
Restricted Holder (as defined in Section 11(a) hereof) or participating in such
registration as a selling shareholder, such Holder will not sell, make any short
sale of, pledge, grant any option for the purchase of or otherwise dispose of
any Registrable Securities (other than those included in the registration or in
any Registration Statement previously declared effective) without the prior
written consent of the Company or such underwriters, as the case may be, or
unless the Company is permitted to sell under Section 11(b) hereof, during the
seven days prior to, and during the 180-day period beginning on, the effective
date of such registration. Each Holder described in the immediately preceding
sentence agrees to confirm the substance and intent of this Section 11(a) in
writing directly to the managing underwriter(s) and book runner(s) in such form
as they shall reasonably request. "Restricted Holder" shall mean any Holder who
beneficially owns (as defined in Rule 13d-3 under the Exchange Act) 2% or more
of the then outstanding Common Stock, any director or executive officer of the
Company (without regard to his or her level of ownership of Common Stock), or
any Holder whose Registrable Securities are being included in the registration
(without regard to the amount of Registrable Securities being registered).
(b) The Company agrees (i) not to effect any public or private
sale or distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, or otherwise grant any
option for the purchase of its equity securities (other than options issued by
the Company pursuant to any stock option plan or other employee benefit plan),
during the seven days prior to and during the 180-day period beginning on the
effective date of any Registration Statement related to a registered
underwritten public offering pursuant to which Registrable Securities are to be
sold (other than registration statement on Form S-8 or any successor form, or a
registration on Form S-4 for the purpose of offering such securities to another
business entity or the shareholders of such entity in connection with the
acquisition of assets or shares of capital stock, respectively, of such entity),
unless the underwriters managing the registered public offering otherwise agree
and (ii) not to issue securities to any Person if, after giving effect to such
issuance, to the knowledge of the Company, such Person would be the beneficial
owner of in excess of 2% of the Common Stock
-14-
unless such Person agrees, in the context of a registration contemplated hereby,
not to effect any sale or distribution of any such securities during the period
referred to above (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
12. Transfer of Registration Rights. Provided that the Company is
-------------------------------
given written notice by the Holder at the time of such transfer stating the name
and address of the transferee and identifying the securities with respect to
which the rights under this Agreement are being assigned, the registration
rights under this Agreement may be transferred in whole or in part in connection
with the transfer of Registrable Securities. Notwithstanding the foregoing, if
such transfer is subject to covenants, agreements or other undertakings
restricting transferability thereof the registration rights under this Agreement
shall not be transferred in connection with such transfer unless such transfer
complies with all such covenants, agreements and other undertakings. In all
cases, such registration rights shall not be transferred unless the transferee
thereof executes a Counterpart.
13. Indemnification and Contribution.
--------------------------------
(a) To the full extent permitted by law, the Company will and
hereby does (i) indemnify and hold harmless each Holder, each director, officer,
partner, employee, affiliate, or agent of or for such Holder, any underwriter
(as defined in the Act), and each Person, if any, who controls such Holder or
underwriter within the meaning of the Act, against any losses, claims, damages,
costs or liabilities, joint or several, to which they may become subject insofar
as such losses, claims, damages, costs or liabilities (or actions in respect
thereof) arise out of, are caused by, or are based on any untrue or alleged
untrue statement of any material fact contained in such Registration Statement,
including any amendments or supplements thereto, or (A) arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading , (B) arise out of, are caused by, or are based on any untrue or
alleged untrue statement of any material fact contained in any preliminary
prospectus or final prospectus contained in such Registration Statement,
including any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, or (C) arise out of, or are caused by, any violation by the
Company of any securities law, rule or regulation applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and (ii) will reimburse each such Person or entity for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, costs, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 13(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld,
delayed or conditioned) nor shall the Company be liable to a Holder, underwriter
or controlling person in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or an alleged untrue statement or omission or alleged omission
made in connection with such Registration Statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by or on
-15-
behalf of any such Holder, underwriter or controlling person. This indemnity
shall be in addition to other indemnification arrangements to which the Company
and any Holders may otherwise be party.
(b) To the full extent permitted by law, each Holder whose
Registrable Securities are included for offer and sale in a registration under
this Agreement, severally and not jointly, will and hereby does (i) indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, each Person, if any, who controls the
Company within the meaning of the Act, and any underwriter (as defined in the
Act), each other Holder and each Person, if any, who controls such underwriter
or other Holder within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer, controlling person, other Holder or underwriter may
become subject, under the Act and applicable state securities laws, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) (A)
arise out of, are caused by, or are based on any untrue or alleged untrue
statement of any material fact contained in such Registration Statement,
including any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (B)
arise out of, are caused by, or are based on any untrue or alleged untrue
statement of any material fact contained in any preliminary prospectus or final
prospectus contained in such Registration Statement, including any amendments or
supplements thereto, or arise out of or are based on the omission or alleged
omission to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, in each of
clauses (A) and (B) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such Registration Statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by such Holder expressly for use in such Registration
Statement; and (ii) will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, other Holder, controlling
person or underwriter attributable to investigating or defending any loss,
claim, damage, liability or action indemnified by such Holder pursuant to clause
(i); provided, however, that the indemnity agreement contained in this Section
13(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld, delayed or
conditioned). In no event shall the liability of any Registered Holder be
greater than the dollar amount of the proceeds (net of payment of all expenses)
received by such Registered Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under this
Section 13 of notice of the commencement of any action or knowledge of a claim
that would, if asserted, give rise to a claim for indemnity hereunder, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 13, notify the indemnifying party in
writing of the commencement thereof or knowledge 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 the defense thereof with counsel mutually
satisfactory to the parties. If prejudicial to any material extent to his
ability to defend such action, the failure to notify an indemnifying party
promptly of the
-16-
commencement of any such action or of the knowledge of any such claim, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 13 to the extent so prejudiced, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section 13. Each indemnified party
shall have the right to employ separate counsel in such action, claim or
proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of each indemnified party unless: (i) such
indemnifying party has agreed to pay such expenses, (ii) such indemnifying party
has failed promptly to assume the defense and employ counsel reasonably
satisfactory to such indemnified party or (iii) such indemnified party shall
have been advised in writing by counsel that either there may be one or more
legal defenses available to it which are different from or in addition to those
available to such indemnifying party or such affiliate or controlling person or
a conflict of interest may exist if such counsel represents such indemnified
party and such indemnifying party or its affiliate or controlling person;
provided, however, that such indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel), which counsel shall be designated by such indemnified party.
(d) The indemnifying party's liability to any such indemnified
party hereunder shall not be extinguished solely because any other indemnified
party is not entitled to indemnity hereunder. The indemnification provided for
under this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling person of such indemnified party, and will survive the
transfer of securities. No Person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the Act shall be entitled to indemnification
from any Person who was not guilty of such fraudulent misrepresentation.
(e) If the indemnification provided for in this Section 13 is
for any reason, other than pursuant to the terms thereof, held to be unavailable
or insufficient to an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying and indemnified parties in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative fault but
also the relative benefits received by the indemnifying and indemnified parties
from the offering of Registrable Securities. The relative benefits received by a
party shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by such party bears to the
total proceeds from the offering received by all parties. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact relates to information supplied by
the Company or a Holder and the parties' relative intent, knowledge, access to
information and opportunity to
-17-
correct or prevent such statement or omission. The Company and the Holders agree
that it would not be just and equitable if contribution pursuant to this
subsection (e) were determined by pro rata allocation or by any other method of
allocation taking into account the equitable considerations referred to above in
this subsection (e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No Person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Act shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. Notwithstanding anything to the contrary, no
Holder shall be required to contribute pursuant to this subsection (e) any
amount in excess of the proceeds received by such Holder (net of all expenses of
such registration paid by such Holder).
14. Remedies. In addition to being entitled to exercise all rights
--------
provided in this Agreement as well as all rights granted by law, including
recovery of damages, each Holder of Registrable Securities will be entitled to
specific performance of its rights under this Agreement without the requirement
that a bond be posted. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees not to raise the defense in any
action for specific performance that a remedy at law would be adequate.
15. Amendments and Waivers. 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, unless the Company has agreed in writing thereto and has
obtained the written consent of both the Holders of (i) a majority of the
Registrable Securities and (ii) ▇▇▇▇▇▇▇▇▇▇ (if ▇▇▇▇▇▇▇▇▇▇ is then a Holder of at
least 10% of the Registrable Securities then governed by this Agreement).
16. Filing Notices and Copies. The Company shall provide to each
-------------------------
Holder of Registrable Securities such number of copies of any Registration
Statement, amendment thereto (including post-effective amendments) or other
report, document or notice that is filed with the Commission or other authority
under the securities laws, as may be reasonably requested by such Holder of
Registrable Securities. In addition, the Company shall provide prior notice to
any Holder of Registrable Securities of any such filing of a Registration
Statement or amendment thereto, provided that the foregoing notice provision
shall not shorten any other advance notice provision contained in this
Agreement.
17. Notices. All notices and other communications hereunder shall be
-------
in writing and shall be given to the Person either by hand delivery or by United
States express mail, postage prepaid, or by overnight courier services
guaranteeing next business day delivery, charges prepaid, or by telecopier, to:
If to the Company, to:
-18-
Pameco Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice Chairman and Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
-19-
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
If to Quilvest, to:
c/o Three Cities Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. Willem ▇.▇. ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
Facsimile: 212-757-3990
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
If to ICPC to:
International Comfort Products Corporation (USA)
▇▇▇ ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: __________________
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: _________________
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esquire
Facsimile: 860-240-2700
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
If the notice is sent by United States express mail or by overnight courier
services, it shall be deemed to have been given to the Person entitled thereto
one business day after deposited with the post office or the courier service for
delivery to that Person or, in the case of a notice given by hand delivery or
telecopy, when received. Notice of any change in any such address shall also be
given in the manner set forth above. Whenever the giving of notice is required,
the giving of such notice may be waived by the party entitled to receive such
notice.
18. Counterparts and Facsimile Signatures. This Agreement may be
-------------------------------------
executed, including by facsimile signature, in one or more counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
19. Interpretation. Unless the context of this Agreement otherwise
--------------
requires, (i) words of any gender include each gender and the neuter; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (v)
the term "including" or similar words shall be construed as to refer to such
matter without limitation
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thereof. Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless business days are specified. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
20. Governing Law; Consent to Jurisdiction. This Agreement shall be
--------------------------------------
construed and enforced in accordance with the laws of the State of New York
without regard to the application of the principles of conflicts or choice of
laws. Each party hereto submits to the jurisdiction of the courts of the State
of New York in New York County and to the jurisdiction of the United States
District Court for the Southern District of New York, and hereby agrees that
service of process may be effected in accordance with the delivery methods
described in Section 17 above.
21. Severability. Whenever possible, each provision of this Agreement
------------
will 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 invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
22. Entire Agreement; Other Registration Rights. This Agreement is
-------------------------------------------
intended by the parties as a final expression of their agreement with regard to
the subject matter hereof and intended to be a complete and exclusive statement
of the agreement and matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the rights granted by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter
(including and any prior arrangements and understandings between the Company, on
the one hand, and either ▇▇▇▇▇▇▇▇▇▇, Quilvest, or their respective Affiliates,
on the other hand, relating to the registration of any securities under the
Act). The Company represents and warrants to ▇▇▇▇▇▇▇▇▇▇ and Quilvest that it is
not a party to any other contract, agreement or arrangement which provides for
the registration of its securities under the Act.
23. No Third Parties Benefited. Nothing in this Agreement, express or
--------------------------
implied, is intended, except as set forth herein, to confer upon any third party
any rights, remedies, obligations or liabilities.
24. Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns including, without limitation,
subsequent Holders of Registrable Securities agreeing to be bound by all and the
terms and conditions of this Agreement.
25. Effectiveness. This Agreement shall become effective upon the
-------------
completion of the Initial Closing (as such term is defined in the Purchase
Agreement), and only if the Initial Closing actually occurs.
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IN WITNESS WHEREOF, this Registration Rights Agreement has been executed as
of the date and year first above written.
COMPANY:
PAMECO CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice Presidet
▇▇▇▇▇▇▇▇▇▇ FUND II, L.P.
By: ▇▇▇▇▇▇▇▇▇▇ Associates II, L.L.C., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Managing Member
QUILVEST AMERICAN EQUITY, LTD.
By: /s/ Willem ▇.▇. ▇▇ ▇▇▇▇▇
-------------------------------------
Name: Willem ▇.▇. ▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
INTERNATIONAL COMFORT PRODUCTS
CORPORATION (USA)
By:_____________________________________
Name:
Title:
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