1
EXHIBIT 4a
================================================================================
REGISTRATION RIGHTS AGREEMENT
Among
MASCO CORPORATION
and
THE INVESTORS LISTED HEREIN
Dated as of August 31, 1999
================================================================================
2
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...............................................................................1
SECTION 1.02. Internal References.......................................................................5
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Demand Registrations......................................................................5
SECTION 2.02. Piggyback Registrations..................................................................10
SECTION 2.03. Other Matters in Connection with Registrations...........................................12
SECTION 2.04. Certain Delay Rights.....................................................................13
SECTION 2.05. Expenses.................................................................................13
SECTION 2.06. Registration and Qualification...........................................................14
SECTION 2.07. Underwriting; Due Diligence..............................................................16
SECTION 2.08. Indemnification and Contribution.........................................................17
SECTION 2.09. Holdback Agreement.......................................................................19
SECTION 2.10. Certain Agreements Regarding Hedging and Resales.........................................20
SECTION 2.11. Adjustment of Share Amounts..............................................................22
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Entire Agreement.........................................................................22
SECTION 3.02. Assignment...............................................................................22
SECTION 3.03. Amendments, Waivers, Etc.................................................................22
SECTION 3.04. Investor Representatives.................................................................22
SECTION 3.05. Severability.............................................................................23
SECTION 3.06. No Waiver................................................................................23
SECTION 3.07. No Third Party Beneficiaries.............................................................23
SECTION 3.08. Governing Law............................................................................23
SECTION 3.09. Jurisdiction.............................................................................23
SECTION 3.10. Descriptive Headings.....................................................................24
SECTION 3.11. Counterparts.............................................................................24
SECTION 3.12. Equitable Relief.........................................................................24
SECTION 3.13. Notices..................................................................................24
3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") dated as of August 31,
1999 among Masco Corporation, a Delaware corporation (the "ISSUER"), and the
Investors as defined herein.
W I T N E S S E T H:
WHEREAS, this Agreement is being entered into in connection with (i) the
Acquisition Agreement dated as of August 31, 1999 among the Issuer, a
wholly-owned subsidiary of the Issuer, Behr Holdings Corporation, a Delaware
corporation ("BEHR"), the stockholders and optionholder of Behr (the "BEHR
ACQUISITION AGREEMENT") and (ii) the Agreement and Plan of Reorganization dated
as of August 31, 1999 among the Issuer, a wholly-owned subsidiary of the Issuer,
Mill's Pride Limited Partnership, an Ohio limited partnership ("MILL'S PRIDE
LP"), Mill's Pride, Inc., a Connecticut corporation ("MILL'S PRIDE CO"), and
limited partners and the stockholders thereof (the "MILL'S PRIDE ACQUISITION
AGREEMENT").
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, shall have
the following respective meanings:
"BEHR INVESTORS" means the stockholders and optionholder of Behr receiving
Common Stock or the Option to acquire Common Stock in connection with the Behr
Acquisition Agreement.
"BEHR INVESTOR REPRESENTATIVE" means the Representatives (as defined in the
Behr Acquisition Agreement), or such other Person designated at any time by the
holders of a majority of Registrable Securities held by the Behr Investors.
"COMMISSION" means the Securities and Exchange Commission or any successor
governmental body or agency.
"COMMON STOCK" means the common stock, par value $1.00 per share, of the
Issuer.
2
4
"DEMAND REGISTRATION" has the meaning ascribed thereto in Section
2.01(a)(i).
"DEMAND REQUEST" has the meaning ascribed thereto in Section 2.01(a).
"DERIVATIVE SECURITIES" means any debt securities or preferred stock that
are convertible or exchangeable into or exercisable for shares of Common Stock.
"DISADVANTAGEOUS CONDITION" has the meaning ascribed thereto in Section
2.04.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FIRST UNDERWRITTEN DEMAND REGISTRATION" means the initial Demand
Registration initiated by the Behr Investors or the Mill's Pride Investors as a
Demand Registration in accordance with this Agreement.
"HEDGING ACTIVITIES" means any transaction intended to reduce the economic
risk of ownership of Common Stock (including, without limitation, the sale of
any option or contract to purchase or the purchase of any option or contract to
sell) that would, directly or indirectly, have the effect (or substantially the
economic equivalent effect) of selling short the Common Stock or securities
convertible or exchangeable into or exercisable for shares of Common Stock.
"HOLDER" means a Person who owns Registrable Securities and is either (i)
an Investor or (ii) a Person that (A) has executed and delivered to the Issuer
and each Investor Representative a letter agreement substantially in the form of
Schedule II agreeing to be bound by the terms of this Agreement as if such
Person were an Investor and (B)(x) is a Person with whom an Investor has entered
into an agreement to transfer Registrable Securities (A) directly or (B) as part
of a transaction pursuant to which Derivative Securities will be offered for
sale in a registered public offering by a trust established by or at the
direction of such Person or (y) is (1) upon the death of any individual
Investor, the executor of the estate of such Investor or such Investor's heirs,
devisees, legatees or assigns or the trustee of any testamentary trust of such
Investor or (2) upon the disability of any individual Investor, any guardian or
conservator of such Investor.
"INVESTOR DEMAND PERIOD" has the meaning ascribed thereto in Section
2.01(a).
"INVESTOR REPRESENTATIVES" means the Behr Investor Representative and the
Mill's Pride Investor Representative.
"INVESTORS" means the Persons designated as Behr Investors or Mill's Pride
Investors on Schedule I hereto. Any transferee of Registrable Securities
pursuant to clause (ii) of the definition of Holder from a Behr Investor or
Mill's Pride Investor shall, for purposes of this Agreement, by deemed to be a
Behr Investor or Mill's Pride Investor, as the case may be.
3
5
"MILL'S PRIDE INVESTORS" means the limited partners of Mill's Pride LP and
the stockholders of Mill's Pride Co receiving Common Stock in connection with
the Mill's Pride Acquisition Agreement.
"MILL'S PRIDE INVESTOR REPRESENTATIVE" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or his
designee, successor or assign, or such other Person designated at any time by
the holders of a majority of Registrable Securities held by the Mill's Pride
Investors. Notwithstanding anything to the contrary in this Agreement, the
Mill's Pride Investor Representative shall not have independent authority to
take any action or omit to take any action under this Agreement and shall act or
omit to act solely at the direction of the holders of a majority of Registrable
Securities held by all the Mill's Pride Investors.
"OPTION" means the substitute option exercisable for shares of Common Stock
issued under the Behr Acquisition Agreement to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"OTHER INVESTORS" means the group of Persons who receive Common Stock from
the Issuer in connection with an acquisition transaction and who are designated
by the Issuer to the Investor Representatives as the Persons entitled to the
rights of the Other Investors under this Agreement; provided that once the
Issuer has made such designation in connection with one acquisition transaction,
the Issuer shall not be entitled to make any further designation in connection
with any other acquisition transaction.
"PERSON" means any individual, firm, partnership, limited liability
company, association, trust, corporation or other entity.
"PRIVATE RESALE" has the meaning ascribed thereto in Section 2.10(B).
"REGISTRABLE SECURITIES" means Common Stock acquired by the Investors
pursuant to the Behr Acquisition Agreement, the Option or the Mill's Pride
Acquisition Agreement or by the Other Investors pursuant to an acquisition or
similar agreement with the Issuer, as applicable, (and any shares of stock or
other securities into which or for which such Common Stock may hereafter be
changed, converted or exchanged and any other shares or securities issued to
Holders of such Common Stock (or such shares of stock or other securities into
which or for which such shares are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event), including all
Common Stock of the Investors held pursuant to the holdback and escrow
arrangements incorporated in the Behr Acquisition Agreement and the Mill's Pride
Acquisition Agreement. As to any particular Registrable Securities, such
Registrable Securities shall cease to be Registrable Securities as soon as (i)
such Registrable Securities have been sold or otherwise disposed of pursuant to
a registration statement that was filed with the Commission and declared
effective under the Securities Act,
4
6
(ii) such Registrable Securities shall have been sold pursuant to Rule 144 or
(iii) they shall have been otherwise sold, transferred or disposed of by a
Holder to any Person that is not covered by clause (ii) of the definition of
Holder.
"REGISTRATION EXPENSES" means any and all expenses incident to performance
of or compliance with any registration of securities pursuant to Article 2,
including, without limitation, (i) the fees, disbursements and expenses of the
Issuer's counsel and accountants (including in connection with any special
audits and the delivery of opinions and/or comfort letters) in connection with
this Agreement and the performance of the Issuer's obligations hereunder; (ii)
all expenses, including filing fees, in connection with the preparation,
printing and filing of one or more registration statements hereunder; (iii) the
cost of printing or producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda; (iv) all registration
and filing fees, including, without limitation (A) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. ("NASD") of the terms of the sale of the securities to be disposed of, (B)
fees and expenses incident to compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications), and (C) if applicable, the fees and expenses of any
"qualified independent underwriter" or other independent appraiser and its
counsel as may be required under the rules and regulations of the NASD; (v)
transfer agents' and registrars' fees and expenses in connection with such
offering; (vi) all security engraving and security printing expenses; (vii) all
fees and expenses payable in connection with the listing of the Registrable
Securities on any securities exchange on which the Common Stock is then listed;
and (viii) all reasonable fees and expenses of one legal counsel for the Holders
in connection with each Demand Registration, which legal counsel shall be
selected by Holders owning a majority of the Registrable Securities then being
registered, provided that Registration Expenses shall exclude (w) in connection
with any request under Section 2.01(a) to register Derivative Securities, any
expenses relating to any action taken by the Issuer in connection with such
offering that exceed the expenses that would have been incurred by the Issuer in
connection with an offering of Registrable Securities other than Derivative
Securities, (x) all underwriting discounts and commissions, selling or placement
agent or broker fees and commissions, and transfer taxes, if any, in connection
with the sale of any securities and (y) the fees and expenses of counsel for any
Holder (other than pursuant to clause (viii)).
"RESTRICTED DISTRIBUTION PERIOD" has the meaning ascribed thereto in
Section 2.01(c).
"RULE 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"RULE 145" means Rule 145 (or any successor rule to similar effect)
promulgated under the Securities Act.
5
7
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SECOND UNDERWRITTEN DEMAND REGISTRATION" means the second Demand
Registration initiated by the Behr Investors or the Mill's Pride Investors as a
Demand Registration.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING HOLDER" means any Holder who sells Registrable Securities pursuant
to a registered public offering.
SECTION 1.02. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
Articles, Sections and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Demand Registrations. (a) Upon written notice to the Issuer
from the Behr Investor Representative (on behalf of Behr Investors) or the
Mill's Pride Investor Representative (on behalf of Mill's Pride Investors)
requesting (a "DEMAND REQUEST"), subject to Section 2.04, at any time during the
period commencing February 1, 2000 through and including March 1, 2003 (as such
period may be extended pursuant to Section 2.04, the "INVESTOR DEMAND PERIOD"),
that the Issuer effect the registration under the Securities Act of Registrable
Securities held by such requesting Investors, which notice shall specify the
intended method or methods of disposition of such Registrable Securities, the
Issuer shall prepare and, within 30 days after such request, file with the
Commission a registration statement with respect to such Registrable Securities
and thereafter use its reasonable best efforts to cause such registration
statement to be declared effective under the Securities Act as soon as possible
for purposes of the offering of such Registrable Securities in accordance with
the intended method or methods of disposition stated in such request (each such
registration, a "DEMAND REGISTRATION"). Notwithstanding any other provision of
this Agreement to the contrary:
(i) the Behr Investors, on the one hand, and the Mill's Pride
Investors, on the other hand, may each exercise their rights to Demand
Registrations under this Section 2.01(a) on not more than four occasions
(of which not more than two occasions may be in the year 2000); provided
that, to the extent that Mill's Pride Investors sell at least an aggregate
of 1,500,000 shares of Common Stock (or the
6
8
equivalent thereof) in a Demand Registration initiated by the Behr Investor
Representative or in any Piggyback Registration initiated by the Other
Investors, or Behr Investors sell at least an aggregate of 1,500,000 shares
of Common Stock (or the equivalent thereof) in a Demand Registration
initiated by the Mill's Pride Investor Representative or in any Piggyback
Registration initiated by the Other Investors, such Demand Registration or
Piggyback Registration shall also count as one of the Demand Registrations
to which the Mill's Pride Investors or the Behr Investors, as the case may
be, are entitled pursuant to this clause (i);
(ii) the Issuer shall not be required to effect a Demand Registration
hereunder unless (A) the aggregate market value of Registrable Securities
to be registered pursuant to such Demand Registration would be greater than
or equal to $300 million, based on the market value of such Registrable
Securities on the date such Demand Request is made, or (B) the aggregate
number of shares of Common Stock represented by such Registrable Securities
to be included in such Demand Registration is greater than or equal to
10,000,000 (it being understood that the Investor Representatives may
submit joint Demand Requests in order to satisfy the conditions set forth
in this clause (ii));
(iii) the Behr Investors shall be entitled to request the registration
of Derivative Securities (and the Registrable Securities into which such
Derivative Securities are convertible or exchangeable) pursuant to a Demand
Request and have such Derivative Securities registered by the Issuer so
long as the number of Registrable Securities underlying such Derivative
Securities requested to be registered does not exceed, in the aggregate,
10,000,000 shares of Common Stock reduced by the sum of (A) the aggregate
number of shares of Common Stock, if any, registered and sold pursuant to a
previous Demand Request by Behr Investors and (B) the aggregate number of
shares of Common Stock, if any, previously sold by Behr Investors pursuant
to Rule 144.
(iv) the Mill's Pride Investors shall be entitled to request the
registration of Derivative Securities (and the Registrable Securities into
which such Derivative Securities are convertible or exchangeable) pursuant
to a Demand Request and have such Derivative Securities registered by the
Issuer so long as the number of Registrable Securities underlying such
Derivative Securities requested to be registered does not exceed, in the
aggregate, 10,000,000 shares of Common Stock reduced by the sum of (A) the
aggregate number of shares of Common Stock, if any, registered and sold
pursuant to a previous Demand Request by Mill's Pride Investors and (B) the
aggregate number of shares of Common Stock, if any, previously sold by
Mill's Pride Investors pursuant to Rule 144;
(v) (A) the Issuer shall not be required to file with the Commission
the registration statement for the First Underwritten Demand Registration
until the Issuer has finalized its financial statements for the fiscal year
ended December 31,
7
9
1999 and (B) the Holders shall not make a Demand Request during the
pendency or within 90 days of the completion of a Demand Registration or a
Piggyback Registration; and
(vi) no Demand Registration shall be a Rule 145 Offering.
(b) Notwithstanding any other provision of this Agreement to the contrary,
a Demand Registration requested by Holders pursuant to this Section 2.01 shall
not be deemed to have been effected, and, therefore, not requested and the
rights of each Holder shall be deemed not to have been exercised for purposes of
paragraph (a) above, (i) if such Demand Registration has not become effective
under the Securities Act, including, without limitation, by reason of the
failure of such Demand Registration to satisfy the conditions set forth in
clause (ii) of Section 2.01(a) (except that subject to the last sentence of this
Section 2.01(b), a Demand Registration requested by Holders pursuant to this
Section 2.01 shall be deemed to have been effected if a Demand Request has been
made and subsequently withdrawn by the requesting Investor Representative for
any reason) or (ii) if such Demand Registration, after it became effective under
the Securities Act, was not maintained effective under the Securities Act (other
than as a result of a request by the requesting Investor Representative, or any
stop order, injunction or other order or requirement of the Commission or other
government agency or court solely on the account of a material misrepresentation
or omission by a Holder) for at least 30 days (or such shorter period ending
when all the Registrable Securities covered thereby have been disposed of
pursuant thereto) and, as a result thereof, the Registrable Securities requested
to be registered cannot be distributed in accordance with the plan of
distribution set forth in the related registration statement. Notwithstanding
any other provision of this Agreement to the contrary, the Holders shall be
entitled to withdraw a Demand Request on one occasion due to market conditions
without that Demand Request being deemed to have been requested.
(c) Prior to March 1, 2001 (the "RESTRICTED DISTRIBUTION PERIOD"), the
Issuer shall not have the right to cause the registration of Common Stock or
Derivative Securities for sale for the account of the Issuer, other than (i) one
or more shelf registrations covering in the aggregate not more than 750,000
shares of Common Stock issued in connection with acquisitions (less any shares
issued pursuant to a shelf registration referred to in clause (ii) of the
parenthetical in the first sentence of Section 2.02(a), (ii) Common Stock in
connection with an acquisition or merger transaction involving a company whose
shares of capital stock are registered under the Exchange Act and with respect
to which a Form S-4 registration statement may be used by the Issuer (or a
transaction involving a private company where the transaction may not reasonably
be completed without registering the shares to be issued in the transaction
under the Securities Act), (iii) Common Stock or Derivative Securities in
connection with employee or director benefit arrangements or compensatory grants
which are eligible to be issued on a Form S-8 registration statement, and (iv)
Derivative Securities up to an aggregate principal amount of $400 million.
8
10
(d) Within 10 days after delivery of a Demand Request by either the Behr
Investor Representative or the Mill's Pride Investor Representative, the Issuer
shall provide a written notice to each Holder (and any non-requesting Investor
Representative) that has not made such Demand Request, advising such Holder of
its right to include any or all (subject to Sections 2.01(e), (f) and (g)) of
the Registrable Securities held by such Holder for sale pursuant to the Demand
Registration and advising such Holder of procedures to enable such Holder to
elect to include Registrable Securities for sale in the Demand Registration. Any
Holder may, within 10 days of delivery to such Holder of a notice pursuant to
this Section 2.01(d), elect to include Registrable Securities in the Demand
Registration by written notice to such effect to the Issuer (with a copy to the
Behr Investor Representative or the Mill's Pride Investor Representative, as
applicable) specifying the number of Registrable Securities desired to be so
included by such Holder. Once a Holder has elected by written notice to include
Registrable Securities in a Demand Registration, such Holder may withdraw its
Registrable Securities from a Demand Registration at any time up to its
execution and delivery of an underwriting, purchase or similar agreement;
provided that if any Holder withdraws Registrable Securities from a Demand
Registration (other than as a result of a withdrawal of the Demand Request
generally or termination of the Demand Registration due to market conditions),
such Holder shall not be entitled to participate in any Demand Registration or
Piggyback Registration for a period of one year from the date of such
withdrawal.
(e) With regard to the First Underwritten Demand Registration, if the
Issuer is advised in writing (with a copy to the Holders participating in such
Demand Registration) by the lead or managing underwriter(s) of the proposed
offering that, in such underwriter(s)'s good faith view, the inclusion of the
Registrable Securities requested to be included in such registration and other
equity securities permitted to be included in such registration would be likely
to have an adverse effect in any significant respect on the pricing, timing or
distribution of the offering and sale of the Registrable Securities and other
equity securities then contemplated, then the Issuer will include any securities
to be sold in such Demand Registration in the following order of priority: (i)
first, allocated 60% to the Behr Investors requesting to include Registrable
Securities in such Demand Registration (allocated among them on a pro rata basis
according to the number of Registrable Securities requested by them to be
included in such Demand Registration) and 40% to the Mill's Pride Investors and
the Other Investors requesting to include Registrable Securities in such Demand
Registration (allocated among the Mill's Pride Investors and the Other Investors
on a pro rata basis according to the number of Registrable Securities requested
by them to be included in such Demand Registration), until the Behr Investors
requesting to include Registrable Securities in such Demand Registration have
been able to include 20,000,000 shares of Common Stock (or the equivalent
thereof), and (ii) second, once the Behr Investors requesting to include
Registrable Securities in such Demand Registration have been able to include
20,000,000 shares of Common Stock (or the equivalent thereof), allocated among
the Behr Investors, the Mill's Pride Investors and the Other Investors
requesting to include Registrable
9
11
Securities in such Demand Registration on a pro rata basis according to the
number of Registrable Securities requested by them to be included in such Demand
Registration and that were not so included pursuant to clause (i) above;
provided that the aggregate number of Registrable Securities allocated pursuant
to this clause (ii) to the Behr Investors shall not exceed 25% of the aggregate
number of Registrable Securities allocated pursuant to this clause (ii) to the
Behr Investors, the Mill's Pride Investors and the Other Investors; and provided
further that, once all of the Registrable Securities requested to be included in
such Demand Registration by the Mill's Pride Investors and the Other Investors
have been so included, any remaining portion of the offering shall be allocated
100% to the Behr Investors (allocated among them on a pro rata basis according
to the number of Registrable Securities requested by them to be included in such
Demand Registration).
(f) With regard to the Second Underwritten Demand Registration, if the
Issuer is advised in writing (with a copy to the Holders participating in such
Demand Registration) by the lead or managing underwriter(s) of the proposed
offering that, in such underwriter(s)'s good faith view, the inclusion of the
Registrable Securities requested to be included in such registration and other
equity securities permitted to be included in such registration would be likely
to have an adverse effect in any significant respect on the pricing, timing or
distribution of the offering and sale of the Registrable Securities and other
equity securities then contemplated, then the Issuer will include any securities
to be sold in such Demand Registration in the following order of priority: (i)
first, if Behr Investors requested to include in the First Underwritten Demand
Registration 20,000,000 or more shares of Common Stock (or the equivalent
thereof) and, pursuant to Section 2.01(e), less than 20,000,000 shares of Common
Stock (or the equivalent thereof) were sold by Behr Investors in the First
Underwritten Demand Registration, allocated 60% to the Behr Investors requesting
to include Registrable Securities in such Demand Registration (allocated among
them on a pro rata basis according to the number of Registrable Securities
requested by them to be included in such Demand Registration) and 40% to the
Mill's Pride Investors and the Other Investors requesting to include Registrable
Securities in such Demand Registration (allocated among the Mill's Pride
Investors and the Other Investors on a pro rata basis according to the number of
Registrable Securities requested by them to be included in such Demand
Registration) until the aggregate number of shares of Common Stock (or the
equivalent thereof) sold by Behr Investors in the First Underwritten Demand
Registration and included in the Second Underwritten Demand Registration equals
20,000,000 and (ii) second, allocated among the Behr Investors, the Mill's Pride
Investors and the Other Investors requesting to include Registrable Securities
in such Demand Registration on a pro rata basis according to the number of
Registrable Securities requested by them to be included in such Demand
Registration, excluding if applicable, any that have already been so included
pursuant to clause (i) above.
(g) With regard to any additional Demand Registrations, if the Issuer is
advised in writing (with a copy to the Holders participating in such Demand
Registration) by the
10
12
lead or managing underwriter(s) of the proposed offering that, in such
underwriter(s)'s good faith view, the inclusion of the Registrable Securities
requested to be included in such registration and other equity securities
permitted to be included in such registration would be likely to have an adverse
effect in any significant respect on the pricing, timing or distribution of the
offering and sale of the Registrable Securities and other equity securities then
contemplated, then the Issuer will include any securities to be sold in such
Demand Registration allocated among the Behr Investors, the Mill's Pride
Investors and the Other Investors requesting Registrable Securities to be
included in such Demand Registration on a pro rata basis according to the number
of Registrable Securities requested by them to be included in such Demand
Registration.
(h) The Issuer shall promptly inform each Investor Representative in
writing of any allocation determinations made in accordance with the provisions
of Section 2.01(e), (f) or (g), which determinations shall be subject to
confirmation by each Investor Representative.
(i) The Issuer shall promptly supplement and amend any Demand Registration
if required by the rules, regulations or instructions applicable to the
registration form used for such Demand Registration, if required by the
Securities Act, or if reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Securities covered by such Demand
Registration or by any underwriter of such Registrable Securities.
SECTION 2.02. Piggyback Registrations. (a) If at any time prior to March 1,
2003 the Issuer proposes (other than pursuant to (i) a Demand Registration, (ii)
a registration on Forms S-4 or S-8 or any successor forms or any registration
effected by the Issuer in connection with an acquisition or merger transaction,
(iii) one or more shelf registrations covering in the aggregate not more than
750,000 shares of Common Stock issued in connection with acquisitions, less any
shares issued pursuant to a shelf registration referred to in clause (i) of
Section 2.01(c)), or (iv) as permitted by Section 2.01(c)) to register any of
its Common Stock under the Securities Act for the Issuer's own account or for
the account of the Other Investors in an underwritten public offering for cash,
the Issuer shall give prompt written notice to all Holders (with a copy to the
Investor Representatives) of its intention to effect such a registration (but in
no event less than 10 days before the earlier of the anticipated filing date of
the registration statement, circulation date of any preliminary offering
circular or other applicable offering materials, as applicable), and such notice
shall offer the Holders the opportunity to register on the same terms and
conditions such number of shares of Common Stock constituting Registrable
Securities as such Holder may request (a "PIGGYBACK REGISTRATION"). The Issuer
shall include in such registration all Common Stock constituting Registrable
Securities with respect to which the Issuer has received written requests for
inclusion therein within 7 days after the receipt by such Holder of the Issuer's
notice, subject to the provisions of Section 2.02(b) below. No Piggyback
Registration shall adversely affect the number of Registrable Securities to be
included in or the timing of any Demand
11
13
Registration previously made and not yet completed. Holders shall be permitted
to withdraw all or part of such Holder's Registrable Securities in connection
with a Piggyback Registration at any time before the earlier of the effective
date of the Piggyback Registration or the execution and delivery of an
underwriting, purchase or similar agreement relating to the registration of such
Holder's Registrable Securities in such Piggyback Registration. Subject to
Section 2.02(b), the Issuer shall use its reasonable efforts to cause the lead
or managing underwriter(s) of the proposed offering covered by the Piggyback
Registration to permit the Registrable Securities to be included in such
offering to be included at the same price and on no less favorable terms and
conditions as any similar securities included therein.
(b) If the Issuer is advised in writing (with a copy to the Holders
participating in such Piggyback Registration) by the lead or managing
underwriter(s) of the proposed offering that, in such underwriter(s)'s good
faith view, the inclusion of such Registrable Securities and other equity
securities in such registration would be likely to have an adverse effect in any
significant respect on the pricing, timing or distribution of the offering and
sale of the Registrable Securities and other equity securities then
contemplated, then the Issuer will include any securities to be sold in such
Piggyback Registration in the following order of priority: (i) first, if the
offering is for the Issuer's own account, the securities the Issuer proposes to
sell for its own account and (ii) second, the Registrable Securities and other
equity securities requested to be included in such Piggyback Registration by the
Other Investors and the Holders that can, in the good faith view of such
underwriter(s), be sold in such offering without adversely affecting such
offering, pro rata in proportion to the amount requested to be included therein
by each Other Investor and each Holder.
(c) The Issuer agrees that if it shall previously have received a request
for registration pursuant to Section 2.01 or pursuant to this Section 2.02, and
if such previous registration shall not have been withdrawn or abandoned, the
Issuer shall not effect any registration of any of its securities under the
Securities Act (other than (i) pursuant to a registration on Form S-4 or Form
S-8 or any successor or similar form which is then in effect or (ii) pursuant to
any registration effected by the Issuer in connection with an acquisition or
merger transaction), whether or not for sale for its own account until the
termination of such period (which shall not in any event exceed 90 days from the
effective date of such previous registration) as may be reasonably requested by
the lead or managing underwriter(s), and the Issuer shall so provide in any
registration rights agreement hereafter entered into with respect to any of its
securities. The Issuer agrees that to the extent, after the date hereof, it
enters into any registration rights or similar agreement with any Person or
grants registration rights with respect to Common Stock or Derivative
Securities, (i) any right to request a demand registration shall not be
effective until the earlier of completion of the Second Underwritten Demand
Registration and September 1, 2000 and (ii) in the case of the Other Investors,
any right to participate in a Demand Registration shall be consistent with
Sections 2.01(e), (f) and (g), 2.02 and 2.09.
12
14
(d) Except as provided in Section 2.01(a)(i), no Piggyback Registration
completed under this Section 2.02 shall relieve the Issuer of its obligation to
effect a Demand Registration pursuant to Section 2.01, nor shall any Piggyback
Registration completed under this Section 2.02 be deemed to have been effected
pursuant to Section 2.01.
SECTION 2.03. Other Matters in Connection with Registrations. If any public
offering pursuant to a Demand Registration shall involve, in whole or in part,
an underwritten offering, (i) the Behr Investor Representative and the Mill's
Pride Investor Representative, for so long as each shall represent holders of
Registrable Securities covered by such underwritten offering having a market
value of not less than $100 million at the time of such designation, shall each
have the right to designate one co-lead or co-managing underwriter reasonably
acceptable to the Issuer of such underwritten offering and (ii) the Issuer shall
have the right, after good faith consultation with the Behr Investor
Representative and the Mill's Pride Investor Representative, as applicable, to
designate one or more "book" managers. The Issuer shall have the right, at its
option, to grant rights similar to those provided for in this Section 2.03 to
the Other Investors, either in connection with a right of the Other Investors to
request a demand registration or in connection with the rights of the Other
Investors pursuant to Sections 2.01(e), (f) and (g) to participate in a Demand
Registration.
SECTION 2.04. Certain Delay Rights. Notwithstanding any other provision of
this Agreement to the contrary, with respect to any registration statement filed
or to be filed pursuant to Section 2.01, if the Issuer provides written notice
to the Behr Investor Representative or the Mill's Pride Investor Representative
that in the Issuer's good faith and reasonable judgment such filing would
require the disclosure of material information that the Issuer has a bona fide
business purpose for preserving as confidential or that would otherwise be
materially disadvantageous to the Issuer (including, without limitation, because
the sale of Registrable Securities covered by such registration statement or the
disclosure of information therein or in any related prospectus or prospectus
supplement would materially interfere with any acquisition, financing or other
material event or transaction in connection with which a registration of
securities under the Securities Act for the account of the Issuer is then
intended or the public disclosure of which at the time would materially
interfere with the business of the Issuer) (a "DISADVANTAGEOUS CONDITION") for
such a registration statement to be maintained effective, or to be filed and
become effective, the Issuer shall be entitled to cause such registration
statement to be withdrawn or the effectiveness of such registration statement
terminated, or, in the event no registration statement has yet been filed, shall
be entitled not to file any such registration statement, until such
Disadvantageous Condition no longer exists (notice of which the Issuer shall
promptly deliver to the Behr Investor Representative and the Mill's Pride
Investor Representative). To the extent it is reasonably within the control of
the Issuer to do so, the Issuer will use reasonable best efforts to ensure that
a Disadvantageous Condition does not continue for longer than is necessary or
appropriate given the particular circumstances of such Disadvantageous
13
15
Condition. With respect to each Holder, upon the receipt by such Holder of any
notice of a Disadvantageous Condition, if so directed by the Issuer, such Holder
will deliver to the Issuer all copies, other than permanent file copies then in
such Holder's possession, of the prospectus and prospectus supplements then
covering such Registrable Securities at the time of receipt of such notice as
aforesaid. Notwithstanding anything else contained in this Agreement, unless
otherwise agreed to by the Issuer and Holders of a majority of the Registrable
Securities, neither the filing nor the effectiveness of any registration
statement under Section 2.01 may be delayed by the Issuer more than twice during
any 365-day period, each of which delays shall not exceed 90 days. The Investor
Demand Period shall be extended by the aggregate number of days of any such
delay.
SECTION 2.05. Expenses. Except as provided herein, the Issuer shall pay all
Registration Expenses with respect to each registration hereunder.
Notwithstanding the foregoing (i) each Holder shall be responsible for the legal
fees and expenses of its own counsel (except as provided in clause (viii) of the
definition of Registration Expenses), and (ii) each Holder shall be responsible
for all underwriting discount and commissions, selling or placement agent or
broker fees and commissions, and transfer taxes, if any, in connection with the
sale of securities by such Holder.
SECTION 2.06. Registration and Qualification. If and whenever the Issuer is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 2.01, the Issuer shall, subject to the
provisions of Section 2.01:
(a) prepare, file and use its reasonable best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered in accordance with the intended method of
disposition thereof;
(b) 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 and to comply
with the provisions of the Exchange Act and the Securities Act with respect to
the disposition of all Registrable Securities in the case of the Demand
Registration, until the earlier of such time as all Registrable Securities
proposed to be sold therein have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement and the
expiration of 30 days after such registration statement becomes effective;
provided that such 30-day period shall be extended for the number of days that
equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (e) below is given by the Issuer to (y) the date on
which the Issuer delivers to the Holders of Registrable Securities the
supplement or amendment contemplated by paragraph (e) below;
(c) furnish without charge to the Holders of Registrable Securities and to
any underwriter of such Registrable Securities such number of conformed copies
of such registration statement and of each such amendment and supplement thereto
(in each case
14
16
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such documents
incorporated by reference in such registration statement or prospectus, as the
Holders of Registrable Securities or such underwriter may reasonably request;
(d) use its reasonable best efforts to furnish to any underwriter of such
Registrable Securities an opinion of counsel for the Issuer and a "cold comfort"
letter signed by the independent public accountants who have audited the
financial statements of the Issuer included in the applicable registration
statement, in each such case covering substantially such matters with respect to
such registration statement (and the prospectus included therein) and the
related offering as are customarily covered in opinions of Issuer's counsel with
respect thereto and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as such
underwriters may reasonably request;
(e) promptly notify the Selling Holders in writing (i) at any time when a
prospectus relating to a registration pursuant to Section 2.01 or Section 2.02
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, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, (ii) of any request by the Commission or any other
regulatory body or other body having jurisdiction for any material amendment of
or supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, (iii) of the receipt by the Issuer of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (iv) of the Issuer's
reasonable determination that a post-effective amendment to any registration
statement covering Registrable Securities would be appropriate;
(f) use its reasonable best efforts to list all such Registrable Securities
on each securities exchange on which the Common Stock is then listed or admitted
for trading;
(g) use its reasonable best efforts to assist the Holders in the marketing
of such Registrable Securities in connection with the Demand Requests hereunder
(including, without limitation, having officers of the Issuer attend "road
shows" and analyst or
15
17
investor presentations scheduled in connection with each Demand Request, it
being understood that each such officer shall devote such time out of such
officer's schedule for such presentations and any related travel commitments as
may be reasonably requested by the lead or managing underwriter(s);
(h) furnish for delivery in connection with the closing of any offering of
Registrable Securities pursuant to a registration effected pursuant to Sections
2.01 or 2.02 unlegended certificates representing ownership of the Registrable
Securities being sold in such denominations as shall be requested by the Selling
Holders or the underwriters; and
(i) use its best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdiction as any Selling
Holder reasonably requests (provided that the Issuer 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).
SECTION 2.07. Underwriting; Due Diligence. (a) If requested by the
underwriters for an underwritten offering of Registrable Securities pursuant to
a Demand Registration, the Issuer shall enter into an underwriting agreement
with such underwriters for such offering, which agreement shall contain such
representations and warranties by the Issuer and such other terms and provisions
as are customarily contained in underwriting agreements with respect to
secondary distributions, including, without limitation, indemnification and
contribution provisions substantially to the effect and to the extent provided
in Section 2.08, subject to such modifications as may reasonably be requested by
the lead or managing underwriter(s) or by the Issuer for any such underwritten
offering and agreements as to the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section
2.06(d). Subject to this Section 2.07, such underwriting agreement shall also
contain such representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 2.08, subject to such modifications
as may reasonably be requested by the lead or managing underwriter(s) or by the
Issuer for any such underwritten offering. Such underwriting agreement shall
also provide that the underwriter shall indemnify and hold harmless the Issuer,
its directors, the officers who sign any registration statement and each Person,
if any, who controls the Issuer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or any amendment
thereof, any prospectus (as amended or supplemented if the Issuer shall have
furnished
16
18
any amendments or supplements thereto) relating to the Registrable Securities,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only with reference to information furnished in
writing by such underwriter (or any representative thereof) expressly for use in
a registration statement, any prospectus or any amendments or supplements
thereto. It is understood that the indemnity obligations provided for in this
Section 2.07(a) shall be subject to such modifications as may be reasonably
requested by the lead or managing underwriter(s) for any such underwritten
offering and agreed to by the Issuer. No Holder shall be required to make any
representations or warranties in connection with any Demand Registration or
Piggyback Registration other than representations and warranties as to (i) such
Holder's ownership of the Registrable Securities to be sold by such Holder, free
and clear of all liens, claims and encumbrances, (ii) such Holder's power and
authority to effect such transfer, and (iii) such matters pertaining to
compliance with securities laws as may be reasonably requested.
(b) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act pursuant
to this Article 2, the Issuer shall give the Holders of such Registrable
Securities and the underwriters, if any, and their respective counsel, such
reasonable and customary access to its books, records and properties and such
opportunities to discuss the business and affairs of the Issuer with its
officers and the independent public accountants who have certified the financial
statements of the Issuer as shall be necessary, in the opinion of such Holders
and such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act; provided that (i) each
Holder and the underwriters, on behalf of themselves, and their respective
counsel and accountants shall have entered into a confidentiality agreement
reasonably acceptable to the Issuer and (ii) the Holders and the underwriters
and their respective counsel shall use their reasonable best efforts to minimize
the disruption to the Issuer's business.
SECTION 2.08. Indemnification and Contribution. (a) The Issuer agrees to
indemnify and hold harmless each Selling Holder and each Person, if any, who
controls each Selling Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or any amendment
thereof, any prospectus (as amended or supplemented if the Issuer shall have
furnished any amendments or supplements thereto) relating to the Registrable
Securities, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished to the Issuer in
17
19
writing by such Selling Holder expressly for use therein. The Issuer also agrees
to indemnify each underwriter of the Registrable Securities so offered and each
Person, if any, who controls such underwriter on substantially the same basis as
that of the indemnification by the Issuer of the Selling Holder provided in this
Section 2.08(a).
(b) Each Selling Holder agrees, severally but not jointly, to indemnify and
hold harmless the Issuer, its directors, the officers who sign any registration
statement and each Person, if any, who controls the Issuer within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or any amendment thereof, any prospectus (as amended or supplemented
if the Issuer shall have furnished any amendments or supplements thereto)
relating to the Registrable Securities, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
with reference to information furnished in writing by a Selling Holder (or any
representative thereof) expressly for use in a registration statement, any
prospectus or any amendments or supplements thereto. Each Selling Holder also
agrees to indemnify any underwriter of the Registrable Securities so offered and
each Person, if any, who controls such underwriter on substantially the same
basis as that of the indemnification by such Selling Holder of the Issuer
provided in this Section 2.08(b).
(c) Each party indemnified under paragraph (a) or (b) above shall, promptly
after receipt of notice of a claim or action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the indemnifying
party in writing of the claim or action; provided that the failure to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) above except to the extent that the
indemnifying party was actually prejudiced by such failure, and in no event
shall such failure relieve the indemnifying party from any other liability that
it may have to such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless based on the written advice of counsel to
such indemnified party that a conflict of interest between such indemnified
party and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in or to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 2.08 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. Any indemnifying party against whom indemnity may be sought
under this Section 2.08 shall not be liable to indemnify
18
20
an indemnified party if such indemnified party settles such claim or action
without the consent of the indemnifying party. The indemnifying party may not
agree to any settlement of any such claim or action, other than solely for
monetary damages for which the indemnifying party shall be responsible hereunder
and in connection with which the indemnified party receives a complete and
unconditional release without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld. In any action hereunder
as to which the indemnifying party has assumed the defense thereof, the
indemnified party shall continue to be entitled to participate in the defense
thereof, with counsel of its own choice, but the indemnifying party shall not be
obligated hereunder to reimburse the indemnified party for the costs thereof.
(d) If the indemnification provided for in this Section 2.08 shall for any
reason be unavailable to an indemnified party in respect of any loss, liability,
cost, claim, or damage 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 loss, liability, cost,
claim or damage in such proportion as is appropriate to reflect the relative
faults of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Issuer on the one hand and the Selling Holders on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer or a Selling
Holder and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of the loss, cost, claim, damage or
liability, or action in respect thereof, referred to above in this paragraph (d)
shall be deemed to include, for purposes of this paragraph (d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. The Issuer and the Selling
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 2.08 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding any other provision of this
Section 2.08, no Selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities of such Selling Holder were offered to the public exceeds the amount
of any damages which such Selling Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
(e) The obligations of the parties under this Section 2.08 shall be in
addition to any liability which any party may otherwise have to any other party.
19
21
SECTION 2.09. Holdback Agreement. In connection with an underwritten public
offering of Registrable Securities effected pursuant to this Article 2, the
Issuer and each Holder (subject in the case of a non-Selling Holder to a
determination at the time by the lead or managing underwriter(s) that such an
agreement is reasonably required in connection therewith) agrees not to effect
any sale or distribution of Common Stock or Derivative Securities (other than,
in the case of the Issuer, (i) pursuant to a registration on Form S-4 or Form
S-8 or any successor or similar form which is then in effect or (ii) pursuant to
any registration effected by the Issuer in connection with an acquisition or
merger transaction of any equity security of the Issuer (otherwise than through
the registered public offering then being made)), within such period (which
shall not in any event start more than 10 days prior to or end more than 90 days
after the effective date of the applicable registration statement) as may be
reasonably requested by the lead or managing underwriter(s). The Issuer shall
use its best efforts to cause the executive officers and directors of the Issuer
who are "reporting persons" within the meaning for Section 16 of the Exchange
Act not to sell, transfer or otherwise dispose of in excess of an aggregate of
3,000,000 shares of Common Stock prior to the closing of the offering of
Registrable Securities covered by the First Underwritten Demand Registration.
SECTION 2.10. Certain Agreements Regarding Hedging and Resales. (a) Prior
to September 1, 2000, each Holder agrees that, without the prior consent of the
Issuer, such Holder will not engage in any Hedging Activities. During the period
from and including September 1, 2000 to and including August 31, 2002, each
Holder agrees that it will engage in Hedging Activities only in accordance with
the following procedures: A Holder desiring to engage in Hedging Activity shall
give the Issuer 24 hours prior notice of the proposed Hedging Activity and the
name of the financial institution participating in such Hedging Activity, such
financial institution to be subject to the reasonable approval of the Issuer,
and, except as provided below, the Holder will have five business days to
complete such Hedging Activity. If another Holder has previously notified the
Issuer of Hedging Activity, and such Holder's five business day period has not
expired, the Issuer will so notify the Holder desiring to engage in Hedging
Activity and such Holder shall either delay its Hedging Activity until the
earlier of the completion of such other Holder's Hedging Activity and expiration
of such other Holder's five business day period or proceed with the Hedging
Activity but only with the financial institution participating in such other
Holder's Hedging Activity.
(b) Each Holder agrees that it will not transfer any shares of Common Stock
except (i) pursuant to an effective registration statement under the Securities
Act, (ii) in compliance with Rule 144 or as contemplated by Rule 144(k), or
(iii) upon receipt by the Issuer of an opinion of counsel to such Holder (which
counsel shall be reasonably satisfactory to the Issuer) in form and substance
customary in similar situations, or of a no-action letter from the SEC addressed
to the Issuer or such Holder, to the effect that no registration statement is
required under the Securities Act.
20
22
(c) During the period from and including September 1, 2000 to and including
August 31, 2002, each Holder agrees that it will engage in resales of
Registrable Securities (including any sale pursuant to Rule 144), other than
pursuant to underwritten offerings or private placements (any such sale, a
"PRIVATE RESALE"), only in accordance with the following procedures: A Holder
desiring to sell Registrable Securities pursuant to a Private Resale shall give
the Issuer 24 hours prior notice of such proposed sale, the amount to be sold
and the name of the broker through whom the sale is proposed to be made, such
broker to be subject to the reasonable approval of the Issuer, and, except as
provided below, the Holder will have five business days to complete such sale.
If another Holder has previously notified the Issuer of a proposed sale of
Registrable Securities pursuant to a Private Resale, and such Holder's five
business day period has not expired, the Issuer will so notify the Holder
proposing to sell Registrable Securities pursuant to a Private Resale and such
Holder shall either delay its sale until the earlier of the completion of such
other Holder's sale and expiration of such other Holder's five business day
period or proceed with its sale but only with the broker through whom the other
Holder's sale is being made.
(d) The Issuer covenants that it shall (i) file the reports required to be
filed by it under the Securities Act and the Exchange Act in a timely manner and
(ii) take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act pursuant to the
exemptions provided by Rule 144 and Rule 144A.
(e) Each Holder agrees that, to the extent required by Rule 144, such
Holder shall file a Form 144 Notice in connection with any Private Resale, a
copy of which shall promptly be delivered to the Issuer and each Investor
Representative.
(f) In addition to any other legend that may be required, each certificate
for shares of Common Stock that are issued to any Holder shall bear a legend in
substantially the following form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THE
REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 31, 1999, COPIES OF WHICH
MAY BE OBTAINED UPON REQUEST FROM MASCO CORPORATION.
If any shares of Common Stock cease to be Registrable Securities, the Issuer
shall, upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such securities without the legend required by this
Section endorsed thereon.
(g) Notwithstanding the provisions of this Section 2.10 and Section 3.03,
(i) the Issuer may, in its sole discretion, waive the provisions of Section
2.10(a) or (c) for any Holder, either generally or for specific Hedging Activity
or a specific Private Resale, and (ii) any Holder who received Common Stock
pursuant to the Behr Acquisition
21
23
Agreement or the Mill's Pride Acquisition Agreement (or, if any such Holder is a
limited partnership or a limited liability company, any Person who is a limited
partner or member thereof as of the date of this Agreement) may sell in Private
Resales an aggregate of 50,000 shares of Common Stock per calendar month without
regard to the procedures set forth in Section 2.10(c); provided that such Holder
shall give the Issuer written notice of the amount sold and the name of the
broker through whom the sale was made concurrent with the completion of such
sale.
SECTION 2.11. Adjustment of Share Amounts. All references to amounts of
shares of Common Stock contained in Sections 2.01(a)(i). (ii), (iii) and (iv)
and 2.01(c), (e) and (f) and 2.02 and 2.10 shall be appropriately adjusted to
take account of any change in the outstanding Common Stock by reason of any
reclassification, recapitalization, stock split or combination, or other similar
transaction.
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
SECTION 3.02. Assignment. Except as contemplated by the definition of
Holder, no party may assign any of its rights or obligations hereunder by
operation of law or otherwise without the prior written consent of the other
parties.
SECTION 3.03. Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the Issuer, Behr
Investors representing a majority of the Registrable Securities then held by all
Behr Investors and Mill's Pride Investors representing a majority of the
Registrable securities then held by all Mill's Pride Investors.
SECTION 3.04. Investor Representatives. (a) Notwithstanding anything to the
contrary in this Agreement, the Behr Investor Representative shall not have
independent authority to take any action or omit to take any action under this
Agreement and shall act or omit to act under this Agreement solely at the
direction of (i) in connection with the initiation of any Demand Request, the
holders of 25% or more of the Registrable Securities held by the Behr Investors,
(ii) in connection with the designation of a co-lead or co-managing underwriter
pursuant to Section 2.03 in a Demand Registration, the holders of a majority of
Registrable Securities held by Behr Investors and requested to be
22
24
included in such Demand Registration, and (iii) in all other cases, the holders
of a majority of Registrable Securities held by all Behr Investors. The Behr
Investor Representative shall promptly notify each Behr Investor of any action
it takes on behalf of the Behr Investors hereunder and deliver to each Behr
Investor a copy of any notice it receives under this Agreement.
(b) The Issuer shall be entitled to rely, without any investigation or
inquiry by the Issuer, upon all actions by the Behr Investor Representative or
the Mill's Pride Investor Representative as having been taken upon the authority
of the Behr Investors or the Mill's Pride Investors, respectively. Any action by
the Behr Investor Representative taken on behalf of the Behr Investors and any
action by the Mill's Pride Investor Representative taken on behalf of the Mill's
Pride Investor Representative shall be conclusively deemed to be the action of
the Behr Investors or the Mill's Pride Investors, as the case may be, and the
Issuer shall not have any liability or responsibility to the Behr Investors or
the Mill's Pride Investors, as the case may be, for any action taken in reliance
thereon.
SECTION 3.05. Severability. Whenever possible, each provision or portion of
any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of 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 shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 3.06. No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
SECTION 3.07. No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any Person who or
which (i) is not a party hereto or (ii) has not agreed to be bound by the terms
of this Agreement.
SECTION 3.08. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state.
SECTION 3.09. Jurisdiction. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this
23
25
Agreement or the transactions contemplated hereby may be brought exclusively in
the United States District Court for the Southern District of New York or any
New York State court sitting in the Borough of Manhattan, New York City, and
each of the parties hereby consents to the personal jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to such jurisdiction or to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 3.04
shall be deemed effective service of process on such party.
SECTION 3.10. Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 3.11. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
SECTION 3.12. Equitable Relief. The Issuer hereby acknowledges that
irreparable damage would occur to the Investors in the event that any of the
provisions of this Agreement to be performed by the Issuer were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
the Investors shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any State having jurisdiction, this
being in addition to any other remedy to which the Investors may be entitled to
at law or in equity.
SECTION 3.13. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand delivery
or telecopy, or by any next-day courier service, such as Federal Express,
providing proof of delivery. All such notices shall be deemed to have been duly
given: (i) if given by telecopy, when such telecopy is transmitted to the
relevant telecopy number and evidence of receipt is received or (ii) if given by
any other means, upon delivery or refusal of delivery at the relevant address.
All communications hereunder shall be delivered to the respective parties at the
address or telecopy number set forth as follows (or such other address or
telecopy number as such party may hereafter specify for the purpose by notice to
the other parties hereto):
(a) if to a Holder at the address of such Holder set forth on Schedule I
hereto, with a copy in like manner to the Investor Representatives as follows:
24
26
Behr Investor Representative:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Behr Holdings Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Kenner & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Mill's Pride Investor Representative:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
250 South Australian Avenue, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(b) if to an Investor Representative, at the address specified in
Section 3.13(a);
(c) if to the Issuer, as follows:
Masco Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
25
27
IN WITNESS WHEREOF, the Issuer and the Holders have caused this Agreement
to be duly executed as of the day and year first above written.
MASCO CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
[Signatures of the stockholders and option holder of Behr Holding Corporation]
[Signatures of the limited partners of Mill's Pride Limited Partnership]
[Signatures of the stockholders of Mill's Pride, Inc.]
28
SCHEDULE I
[List of Behr Investors]
[List of Mill's Pride Investors]
I-1
29
SCHEDULE II
FORM OF AGREEMENT TO BE BOUND
Masco Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Dear Sir/Madam:
Reference is made to the Registration Rights Agreement dated as of August
31, 1999 (the "Agreement") among Masco Corporation and the Investors listed
therein. Terms used but not otherwise defined in this letter agreement shall
have the meanings ascribed to them in the Agreement.
We have acquired Registrable Securities from a Person who is a [Behr]
[Mill's Pride] Investor under the Agreement. We hereby agree to be bound by the
terms and conditions of the Agreement as an Investor and as a Holder thereunder
as if we were an original party thereto, to accept our status as a [Behr]
[Mill's Pride] Investor under the Agreement and to accept the [Behr] [Mill's
Pride] Investor Representative as our representative under the Agreement.
Sincerely,
[NAME OF PERSON]
By
--------------------------------------
Name:
Title:
Information for Notices:
[Name]
[Address]
Attn:
Fax: