EXHIBIT 10.20
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REGISTRATION RIGHTS AGREEMENT
among
SOLO CUP INVESTMENT CORPORATION
and
THE STOCKHOLDERS NAMED HEREIN
dated as of February 27, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS .................................................................1
SECTION 1.1. Certain Defined Terms ...............................................1
SECTION 1.2. Other Definitional Provisions; Interpretation .......................4
ARTICLE II REGISTRATION RIGHTS ........................................................4
SECTION 2.1. Demand Registration .................................................4
SECTION 2.2. Incidental Registration .............................................7
SECTION 2.3. Registration Procedures .............................................9
SECTION 2.4. Underwritten Offerings. ............................................12
SECTION 2.5. Preparation; Reasonable Investigation ..............................13
SECTION 2.6. Limitations, Conditions and Qualifications to Obligations under
Registration Covenants .....................................................13
SECTION 2.7. Expenses ...........................................................14
SECTION 2.8. Indemnification ....................................................14
SECTION 2.9. Participation in Underwritten Registrations ........................16
SECTION 2.10. Rule 144 and Rule 144A ............................................17
SECTION 2.11. Holdback Agreements ...............................................17
SECTION 2.12. Registration Rights to Others .....................................17
ARTICLE III MISCELLANEOUS ............................................................18
SECTION 3.1. Recapitalizations, Exchanges, Etc. .................................18
SECTION 3.2. Excluded Shares ....................................................18
SECTION 3.3. Termination ........................................................18
SECTION 3.4. Amendments and Waivers .............................................18
SECTION 3.5. Successors, Assigns and Transferees ................................18
SECTION 3.6. Notices ............................................................18
SECTION 3.7. Integration; Entire Agreement ......................................20
SECTION 3.8. Further Assurances .................................................20
SECTION 3.9. Delays or Omissions ................................................20
SECTION 3.10. Governing Law; Jurisdiction; Waiver of Jury Trial .................20
SECTION 3.11. Severability ......................................................20
SECTION 3.12. Enforcement .......................................................21
SECTION 3.13. Titles and Subtitles ..............................................21
SECTION 3.14. No Recourse .......................................................21
SECTION 3.15. Counterparts ......................................................21
SECTION 3.16. Additional Management Investors ...................................21
THIS
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is entered into
as of February 27, 2004, between SOLO CUP INVESTMENT CORPORATION, a Delaware
corporation (the "COMPANY"), and each of the stockholders of the Company whose
name appears on the signature pages hereof (individually, an "INVESTOR
STOCKHOLDER" and, collectively, the "INVESTOR STOCKHOLDERS").
RECITALS
WHEREAS, the Company and certain of the Investor Stockholders have
entered into a Convertible Participating Preferred Stock Purchase Agreement,
dated as of February 27, 2004 (the "PREFERRED STOCK PURCHASE AGREEMENT"),
pursuant to which certain of the Investor Stockholders will purchase 240,000
newly issued shares of Convertible Participating Preferred Stock (as defined
below), for an aggregate purchase price of $240 million;
WHEREAS, the execution and delivery of this Agreement is a condition
to the obligations of Investor Stockholders to purchase the Convertible
Participating Preferred Stock pursuant to the Preferred Stock Purchase
Agreement; and
WHEREAS, the Company has agreed to provide registration rights with
respect to certain securities held by the Investor Stockholders to be effective
on the terms provided for herein.
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. As used in this Agreement, terms
defined in the heading and the recitals shall have their respective assigned
meanings, and the following capitalized terms shall have the meanings ascribed
to them below:
"AFFILIATE" shall mean, with respect to any Person, (i) any Person
that directly or indirectly controls, is controlled by or is under common
control with such Person or (ii) any Person directly or indirectly owning or
controlling ten percent (10%) or more of any class of outstanding equity
interests after giving effect to the exercise, exchange or conversion of
options, warrants or other securities owned or controlled by such Person which
are exercisable, exchangeable or convertible into such equity interests or (iii)
any director, officer, partner, trustee, or member of such Person or any Person
specified in clause (i) or (ii) above or (iv) in the case of any Person
specified in clause (i), (ii) or (iii) above who is an individual, Family
Members of such Person.
"AGREEMENT" shall mean this
Registration Rights Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"BENEFICIAL OWNER" shall have the meaning assigned to such term in the
Stockholders' Agreement.
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"BOARD OF DIRECTORS" shall mean, unless otherwise specified hereunder,
the Board of Directors of the Company.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday, federal
or
New York State holiday or other day on which commercial banks in
New York are
authorized or required by law to close.
"CLOSING DATE" shall mean the date of the sale of Convertible
Participating Preferred Stock pursuant to the Preferred Stock Purchase
Agreement.
"COMMON STOCK" shall mean the common stock, par value $.01 per share,
of the Company.
"COMMON STOCK EQUIVALENTS" shall mean any warrants, rights, calls,
options or other securities exchangeable or exercisable for or convertible into
Common Stock.
"COMMON STOCK REQUEST" shall have the meaning specified in Section
2.1(b).
"CONVERTIBLE PARTICIPATING PREFERRED STOCK" shall mean the Convertible
Participating Preferred Stock, par value $.01 per share, of the Company.
"EQUITY SECURITIES" shall mean any and all shares of Common Stock and
Common Stock Equivalents.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as the same may
be amended from time to time.
"FAMILY MEMBER" means with respect to any individual (i) any member of
the immediate family of such individual (which shall mean, any parent, spouse,
child or other lineal descendants (including by adoption), brother or sister
thereof or any spouse of any of the foregoing), (ii) each trust created for the
benefit of such individual or in which one or more members of such individual's
immediate family has a beneficial interest and (iii) any Person who is
controlled by any such immediate family member or trust (including each
custodian of property for one or more such Persons).
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HOLDINGS LLC" shall mean SCC Holding Company LLC, a Delaware limited
liability company.
"INVESTOR STOCKHOLDER" shall have the meaning assigned to such term in
the Recitals.
"IPO" shall have the meaning assigned to such term in the
Stockholders' Agreement.
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"IPO DATE" shall mean the first date of the issuance of Common Stock
in an IPO.
"LIQUIDITY EVENT" shall have the meaning assigned to such term in the
Stockholders' Agreement.
"LOCK-UP PERIOD" shall have the meaning set forth in Section 2.11(a).
"MANAGEMENT INVESTORS" shall mean the persons designated as such on
the signature pages hereto.
"NASD" shall have the meaning set forth in Section 2.3(m).
"PERMITTED TRANSFEREE" shall mean any Person to whom any Investor
Stockholder (or any direct or indirect permitted transferee thereof) Transfers
securities in accordance with the terms of this Agreement, the Stockholders'
Agreement (including, without limitation, Sections 3.5 and 3.7 thereof) and any
other agreements with the Company by which such Transferor is bound (other than
pursuant to a Public Offering or pursuant to Rule 144 under the Securities Act)
and who becomes a party to, and is bound to the same extent as its transferor by
the terms of, this Agreement.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, trust, association, trust or business trust,
unincorporated organization or joint venture, Governmental Authority or other
entity of any nature whatsoever.
"PREFERRED STOCK PURCHASE AGREEMENT" shall have the meaning assigned
to such term in the Recitals.
"PUBLIC OFFERING" shall have the meaning assigned to such term in the
Stockholders' Agreement.
"REQUESTING STOCKHOLDER" shall have the meaning set forth in Section
2.1(a).
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may be amended
from time to time.
"SELLING STOCKHOLDERS" shall have the meaning set forth in Section
2.3(c).
"SENIOR EXECUTIVE" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"SHELF FILING DATE" shall have the meaning set forth in Section
2.1(a).
"SHELF REGISTRATION" shall have the meaning set forth in Section
2.1(a).
"SHELF REGISTRATION STATEMENT" shall have the meaning set forth in
Section 2.1(a).
"SHELF REQUEST DATE" shall have the meaning set forth in Section
2.1(a).
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"STOCKHOLDERS' AGREEMENT" shall mean the Stockholders' Agreement dated
as of the Closing Date among the Company, Solo Cup Company, a Delaware
corporation, Vestar Investment, Vestar Investment II, VCP, the Management
Investors and Holdings LLC, as amended in accordance with its terms.
"TRANSFER" shall have the meaning assigned to such term in the
Stockholders' Agreement.
"VCP" shall mean Vestar Capital Partners IV, L.P., a Delaware limited
partnership.
"VESTAR" shall mean, collectively, VCP, Vestar Investment II and
Vestar Investment.
"VESTAR INVESTMENT II" shall mean Vestar Cup Investment II, LLC, a
Delaware limited liability company and an Affiliate of VCP.
"VESTAR INVESTMENT" shall mean Vestar Cup Investment, LLC, a Delaware
limited liability company and an Affiliate of VCP.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS; INTERPRETATION. (i) The
words "hereof", "herein", and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section references are to this
Agreement unless otherwise specified.
(a) The headings in this Agreement are included for convenience of
reference only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) For purposes of comparing the beneficial ownership of any Person
on the date of execution and delivery of this Agreement to the level of such
ownership at any later time, the level of ownership on such later date shall be
adjusted to eliminate the effect of any subdivision of the Common Stock, any
combination of the Common Stock, any issuance of Common Stock by reason of any
reclassification (including, without limitation, any reclassification in
connection with a merger or consolidation), or any dividend payable in Common
Stock.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. DEMAND REGISTRATION.
(a) SHELF REGISTRATION. Subject to the terms hereof, at any time after
the IPO Date, but in no event during the Lock-up Period, (i) Vestar and, if
Vestar shall cease to beneficially own any shares of Common Stock or if Vestar
shall give its prior written consent thereto, any Permitted Transferee of
Vestar, (ii) Holdings LLC and, if Holdings LLC shall cease
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to beneficially own any shares of Common Stock or if Holdings LLC shall give its
prior written consent thereto, any Permitted Transferee of Holdings LLC or (iii)
the Senior Executive and, if the Senior Executive shall give his prior written
consent thereto, any Permitted Transferee of the Senior Executive; PROVIDED,
HOWEVER, that the Senior Executive's and his Permitted Transferees' rights under
Section 2.1(a) and (b) shall only be effective following the date on which none
of Vestar and its Affiliates are Stockholders (as defined in the Stockholders'
Agreement) (each of such Persons referred to in clauses (i), (ii) and (iii)
above referred to herein as a "REQUESTING STOCKHOLDER") may make a written
request that the Company file a shelf registration statement (a "SHELF
REGISTRATION STATEMENT") pursuant to Rule 415 promulgated under the Securities
Act (a "SHELF REGISTRATION") providing for the sale by the Requesting
Stockholder of all or part of the shares of Common Stock owned or to be acquired
upon conversion, exercise or exchange of Common Stock Equivalents held by such
Requesting Stockholder (the date of such written request, the "SHELF REQUEST
DATE"); PROVIDED, the request must specify the approximate number of shares of
Common Stock to be registered. The Company shall use its reasonable best efforts
to file such Shelf Registration Statement under the Securities Act at the
earliest practicable date, but in any event not later than 90 days after the
Shelf Request Date (the "SHELF FILING DATE"), and use its reasonable best
efforts to have such Shelf Registration Statement thereafter declared effective
by the SEC at the earliest practicable date. Subject to Section 2.6(a) hereof,
the Company agrees to use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective for the period beginning on the
date on which the Shelf Registration Statement is declared effective under Rule
415 of the Securities Act until the earlier to occur of (i) eighteen (18) months
after the date such Shelf Registration Statement initially is declared effective
by the SEC (plus a number of Business Days equal to the number of Business Days,
if any, that the Shelf Registration Statement is not kept effective after the
initial date of its effectiveness and prior to eighteen (18) months thereafter
pursuant to Section 2.6(a) or otherwise), (ii) the day after the date on which
all of the Common Stock covered by the Shelf Registration Statement has been
sold pursuant to the Shelf Registration Statement or (iii) the first date on
which there shall cease to be any Common Stock covered by such Shelf
Registration Statement. The Company further agrees, if necessary, to supplement
or amend the Shelf Registration Statement, if required by the rules, regulations
or instructions applicable to the registration form used by the Company for such
Shelf Registration or by the Securities Act or by any other rules and
regulations thereunder for shelf registration, and the Company agrees to furnish
to the Requesting Stockholders whose Common Stock is included in such Shelf
Registration Statement copies of any such supplement or amendment promptly after
its being issued or filed with the SEC.
(b) NON-SHELF REGISTRATION. Subject to the terms and conditions
hereof, at any time after the IPO Date and when a Shelf Registration Statement
covering all shares of Common Stock is not effective, but in no event during the
Lock-up Period, upon the written request (a "COMMON STOCK REQUEST") of a
Requesting Stockholder that the Company effect the registration under the
Securities Act of all or part of the shares of Common Stock owned or to be
acquired upon conversion, exercise or exchange of Common Stock Equivalents held
by such Requesting Stockholder, the Company will use its reasonable best efforts
to effect the registration under the Securities Act of such shares; PROVIDED,
HOWEVER, (i) with respect to Vestar, that the shares of Common Stock covered by
any such Common Stock Request shall constitute not less than one-quarter (1/4)
of the number of shares of Common Stock beneficially owned on a fully diluted
basis by Vestar on the Closing Date; and (ii) with respect to the Senior
Executive, that the shares
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of Common Stock covered by such Common Stock Request shall constitute no less
than 50% of the shares of Common Stock then beneficially owned by the Senior
Executive.
(c) REGISTRATION STATEMENT FORM. Registrations under this Section 2.1
shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Company and (ii) as shall permit the disposition of the Common
Stock being registered in accordance with the intended method or methods of
disposition specified in the request for such registration. The Company agrees
to consider in good faith for inclusion in any such registration statement all
information which, in the opinion of counsel to the underwriters, if any, or the
Requesting Stockholder is required to be included.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected and shall
not be counted for purposes of Section 2.1(f) (i) in the case of a shelf
registration under Section 2.1(a), unless a registration statement with respect
thereto has been declared effective by the SEC and remains effective for the
time period required by Section 2.1(a), other than primarily as a result of acts
or omissions of any Selling Stockholder or any authorized agent thereof; (ii) in
the case of a demand registration under Section 2.1(b), unless a registration
statement with respect thereto has been declared effective by the SEC and
remains effective for the time period required by Section 2.3(a), other than
primarily as a result of acts or omissions of any Selling Stockholder or any
authorized agent thereof, and 75% or more of the Common Stock requested to be
sold by the Requesting Stockholder (after any cutbacks by the underwriters
associated with market conditions but not including any cutbacks associated with
Section 2.2(a)) has been disposed of in accordance with such registration
statement, other than primarily as a result of acts or omissions of any Selling
Stockholder or any authorized agent thereof, or there shall cease to be any
Common Stock covered by such registration statement; (iii) if after it has
become effective, such registration becomes the subject of any stop order,
injunction or other order or requirement of the SEC or other Governmental
Authority, other than primarily as a result of acts or omissions of any Selling
Stockholder or any authorized agent thereof; or (iv) if, in the case of an
underwritten offering as to which a registration is declared effective, the
conditions to closing specified in an underwriting agreement to which the
Company is a party are not satisfied or waived other than by reason of any
breach or failure by any Investor Stockholder or Permitted Transferee thereof,
or are not otherwise waived.
(e) TERMINATION OF REQUEST FOR REGISTRATION. An Investor Stockholder
or Permitted Transferee that is a holder of Common Stock to be included in a
registration statement may at any time prior to the effectiveness thereof
terminate a request for registration by written notice to the Company and, upon
receipt of such notice of the withdrawal from such Investor Stockholder or
Permitted Transferee, the Company shall not effect the registration of such
Common Stock. A requested registration terminated pursuant to this Section
2.1(e) shall be counted for purposes of Section 2.1(f) unless (i) the managing
underwriter, if any, of any underwritten offering shall advise an Investor
Stockholder or Permitted Transferee participating in such registration that the
Common Stock covered by the registration statement cannot be sold in such
offering within a price range acceptable to such Investor Stockholder or
Permitted Transferee, provided such determination by the Investor Stockholder or
its Permitted Transferee must be made within 10 Business Days of the selection
of the underwriter, or (ii) such Investor
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Stockholder or Permitted Transferee agrees to pay all of the costs and expenses
of such terminated registration.
(f) LIMITATIONS ON REGISTRATION ON REQUEST. Notwithstanding anything
in this Section 2.1 to the contrary, in no event will (i) the Company be
required to effect more than one registration pursuant to Section 2.1(b) within
any 180 day period, (ii) Vestar and Permitted Transferees be entitled to more
than four registrations in the aggregate pursuant to Sections 2.1(a) and 2.1(b)
or to more than two registrations pursuant to Section 2.1(a), (iii) Holdings LLC
and Permitted Transferees be entitled to more than six registrations in the
aggregate pursuant to Sections 2.1(a) and 2.1(b) or more than three
registrations pursuant to Section 2.1(a), (iv) the Senior Executive and
Permitted Transferees be entitled to more than one registration in the aggregate
pursuant to Sections 2.1(a) and 2.1(b), unless in the case of each of clauses
(ii), (iii) and (iv) above such Requesting Stockholder agrees to pay all of the
costs and expenses of each such additional registration.
(g) REGISTRATIONS OF OTHER SECURITIES. Whenever the Company shall
effect a registration pursuant to Section 2.1 hereof, no securities other than
Common Stock shall be included among the securities covered by such registration
unless the Requesting Stockholders and the Company shall have consented in
writing to the inclusion of such other securities.
(h) PRIORITY IN NON-SHELF REGISTRATION. In a registration pursuant to
Section 2.1 involving an underwritten Public Offering, if the managing
underwriter of such underwritten offering shall inform the Company and the
relevant Investor Stockholders and Permitted Transferees by letter of its belief
that the number of shares of Common Stock to be included in such offering would
adversely affect its ability to effect such offering, including the price at
which such Common Stock can be sold, then the Company will be required to
include in such offering only that number of shares of Common Stock which it is
so advised should be included in such offering. Shares of Common Stock proposed
to be included by Vestar and its Permitted Transferees, on the one hand, and
Holdings LLC and its Permitted Transferees, on the other hand, shall be given
first priority on a one for one basis and shares of Common Stock proposed to be
included by the Management Investors and their Permitted Transferees shall be
included on a pro rata basis with the shares of Common Stock proposed to be
included by Vestar and its Permitted Transferees based on the number of shares
of Common Stock requested to be registered by such holders; shares of Common
Stock proposed by the Company to be sold for its own account shall be given
second priority; and all other shares of Common Stock shall be given third
priority.
SECTION 2.2. INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE COMMON STOCK. So long as any Investor Stockholder
and its Permitted Transferees beneficially own a number of shares of Common
Stock equal to at least ten percent (10%) of the number of shares of Common
Stock beneficially owned by it on the Closing Date, if the Company at any time
after the IPO Date, when a Shelf Registration Statement covering all shares of
Common Stock subject to registration hereunder is not effective, proposes to
register any shares of Common Stock under the Securities Act (other than a
registration filed by the Company in connection with the IPO or a registration
on Form S-4 or S-8, or any successor form or other form promulgated for similar
purposes), including registrations
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pursuant to Section 2.1(a) or 2.1(b), whether or not for sale for its own
account, it will each such time as soon as practicable give written notice of
its intention to do so to all Investor Stockholders and Permitted Transferees
which notice, in any event, shall be given at least 30 days prior to such
proposed registration. Upon the written request (which request shall specify the
total number of shares of Common Stock intended to be disposed of by such
Investor Stockholder and Permitted Transferee) of any Investor Stockholder and
Permitted Transferee made within 30 days after the receipt of any such notice
(15 days if the Company gives telephonic notice, with written confirmation to
follow promptly thereafter, stating that (i) such registration will be on Form
S-3 or any successor form and (ii) such shorter period of time is required
because of a planned filing date), the Company will use its reasonable best
efforts to effect the registration under the Securities Act of all Common Stock
held or to be acquired upon conversion, exercise or exchange of Common Stock
Equivalents by such Investor Stockholder and Permitted Transferee which the
Company has been so requested to register for sale in the manner initially
proposed by the Company. Prior to the effective date of the registration
statement filed in connection with such registration, promptly following receipt
of notification by the Company from the underwriter (if an underwritten
offering) of a range of prices at which such securities are likely to be sold,
the Company shall so advise each Investor Stockholder of such price, and if such
price is below the minimum price which shall be acceptable to such Investor
Stockholder, such Investor Stockholder shall then have the right irrevocably to
withdraw its request to have its Common Stock included in such registration
statement, by delivery of written notice of such withdrawal to the Company
within three Business Days of its being advised of such price, without prejudice
to the rights of any such holder to include Common Stock in any future
registration (or registrations) pursuant to this Section 2.2 or to cause such
registration to be effected as a registration under Section 2.1 hereof, as the
case may be. If the Company thereafter determines for any reason not to register
or to delay registration of the Common Stock (provided, however, that such
determination shall not violate any of the Company's obligations under this
Agreement), the Company must give written notice of such determination to the
Investor Stockholders and Permitted Transferees and (i) in the case of a
determination not to register, shall be relieved of the obligation to register
such Common Stock in connection with such registration, without prejudice,
however, to any right the Requesting Stockholder may have to request that such
registration be effected as a registration under Section 2.1 and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Common Stock of any Investor Stockholder and Permitted
Transferee for the same period as the delay in registration of such other
securities. Except as otherwise expressly provided in Section 2.1, no
registration effected under this Section 2.2(a) shall relieve the Company of any
obligation to effect a registration under Section 2.1. Subject to Section
2.2(b), if any registration was initiated by the Company for its own account and
involves an underwritten offering, each Requesting Stockholder shall sell its
Common Stock on the same terms and conditions as those that apply to the
Company.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. In a registration pursuant
to this Section 2.2 where the Company proposes to register any of its securities
for its own account, if the managing underwriter of such underwritten offering
shall inform the Company and the relevant Investor Stockholders and Permitted
Transferees electing to participate pursuant to Section 2.2(a) by letter of its
belief that the number of shares of Common Stock to be included in such
registration would adversely affect its ability to effect such offering,
including the price at which such Common Stock can be sold, then the Company
will be required to include in such
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registration only that number of shares of Common Stock which it is so advised
should be included in such offering. Shares of Common Stock proposed by the
Company to be registered for issuance by the Company shall have the first
priority in a registration pursuant to Section 2.2(a), shares of Common Stock
owned by Investor Stockholders and Permitted Transferees to be registered
hereunder shall be given second priority and all other shares of Common Stock
shall be given third priority. As among (i) Vestar and its Permitted
Transferees, (ii) Holdings LLC and its Permitted Transferees and (iii) the
Management Investors and their respective Permitted Transferees, the priority
set forth in Section 2.1(h) shall apply. In the case of any other registration
contemplated by Section 2.2, the priority set forth in Section 2.1(h) shall
apply.
SECTION 2.3. REGISTRATION PROCEDURES. In connection with the Company's
obligations pursuant to Sections 2.1 and 2.2 hereof, the Company will use all
reasonable best efforts to effect such registration and the Company will
promptly:
(a) Prepare and file with the SEC as soon as practicable after request
for registration hereunder the requisite registration statement to effect such
registration and use all reasonable best efforts to cause such registration
statement to become effective and to remain continuously effective (i) in the
case of registrations under Section 2.1(a) for the period of time specified
therein and (ii) in the case of other registrations hereunder, until the earlier
to occur of (x) 180 days following the date on which such registration statement
is declared effective or (y) the termination of the offering being made
thereunder;
(b) (i) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for the
applicable period of time specified in Section 2.3(a) and to comply with the
provisions of the Securities Act with respect to the disposition of all shares
of Common Stock covered by such registration statement during the applicable
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement or supplements to such
prospectus, and, at the written request of any such seller of Common Stock,
furnish to such sellers a reasonable number of copies of such supplements and
amendments and (ii) provide notice to such sellers and the managing underwriter,
if any, of the Company's reasonable determination that a post-effective
amendment to a registration statement would be appropriate;
(c) Furnish to each Investor Stockholder and Permitted Transferee
which owns shares of Common Stock covered by such registration statement (the
"SELLING STOCKHOLDERS") and the managing underwriter, if any, such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, as may reasonably be requested by
such Selling Stockholder;
(d) Use reasonable best efforts (i) to register or qualify all shares
of Common Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions in the United States where an exemption is
not available as the Selling Stockholders shall reasonably request, (ii) subject
to Section 2.6(a), to keep such registration or qualification
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in effect for so long as such registration statement remains in effect and (iii)
to take any other action which may be reasonably necessary or advisable to
enable the Selling Stockholders to consummate the disposition in such
jurisdictions of such Common Stock, PROVIDED that the Company will not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified, subject itself to taxation in any such jurisdiction, take any
action which would subject it to general service of process in any such
jurisdiction or amend its certificate of incorporation or bylaws;
(e) Notify the Selling Stockholders and the managing underwriter, if
any, promptly, and, if requested by such person, confirm such advice in writing
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed and, with respect to a registration statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to a registration statement or
related prospectus or for additional information, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of a registration statement
or the initiation of any proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of any of the registered securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose and (v) of
the happening of any event or information becoming known which requires the
making of any changes in a registration statement or related prospectus so that
such documents will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; provided with respect to clause (v),
notice shall only be required if a prospectus relating thereto is required to be
delivered under the Securities Act;
(f) Use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the registered securities for sale in
any jurisdiction, as promptly as practicable;
(g) Upon the occurrence of any event contemplated by clause (e)(v)
above, and so long as a prospectus relating thereto is required to be delivered
under the Securities Act, prepare a supplement or post-effective amendment to
the applicable registration statement or related prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the securities being sold
thereunder, such prospectus will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading;
(h) Use reasonable best efforts to furnish to the Selling Stockholders
a signed counterpart, addressed to the Selling Stockholders and the
underwriters, if any, of (A) an opinion of counsel for the Company, and (B) a
"comfort" letter, signed by the independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountant's letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and dated the dates
such opinions and comfort letters are customarily dated;
11
(i) Otherwise use all reasonable best efforts to comply with all
applicable rules and regulations of the SEC and any other Governmental Authority
having jurisdiction over the offering, and make available to the Selling
Stockholders an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 promulgated thereunder; no later than 90 days
after the end of the 12-month period beginning with the first day of the
Company's first calendar quarter after the effective date of a registration
statement pursuant to which shares of Common Stock are sold, which statement
shall cover such 12-month period;
(j) Cooperate with the Selling Stockholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Common Stock to be sold; and enable such
shares of Common Stock to be in such denominations and registered in such names
as the Selling Stockholders or the managing underwriters, if any, may request at
least two Business Days prior to any sale of shares of Common Stock to the
underwriters;
(k) Use commercially reasonable best efforts to cause the shares of
Common Stock covered by the applicable registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Selling Stockholder(s) or the underwriters, if any, to
consummate the disposition of such shares of Common Stock;
(l) If requested by the managing underwriters, if any, or the holders
of a majority of the shares of Common Stock covered by the registration
statement, cause all shares of Common Stock covered by the registration
statement to be (i) listed on each securities exchange, if any, on which
securities of such class, series and form issued by the Company, if any, are
then listed or (ii) authorized to be quoted on the Nasdaq National Market if the
Common Stock so qualifies to be so quoted;
(m) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD);
(n) As needed, provide a transfer agent and registrar for the Common
Stock covered by a registration statement no later than the effective date
thereof; and
(o) As soon as practicable prior to the filing of any document which
is to be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement), provide copies
of such document to counsel to the Selling Stockholders and to the managing
underwriters, if any, and make the Company's representatives reasonably
available for discussion of such document upon written request and consider in
good faith making such changes in such document prior to the filing thereof as
counsel for such Selling Stockholders or underwriters may reasonably request.
The Company may require each Selling Stockholder to furnish to the
Company such information regarding such Selling Stockholder and the distribution
of such securities as the Company may from time to time reasonably request in
order to comply with the Securities Act.
12
The Selling Stockholders agree that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
2.3(e)(ii), (iii), (iv) or (v) hereof, they will forthwith discontinue
disposition pursuant to such registration statement of any shares of Common
Stock as the case may be, covered by such registration statement or prospectus
until their receipt of the copies of the supplemented or amended prospectus
relating to such registration statement or prospectus or until they are advised
in writing by the Company that the use of the applicable prospectus may be
resumed (and the period of such discontinuance shall be excluded from the
calculation of the period specified in clause (x) of Section 2.3(a)) and, if so
directed by the Company, will deliver to the Company (at the Company's expense,
except as otherwise provided in Section 2.1(e)) all copies, other than permanent
file copies then in their possession, of the prospectus covering such securities
in effect at the time of receipt of such notice. The Selling Stockholders agree
to furnish the Company a signed counterpart, addressed to the Company and the
underwriters, if any, of an opinion of counsel for the Selling Stockholders
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of selling stockholder's counsel delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
are customarily dated) and such other legal matters as the Company or the
underwriters may reasonably request.
SECTION 2.4. UNDERWRITTEN OFFERINGS.
(a) DEMAND UNDERWRITTEN OFFERINGS. In any underwritten offering
pursuant to a registration requested under Section 2.1(b), the Company will use
reasonable best efforts to enter into an underwriting agreement for such
offering with the underwriters selected by the Requesting Stockholder, such
agreement and underwriters to be reasonably satisfactory in form and substance
to the Company, the Requesting Stockholder and the underwriters and to contain
such representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type. The Selling Stockholders who
hold shares of Common Stock to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to their obligations.
The Company may, at its option, require that the Selling Stockholders, severally
and not jointly, make customary representations and warranties to and for the
benefit of such underwriters and the Company with respect to such Selling
Stockholder and the securities such Selling Stockholder proposes to sell in such
offering.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
proposes to register any shares of its Common Stock under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company and the Selling Stockholders who
hold shares of Common Stock to be distributed by such underwriters in accordance
with Section 2.2 hereof shall be parties to the underwriting agreement with such
underwriters and may, at their option, require that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to their obligations. The Company may, at its
option, require that the Selling Stockholders, severally and not jointly, make
customary representations and warranties to and for the benefit of such
underwriters and the Company with respect to such Selling Stockholder and the
securities such Selling Stockholder proposes to sell in such offering.
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SECTION 2.5. PREPARATION; REASONABLE INVESTIGATION. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Selling Stockholders,
the underwriters and their respective counsel and accountants the opportunity
(but such Persons shall not have the obligation) to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the SEC and, to the extent practicable, each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records (to the extent customarily given to the underwriters of the Company's
securities), and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the reasonable opinion of the
Selling Stockholders' and the underwriters' respective outside counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
SECTION 2.6. LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS. The obligations of the Company to use its
reasonable best efforts to cause shares of Common Stock to be registered under
the Securities Act are subject to each of the following limitations, conditions
and qualifications:
(a) The Company shall be entitled to postpone for a reasonable period
of time the filing or effectiveness of, or suspend the rights of Selling
Stockholders to make sales pursuant to, any registration statement otherwise
required to be prepared, filed and made and kept effective by it hereunder (but
the duration of such postponement or suspension may not exceed the earlier to
occur of (w) 5 Business Days after the cessation of the circumstances described
in clauses (i) and (ii) below or (x) 120 days after the date of the
determination of the Board of Directors referred to below, and the duration of
such postponement or suspension shall be excluded from the calculation of the
period specified in clause (x) of Section 2.3(a)) if the Board of Directors of
the Company determines in good faith that (i) there is a material undisclosed
development in the business or affairs of the Company (including any pending or
proposed financing, recapitalization, acquisition or disposition), the
disclosure of which at such time could be materially adverse to the Company's
interests or (ii) the Company is preparing to or has filed a registration
statement with the SEC, and if filed such registration statement has not yet
been declared effective, the Company is using its reasonable best efforts to
have such registration statement declared effective and the underwriters, if
any, with respect to such registration advise that such registration would be
adversely affected. If the Company shall so delay the filing of a registration
statement, it shall, as promptly as possible, notify the Selling Stockholders of
such determination, and the Selling Stockholders shall have the right (y) in the
case of a postponement of the filing or effectiveness of a registration
statement, to withdraw the request for registration by giving written notice to
the Company within 10 days after receipt of the Company's notice or (z) in the
case of a suspension of the right to make sales, to receive an extension of the
registration period equal to the number of days of the suspension.
(b) The Company shall not be required hereby to include shares of
Common Stock in a registration statement if the beneficial owner of such Common
Stock seeking registration can obtain, after making a good faith attempt to so
obtain, a written opinion of its outside counsel that such beneficial owner
would be free to sell all of such shares of Common Stock within the current
calendar quarter under Rule 144 under the Securities Act.
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(c) The Company's obligations shall be subject to the obligations of
the Selling Stockholders, which the Selling Stockholders acknowledge, to furnish
all information and materials and to take any and all actions as may be required
under applicable federal and state securities laws and regulations to permit the
Company to comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such registration statement.
(d) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant hereto.
SECTION 2.7. EXPENSES. Except as otherwise provided in Section 2.1(f),
the Company will pay all expenses incident to the Company's performance of or
compliance with this Agreement (whether or not such registration shall become
effective and whether or not all or any portion of the Common Stock originally
requested to be included in such registration are ultimately included in such
registration), including any and all registration and filing fees payable to the
SEC, fees incurred in connection with the listing or quotation of the Common
Stock, fees and expenses of compliance with state securities or blue sky laws
(including reasonable fees and disbursements of a single firm of outside counsel
for the underwriters in connection with blue sky qualifications of the Common
Stock being registered and determination of its eligibility for investment under
the laws of such jurisdictions as the Selling Stockholders may request),
printing expenses, fees and disbursements of counsel and accountants of the
Company, including costs associated with comfort letters, and fees and expenses
of other Persons retained by the Company, but excluding underwriters' expenses
(including discounts, commissions or fees of underwriters and expenses included
therein, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the securities being registered or
legal expenses of any Person other than the Company and the Selling Stockholders
as provided below) but including the fees and expenses of any qualified
independent underwriter required to participate in such registration pursuant to
applicable law or the requirements of the NASD. The Company shall, in any event
in all cases, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), and the expense of securities law liability insurance and
rating agency fees, if any. In connection with a registration under Section 2.1
or 2.2, the Company shall reimburse Selling Stockholders covered by such
registration for the reasonable fees and expenses of one counsel chosen by the
holders of a majority of the shares of Common Stock covered by such
registration. To the extent expenses are not required to be paid by the Company
under this Section 2.7, each Selling Stockholder shall pay those expenses
allocable to the registration of the holder's Common Stock so included, and any
expenses not so allocable shall be borne by all Selling Stockholders in
proportion to the aggregate selling price of the securities to be so registered.
SECTION 2.8. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In connection with any
registration pursuant hereto, the Company shall indemnify and hold harmless, to
the extent permitted by law, each Selling Stockholder and its officers,
directors, agents and employees and each Person who controls such holder (within
the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of a
material
15
fact contained in any registration statement, prospectus or preliminary
prospectus or 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, including, without limitation, any loss, claim, damage, liability or
expense resulting from the failure to keep a prospectus current, except insofar
as the same (i) are caused by or contained in any information relating to such
holder furnished in writing to the Company by such holder expressly for use
therein or (ii) are caused by such holder's failure to deliver a copy of the
current prospectus simultaneously with or prior to such sale after the Company
has furnished such holder with a sufficient number of copies of such prospectus
correcting such material misstatement or omission or (iii) arise in respect of
any offers to sell or sales made during any period when a holder is required to
discontinue sales under Section 2.3(e) (and after such holder has received the
notice contemplated by Section 2.3(e)). The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers and directors
and each person who controls such Persons (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the Selling Stockholders, and shall enter into an indemnification agreement with
such Persons containing such terms, if requested. Notwithstanding any other
provision of this Agreement to the contrary, the Company shall have no
obligation to indemnify under this Section 2.8 to the extent any such losses,
claims, damages or liabilities are incurred as a result of such indemnitee's bad
faith, willful misconduct or gross negligence.
(b) INDEMNIFICATION BY STOCKHOLDERS. In connection with each
registration statement effected pursuant hereto, each Selling Stockholder shall,
severally but not jointly, indemnify and hold harmless, to the full extent
permitted by law, the Company, each other Selling Stockholder and their
respective directors, officers, agents and employees and each Person who
controls the Company and each other Selling Stockholder (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement of a material fact or any omission
of a material fact required to be stated in such registration statement or
prospectus or preliminary prospectus or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or omission relates to such Selling Stockholder and is contained in
any information furnished in writing by such Selling Stockholder or any of its
Affiliates to the Company expressly for inclusion in such registration statement
or prospectus. In no event shall the liability of any Selling Stockholder
hereunder be greater in aggregate amount than the dollar amount of the proceeds
actually received by such Selling Stockholder upon the sale of the securities
giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder shall give prompt notice to the indemnifying party of
any claim with respect to which it shall seek indemnification and shall permit
such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; PROVIDED, HOWEVER, that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (i)
the indemnifying party shall have agreed to pay such fees or expenses or (ii)
the indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person or (iii) in the opinion of
outside counsel to such Person there may be one or more legal defenses
16
available to such Person which are different from or in addition to those
available to the indemnifying party with respect to such claims (in which case,
if the Person notifies the indemnifying party in writing that such Person elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person). If such defense is not assumed by the indemnifying
party, the indemnifying party shall not be subject to any liability for any
settlement made without its consent (but such consent shall not be unreasonably
withheld). No indemnified party shall be required to consent to any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of an irrevocable written
release from all liability and claims that are subject matter of such claim. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim shall not be obligated to pay the fees and expenses of more than one
firm of counsel (and, if necessary, local counsel) for all parties indemnified
by such indemnifying party with respect to such claim, unless in the written
opinion of outside counsel to an indemnified party a conflict of interest as to
the subject matter exists between such indemnified party and another indemnified
party with respect to such claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of additional counsel for such
indemnified party.
(d) CONTRIBUTION. If for any reason the indemnification provided for
herein is unavailable to an indemnified party or is insufficient to hold it
harmless as contemplated hereby, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided that in no event shall the liability of any Selling Stockholder for
such contribution and indemnification exceed, in the aggregate, the dollar
amount of the proceeds received by such Selling Stockholder upon the sale of
securities giving rise to such indemnification and contribution obligation. In
addition, no Person shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action effected without such Person's consent,
which consent shall not be unreasonably withheld.
(e) ADVANCES. Expenses required to be paid pursuant to this Section
2.8 shall be paid periodically during the course of any investigation or
defense, as and when incurred, provided that the recipient thereof hereby
undertakes to repay such payments if and to the extent it shall be determined by
a court of competent jurisdiction that such recipient is not entitled to such
payment hereunder.
SECTION 2.9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Investor
Stockholder or Permitted Transferee may participate in any underwritten
registration hereunder unless such Investor Stockholder or Permitted Transferee
(a) agrees to sell its shares of Common Stock on the basis provided in and in
compliance with any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, limited powers of attorney, escrow agreements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements; provided that all such documents shall be
consistent with the provisions hereof.
17
SECTION 2.10. RULE 144 AND RULE 144A. The Company hereby covenants
that after it has filed (i) a registration statement (and such registration
statement has been declared effective) pursuant to the requirements of Section
12 of the Exchange Act or (ii) a registration statement (and such registration
statement has been declared effective) pursuant to the requirements of the
Securities Act, in each case, in respect of Common Stock, the Company will file
in a timely manner all reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder (or, if the Company is not required to file such reports, it will,
upon the request of any Investor Stockholder or Permitted Transferee, make
publicly available other information so long as necessary to permit sales by
such Investor Stockholder or Permitted Transferee under Rule 144 under the
Securities Act, as such Rule may be amended, Rule 144A under the Securities Act,
as such Rule may be amended, or any similar rules or regulations hereafter
adopted by the SEC) and will take such further action as any Investor
Stockholder or Permitted Transferee may reasonably request to the extent
required from time to time to enable such Investor Stockholder or Permitted
Transferee to sell shares of Common Stock under Rule 144, Rule 144A or any
similar rules or regulations hereafter adopted by the SEC.
SECTION 2.11. HOLDBACK AGREEMENTS.
(a) Each Investor Stockholder and Permitted Transferee agrees in
connection with an underwritten Public Offering not to effect any public sale or
distribution (including sales pursuant to Rule 144) of Common Stock or Common
Stock Equivalents during the 10 days prior to the effective date of such
registration statement under the Securities Act and thereafter until all shares
included in such offering have been sold by the underwriter(s) thereof (not to
exceed 90 days or, in the case of an IPO, such longer period not in excess of
180 days as required by the underwriters managing the Public Offering (the
"LOCKUP PERIOD"), except for sales of such securities as part of such
underwritten Public Offering or unless the underwriters managing the registered
public offering otherwise agree.
(b) If the Company has filed a registration statement pursuant to
Section 2.1(b), unless otherwise agreed to by a majority of the Selling
Stockholders, the Company agrees not to effect any primary public sale or
distribution of any Common Stock (other than a registration on Form S-4 or S-8
or any successor form promulgated for similar purposes) during the Lock-up
Period of any registration statement in which any Investor Stockholder or
Permitted Transferee is participating in connection with an underwritten Public
Offering, if and to the extent reasonably requested in writing (with reasonable
prior notice) by the managing underwriter(s) of the underwritten Public
Offering.
(c) In connection with Sections 2.11(a) and (b), the parties agree to
enter into such customary agreements with the underwriters managing the Public
Offering as may be reasonably requested by such underwriters.
SECTION 2.12. REGISTRATION RIGHTS TO OTHERS. If the Company shall at
any time hereafter provide to any holder of any securities of the Company rights
with respect to the registration of such securities under the Securities Act or
the Exchange Act, such rights shall not be in conflict with or adversely affect
any of the rights provided to the holders of Common Stock
18
in, or conflict (in a manner that adversely affects holders of Common Stock)
with any other provisions included in, this Agreement.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Common Stock, to any and all shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for or in
substitution of, the Common Stock and shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, recapitalizations and the
like occurring after the date hereof.
SECTION 3.2. EXCLUDED SHARES. Notwithstanding anything in this
Agreement to the contrary, the Common Stock ownership of Vestar, Holdings LLC
and the Senior Executive and their respective Permitted Transferees under
Sections 2.1(a), 2.1(b) and 2.2(a) shall in all cases exclude Common Stock
purchased in a Public Offering or in a brokers' transaction (as defined in Rule
144(g) under the Securities Act) after the IPO Date and in no event may such
Common Stock be included in any registration statement hereunder.
SECTION 3.3. TERMINATION. This Agreement shall terminate, and thereby
become null and void, (A) in its entirety, on the date on which none of the
Investor Stockholders and their Permitted Transferees beneficially own any
Common Stock, and (B) as to any particular shares of Common Stock, on the date
on which they are sold or are able to be sold pursuant to a registration
statement under the Securities Act or are sold pursuant to Rule 144 under the
Securities Act.
SECTION 3.4. AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or any Investor Stockholder unless such
modification, amendment or waiver is approved in writing by (i) the Company,
(ii) each of Holdings LLC and Vestar, so long as it and its Affiliates
beneficially own Common Stock, and (iii) by Investor Stockholders which
beneficially own Common Stock representing at least a majority of the shares of
Common Stock subject to this Agreement at such time. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
SECTION 3.5. SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall
bind and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and, subject to the terms of the Stockholders'
Agreement, permitted assigns.
SECTION 3.6. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when
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delivered by hand, or three days after being delivered to a recognized courier
(whose stated terms of delivery are three days or less to the destination of
such notice) or, in the case of telecopy notice, when received, addressed as
follows to the parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto:
if to Vestar:
Vestar Capital Partners IV, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Solo Cup Investment Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to Holdings LLC, to:
SCC Holding Company LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
in each case, with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
20
if to the Management Investors, to
them at the addresses or telecopy
numbers set forth in the books and records of the Company
SECTION 3.7. INTEGRATION; ENTIRE AGREEMENT. Except as otherwise
expressly set forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way; PROVIDED that the parties to this
Agreement acknowledge and agree that the rights and restrictions set forth in
this Agreement are in addition to, and not in replacement of, the rights,
restrictions and obligations set forth in the Preferred Stock Purchase Agreement
and the Stockholders' Agreement
SECTION 3.8. FURTHER ASSURANCES. At any time or from time to time
after the date hereof, the parties agree to cooperate with each other, and at
the request of any other party, to execute and deliver any further instruments
or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder. In particular, in connection with any Liquidity Event, the
parties agree to cooperate with each other to structure the transaction to be as
mutually tax efficient as possible.
SECTION 3.9. DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach, default or
noncompliance under this Agreement or any waiver on such party's part of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, by law, or otherwise afforded to any
party, shall be cumulative and not alternative.
SECTION 3.10. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. This
Agreement shall be governed in all respects by the laws of the State of
New
York. No suit, action or proceeding with respect to this Agreement may be
brought in any court or before any similar authority other than in a court of
competent jurisdiction in the State of
New York, and the parties hereto hereby
submit to the exclusive jurisdiction of such courts for the purpose of such
suit, proceeding or judgment. Each party hereto hereby irrevocably waives any
right which it may have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. Each party
hereto hereby irrevocably and unconditionally waives trial by jury in any legal
action or proceeding in relation to this Agreement and for any counterclaim
therein.
SECTION 3.11. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any
21
respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
SECTION 3.12. ENFORCEMENT. Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.
SECTION 3.13. TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
SECTION 3.14. NO RECOURSE. Notwithstanding anything that may be
expressed or implied in this Agreement, the Company and each Investor
Stockholder covenants, agrees and acknowledges that no recourse under this
Agreement or any documents or instruments delivered in connection with this
Agreement shall be had against any current or future director, officer,
employee, general or limited partner or member of any Investor Stockholder or
the Company or of any Affiliate or assignee thereof, whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any
statute, regulation or other applicable law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed
on or otherwise be incurred by any current or future officer, agent or employee
of any Investor Stockholder or the Company or any current or future member of
any Investor Stockholder or the Company or any current or future director,
officer, employee, partner or member of any Investor Stockholder or the Company
or of any Affiliate or assignee thereof, as such for any obligation of any
Investor Stockholder or the Company under this Agreement or any documents or
instruments delivered in connection with this Agreement for any claim based on,
in respect of or by reason of such obligations or their creation.
SECTION 3.15. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This Agreement may be executed by
facsimile signature.
SECTION 3.16. ADDITIONAL MANAGEMENT INVESTORS. Any employee or
director of any of the Company and its subsidiaries who becomes party after the
date hereof to an agreement pursuant to which he or she receives Equity
Securities may become a party hereto and may become bound hereby by entering
into a supplementary agreement with the Company agreeing to be bound by the
terms hereof in the same manner as the Management Investors. Each such
supplementary agreement shall become effective upon its execution by the Company
and such employee or director, and it shall not require the signature or consent
of any other party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Registration
Rights Agreement as of the date set forth in the first paragraph hereof.
SOLO CUP INVESTMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Operating Officer
SCC HOLDING COMPANY LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
[Signature Page to
Registration Rights Agreement]
VESTAR CAPITAL PARTNERS IV, L.P.
By: Vestar Associates IV, L.P.,
its general partner
By: Vestar Associates Corporation IV,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name:
Title: Managing Director
VESTAR CUP INVESTMENT, LLC
By: Vestar Capital Partners IV, L.P.,
its managing member
By: Vestar Associates IV, L.P.,
its general partner
By: Vestar Associates Corporation IV,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name:
Title: Managing Director
VESTAR CUP INVESTMENT II, LLC
By: Vestar Capital Partners IV, L.P.,
its managing member
By: Vestar Associates IV, L.P.,
its general partner
By: Vestar Associates Corporation IV,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name:
Title: Managing Director
[Signature Page to
Registration Rights Agreement]
MANAGEMENT INVESTORS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page to
Registration Rights Agreement]