EXHIBIT 10.3
------------
EXECUTION COPY
STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
ARMSTRONG WORLD INDUSTRIES, INC.
AND
ARMSTRONG WORLD
INDUSTRIES, INC. ASBESTOS PERSONAL INJURY SETTLEMENT TRUST
DATED AS OF OCTOBER 2, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS..............................................2
ARTICLE II
EQUITY REGISTRATION RIGHTS...............................8
2.1 Equity
Security Demand Registration..........................8
2.2 Piggyback
Registration......................................10
2.3
Registration Procedures.....................................11
2.4
Expenses....................................................13
2.5
Indemnification and Contribution............................14
2.6 Rule
144....................................................17
2.7 Duration
of Equity Registration Rights......................17
2.8 "Market
Stand-Off" Agreement................................17
2.9 Transfer
of Registration Rights.............................17
2.10
Granting of Additional Registration Rights..................18
ARTICLE III
DEBT REGISTRATION RIGHTS................................18
3.1 Debt
Security Demand Registration...........................18
3.2 Shelf
Registration..........................................20
3.3
Registration Procedures.....................................20
3.4
Expenses....................................................22
3.5
Indemnification and Contribution............................23
3.6 Rule
144....................................................26
3.7 Duration
of Debt Registration Rights........................26
3.8 "Market
Stand-Off" Agreement................................26
3.9 Transfer
of Registration Rights.............................27
3.10
Granting of Additional Registration Rights..................27
ARTICLE IV
TAG-ALONG RIGHTS........................................27
4.1
Restrictions on Transfer of Shares of Common
Stock by the Trust..........................................27
4.2 Offer to
Other Stockholders.................................28
4.3 Third
Party Beneficiary Rights..............................28
ARTICLE V
CERTAIN COVENANTS OF THE COMPANY........................29
5.1 Approval
Requirements Respecting A Shareholder Rights
Plan........................................................29
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE VI
VOTING AGREEMENT AND RELATED COVENANTS OF THE TRUST.....29
6.1
Independent Directors.......................................29
6.2 Approval
of New Long-term Incentive Plan....................29
6.3 Certain
Director Elections..................................30
6.4 Third
Party Beneficiary Rights..............................30
ARTICLE VII
MISCELLANEOUS PROVISIONS................................30
7.1 Successor
Securities........................................30
7.2 Equitable
Relief............................................31
7.3 No
Inconsistent Agreements..................................31
7.4 Amendments
and Waivers......................................31
7.5 Notice
Generally............................................31
7.6 Successors
and Assigns......................................32
7.7
Headings....................................................33
7.8 Governing
Law; Jurisdiction; Jury Waiver....................33
7.9
Severability................................................33
7.10
Entire Agreement............................................33
7.11
Counterparts................................................33
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STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT
---------------------------------------------
Stockholder and Registration Rights Agreement, dated as of
October 2, 2006, by and between Armstrong World Industries, Inc., a
Pennsylvania
corporation (the "COMPANY"), and the Armstrong World Industries,
Inc. Asbestos
Personal Injury Settlement Trust (the "TRUST") established pursuant
to the Trust
Agreement (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Company filed its Fourth Amended Plan of
Reorganization, as Modified dated February 21, 2006 with the United
States
Bankruptcy Court for the District of Delaware (the "COURT")
pursuant to and in
accordance with chapter 11 of the U.S. Bankruptcy Code (as filed
with the Court
and as may be amended from time to time in accordance with its
terms, the
"PLAN"), which was confirmed on August 18, 2006; and
WHEREAS, capitalized terms used herein and not defined above
shall have the meaning provided by Article I hereof or otherwise
provided below;
and
WHEREAS, pursuant to the Plan, (i) on the Effective Date, all
previously outstanding shares of the Company will be cancelled,
(ii) on the
Effective Date, the Trust will receive new shares of Common Stock
to be issued
by the Company, and on the Initial Distribution Date the holders of
Allowed
Unsecured Claims will receive new shares of Common Stock to be
issued by the
Company, representing 65.57% and 34.43%, respectively, of the
shares of Common
Stock to be outstanding on the Initial Distribution Date, (iii) on
the Initial
Distribution Date, Plan Notes may be issued to the Trust and to the
holders of
Allowed Unsecured Claims, upon the terms and in accordance with
certain
provisions of the Plan and (iv) in accordance with the Plan, the
New Long Term
Incentive Plan will be established; and
WHEREAS, in accordance with the Plan, the Company and the
Trust are entering into this Agreement on the Effective Date (i) to
provide for
certain rights and obligations of the Trust with respect to shares
of Common
Stock held by the Trust, including certain obligations for the
benefit of the
holders of shares of Common Stock issued to holders of Allowed
Unsecured Claims
(and any transferees, other than the Trust, of the shares of Common
Stock of
such holders) and other future holders of shares of Common Stock
(other than any
such holder whose shares are Beneficially Owned by the Trust) (all
such holders,
including but not limited to those who are holders of Allowed
Unsecured Claims,
collectively, the "OTHER STOCKHOLDERS") with respect to certain
transactions by
the Trust in shares of Common Stock held by the Trust, and certain
consent
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rights for the benefit of the Trust, (ii) to provide registration
rights for the
Trust with respect to its holding of shares of Common Stock, and
(iii) to
provide registration rights for the Trust with respect to its
holdings of Plan
Notes, if they are issued under the Plan;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, it is hereby agreed as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the meanings ascribed thereto below (such meanings being
equally
applicable to both the singular and plural form of the terms
defined):
"ACTION" shall have the meaning provided by Section 2.5(e) or
3.5(e) hereof, as the case may be.
"AFFILIATE," with respect to a Person, means any other Person
which directly or indirectly, through one or more intermediaries,
controls, is
controlled by, or is under common control with, such Person, within
the meaning
of Rule 12b-2 under the Exchange Act.
"AGREEMENT" shall mean this Stockholder and Registration
Rights Agreement, as the same may from time to time be amended,
modified and
supplemented in accordance with its terms.
"ALLOWED UNSECURED CLAIMS" shall have the meaning provided in
the Plan.
"ARTICLES OF INCORPORATION" shall mean the Amended and
Restated Articles of Incorporation of the Company, as in effect on
the Effective
Date and as the same may from time to time be amended or restated
in accordance
with its terms.
"BUSINESS DAY" shall mean any day on which commercial banks
are required to be open for business in New York, New York.
"BENEFICIALLY OWNED" or "BENEFICIAL OWNERSHIP" shall have the
meaning prescribed by Regulation 13D-G under the Exchange Act, as
amended and
from time to time in effect.
"BYLAWS" shall mean the amended and restated bylaws of the
Company, as in effect on the Effective Date and as the same may
from time to
time be amended or restated in accordance with their terms.
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"CHANGE IN CONTROL" with respect to the Company shall mean the
acquisition by any person, or any group (within the meaning of
Section 13(d) of
the Exchange Act), of either Beneficial Ownership of more than 25%
of the Voting
Stock or the right, by contract, voting power or otherwise (or any
combination
thereof), to designate more than one-third of the members of the
board of
directors of the Company (assuming no vacancy on the board of
directors).
"CHAPTER 11 CASE" shall mean the chapter 11 case of Armstrong
World Industries, Inc., pending in the Court as In re Armstrong
World
Industries, Inc., et al., Case No. 00-4471 (RJN) (Jointly
Administered).
"COMMON STOCK" shall meaning the common shares, $0.01 par
value per share, of the Company, as authorized by the Articles of
Incorporation
on the Effective Date, and any successor security as provided by
Section 7.1
hereof.
"DEBT SECURITY DEMAND REGISTRATION" shall have the meaning
provided by Section 3.1(a) hereof.
"DEMANDING EQUITY SECURITY HOLDERS" shall have the meaning
provided by Section 2.2(a) hereof.
"DEMANDING OTHER DEBT SECURITY HOLDERS" shall have the meaning
provided by Section 3.2(a) hereof.
"DISINTERESTED DIRECTOR" shall mean, in respect of a
transaction or potential transaction (or category of immaterial
transactions), a
director who is not Affiliated with the Trust and who has no
personal financial
interest in the transaction (other than the same interest, if a
shareholder of
the Corporation, as the other shareholders of the Corporation).
"EFFECTIVE DATE" shall mean October 2, 2006 (which is the
first Business Day of the month immediately following the date by
which all of
the conditions precedent to the effectiveness of the Plan specified
in Section
7.17 of the Plan have been satisfied or waived, no stay of the
order confirming
the Plan in accordance with chapter 11 of the U.S. Bankruptcy Code
being in
effect on such date. The Effective Date for purposes of this
Agreement shall be
the same as the Effective Date for purposes of the Plan.
"EQUITY SECURITY DEMAND REGISTRATION" shall have the meaning
set forth in Section 2.1 (a) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any successor federal statute, and the rules and
regulations of
the SEC promulgated thereunder, all as the same may be amended and
shall be in
effect from time to time.
"INDEMNIFIED PARTY" shall have the meaning provided by Section
2.5(e) or 3.5(e) hereof, as the case may be.
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"INDEMNIFYING PARTY" shall have the meaning provided by
Section 2.5(e) or 3.5(e) hereof, as the case may be.
"INDEPENDENT DIRECTOR" shall mean a director who (i) qualifies
as an "independent director" within the meaning of the corporate
governance
listing standards from time to time adopted by the NYSE or Nasdaq
with respect
to the composition of the board of directors of a listed company
(without regard
to any independence criteria applicable under such standards only
to the members
of a committee of the board of directors), as applicable to
whichever market the
shares of Common Stock are to be listed on for trading upon the
issuance of such
shares pursuant to the Plan and, thereafter, are from time to time
listed for
trading on) and (ii) satisfies the minimum requirements of director
independence
of SEC Rule 10A-3(b)(1) under the Exchange Act; provided, however,
that, to the
extent that any requirements in addition to those required in order
for a
director to be considered independent in accordance with such
listing standards
must be satisfied in order for a director of the Company to qualify
as an
"outside director" for purposes of Rule 16b-3 under the Exchange
Act or for
purposes of Section 162(m) of the Internal Revenue Code, at least
three
directors of the Company must also qualify as such under such
additional
requirements in order for the Company to be considered to have
Independent
Directors in satisfaction of clause (i) of subparagraph (a) of
Article VI
hereof.
"INITIAL DISTRIBUTION DATE" shall mean a date on or after the
Effective Date that is selected by the Company in its discretion
but, in any
event, is within fifteen (15) days after the Effective Date, or
such later date
as the Court may establish upon request by the Company, for cause
shown, as
permitted by the Plan; provided, however, that in no event shall
the Initial
Distribution Date be more than forty-five days after the Effective
Date.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended from time to time, and any applicable rulings,
Treasury
Regulations, judicial decisions, and notices, announcements, and
other releases
of the United States Treasury Department or the IRS.
"IRS" shall mean the United States Internal Revenue Service.
"NASD" shall mean the National Association of Securities
Dealers, Inc., or any successor corporation thereto.
"NASDAQ" shall mean the Nasdaq Stock Market.
"NEW LONG-TERM INCENTIVE PLAN" shall mean the New Long-Term
Incentive Plan of the Company, substantially in the form of Exhibit
1.90
attached to the Plan.
"NYSE" shall mean the New York Stock Exchange.
"OTHER STOCKHOLDERS" shall have the meaning set forth in the
fourth recital of this Agreement.
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"PERSON" shall mean any individual, partnership (general,
limited or limited liability), corporation, limited liability
company, trust,
unincorporated organization or other legal entity, and a government
or agency or
political subdivision thereof.
"PLAN NOTE INDENTURES" shall mean the indentures,
substantially in the form of Exhibit 1.96 to the Plan and qualified
under the
Trust Indenture Act of 1939, as amended, entered into by and
between the
Company, as the issuer, and a trustee selected by the Company,
pursuant to
which, if issued or to be issued, Plan Notes have been or will be
issued.
"PLAN NOTES" shall mean, if issued or to be issued, the
unsecured notes issued or to be issued by the Company pursuant to
the Plan Note
Indentures as provided by Sections 3.2(f) and (g) of the Plan.
"PROPOSED PURCHASER" shall have the meaning set forth in
Section 4.1 hereof.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus
that
discloses information previously omitted from a prospectus filed as
part of an
effective registration statement in reliance upon Rule 430A under
the Act), as
amended or supplemented by any prospectus supplement, with respect
to the terms
of the offering of any portion of the Registrable Equity Securities
covered by
such Registration Statement, and all amendments and supplements
thereto and all
material incorporated by reference therein.
"REGISTRABLE DEBT SECURITIES" shall mean (i) the Plan Notes
issued to the Trust pursuant to the Plan (if any), (ii) any other
debt security
issued by the Company in exchange for, upon conversion of or as a
result of a
reclassification of or otherwise in respect of the Plan Notes or
any other debt
security issued by the Company that is a Registrable Debt Security,
and (iii)
any debt security issued by the Company in exchange for, as a
reclassification
of or otherwise in respect of any Registrable Equity Security, in
each case for
so long as such debt security is owned by the Trust or a permitted
transferee of
the Trust's rights under Article III hereof in accordance with
Section 3.9
hereof. For the avoidance of doubt, it is understood and agreed
that any
particular Registrable Debt Security shall cease to be such when
(A) a
Registration Statement with respect to the sale of such security
shall have
become effective under the Securities Act and such security shall
have been
disposed of in accordance with such Registration Statement, (B)
such security
shall have been sold pursuant to Rule 144 or (C) such security
shall have ceased
to be outstanding.
"REGISTRABLE EQUITY SECURITIES" shall mean (i) the shares of
Common Stock issued to the Trust pursuant to the Plan, (ii) any
additional
shares of Common Stock or other Voting Stock or other equity
securities issued
by the Company to the Trust as a dividend upon or a distribution in
respect of,
or upon conversion of or in exchange for or as a result of any
reclassification
of, any such shares of Common Stock or any other equity security
that is a
Registrable Equity Security, (iii) any equity security issued upon
exercise of
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any warrant, right or option which is a Registrable Equity
Security, (iv) any
equity security issued by the Company in exchange for, as a
reclassification of
or otherwise in respect of any Registrable Debt Security and (v)
any other
equity security which is considered a successor security in respect
of any such
security as provided in Section 7.1 hereof, in each case for so
long as such
equity security is owned by the Trust or a permitted transferee of
the Trust's
rights under Article II hereof in accordance with Section 2.9
hereof. For the
avoidance of doubt, it is understood and agreed that any particular
Registrable
Equity Security shall cease to be such when (A) a Registration
Statement with
respect to the sale of such security shall have become effective
under the
Securities Act and such security shall have been disposed of in
accordance with
such Registration Statement, (B) such security shall have been sold
pursuant to
Rule 144 or (C) such security shall have ceased to be
outstanding.
"REGISTRATION STATEMENT" shall mean a registration statement
of the Company as it may be amended or supplemented from time to
time, including
without limitation, all exhibits, financial statements, schedules
and
attachments thereto.
"RULE 144" shall mean Rule 144 promulgated by the SEC under
the Securities Act, or any similar rule or regulation permitting
the sale of
securities without registration under the Securities Act, hereafter
adopted by
the SEC, as the same may be amended and shall be in effect from
time to time.
"SEC" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and
other federal
securities laws.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations of the
SEC promulgated thereunder, all as the same may be amended and
shall be in
effect from time to time.
"TRANSFER" shall mean directly or indirectly transfer, sell,
assign, donate, contribute, place in trust (including a voting
trust), or
otherwise voluntarily or involuntarily dispose.
"TREASURY REGULATIONS" shall mean the regulations (including
temporary and proposed regulations) promulgated under the Internal
Revenue Code
by the United States Treasury Department, as amended from time to
time.
"TRUST" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"TRUST AGREEMENT" shall mean the Armstrong World Industries,
Inc. Asbestos Personal Injury Settlement Trust Agreement, dated as
of October 2,
2006, and entered into by the Company, the Legal Representative
for
Asbestos-Related Future Claimants and the Official Committee of
Asbestos
Creditors (each as appointed by the Court in the Chapter 11 Case)
and the
trustees and members of the PI Trust Advisory Committee identified
on the
signature page thereof.
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"TRUST PRO RATA SHARE", for purposes of Section 2.2(b) hereof,
shall mean the ratio of (i) the number of shares of Common Stock
owned by the
Trust to (ii) the total number of shares of Common Stock owned by
the Trust and
each Other Stockholder for whose benefit shares of Common Stock
will be included
in the Registration Statement, such ratio calculated as of the date
of filing of
the applicable Registration Statement pursuant to Section 2.2(b)
and, for
purposes of Section 3.2(b) hereof, shall mean the ratio of (i) the
aggregate
principal amount of Registrable Debt Securities owned by the Trust
to (ii) the
sum of the aggregate principal amount of Registrable Debt
Securities owned by
the Trust plus the aggregate principal amount of debt securities of
Demanding
Other Debt Security Holders whose debt securities will be included
in the
Registration Statement, such ratio calculated as of the date of
filing of the
applicable Registration Statement pursuant to Section 3.2(b) .
"VOTING STOCK" shall mean shares of the Company, of any class
or series, entitled to vote for the election of directors of the
Company,
including shares of Common Stock (other than preferred shares
entitled to vote
for the election of directors who are to be elected only by the
holders of a
particular class or series of shares, or collectively by the
holders of two or
more classes or series of shares, and only in the event of an
arrearage in
payment of dividends on such class or series of shares and who
constitute less
than one-third of all the directors (assuming no vacancies on the
board of
directors)) and any successor security as provided in Section 7.1
hereof.
Other terms are defined herein and shall have the meanings
elsewhere provided
herein.
ARTICLE II
EQUITY REGISTRATION RIGHTS
2.1 Equity
Security Demand Registration.
(a) Request
for Equity Security Demand Registration. If
at any time after the Effective Date, the Company receives a
written request (a
"DEMAND NOTICE") from the Trust requesting that the Company effect
a
registration under the Securities Act of Registrable Equity
Securities and
specifying the intended method or methods of disposition thereof,
the Company
shall, as promptly as practicable, but in no event later than 60
days following
receipt of the Demand Notice, prepare and cause to be filed with
the SEC a
Registration Statement on the appropriate form relating to resales
of such
Registrable Equity Securities ("EQUITY SECURITY DEMAND
Registration") and shall
use its reasonable best efforts to cause the Equity Security Demand
Registration
to become effective within 90 days following the date on which it
receives the
Demand Notice (including, without limitation, appropriate
qualification under
applicable blue sky or other state securities laws and appropriate
compliance
with applicable regulations issued under the Securities Act and any
other
governmental requirements or regulations). The obligations of the
Company under
this Section 2.1(a) are subject to the provisions of Section 2.(b)
hereof.
(b) Conditions
on Requirement to Effect Equity Security
Demand Registration.
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The obligations of the Company set forth in Section 2.1(a) are
subject to each of the following limitations, conditions and
qualifications:
(i) The Company
shall not be required to take any
action to
effect an Equity Security Demand Registration unless the
anticipated aggregate offering price of the Registrable Equity
Securities
to be
offered and sold pursuant to such registration is at least
$100,000,000 (or, if the anticipated aggregates offering price for
all
Registrable Equity Securities owned by the Trust at the time such
demand
is made is
less than $100,000,000, such lesser amount).
(ii) The Company shall
not be required to take any
action to
effect an Equity Security Demand Registration pursuant to
Section
2.1(a) more than once in any nine month period or at such time
when the
Trust is not permitted to sell shares in accordance with
Section
2.8
hereof.
(iii) The Company shall be entitled to postpone, for a
reasonable
period of time (which shall be as short as practicable), during
no more
than two periods aggregating not more than 90 days in any
twelve-month period, the filing or effectiveness of, or suspend the
right
of the
Trust to make sales pursuant to, any Registration Statement
otherwise
required to be prepared, filed and made and kept effective by
it
under the
registration covenants described in Section 2.1 or 2.2 hereof,
in the
event that (i) (A) an event has occurred or a circumstance
exists
as a
result of which such Registration Statement, any related
Prospectus
or any
document incorporated therein by reference as then amended or
supplemented or proposed to be filed would, in the Company's good
faith
judgment,
contain an untrue statement of a material fact or omit to state
a material
fact necessary in order to make the statements therein, in the
light of
the circumstances under which they were made, not misleading
(in
which case
the Company will be obligated to file an appropriate amendment
to the
Registration Statement as contemplated in Section 2.3(k) hereof
at
such time
as required by this paragraph), and (B) either (x) the Company
has
determined in its good faith judgment that the disclosure of the
event
or
circumstance at that time would materially and adversely
affect,
interfere
with or hinder the success of any financing, acquisition,
merger
or similar
transaction involving the Company or (y) after consultation
with the
Trust concerning the matter, the Company has reasonably
determined
that the disclosure would otherwise have a material adverse
effect on
the business, operations or prospects of the Company or (ii)
the
Company
shall have received a notice issued by the SEC of a stop order
suspending
the effectiveness of the Registration Statement or the
initiation
of any proceedings for that purpose. If the Company shall so
postpone
the filing or effectiveness of, or suspend the rights of the
Trust to
make sales pursuant to, a Registration Statement it shall
promptly
notify the Trust in writing of such determination (a
"SUSPENSION
NOTICE").
The Suspension Notice shall contain a statement of the reasons
for such
suspension and an approximation of the anticipated delay. Upon
receipt of
such Suspension Notice, to the extent applicable, the Trust
will
forthwith discontinue disposition of Registrable Equity
Securities
pursuant
to the Registration Statement until (i) the Trust has received
copies of
the supplemented or amended Prospectus contemplated by Sections
2.3(b) and
(k) hereof, or (ii) the Trust is advised in writing by the
Company
that the use of the Prospectus may be resumed, and has received
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copies of
any additional or supplemental filings that are incorporated by
reference
in the Prospectus (in each case, the "RECOMMENCEMENT DATE").
The
time
period provided in Section 2.3(a) hereof for which the Company
is
required
to maintain the effectiveness of any Registration Statement
shall
be
extended by the aggregate number of days by which sales of
securities
pursuant
to any Registration Statement that has been declared effective
has been
delayed, postponed or suspended by the Company pursuant to this
Section
2.1(b) (iii).
(iv) If the Company
receives a request for a Equity
Security
Demand Registration during a "lock-up" period (the "LOCK-UP
PERIOD")
agreed to by the Trust pursuant to Section 2.8 of this
Agreement
pursuant
to or in connection with any underwriting or purchase agreement
relating
to an offering under Rule 144A under the Securities Act (or any
successor
rule or regulation, as the same may be amended or in effect
from
time to
time) or a registered public offering of Common Stock or
securities
convertible into or exchangeable for Common Stock, the Company
shall not
be required to file a Registration Statement under Section 2.1
of this
Agreement prior to the end of the Lock-Up Period.
(v) The
Company's obligations shall be subject to the
obligations of the Trust to furnish all information and materials
and to
take any
and all actions as may be required of it under 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. Without limiting the
generality
of the forgoing, the Trust shall furnish to the Company in
writing,
promptly after receipt of a request therefore, the information
specified
in Item 507 or 508 of Regulation S-K, as applicable, of the
Securities
Act for use in connection with any Registration Statement or
Prospectus
or preliminary Prospectus included therein. The Trust agrees to
promptly
furnish additional information required to be disclosed in
order
to make
the information previously furnished to the Company by the
Trust
not
materially misleading.
(vi) The Company shall
not be obligated to cause any
special
audit to be undertaken in connection with any Registration
Statement
pursuant to this Agreement.
(c)
Underwriting. The managing underwriter for any underwritten
offering of Registrable Equity Securities pursuant to an Equity
Securities
Demand Registration under his Section 2.1 shall be selected by the
Company and
shall be reasonably acceptable to the Trust, and the co-managing
underwriter
shall be selected by the Trust and shall be reasonably acceptable
to the
Company.
2.2 Piggyback
Registration.
(a) If the
Company at any time proposes to file on its behalf
and/or on behalf of any of its holders of equity securities other
than the Trust
(collectively, the "DEMANDING OTHER EQUITY SECURITY HOLDERS") a
Registration
Statement under the Securities Act on any form (other than a
Registration
Statement on Form S-4 or S-8, or any successor form, for securities
to be
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offered in a transaction of the type referred to in Rule 145 under
the
Securities Act or to employees of the Company pursuant to any
employee benefit
plan, respectively, which may be used for the registration of
shares of Common
Stock, it will give written notice of such proposed filing to the
Trust at least
20 Business Days before the initial filing with the SEC of such
Registration
Statement (the "PIGGYBACK NOTICE"), which Piggyback Notice shall
set forth the
number of securities proposed to be offered and a description of
the intended
method of disposition of such securities. The Piggyback Notice
shall offer to
include in such filing such number of Registrable Equity Securities
as the Trust
may request. If the registration of which the Company gives notice
is for a
registered public offering involving an underwriting, the Company
shall so
advise the Trust as part of the Piggyback Notice. In such event,
the right of
the Trust to include its Registrable Equity Securities in the
registration shall
be conditioned upon the Trust entering into an underwriting
agreement in
customary form, which shall be the same for all selling
shareholders, with the
managing underwriter selected for such underwriting by the
Company.
(b) The Trust
shall advise the Company in writing within 10
Business Days after the date of receipt of the Piggyback Notice
from the
Company, of its election to accept the Company's offer to include
its
Registrable Equity Securities in the Registration Statement to be
filed by the
Company pursuant to Section 2.2(a), setting forth the amount of
such Registrable
Equity Securities for which registration is requested. The Company
shall
thereupon include in such filing the number of Registrable Equity
Securities for
which registration is so requested; provided, however, that, (i) if
the managing
underwriter of a proposed underwritten offering shall advise the
Company in
writing that, in its opinion, the distribution of the Registrable
Equity
Securities requested to be included in the registration
concurrently with the
securities being registered by the Company or a Demanding Other
Equity Security
Holder would adversely affect the distribution by the Company of
the shares of
Common Stock of the Company or such Other Demanding Equity Security
Holder, then
the Company and its underwriters shall be entitled to reduce the
number of
Registrable Equity Securities to be registered by the Trust; and
provided,
further, however, that, if after such reduction any shares of
Common Stock are
to be included in such Registration Statement on behalf of
Demanding Other
Equity Security Holders, the number of Registrable Equity
Securities to be
included in such Registration Statement on behalf of the Trust
shall be no less
than the Trust Pro Rata Share of all securities to be included in
such
Registration Statement on behalf of all selling shareholders, and
(ii) in
connection with piggyback rights in a secondary offering by a
selling Demanding
Other Equity Security Holder, the number of Registrable Equity
Securities to be
included in such Registration Statement on behalf of the Trust
shall be no less
than the Trust Pro Rata Share of all securities to be included in
such
Registration Statement.
(c) The
Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2.2 prior to the
effectiveness
of such registration whether or not the Trust has elected to
include securities
in such registration.
2.3
Registration Procedures. If the Company is required by the
provisions of Article II to effect the registration of any
Registrable Equity
Securities under the Securities Act, the Company will, as promptly
as
practicable:
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(a) prepare
and file in accordance with this Article II with the
SEC a Registration Statement with respect to such securities and
use it
reasonable best efforts to cause such Registration Statement to
become and
remain effective for at least one hundred and eighty (180) days or
until the
distribution described in the Registration Statement has been
completed;
(b) prepare
and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such
supplements
to the related prospectus, as may be required by the applicable
rules,
regulations or instructions under the Securities Act during the
applicable
period in accordance with the intended methods of disposition
specified by the
Trust, (ii) make generally available earnings statements satisfying
the
provisions of Section 11(a) of the Securities Act (provided that
the Company
shall be deemed to have complied with this clause if it has
complied with Rule
158 under the Securities Act) and (iii) cause the related
prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities
Act;
(c) notify the
Trust promptly and, if requested, confirm such
notice in writing (i) when a prospectus, prospectus supplement or
post-effective
amendment has been filed and, with respect to such 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 such
Registration Statement
or the related Prospectus or for additional information regarding
the Trust or
any Other Stockholder whose shares are registered pursuant to such
Registration
Statement, (iii) of the issuance by the SEC of any stop order
suspending the
effectiveness of such Registration Statement or the initiation of
any
proceedings for the purpose, and (iv) of the receipt by the Company
of any
notification with respect to the suspension of the qualification or
exemption
from qualification of any of the Registrable Equity Securities for
sale in any
jurisdiction or the initiation or threatening of any proceeding for
such
purpose;
(d) use
reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such Registration Statement,
or the
lifting of any suspension of the qualification or exemption from
qualification
of any Registrable Equity Securities for sale in any jurisdiction
in the United
States;
(e) furnish to
the Trust, counsel for the Trust and each managing
underwriter, if any, without charge, such number of copies of the
Registration
Statement as initially filed with the SEC and of each pre-effective
and
post-effective amendment or supplement thereto (in each case
including at least
one copy of all exhibits thereto and all documents incorporated by
reference
therein) and of the Prospectus included therein, including the
preliminary
Prospectus and any summary Prospectus, and any other Prospectus
filed under Rule
424 under the Securities Act in connection with the disposition of
any
Registrable Equity Securities covered by such Registration
Statement, and such
other documents as the Trust may reasonably request;
(f) use its
reasonable best efforts to register or qualify the
Registrable Equity Securities covered by such Registration
Statement under such
other securities or blue sky laws of such jurisdictions within the
United States
and Puerto Rico as the Trust may reasonably request (provided,
however, that the
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Company shall not be obligated to qualify as a foreign corporation
to do
business under the laws of any jurisdiction in which it is not then
qualified or
to file any general consent to service of process to effect such
registration),
and do such other reasonable acts and things as may be required of
it to enable
the Trust to consummate the disposition in such jurisdiction of the
Registrable
Equity Securities covered by such Registration Statement;
(g) in the
event of any underwritten public offering, use its
reasonable best efforts to furnish, at the request of the Trust, on
the date
that such Registrable Equity Securities are delivered to the
underwriters for
sale pursuant to such registration, (1) an opinion, dated such
date, of the
independent counsel representing the Company for the purposes of
such
registration, addressed to the underwriters and covering matters of
the type
customarily covered in such legal opinions; (2) a comfort letter
dated such
date, and updates thereof, from the independent certified public
accountants who
have issued an audit report on the Company's financial statements
included or
incorporated by reference in the Registration Statement, addressed
to the
underwriters and covering matters of the type customarily covered
by such
comfort letters and as the underwriters shall reasonably request
and (3) if
requested and if an underwriting agreement is entered into,
indemnification of
the underwriters pursuant to provisions and procedures reasonably
requested by
the underwriters; the procedures referred to in this paragraph
shall be followed
at each closing under such underwriting or similar agreement, as
and to the
extent required thereunder;
(h) enter into
customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably
required in order to expedite or facilitate the disposition of such
Registrable
Equity Securities;
(i) cooperate
with the Trust, the underwriters participating in
the offering and their counsel in any due diligence investigation
reasonably
requested by the Trust or the underwriters in connection therewith,
and
participate, to the extent reasonably requested by the managing
underwriter for
the offering or the Trust, in efforts to sell the Registrable
Equity Securities
in the offering (including, without limitation, participating in
"roadshow"
meetings with prospective investors) that would be customary for
underwritten
primary offerings of a comparable amount of equity securities by
the Company;
(j)
use its
reasonable best efforts to cause the Registrable
Equity Securities covered by a Registration Statement to be listed
on each
national securities exchange or Nasdaq, as applicable, on which the
Company's
equity securities are then listed at the time of the sale of such
Registrable
Equity Securities pursuant to such Registration Statement;
(k) notify the
Trust, at any time when a Prospectus is required to
be delivered under the Securities Act, upon discovery that, or upon
the
happening of any event as a result of which, such Prospectus (as
then in effect)
contains any untrue statement of a material fact or omits to state
a material
fact necessary to make the statements therein (including in a
document
incorporated by reference therein), in light of the circumstances
under which
they were made, not misleading, and promptly prepare a supplement
or
post-effective amendment to such Registration Statement or the
related
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prospectus or a supplement or amendment to any document
incorporated or deemed
to be incorporated therein by reference, and file with the SEC any
other
required document so that, as thereafter delivered to the
purchasers of such
Registrable Equity Securities, such Prospectus shall not contain
any untrue
statement of a material fact or omit to state a material fact
necessary to make
the statements therein, in light of the circumstances under which
they were
made, not misleading; and
(l) on or
before the effective date of such Registration
Statement, provide the transfer agent of the Company for the
Registrable Equity
Securities with printed certificates for the Registrable Equity
Securities by
such Registration Statement, which are in a form eligible for
deposit with The
Depository Trust Company.
2.4 Expenses.
All expenses incurred in complying with Article II,
including, without limitation, all SEC or stock exchange
registration or filing
fees (including all expenses incident to filing with the NASD),
stock exchange
listing fees, Nasdaq quotation fees, printing expenses (including
all expenses
of printing certificates for Registrable Equity Securities and of
printing
prospectuses if the printing of prospectuses is requested by the
Trust or the
managing underwriter, if any), fees and disbursements of counsel
for the
Company, the reasonable fees and expenses of one counsel for the
Trust and all
other selling security holders (selected by those holding a
majority of the
Registrable Equity Securities being registered), fees of the
Company's
independent public accountants and the expenses of any special
audit work
incident to or required for any such registration (including
expenses of any
"cold comfort" letters required in connection with this Article
II), but subject
to Section 2.1(b)(vi) hereof, the expenses of complying with the
securities or
blue sky laws of any jurisdiction and fees and disbursements of
underwriters
customarily paid by the issuers or sellers of securities (including
reasonable
fees of counsel to the underwriters), shall be paid by the Company
except that
any discounts, commissions or brokers' fees or fees of similar
securities
industries professionals and transfer taxes relating to the
disposition of the
Registrable Equity Securities will be payable by the Trust (or
other
securityholders participating in such registered offering) and the
Company will
have no obligation to pay any such amounts.
2.5
Indemnification and Contribution.
(a) In the
event of any registration of any Registrable Equity
Securities under the Securities Act pursuant to this Agreement, the
Company
shall indemnify and hold harmless the Trust, the Trust's
Affiliates, trustees,
officers and agents, and each other Person (including each
underwriter) who
participated in the offering of such Registrable Equity Securities
and each
other Person, if any, who controls the Trust or such participating
person within
the meaning of the Securities Act, against any losses, claims,
damages or
liabilities, joint or several, to which the Trust or any such
Affiliate,
trustee, officer, agent or participating person or controlling
person may become
subject under the Securities Act or any other statute or at common
law, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue
statement of any material fact contained in any Registration
Statement under
which such Registrable Equity Securities were registered under the
Securities
Act, any preliminary Prospectus or final Prospectus contained
therein, or any
amendment or supplement thereto, or (ii) any omission or alleged
omission to
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state therein a material fact required to be stated therein or
necessary to make
the statements therein not misleading, and shall reimburse the
Trust or such
Affiliate, director, officer, agent or participating person or
controlling
person for any legal or any other expenses reasonably incurred by
the Trust or
such Affiliate, director, officer, agent or participating person or
controlling
person in connection with investigating or defending any such loss,
claim,
damage, liability or action; provided, however, that the Company
shall not be
l
