As Filed with the Securities and Exchange Commission on July 15, 1999
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERNATIONAL COMFORT PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Canada 98-0045209
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
David P. Cain, Esq.
501 Corporate Centre Drive 501 Corporate Centre Drive
Suite 200 Suite 200
Franklin, Tennessee 37067 Franklin, Tennessee 37067
(615) 771-0200 (615) 771-0216
(Address, including zip code, (Address, including zip code,
and telephone number, including and telephone number, including
area code, of registrant's area code, of agent for service)
principal executive offices)
Copy To:
Gary M. Brown, Esq.
Tuke Yopp & Sweeney, PLC
NationsBank Plaza, Suite 1100
Nashville, Tennessee 37219
(615) 313-3325
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
Title of Each Class Proposed Maximum Proposed Maximum
of Securities to be Amount to be Offering Price Aggregate Amount of
Registered Registered Per Unit (1) Offering Price (1) Registration Fee
<S> <C> <C> <C> <C>
Ordinary Shares 1,488, 162 $ 11.47 $ 17,069,218 $ 4,745.24
shares
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
Calculated on the basis of the average of the high and low reported prices of
the Registrant's Ordinary Shares on the American Stock Exchange on July 12,
1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PROSPECTUS
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD, NOR MAY OFFERS TO BUY BE ACCEPTED, BEFORE THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER, SOLICITATION OR SALE IS NOT PERMITTED.
Subject to Completion July 15, 1999
INTERNATIONAL COMFORT PRODUCTS CORPORATION
------------------------------------------
1,488,162 Ordinary Shares
------------------------------------------
The following selling shareholders are offering up to 1,488,162 ordinary
shares ("Shares") of International Comfort Products Corporation (the
"Company," which sometimes in this Prospectus is referred to as "we" or "us"
and in the possessive as "our").
Watsco Investments I, Inc. 1,398,872 Shares
Watsco Investments II, Inc. 89,290 Shares
Watsco Investments I, Inc. and Watsco Investments II, Inc. each are
subsidiaries of Watsco, Inc. and are referred to in this Prospectus as the
"Selling Shareholders."
Our Shares trade on both the American Stock Exchange ("AMEX") and the
Toronto Stock Exchange ("TSE") under the symbol "ICP." On July 13, 1999, the
last reported sale price of the Shares on Amex was $11.44 (U.S.) and on the
TSE was $16.90 (Can.).
Our principal executive offices are located at 501 Corporate Centre
Drive, Suite 200, Franklin, Tennessee 37067. The phone number there is (615)
771-0200.
We will not be paying any underwriting discounts or commissions in this
offering.
INVESTING IN OUR SHARES INVOLVES CERTAIN
RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
We will not receive any proceeds from the sale of Shares by the Selling
Shareholder. We have agreed to pay certain expenses of registration of the
Shares under United States federal and state securities laws. We are not
required to pay commissions and discounts of agents or broker-dealers and
transfer taxes, if any, that the Selling Shareholders may be required to pay
when they sell their Shares. We also have agreed to indemnify the Selling
Shareholders against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended (the "Securities Act").
__________________________________________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________________________________________________
The date of this Prospectus is July 15, 1999.
AVAILABLE INFORMATION
We have filed a Registration Statement on Form S-3 under the Securities
Act (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") in Washington, D.C. The Registration Statement
covers the Shares offered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement and
the exhibits thereto. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete and in each instance such statement is qualified by reference to
each such contract or document filed (or incorporated by reference) as an
exhibit to the Registration Statement.
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file reports and other information with the Commission. Reports
and other information filed by us with the Commission can be inspected
without charge and copied at the public reference facilities maintained by
the Commission at the following addresses: New York Regional Office, Seven
World Trade Center, New York, New York 10048; and Chicago Regional Office,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material can be obtained upon written request from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates. Information on the operation of the Public Reference
Room may be obtained by calling the Commission at 1-800-SEC-0330. The
Commission maintains a Web site at http://www.sec.gov that contains reports,
proxy statements and other information regarding issuers that file
electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 1-7955) are incorporated in and made a part of this Prospectus by this
reference:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed with the Commission on March 31, 1999.
(ii) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 14, 1999.
(iii) The description of the Company's Ordinary Shares contained in its
Registration Statement on Form 8-A filed under the Exchange Act with the
Commission on March 14, 1990, including any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the filing of a post-effective amendment which
indicates that all Shares offered hereby have been sold or which deregisters
all Shares then remaining unsold shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing such reports
and documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents or into this
Prospectus) will be provided without charge to each person, including any
beneficial owner, to
2
whom this Prospectus is delivered, upon a written or oral request to the
Company, Attention: David P. Cain, 501 Corporate Centre Drive, Suite 200,
Franklin, Tennessee 37067, telephone number (615) 771-0216.
RISK FACTORS
On June 30, 1999, Titan Acquisitions, Ltd., a New Brunswick corporation,
and a wholly owned subsidiary of United Technologies Corporation
(collectively, "UTC"), commenced a tender offer to acquire all of our
outstanding Shares at a price of $11.75 (U.S.) per Share (the "Tender Offer
Price"). See Material Changes below. Currently, the tender offer expires
at 12:00 p.m. on July 28, 1999. The completion of the tender offer is
subject to a number of conditions, including regulatory approval.
Accordingly, there is no assurance that the tender offer will be completed.
If the tender offer is not completed, there is no assurance that you would be
able to resell your Shares for the Tender Offer Price or for the price that
you paid for the Shares. The Tender Offer Price exceeds the trading prices
for the Shares that had prevailed during the six months preceding the
announcement of the tender offer.
In addition, if the tender offer is completed but you fail to tender
your Shares, there is no assurance of the continuing liquidity of your
Shares. The Shares may cease to trade on both the AMEX and the TSE and there
may be no other market for the Shares. Although UTC has indicated that it
intends to subsequently acquire all Shares that are not tendered through a
merger, amalgamation or other similar transaction, there is no assurance that
this will occur or when it will occur. Accordingly, your investment in the
Shares could become illiquid for an indeterminate length of time.
THE COMPANY
The Company is one of North America's leading manufacturers of quality
residential and light commercial heating and cooling products. Its products
are marketed under the Arcoaire, Comfortmaker, Airquest, Heil, Tempstar,
Lincoln and KeepRite brand names to dealers, contractors and builders through
independent distributors. These products include a variety of heating and
cooling products, including gas and oil furnaces, split-system and package
air conditioners, split-system and package heat pumps, and gas/electric
combination units. These products range up to 20 tons cooling capacity.
The executive offices of the Company are located at 501 Corporate Centre
Drive, Suite 200, Franklin, Tennessee 37067, telephone number (615) 771-0200.
USE OF PROCEEDS
The Shares that are the subject of this offering are being sold by the
Selling Shareholders. Accordingly, we will not receive any of the proceeds
from the sale of these Shares.
SELLING SHAREHOLDERS
The Selling Shareholders are wholly owned subsidiaries of Watsco,
Inc.("Watsco"). Watsco is one of our two largest customers. In addition,
the shares owned by the Selling Shareholders were issued to affiliates of
Watsco in exchange for substantially all of the assets of what now is A-1
Components, Inc., one of our subsidiaries. That transaction occurred and the
Shares were issued on May 29, 1998.
When we acquired the assets of A-1 Components, the Shares that were
issued (and that now are being sold by the Selling Shareholders) were not
registered under the Securities Act. They were issued in an exempt offering
and, therefore, were "restricted" securities. Accordingly, the Shares could
not be sold by the Selling Shareholders without registration or an exemption.
Because of this restriction, in the A-1
3
Components transaction, we agreed that we would register the Shares owned by
the Watsco affiliates prior to them having owned the Shares for two years, at
which time they could be sold without registration.
On July 1, 1999 Watsco exercised it right to require that we register
the Shares issued in the A-1 transaction. That is the reason that we have
filed the registration statement of which this Prospectus is a part.
As of the date of this Prospectus, the Selling Shareholders own
1,488,162 Shares. The Selling Shareholders may sell all, a portion or none of
these Shares. If the offering is completed, the Selling Shareholders will own
no Shares. This information is based upon data supplied to us by the Selling
Shareholders.
PLAN OF DISTRIBUTION
We have been advised by the Selling Shareholders that they intend to
sell all or a portion of the Shares offered hereby, from time to time, on the
Toronto Stock Exchange and/or the American Stock Exchange, and that sales
will be made at prices prevailing at the time of such sales. The Selling
Shareholders also may make sales on the over-the-counter market, pursuant to
Rule 144 promulgated under the Securities Act or otherwise at prices and on
terms then prevailing or at prices related to the then current market price,
or in negotiated transactions. The Selling Shareholders may sell Shares in
(i) a block trade in which the broker or dealer so engaged will attempt to
sell Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction, (ii) transactions in which a broker
or dealer acts as principal and resells Shares for its account pursuant to
this Prospectus, (iii) an exchange distribution in accordance with the rules
of such exchange, (iv) ordinary brokerage transactions and transactions in
which the broker solicits purchases, (v) privately negotiated transactions,
(vi) a combination of any such methods of sale or (vii) any other method of
sale permitted pursuant to applicable laws.
In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. The
Selling Shareholders also from time to time, may authorize underwriters
acting as their agents to offer and sell Shares upon such terms and
conditions as shall be set forth in a prospectus supplement, to the extent
required. Underwriters, brokers or dealers will receive commissions or
discounts from the Selling Shareholders in amounts to be negotiated
immediately prior to sale. The Selling Shareholders, as well as such
underwriters, brokers or dealers and any other participating brokers or
dealers may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act in connection with such sales and any discounts
and commissions received by them and any profit realized by them on the
resale of Shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
There is no assurance that the Selling Shareholders will offer for sale
or sell any or all of the Shares covered by this Prospectus. We have been
advised by the Selling Shareholders that they or their pledgees, donees,
transferees or other successors in interest may sell all, a portion of, or
none of the Shares covered by this Prospectus.
At the time a particular offer of Shares is made by either of the
Selling Shareholders, to the extent required, a supplement to this Prospectus
will be distributed which will identify and set forth the aggregate amount of
Shares being offered and the terms of the offering.
4
LEGAL MATTERS
Certain legal matters in connection with the sale of the Shares offered
by this Prospectus will be passed upon for us by Tuke Yopp & Sweeney, PLC,
Nashville, Tennessee.
EXPERTS
Our consolidated financial statements and schedules as of December 31,
1998, and for each of the two years then ended, included and/or incorporated
by reference in this Prospectus and elsewhere in the Registration Statement
have been audited by Arthur Andersen & Co., Chartered Accountants, as
indicated in their reports with respect thereto, and have been incorporated
and/or included herein in reliance upon the authority of said firm as experts
in giving said reports.
Our consolidated financial statements and schedules as of December 31,
1996, and for the year then ended, included and/or incorporated by reference
in this Prospectus and elsewhere in the Registration Statement have been
incorporated herein in reliance on the report of PricewaterhouseCoopers,
Chartered Accountants, given on the authority of that firm as experts in
accounting and auditing.
Any financial statements and schedules hereafter incorporated by
reference in the registration statement that have been audited and are the
subject of a report by independent accountants will be so incorporated by
reference in reliance upon such reports and upon the authority of such firms
as experts in accounting and auditing to the extent covered by consents filed
with the Commission.
MATERIAL CHANGES
On June 23, 1999, we entered into a Pre-Acquisition Agreement (the
"Acquisition Agreement") with UTC. The Acquisition Agreement provides that
UTC will make a tender offer ("Tender Offer") to purchase all of our
outstanding Shares. Shares validly tendered in the Tender Offer shall be
entitled to receive $11.75 (U.S.), net to the seller, in cash. Consummation
of the Tender Offer is subject to certain conditions as specified in the
Acquisition Agreement.
On June 25, 1999, Stanley Ginkowski and Jeff Grau filed a class action
lawsuit in the Chancery Court of Marshall County, Tennessee, naming as
defendants the Company and all of our directors. The plaintiffs seek to
enjoin any actions by us in furtherance of the Tender Offer or,
alternatively, to recover damages in the event the Tender Offer and any
subsequent merger is consummated. The plaintiffs claim that the
consideration to be received by our shareholders in the proposed transaction
with UTC is unfair and inadequate, that our directors breached certain
alleged fiduciary duties to our shareholders and that our directors will be
unjustly enriched by the transaction. We believe that the claims against us
and our directors are without merit and intend to vigorously defend all
claims made against us and them.
A copy of the Acquisition Agreement is filed as Exhibit 2 to the
Registration Statement and is incorporated herein by this reference. A copy
of the Schedule 14D-9 (Solicitation/Recommendation Statement) ("Schedule 14D-
9") that we filed in connection with the Tender Offer is filed as Exhibit
99.1 to the Registration Statement and is incorporated herein by this
reference. The Schedule 14D-9 contains information about the Tender Offer
and we encourage you to obtain a copy and read it thoroughly.
5
MISCELLANEOUS
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus in connection with the offering herein
contained, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any of the Shares offered hereby in any
jurisdiction to any person to whom it is unlawful to make such an offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus
nor any sale hereunder shall under any circumstances create any implication
that there has been no change in the affairs of the Company since any of the
dates as of which information is furnished herein or since the date hereof.
6
INTERNATIONAL
COMFORT
PRODUCTS [ICP LOGO]
CORPORATION
TABLE OF CONTENTS
Available Information .......... 2
Incorporation of Certain
Documents by Reference ....... 2
Risk Factors.................... 3
The Company..................... 3
Use of Proceeds................. 3
Selling Shareholders............ 3
Plan of Distribution............ 4
Legal Matters................... 5
Experts......................... 5
Material Changes................ 6
Miscellaneous................... 7
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the distribution of the Securities registered hereby. One-half of the expenses
in connection with the distribution contemplated by this Registration Statement
will be borne by the Company and one-half by the Selling Shareholders.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $ 4,745
Legal fees and expenses 5,000
Accounting fees and expenses 2,500
Blue sky fees and expenses 0
Printing 500
Miscellaneous 1,000
-------
TOTAL $13,745
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Canada Business Corporations Act (the "CBCA") permits a corporation
to indemnify a director or officer of the corporation, a former director or
officer of the corporation or a person who acts or acted at the corporation's
request as a director or officer of a body corporate of which the corporation
is or was a shareholder or creditor, and his or her heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him or
her in respect of any civil, criminal or administrative action or proceeding
to which he or she is made a party by reason of his or her being or having
been a director or officer of such corporation or body corporate, if (i) he
or she acted honestly and in good faith with a view to the best interests of
the corporation, and (ii) in the case of a criminal or administrative action
or proceeding that is enforced by a monetary penalty, he or she had
reasonable grounds for believing that his or her conduct was lawful, and
requires the corporation to so indemnify any such person who has been
substantially successful on the merits in his or her defense of such action
or proceeding.
The Registrant's By-laws provide that subject to the limitations
contained in the CBCA but without limit to the right of the Registrant to
indemnify any person under the CBCA or otherwise, the Registrant shall
indemnify present and former directors and officers of the Registrant or any
person who acts or acted at the Registrant's request as a director or officer
of a body corporate of which the Registrant is or was a shareholder or
creditor, and his or her heirs and legal representatives, against all costs,
charges and expenses, including an amount paid to settle an action or satisfy
a judgment, reasonably incurred by such person in respect of any civil,
criminal and administrative action or proceeding to which he or she is made
a party by reason of being or having been a director or officer of the
Registrant or of a body corporate of which the Registrant is or was a
shareholder or creditor, if such person (i) acted honestly and in good faith
with a view to the best interests of the Registrant and (ii) in the case of
a criminal or administrative action or proceeding that is enforced by a
monetary penalty, had reasonable grounds for believing that his or her
conduct was lawful.
The description of the Registrant's By-laws contained in the
preceding paragraph is qualified in its entirety by reference to the
Registrant's By-laws (filed with the Commission as Exhibit 1.2 to the
II-1
Registrant's Annual Report on Form 20-F for the fiscal year ended December
31, 1993, filed with the Commission on June 29, 1994) which is incorporated
by reference herein as Exhibit 3(i)/4.2.
ITEM 16. EXHIBITS.
See the Exhibit Index beginning on page II-6.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) (A) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the Part
II-2 information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(a) and (1)(b) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(B) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
and
(C) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(2) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
II-2
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Nashville, State of Tennessee, on
this 14th day of July, 1999.
INTERNATIONAL COMFORT PRODUCTS CORPORATION
By:/s/ David P. Cain
---------------------------
David P. Cain
Senior Vice President, General
Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on July 14, 1999.
SIGNATURE TITLE
--------- -----
/s/ Richard W. Snyder * Chairman of the Board and Director
- -------------------------
(Richard W. Snyder)
/s/ W. Michael Clevy * President, Chief Executive Officer
- ------------------------- and Director
(W. Michael Clevy)
/s/ David P. Cain Senior Vice President, General Counsel
- ------------------------- and Secretary
(David P. Cain)
/s/ S.L. Clanton Senior Vice President, Chief Financial
- ------------------------- Officer and Treasurer
(S.L. Clanton)
/s/ Richard C. Barnett * Director
- -------------------------
(Richard C. Barnett)
/s/ Stanley M. Beck * Director
- -------------------------
(Stanley M. Beck)
/s/ William G. Davis * Director
- -------------------------
(William G. Davis)
II-4
SIGNATURE TITLE
--------- -----
/s/ John F. Fraser * Director
- -------------------------
(John F. Fraser)
Director
- -------------------------
(Roy T. Graydon)
/s/ Marvin G. Marshall * Director
- -------------------------
(Marvin G. Marshall)
/s/ Ernest C. Mercier * Director
- -------------------------
(Ernest C. Mercier)
/s/ David H. Morris * Director
- -------------------------
(David H. Morris)
/s/ David A. Rattee Director
- -------------------------
(David A. Rattee)
/s/ William A. Wilson * Director
- -------------------------
(William A. Wilson)
* By David P. Cain pursuant to powers of attorney filed as Exhibit 24 to
this Registration Statement
II-5
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
2 Pre-Acquisition Agreement dated as of June 23, IBR
1999 by and among the Company, Titan Acquisitions,
Ltd., and United Technologies Corporation filed as
Exhibit 1 to the Company's Schedule 14D-9 dated
June 30, 1999 and filed with the Commission on
June 30, 1999.
3(i), 4.1 Articles of Incorporation of International IBR
Comfort Products Corporation filed as Exhibit
3(i)/4.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30,
1997 filed with the Commission on November
14, 1997, and incorporated herein by this
reference.
3(ii), 4.2 Bylaws of International Comfort Products IBR
Corporation filed as Exhibit 1.2 to the
Company's Annual Report on Form 20-F for the
year ended December 31, 1993 filed with the
Commission on June 29, 1994, and incorporated
herein by this reference.
4.3 Indenture dated as of May 13, 1998, by and IBR
among International Comfort Products
Holdings, Inc. ("ICP Holdings"),
International Comfort Products Corporation
and United States Trust Company of New York,
as Trustee, with respect to the Series A and
Series B 8 5/8% Senior Notes due 2008, filed
as Exhibit 4.5 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837) filed with the Commission on July
10, 1998, and incorporated herein by this
reference.
5 Opinion of Tuke Yopp & Sweeney, PLC (to be filed
by amendment)
10.1 Master Trust Pooling and Service Agreement, IBR
dated as of July 25, 1996 among Inter-City
Products Receivables Company, L.P.
("ICP-Receivables"), International Comfort
Products Corporation (USA) ("ICP(USA)") and
LaSalle National Bank, as Trustee filed as Exhibit
10.1 to Amendment No. 1 to the Registrants'
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.2 Series 1996-1 Supplement to Master Trust IBR
Pooling and Service Agreement, dated as of
July 25, 1996 among ICP-Receivables, ICP(USA)
and LaSalle National Bank, as Trustee (and
correlative form of Class A (Series 1996-1)
Certificate and form of Class B (Series
1996-1) Certificate, and form of Guaranty
from ICP(USA) filed as Exhibit 10.2 to
Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
II-6
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
10.3 Receivables Purchase Agreement dated as of IBR
July 25, 1996 among ICP(USA), Inter-City
Products Partner Corporation ("ICP-Partner")
and ICP-Receivables filed as Exhibit 10.3 to
Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.4 Certificate Purchase Agreement (Series IBR
1996-1, Class A) dated as of July 25, 1996
among ICP-Receivables, ICP(USA), the
Purchasers named therein and The Chicago
Corporation, as Agent filed as Exhibit 10.4
to Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.5 Certificate Purchase Agreement (Series IBR
1996-1, Class B) dated as of July 25, 1996
among ICP-Receivables, ICP(USA) and Argos
Funding Corp. filed as Exhibit 10.5 to
Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.6 First Amendment to Certificate Purchase IBR
Agreement (Series 1996-1, Class A) dated as
of December 1, 1996 among ICP-Receivables,
ICP(USA), the Purchasers named therein and The
Chicago Corporation, as Agent filed as
Exhibit 4.9 to the Company's Quarterly Report
on Form 10-Q for the quarter ended September
30, 1997 filed with the Commission on
November 14, 1997, and incorporated herein by
this reference.
10.7 First Amendment to Receivables Purchase IBR
Agreement and Second Amendment to Certificate
Purchase Agreement (Series 1996-1, Class A)
dated as of January 27, 1997 among ICP(USA),
ICP-Partner, General Heating and Cooling
Company, Coastline Distribution, Inc.,
ICP-Receivables, Anagram Funding Corp. and
ABN AMRO Chicago Corporation filed as Exhibit
10.7 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
II-7
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
10.8 Second Amendment to Receivables Purchase IBR
Agreement as of September 30, 1997 among
ICP(USA), ICP-Partner, General Heating and
Cooling Company, ICP-Receivables, Anagram
Funding Corp. and ABN AMRO Chicago
Corporation filed as Exhibit 10.8 to
Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.9 Loan and Security Agreement dated as of July IBR
18, 1997 between ICP(USA) and NationsBank,
N.A. filed as Exhibit 10.9 to Amendment No.
1 to the Registrant's Registration Statement
on Form S-4 (File No. 333-58837 and
333-58837-01) filed with the Commission on
August 28, 1998, and incorporated herein by
this reference.
10.10 Amendment to Loan and Security Agreement made IBR
and entered into as of February 24, 1998
between NationsBank, N.A. and ICP(USA) filed
as Exhibit 10.10 to Amendment No. 1 to the
Registrant's Registration Statement on Form
S-4 (File No. 333-58837 and 333-58837-01)
filed with the Commission on August 28,
1998, and incorporated herein by this
reference.
10.11 Second Amendment to Loan and Security IBR
Agreement made and entered into as of May 13,
1998 between NationsBank, N.A. and ICP(USA)
filed as Exhibit 10.10 to Amendment No. 1 to
the Registrant's Registration Statement on
Form S-4 (File No. 333-58837 and
333-58837-01) filed with the Commission on
August 28, 1998, and incorporated herein by
this reference.
10.12 Credit Agreement made and entered into as of IBR
December 16, 1996 between Inter-City Products
Corporation (Canada) ("ICP Canada"), G.C.
McDonald Supply Limited, the Lenders named
therein and General Electric Capital Canada
Inc., as agent filed as Exhibit 10.12 to
Amendment No. 1 to the Registrant's
Registration Statement on Form S-4 (File No.
333-58837 and 333-58837-01) filed with the
Commission on August 28, 1998, and
incorporated herein by this reference.
10.13 First Amendment to Credit Agreement made and IBR
entered into as of May 13, 1998 between ICP
Canada, G.C. McDonald Supply Limited, the
Lenders named therein and General Electric
Capital Canada Inc., as agent filed as
Exhibit 10.13 to Amendment No. 1 to the
Registrant's Registration Statement on Form
S-4 (File No. 333-58837 and 333-58837-01)
filed with the Commission on August 28,
1998, and incorporated herein by this
reference.
II-8
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
10.14 Second Amendment to Credit Agreement made and IBR
entered into as of July 21, 1998 between ICP
Canada, G.C. McDonald Supply Limited, the
Lenders named therein and General Electric
Capital Canada Inc., as agent filed as
Exhibit 10.14 to Amendment No. 1 to the
Registrant's Registration Statement on Form
S-4 (File No. 333-58837 and 333-58837-01)
filed with the Commission on August 28,
1998, and incorporated herein by this
reference.
10.15 International Comfort Products Corporation IBR
Employee Stock Option Plan filed as Exhibit
4.1 to the Company's Registration Statement
on Form S-8 filed with the Commission on
March 16, 1995, and incorporated herein by
this reference.
10.16 International Comfort Products Corporation IBR
1998 Stock Option Plan filed as Exhibit 10.30
to the Registrant's Registration Statement on
Form S-4 (File No. 333-58837) filed with the
Commission on July 10, 1998, and incorporated
herein by this reference.
10.17 International Comfort Products Corporation IBR
Share Compensation Arrangement for
Non-Employee Directors filed as Exhibit 10.3
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997 filed
with the Commission on March 30, 1998, and
incorporated herein by this reference.
10.18 International Comfort Products Corporation IBR
Long Term Incentive Plan filed as Exhibit
10.25 to ICP(USA)'s Registration Statement on
Form S-1 (File No. 33-56238) filed with the
Commission on December 23, 1992, and
incorporated herein by reference.
10.19 Amendment to International Comfort Products IBR
Corporation Long Term Incentive Plan filed as
Exhibit 10.11 to ICP(USA)'s Annual Report on
Form 10-K for the year ended December 31,
1993 filed with the Commission on March 28,
1994, and incorporated herein by reference.
10.20 International Comfort Products Corporation IBR
1997 Long Term Incentive Plan for Senior
Management filed as Exhibit 10.6 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1997 filed with the
Commission on March 30, 1998, and
incorporated herein by this reference.
10.21 ICP(USA) Share Ownership Savings Plan filed IBR
as Exhibit 10.26 to ICP(USA)'s Registration
Statement on Form S-1 (File No. 33-56238)
filed with the Commission on December 23,
1992, and incorporated herein by this
reference.
II-9
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
10.22 Amendments to ICP(USA)'s Share Ownership IBR
Savings Plan filed as Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1997 filed with the
Commission on March 30, 1998, and
incorporated herein by this reference.
10.23 Retirement Plan for Salaried Employees filed IBR
as Exhibit 10.27 to ICP(USA)'s Registration
Statement on Form S-1 (File No. 33-56238)
filed with the Commission on December 23,
1992, and incorporated herein by this
reference.
10.24 Supplemental Retirement Benefit Agreement IBR
dated September 1, 1994 with W. Michael Clevy
filed as Exhibit 10.16 to ICP(USA)'s Annual
Report on Form 10-K for the year ended
December 31, 1995 filed with the Commission
on March 28, 1996, and incorporated herein by
this reference.
10.25 Termination Agreement with W. Michael Clevy IBR
filed as Exhibit 10.11 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1997 filed with the Commission
on March 30, 1998, and incorporated herein by
this reference.
10.26 Termination Agreement with Stephen L. Clanton IBR
filed as Exhibit 10.12 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1997 filed with the Commission
on March 30, 1998, and incorporated herein by
this reference.
10.27 Termination Agreement with Herman V. Kling *
10.28 Change in Control Agreement with W. Michael IBR
Clevy filed as Exhibit 10.11 to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 filed with the Commission
on May 14, 1999, and incorporated herein by
this reference.
10.29 Change in Control Agreement with David P. IBR
Cain filed as Exhibit 10.12 to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 filed with the Commission
on May 14, 1999, and incorporated herein by
this reference.
10.30 Change in Control Agreement with Stephen L.Clanton **
10.31 Change in Control Agreement with Douglas K. IBR
Gibbs filed as Exhibit 10.13 to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 filed with the Commission
on May 14, 1999, and incorporated herein by
this reference.
10.32 Change in Control Agreement with Herman V. Kling ***
II-10
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
10.33 Change in Control Agreement with Francis C.Harrell ***
10.34 Change in Control Agreement with Robert C. Henningsen ***
10.35 Change in Control Agreement with Augusto H. Millan ***
10.36 Change in Control Agreement with David B. Schumacher ***
10.37 Change in Control Agreement with Karla G. Smith ***
10.38 Change in Control Agreement with H. David Tayler ***
10.39 Change in Control Agreement with James R. Wiese ***
10.40 Registration Rights Agreement dated May 29, 1998
among the Company, P.E./DelMar, Inc. and Watsco
Components, Inc.
23.1 Consent of Arthur Andersen LLP, independent
chartered accountants (to be filed by amendment)
23.2 Consent of PricewaterhouseCoopers LLP,
independent chartered accountants
(to be filed by amendment)
24 Powers of Attorney
99.1 The Company's Schedule 14D-9 dated June 30, 1999 IBR
and filed with the Commission on June 30, 1999,
and incorporated herein by this reference.
99.2 Directors' Circular dated as of June 30, 1999 issued IBR
by the Company and filed as Exhibit 6 to the Company's
Schedule 14D-9 dated June 30, 1999 and filed with the
Commission on June 30, 1999, and incorporated herein
by this reference.
- ----------------------
IBR Document incorporated by reference from previous filing
* Document not filed because substantially identical to Exhibit 10.26
** Document not filed because substantially identical to Exhibit 10.29
*** Document not filed because substantially identical to Exhibit 10.31
II-11
</TABLE>
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
INTERNATIONAL COMFORT PRODUCTS CORPORATION
AND
WATSCO COMPONENTS, INC.
and
P.E./DEL MAR, INC.
NASHVILLE, TENNESSEE
MAY 29, 1998
TABLE OF CONTENTS
1. Certain Definitions and Terms
2. Statement of Intent
3. Required and Incidental Registrations
4. Deviation from Agreement; Amendments; and Waivers
5. Construction
6. Titles of Articles, Sections and Subsections
7. Time of Essence
8. Successors and Assigns, Etc
9. Notices
10. Arbitration
11. Best Efforts
12. Resolution of Issues, Etc
13. Counterparts
SIGNATURES
ii
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
INTERNATIONAL COMFORT PRODUCTS CORPORATION
AND
WATSCO COMPONENTS, INC.
and
P.E./DEL MAR, INC.
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") entered into and made
by International Comfort Products Corporation (the "Company") and Watsco
Components, Inc. ("Components") and P.E./Del Mar, Inc. ("Del Mar")
(Components and Del Mar being referred to herein individually as a
"Shareholder" and collectively as the "Shareholders"), to be effective as of
May 29, 1998.
RECITALS:
A. Pursuant to that certain Asset Purchase Agreement dated as of May
29, 1998 (the "Purchase Agreement") among the Company, Comfort Components of
America, Inc., Shareholders and Watsco, Inc., Shareholders sold substantially
all of their assets and liabilities to the Company in exchange for 1,488,162
of the ordinary shares of the Company (the "ICP Shares"). Unless otherwise
defined herein, all capitalized terms used herein without definition shall
have the meanings ascribed to such terms in the Purchase Agreement.
B. The ICP Shares were issued to Shareholders without registration
under the Securities Act of 1933, as amended. It is a condition to closing
the transactions contemplated by the Purchase Agreement that ICP grant to
Shareholders certain "piggyback" and demand registration rights with respect
to the ICP Shares.
NOW THEREFORE, in consideration of the transactions embodied in the
Purchase Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties have
agreed to the terms set forth in this Agreement.
TERMS:
1. Certain Definitions and Terms. The following terms and
definitions apply to this Agreement:
a. "AMEX" means the American Stock Exchange, Inc. and any
successor(s) in interest thereto.
b. "Common Stock" means the Company's ordinary shares, no par value,
outstanding on the date hereof, together with any reclassifications thereof
or other changes in respect thereof.
1
c. "Company" means International Comfort Products Corporation, a
Canadian corporation with principal offices located currently at 501
Corporate Centre Drive, Suite 200, Franklin, Tennessee 37076, and any
successor(s) in interest thereto.
d. "Company Party" shall have the meaning ascribed to such term in
Subsection 3.e. hereof.
e. "Person" means any individual, corporation, limited liability
company, limited liability partnership, partnership, general partnership,
association, joint venture, joint stock company, syndicate, business trust or
other type of trust, unincorporated organization, government or any agency or
political subdivision thereof, or any other form of entity.
f. "Plan Registration" means a registration statement filed on Form
S-4 or Form S-8, or any shelf registration statement (unless and until the
securities registered under a shelf registration statement are actually
offered for sale) or other similar successor registration statement.
g. "Registrable Securities" shall have the meaning ascribed to such
term in Section 3 hereof.
h. "Securities Act" means the Securities Act of 1933, as amended.
i. "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
j. "SEC" means the United States Securities and Exchange Commission.
k. "Shareholder" means each of Components and Del Mar. Shareholders
means both Components and Del Mar.
l. "Shareholder Party" shall have the meaning ascribed to such term
in Subsection 3.e. hereof.
m. "Shares" means shares of Common Stock beneficially owned by the
Shareholders as listed on Schedule A hereto, subject to any adjustment to
reflect any reclassifications thereof or other changes in respect thereof.
n. "State Administrator" means the Person charged with administering
or enforcing State Laws.
o. "State Laws" mean laws, rules and regulations applicable to the
registration or sale of securities in the various states and territories of
the United States of America, including the District of Columbia, and this
term includes those statutes commonly referred to as "Blue Sky Laws."
2
p. The words "hereof", "herein", "hereunder", and words of similar
import shall, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement.
q. Words importing a particular gender mean and include every other
gender, and words importing the singular number mean and include the plural
number, and vice versa, as the context shall require.
2. Statement of Intent. This Agreement is intended to serve as the
mechanism for avoiding, to the extent practicable, a disruption of the market
in the Common Stock resulting from any sale of all or a material portion of
the Shares (the Shares having not been registered pursuant to the Securities
Act) in a public distribution pursuant to applicable exemptions under the
Securities Act. The parties' agreements herein are subject to the terms and
conditions set forth in this Agreement. This Agreement provides a non-
exclusive means for the Shareholders to dispose of the Shares.
3. Required and Incidental Registrations.
a. Required Registration.
i. Between June 1, 1999 and May 31, 2000, upon the written request
of the Shareholders, the Company agrees to prepare and file a
registration statement under the Securities Act covering the
Shares which are the subject of such request (referred to herein
as the "Registrable Securities") and agrees to use its best
efforts to cause such registration statement to become effective
as expeditiously as possible.
ii. The Company shall be required to prepare, file and to use its
best efforts to cause to become effective only one registration
statement pursuant to this Subsection 3.a.
iii. The request for registration by the Shareholders shall specify
the number of Shares to be registered and shall describe the
proposed method of sale of such Shares. If, in the judgment of
the Shareholders, the proposed sale of Registrable Securities is
not on satisfactory terms, such request may be withdrawn by the
Shareholders at any time before the registration statement is
effective, with the effect that such request shall be deemed,
for the purposes of this Agreement, never to have been made so
long as the Shareholders promptly reimburse the Company for all
reasonable expenses incurred by the Company related to such now-
withdrawn request. Such expenses shall be itemized.
iv. If the Shareholders intend to distribute the Registrable
Securities by means of an underwriting, the Shareholders shall
provide the Company with the name of a nationally recognized
managing underwriter or underwriters (the "Managing
3
Underwriter") that the Shareholders propose to employ as a part
of Shareholders' request made pursuant to this Subsection. The
Company shall have the right to approve such Managing
Underwriter, which approval shall not be unreasonably withheld,
delayed or conditioned. The Company may disapprove the
Shareholders' proposed underwriter if the Company is then in the
process of registering its securities using another nationally
recognized Managing Underwriter or has otherwise obligated
itself to use another nationally recognized Managing Underwriter
in public offerings of its securities. In the event that the
Shareholders propose to sell Shares through such underwriting,
the Company agrees to enter into (together with the Shareholders
and the other shareholders distributing their securities through
such underwriting) an underwriting agreement with the nationally
recognized Managing Underwriter and other underwriters selected
for such underwriting, provided that such underwriting agreement
is in customary form (including customary provisions restricting
any participant's ability to sell shares of the Company
securities for a reasonable period following the effective date
of the registration statement) and is reasonably acceptable to
the Company.
v. The Company and, subject to the requirements of Subsection f. of
this Section 3, other holders of the Company's securities may
include securities for its (or their) own account in such
registration (1) if the Managing Underwriter so agrees and (2)
if the number of Registrable Securities which would otherwise
have been included in such registration statement and
underwriting will not thereby be limited.
vi. The Company may postpone the filing of any registration
statement requested pursuant to this Subsection for a reasonable
period of time not to exceed one hundred twenty (120) days if it
deems such postponement prudent as a result of current Company
or market circumstances.
vii. Notwithstanding anything to the contrary contained herein, the
Company may choose to deny any request for registration pursuant
to Subsection 3.a. within one hundred twenty (120) days after
the effective date of a registration statement filed by the
Company covering an underwritten public offering which the
Shareholders shall have been entitled to join, pursuant to
Subsection 3.b., but failed or refused to join, unless (1) the
Managing Underwriter shall have limited the number of
Registrable Securities that the Shareholders proposed to offer
for sale pursuant to such registration statement, and/or (2) if
the registration statement shall have been withdrawn by the
Company or the underwriting was not completed substantially in
accordance with the terms offered to the Shareholders.
viii. The Company shall not be required to effect any requested
registration pursuant to this Subsection 3.a. if such
registration does not involve the disposition of Registrable
Securities constituting at least twenty-five percent (25%) of
the Shares
4
registered in the name of the Shareholders and if the Company
shall deliver to the Shareholders an unqualified opinion of
counsel reasonably acceptable to such Shareholders to the effect
that no such registration is necessary under the Securities Act
and applicable State Laws in connection with the proposed
disposition of such Registrable Securities. Such opinion shall
be addressed to the Shareholders and shall specifically state
that such person or entity, and the proposed purchaser(s) of the
Shares to which the opinion relates, are entitled to rely
thereon in connection with the means of disposition covered by
such opinion.
ix. The Company shall not be required to effect any requested
registration pursuant to Subsection 3.a. if the Company is
engaged or plans to be engaged within ninety (90) days, at the
time of such written request, in a registered public offering in
which the Shareholders have the right to request inclusion of
the Registrable Securities pursuant to Subsection 3.b. hereof so
long as the Company uses its best efforts to assure that all of
the Registrable Securities are in fact included in such
registration. In the event that the Company advises the
Shareholders that the Company is denying the request for the
reason set out in this paragraph, it is agreed that such request
for registration shall not be deemed or understood to count as
a demand registration request under Subsection 3.a. for purposes
of this Agreement.
x. If the requested registration pursuant to Subsection 3.a. hereof
does not involve an underwritten public offering, the Company's
obligation to maintain the availability of such registration
statement for the public distribution of the Registrable
Securities included thereunder shall not exceed ninety (90) days
from the effective date of the registration statement.
xi. The Shareholders may withdraw the Registrable Securities from
any registration statement filed pursuant to Subsection 3.a. at
any time before the registration statement becomes effective by
giving telephonic notice to the Company and any Managing
Underwriter, which notice shall be reduced to writing and sent
immediately to the Company in accordance with the notice
provisions hereof, and in such event the Shareholders shall
promptly reimburse the Company for all reasonable expenses
related to the filing of the registration statement and the
Company's obligation to file a registration statement under
Subsection 3.a. shall continue as if the demand never had been
made. Such expenses shall be itemized.
xii. The Company's undertakings in this Section 3.a. include filings
under and in compliance with State Laws, subject to the
limitation set forth in Subsection 3.c.i.D.
5
b. Incidental Registration.
i. Each time prior to June 1, 2000 that the Company shall determine
to file a registration statement under the Securities Act (other
than pursuant to Section 3.a. hereof and other than in respect
of a Plan Registration), either for its own account or on behalf
of any other security holder, the Company agrees to give prompt
written notice of its determination to the Shareholders. Upon
the written request of the Shareholders stating the number of
Shares the Shareholders desires to have registered and sold,
received within fifteen (15) days after the receipt of such
written notice from the Company, the Company agrees to use its
best efforts to cause all or a portion of such Registrable
Securities to be included in the Company's registration
statement and registered under the Securities Act, all to the
extent requisite to permit the sale or other disposition by the
Shareholders of as many of the shares of Registrable Securities
as practicable. Notwithstanding the foregoing provisions of
this Subsection 3.b.i., the Company may withdraw any
registration statement filed or planned to be filed pursuant to
Subsection 3.b. hereof without incurring any liability to the
Shareholders (other than reimbursement of fees, including
counsel, accounting and underwriting fees actually expended by
the Shareholders in connection with the proposed registration).
ii. If the registration of which the Company gives written notice
pursuant to Subsection 3.b.i. is for a public offering involving
an underwriting, the Company agrees to so advise the
Shareholders as a part of its written notice, including the
identity of a nationally recognized Managing Underwriter
selected by the Company. In such event the right of the
Shareholders to registration pursuant to this Subsection 3.b.i.
shall be conditioned upon the Shareholder's participation in
such underwriting and the inclusion of the Shareholder's
Registrable Securities in the underwriting to the extent
provided herein. In the event that the Shareholders propose to
sell Shares through such underwriting, the Shareholders agree to
enter into (together with the Company and the other shareholders
distributing their securities through such underwriting) an
underwriting agreement with the nationally recognized Managing
Underwriter and other underwriters selected for such
underwriting by the Company, provided that such underwriting
agreement is in customary form (including customary provisions
restricting the ability of the Shareholders to sell Shares for
a reasonable period following the effective date of the
registration statement) and is reasonably acceptable to the
Company. No underwriting agreement shall result in charges to
the Shareholders that are disproportionate to the number of
Registrable Securities included in the registration statement.
iii. Notwithstanding any other provision of this Section 3.b., if the
Managing Underwriter of an underwritten distribution advises the
Company and the Shareholders in writing that in its good faith
judgment the number of shares
6
of Registrable Securities and the other securities requested to
be registered exceeds the number of shares of Registrable
Securities and other securities which is advisable to include in
such offering (a "Recommendation"), then (A) the number of
shares of Registrable Securities and other securities so
requested to be included in the offering shall be reduced to
that number of shares which in the good faith judgment of the
Managing Underwriter it is advisable to include in such offering
except for shares to be issued by the Company in an offering
initiated by the Company, which shall have priority over the
shares of Registrable Securities, and (B) such reduced number of
shares shall be allocated among the Shareholders and holders of
other securities in proportion, as nearly as practicable, to the
respective number of shares of Registrable Securities requested
by the Shareholders or other securities requested by other
holders to be included in the registration statement. All
Registrable Securities and other securities which are excluded
from the underwriting by reason of the Managing Underwriter's
Recommendation and all Shares not originally requested to be so
included shall not be included in such registration statement
and shall be withheld from the market by the holders thereof for
a period which the Managing Underwriter reasonably determines is
necessary to effect the underwritten public offering.
iv. In the event that, as a result of the allocation as described in
Subsection 3.b.iii. above, the Shareholders are unable to
include all requested Registrable Securities in a registration
statement which is the subject of Subsection 3.b., then the
Company, upon request of the Shareholders, hereby agrees to
include such Registrable Securities, with a full priority over
other Company securities being offered by other Company security
holders, in the next subsequent registration by the Company in
accordance with Subsection 3.b. above, subject to a reduction
being effected by reason of the Managing Underwriter's
recommendation and compliance with other applicable terms of
Subsection 3.b.
v. The Shareholders may withdraw Registrable Securities from any
registration statement at any time before the registration
statement becomes effective by giving telephonic notice to the
Company and the Managing Underwriter, which notice shall be
reduced to writing and sent immediately to the Company and to
the Managing Underwriter in accordance with the notice
provisions hereof.
vi. The Company's undertakings in this Section 3.b. include filings
under and in compliance with State Laws, subject to the
limitation set forth in Subsection 3.c.i.D.
c. Registration Procedures.
i. If and whenever the Company is required by the provisions of
Subsections a. or b. of this Section 3 to use its best efforts
to effect the registration of Registrable
7
Securities under the Securities Act, the Company, as
expeditiously as possible, agrees to:
A. In accordance with the Securities Act and all applicable
rules and regulations, prepare and file with the SEC a
registration statement with respect to such securities and
use its best efforts to cause such registration statement to
become and remain effective for the period of distribution
contemplated thereby, not to exceed ninety (90) days, and
prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus contained therein as may be necessary to keep
such registration statement effective for such period and to
maintain such registration statement and prospectus accurate
and complete in all material respects for such period;
provided, however, that the Company shall not be required to
maintain the effectiveness of any registration statement not
covering an underwritten public offering (1) beyond the
period of distribution contemplated thereby or (2) for more
than ninety (90) days after such registration statement
becomes effective (whichever period is shorter);
B. If the offering is to be underwritten in whole or in part,
enter into and perform under a written underwriting
agreement in customary form and substance which is
reasonably satisfactory to the Managing Underwriter of the
public offering, the Shareholders, and the Company;
C. Furnish to the Shareholders and to the underwriters of the
securities being registered such number of copies of the
registration statement and each amendment and supplement
thereto, preliminary prospectus, final prospectus and such
other documents as such underwriters and the Shareholders
may reasonably request in order to facilitate the public
offering of such securities;
D. Use its best efforts to list, register or qualify the
securities covered by such registration statement with the
AMEX and under such State Laws of such jurisdictions as the
Shareholders and underwriters may reasonably request, except
that the Company shall not for any purpose be required to
qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;
E. Notify the Shareholders, promptly after it shall receive
notice thereof, of the date and time when such registration
statement and each post-effective amendment thereto has
become effective or a supplement to any prospectus forming
a part of such registration statement has been filed;
8
F. Notify the Shareholders promptly of any request by the SEC
for the amending or supplementing of such registration
statement or prospectus or for additional information;
G. Prepare and file with the SEC, promptly upon the request of
the Shareholders, any amendments or supplements to such
registration statement or prospectus which, in the
reasonable opinion of counsel for the Shareholders, is
required under the Securities Act or the rules and
regulations thereunder in connection with the distribution
of the Registrable Securities by the Shareholders;
H. Prepare and file promptly with the SEC, and promptly notify
the Shareholders of the filing of, such amendments or
supplements to such registration statement or prospectus as
may be necessary to correct any statements or omissions if,
at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event
has occurred as the result of which any such prospectus or
any other prospectus as then in effect would include an
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, in light of the circumstances
in which they were made, not misleading;
I. In case the Shareholders or any underwriter for the
Shareholders is required to deliver a prospectus at a time
when the prospectus then in circulation is not in compliance
in all material respects with the Securities Act or the
rules and regulations of the SEC, or applicable State Laws,
prepare promptly upon request such amendments or supplements
to such registration statement and such prospectus as may be
necessary in order for such prospectus to comply with the
requirements of the Securities Act and such rules and
regulations, and/or applicable State Laws;
J. Advise the Shareholders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any
stop order by the SEC (and/or any State Administrator)
suspending the effectiveness of such registration statement
or the initiation or threatening of any proceeding for that
purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its prompt
withdrawal if such stop order should be issued;
K. Not file any registration statement or prospectus or any
amendment or supplement to such registration statement or
prospectus to which the Shareholders has reasonably objected
on the grounds that such registration statement or
prospectus or amendment or supplement thereto does not
comply in all material respects with the requirements of the
Securities Act
9
or the rules and regulations thereunder, and/or under any
applicable State Laws, after having been furnished with a
copy thereof a reasonable time (under the circumstances)
prior to the filing thereof; provided, however, that the
failure of the Shareholders or its counsel to review or
object to any registration statement or prospectus or any
amendment or supplement to such registration statement or
prospectus (except to the extent of information furnished to
the Company by the Shareholders in writing) shall not affect
the rights of the Shareholders or their respective
representatives, executors, administrators, partners,
assigns, legal counsel, accountants or controlling persons
or any underwriter or any controlling person of such
underwriter under Section 3.e. hereof; and
L. At the request of the Shareholders, use its best efforts to
furnish to the Shareholders on the effective date of the
registration statement or, if such registration includes an
underwritten public offering, at the closing provided for in
the underwriting agreement, (A) a copy of the opinion of the
counsel representing the Company for the purposes of such
registration, covering such matters with respect to the
registration statement, the prospectus and each amendment or
supplement thereto, proceedings under state and federal
securities laws, other matters relating to the Company, the
securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of
issuer's counsel provided to underwriters in underwritten
public offerings, and (B) copies of letters from the
independent certified public accountants of the Company,
stating that they are independent public accountants within
the meaning of the Securities Act and dealing with such
matters as the Managing Underwriter may reasonably request,
or if the offering is not underwritten that in the opinion
of such accountants the financial statements and other
financial data of the Company included in the registration
statement or the prospectus or any amendment or supplement
thereto comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and
any applicable State Laws.
ii. If and when the Shareholders request registration of Registrable
Securities pursuant to Subsections a. or b. of this Section 3,
the Shareholders shall, at their expense and as expeditiously as
possible, do the following:
A. Supply the Company with all information reasonably required
by the Company concerning the Shareholders, and the
respective securities holdings and affiliates thereof, in
connection with the proposed distribution by the
Shareholders and their respective affiliates;
10
B. Correct, supplement or amend information requested by or
furnished to the Company so as to ensure that information
supplied is not materially misleading or does not omit to
state facts or information necessary to cause information
provided, in light of the circumstances, not to be
materially misleading or incomplete;
C. Provide counsel to the Company, underwriters and accountants
access to all information and records of the Shareholders
and their affiliates, that these professionals reasonably
require to perform their "due diligence" functions in
connection with any registration hereunder;
D. Comply in all respects with the requirements of the
Securities Act, the Securities Exchange Act, the AMEX, and
applicable State Laws in connection with any registration or
sale of securities hereunder;
E. Comply in all material respects with reasonable requests by
the Company and the Managing Underwriter in connection with
the sale of the Registrable Securities (including without
limitation entering into customary underwriting agreements)
or with the activities by the Shareholders and the
affiliates thereof during or immediately following any
underwriting period hereunder (including without limitation
other sales or purchases of Company securities,
confidentiality requirements, public statements, and
responses to the SEC or other regulatory inquiries); and
F. Pay promptly when due all registration fees and other fees
and expenses of the SEC, the AMEX, and any State
Administrator or other governmental entity, and all fees and
expenses of their counsel, underwriters or placement agents,
with respect to the registration and/or sale of Registrable
Securities in accordance with the terms hereof.
iii. The Company reserves the right to amend or to stop any
registration or sale of Company securities if it concludes in
good faith that such registration or sale would violate any
applicable securities law or regulation. In such event, the
Company shall send prior written notice to the Shareholders
specifying the problems that the Company has identified in such
detail as shall permit the Shareholders to attempt to resolve
such ostensible violations to the Company's reasonable
satisfaction such that the registration is not stopped or
withdrawn. However, the Company shall not be required, in any
event, to take or to permit any registration or sale that it
deems, in good faith, to violate the Securities Act (inclusive
of its rules and regulations) or any State Laws. However, if
such registration is canceled or withdrawn by the Company for
any reason or reasons not related to deliberate or grossly
negligent misconduct by a Shareholder Party, including the
intentional provision of materially misleading information (or
the intentional omission of information required to make the
statements made not
11
materially misleading in light of the circumstances then and
there pertaining), such registration shall not be deemed to be
a demand registration by the Shareholders.
d. Expenses.
i. Subject to any generally applicable State Law requirements with
respect to allocation of expenses, the Company shall bear one-
half of all expenses incurred in connection with a registration
statement filed pursuant to Subsection 3.a. hereof, including,
without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses incurred
in connection with complying with State Laws, fees of the AMEX,
and fees of transfer agents and registrars; provided, that the
Shareholders holding the Registrable Securities covered by or
included in such registration statement shall bear (1) the fees
and disbursements of any legal counsel, accountants or other
experts retained by the Shareholders to review matters relating
to such registration statement on behalf of the Shareholders (2)
any underwriting discounts or commissions applicable to the
Registrable Securities, and (3) any transfer taxes payable on
account of the transfer of such Registrable Securities.
ii. Subject to any generally applicable State Law requirements with
respect to allocation of expenses, the Company shall bear all
expenses incurred in connection with a registration statement
filed pursuant to Subsection 3.b. hereof, including, without
limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses incurred in
connection with complying with State Laws, fees of the AMEX, and
fees of transfer agents and registrars; provided, that the
Shareholders holding the Registrable Securities covered by or
included in such registration statement shall bear (1) the fees
and disbursements of any legal counsel, accountants or other
experts retained by the Shareholders to review matters relating
to such registration statement on behalf of the Shareholders (2)
any underwriting discounts or commissions applicable to the
Registrable Securities, and (3) any transfer taxes payable on
account of the transfer of such Registrable Securities.
e. Indemnification and Contribution.
i. The Company hereby agrees to indemnify and hold harmless each
Shareholder Party (as defined below) from and against, and
agrees to reimburse each such Shareholder Party with respect to,
any and all claims, actions (actual or threatened), demands,
losses, damages, liabilities, costs and expenses (including
12
reasonable attorneys and other professional fees and the
disbursements thereof) to which any Shareholder Party may become
subject, under the Securities Act or otherwise, insofar as such
claims, actions, demands, losses, damages, liabilities, costs or
expenses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the
Company will not be liable in any such case to the extent that
any such claim, action, demand, loss, damage, liability, cost or
expense is caused by an untrue statement or alleged untrue
statement or omission or alleged omission so made in strict
conformity with written information furnished by a Shareholder
to such underwriter or such controlling person specifically for
use in the preparation thereof.
As used herein, the term "Shareholder Party" means and
includes each of the following: the Shareholders and each of the
Shareholders' other representatives, executors, administrators,
assigns, representatives, and partners, and each person who
controls or is controlled by the Shareholders within the meaning
of the Securities Act.
ii. The Shareholders hereby agree that they will indemnify and hold
harmless each Company Party (as defined below) from and against,
and agrees to reimburse each such Company Party, with respect
to, any and all claims, actions (actual or threatened), demands,
losses, damages, liabilities, costs or expenses (including
attorneys and other professional fees and the disbursements
thereof) to which any Company Party may become subject, under
the Securities Act or otherwise, insofar as such claims,
actions, demands, losses, damages, liabilities, costs or
expenses are caused by any untrue or alleged untrue statement of
any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement
thereto, or are caused by the omission or the alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each
case to the extent, but if and only to the extent, that such
untrue statement or alleged untrue statement or omission or
alleged omission was actually so made in reliance upon and in
strict conformity with written information furnished by a
Shareholder specifically for use in the preparation thereof, or
withheld by a Shareholder after a request for such information
is received from the Company or its representatives for use in
the preparations thereof.
As used herein, the term "Company Party" means and includes
each of the following: the Company, its officers, and directors,
legal counsel and accountants
13
and each person who controls the Company within the meaning of
the Securities Act.
iii. Promptly after receipt by a party indemnified pursuant to the
provisions of Subsection e.i. or e.ii. of this Section 3 of
notice of the commencement (or threatened commencement) of any
action involving the subject matter of the foregoing indemnity
provisions, such indemnified party will, if a claim therefor is
to be made against the indemnifying party pursuant to the
provisions of Subsection e.i. or e.ii. of this Section 3, notify
the indemnifying party of the commencement (or threatened
commencement) thereof; but the omission to notify the
indemnifying party will not relieve it from any liability which
it may have to an indemnified party otherwise than under this
Section 3.e. and shall not relieve the indemnifying party from
liability under this Section 3.e. unless such indemnifying party
is prejudiced by such omission. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying parties
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may
be legal defenses available to it and/or other indemnified
parties which are different from or additional to those
available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel (in
which case the indemnifying party shall not have the right to
direct the defense of such action on behalf of the indemnified
party or parties). Upon the permitted assumption by the
indemnifying party of the defense of such action, and approval
by the indemnified party of counsel, the indemnifying party
shall not be liable to such indemnified party under Subsection
e.i. or e.ii. of this Section 3 for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof (other than reasonable costs of
investigation) unless (A) the indemnified party shall have
employed separate counsel in connection with the assertion of
legal defenses in accordance with the proviso to the immediately
preceding sentence, (B) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable
time, (C) the indemnifying party and its counsel do not actively
and vigorously pursue the defense of such action, or (D) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party.
No indemnifying party shall be liable to an indemnified party
for any settlement of any action or claim without the consent of
the indemnifying party and no indemnifying party may
unreasonably withhold its consent to any such settlement. No
party seeking indemnity will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the
14
claimant or plaintiff to such indemnified party of a release
from all liability with respect to such claim or litigation.
The indemnified and the indemnifying party agree to cooperate
fully and, to the maximum extent practicable, to wage a joint
defense as to all claims for which the indemnified party demands
indemnification pursuant to this Agreement.
iv. If the indemnification provided for in Subsection e.i. or e.ii.
of this Section 3 is held by a court of competent jurisdiction
to be unavailable to a party to be indemnified with respect to
any claims, actions, demands, losses, damages, liabilities,
costs or expenses referred to therein, then each indemnifying
party under any such Subsection, in lieu of indemnifying such
indemnified party thereunder, hereby agrees to contribute to the
amount paid or payable by such indemnified party as a result of
such claims, actions, demands, losses, damages, liabilities,
costs or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such claims,
actions, demands, losses, damages, liabilities, costs or
expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any indemnifying party
shall be obligated to contribute pursuant to this Subsection
3.e.iv. shall be limited to an amount equal to the per share
public offering price (less any underwriting discount and
commissions) multiplied by the number of shares of Common Stock
sold by the indemnifying party pursuant to the registration
statement which gives rise to such obligation to contribute
(less the aggregate amount of any damages which the indemnifying
party has otherwise been required to pay in respect of such
claim, action, demand, loss, damage, liability, cost or expense
or any substantially similar claim, action, demand, loss,
damage, liability, cost or expense arising from the sale of such
Common Stock).
v. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution hereunder from any Person who was not
guilty of such fraudulent misrepresentation.
f. Future Registration Rights. Except as expressly permitted by
this Agreement or by the Shareholders, and except for an underwriting
agreement between the Company and one or more professional underwriters of
securities, from and after the date hereof the Company agrees not to enter
into any agreement to file a registration statement on demand for any equity
securities under the Securities Act held by any other holder(s) of such
securities ("Other Shareholder(s)") except pursuant to an agreement between
the Company and such Other
15
Shareholder(s) that specifically provides as follows: (i) the Other
Shareholder(s) of such equity securities may not participate in any
registration requested pursuant to Subsection a. of this Section 3 hereof
without the written consent of the Shareholders unless (A) the sale of the
Registrable Securities is to be underwritten on a firm commitment basis and
the Managing Underwriter in its good faith judgment concludes that the public
offering or sale of such equity securities would not cause the number of
shares of Registrable Securities and such equity securities to exceed the
number which it is advisable to include in such offering to achieve not less
than the minimum desired sale price, and (B) the Shareholders shall have the
right to participate, to the extent that either of them may request, in any
registration statement initiated under a demand registration right exercised
by the Other Shareholder(s), except that if the Managing Underwriter of a
public offering made pursuant to such a demand registration limits the number
of shares of Common Stock to be sold, the participation of the Shareholders
and the holders of all other Common Stock desiring to participate (other than
the Other Shareholder(s)) shall be reduced pro rata based upon the number of
shares of Registrable Securities and Common Stock held at the time of filing
the Registration Statement; (ii) the Other Shareholder(s) may not participate
in any registration requested pursuant to Section 3.b. hereof if the sale of
Registrable Securities is to be underwritten unless, if the Managing
Underwriter limits the total number of securities to be sold, the Other
Shareholder(s) and the Shareholders are entitled to participate in such
underwritten distribution pro rata based upon the number of shares of Common
Stock and Registrable Securities held at the time of filing the registration
statement; and (iii) all equity securities excluded from any registration as
a result of the foregoing limitations shall not be included in such
registration and may not be publicly offered or sold for such period as the
Managing Underwriter of such registered distribution may reasonably request.
g. Reporting Requirements. The Company agrees (1) to use its best
efforts to file timely such information, documents and reports as the SEC may
require or prescribe under Sections 13, 14 or 15(d) (whichever is applicable)
of the Securities Exchange Act of 1934 and (2) upon request, to furnish to
the Shareholders such reports and documents filed by the Company with the SEC
as the Shareholders may reasonably request in availing itself of an exemption
for the sale of Registrable Securities without registration under the
Securities Act. The Company acknowledges and agrees that the purposes of the
requirements contained in this Section 3 are (i) to enable the Shareholders
to comply with the current public information requirement contained in
paragraph (c) of Rule 144 under the Securities Act should the Shareholders
ever wish to dispose of any of the securities of the Company acquired by the
Shareholders or his affiliates without registration under the Securities Act
in reliance upon Rule 144 (or any other similar exemptive provision) and (3)
to qualify the Company for the use of registration statements on Form S-3.
In addition, the Company agrees to use its best efforts to take such other
measures and file such other information, documents and reports, as shall be
required of it hereafter by the SEC as a condition to the availability of
Rule 144 under the Securities Act (or any similar exemptive provision
hereafter in effect) and the use of Form S-3. The Company also covenants to
use its best efforts, to the extent that it is reasonably within its power to
do so, to qualify, and maintain such qualification, for the use of Form S-3.
16
h. Shareholder Information. The Shareholders shall furnish the
Company with such information with respect to the Shareholders and their
affiliates in connection with the distribution of such Registrable Securities
as the Company may from time to time reasonably request in writing and as
shall be required by law or by the SEC in connection therewith. Such
information shall be used by the Company solely in connection with the
requested registration and not for any other purpose(s) and shall be treated
as strictly confidential by the Company except as otherwise required by the
Securities Act or other laws, rules and regulations.
i. Forms. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to
include, references to all successor forms which are intended to replace, or
to apply to similar transactions as, the forms herein referenced.
4. Deviation from Agreement; Amendments; and Waivers. In order to
amend or deviate from the terms of the Agreement, a party must first obtain
the prior written consent of the other party, which consent may be withheld
or granted in such party's sole discretion. No amendment(s),
modification(s), deviations from agreements or covenants, or waiver(s) of any
provision of this Agreement, shall in any event be effective unless the same
shall be in writing and signed by appropriate officers of the Company and by
the Shareholders. No action or course of dealing on the part of any Person
or entity, its officers, employees, consultants, heirs, administrators,
executors or agents, nor any failure or delay by a party with respect to
exercising any right, power or privilege of such party under this Agreement
shall operate as a waiver thereof, except as expressly provided in writing in
accordance with this Section.
5. Construction. This Agreement constitutes a contract made under
and shall be construed in accordance with and governed by the laws of the
State of Tennessee.
6. Titles of Articles, Sections and Subsections. All titles or
headings to articles, sections, Subsections or other divisions of this
Agreement are only for the convenience of the parties and shall not be
construed to have any effect or meaning with respect to the other content of
such articles, sections, Subsections or other divisions, such other content
being controlling as to the agreement between the parties hereto.
7. Time of Essence. Time is of the essence with regard to each and
every provision of this Agreement.
8. Successors and Assigns, Etc. All covenants and agreements
contained by or on behalf of the parties in this Agreement shall bind such
Person's successors and assigns. However, the rights and duties of the
parties under this Agreement may not be assigned or delegated by either party
without the written consent of the other, which may be withheld in that
party's sole discretion.
9. Notices. All communications under or in connection with this
Agreement shall be in writing and shall be delivered by an overnight courier
service of national standing (such
17
as Federal Express) and sent, charges prepaid, for next business day
delivery. In addition, any communication deemed by the sending party to be
urgent shall also be in writing and sent by telecopy or other similar form of
rapid transmission followed by contemporaneously sending for overnight
delivery by overnight courier as provided above (or, in the discretion of the
sender, in lieu of telecopy, such communication can be delivered personally
to the receiving party or to a representative thereof at such person's
principal office as indicated herein (subject to change as provided below)).
All such communications shall be sent or delivered to the parties at their
respective addresses set forth below:
a. If to the Company, to:
International Comfort Products Corporation
501 Corporate Centre Drive, Suite 200
Franklin, Tennessee 37067
Facsimile No. (615) 771-4001
Attention: David P. Cain
With a copy in each instance to:
Gary M. Brown
Tuke Yopp & Sweeney, PLC
Suite 1100, NationsBank Plaza
Nashville, Tennessee 37219
Facsimile No. (615) 313-3310
b. If to the Shareholders, to:
Watsco Components, Inc.
P.E./Del Mar, Inc.
2665 South Bayshore Drive, Suite 901
Coconut Grove, Florida 33133
Attention: Barry S. Logan
Facsimile No.: (305) 858-4492
With a copy in each instance to:
Aaron D. Cowell, Jr.
Moore & Van Allen, PLCC
NationsBank Corporate Center
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202
Facsimile No.: (704) 331-1159
Any party may send notice in accordance with this Section of a new
address to be used to contact such party. Any communication so addressed and
transmitted shall be deemed to be given on the date received.
10. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the actual or asserted violation or other
breach of this Agreement, shall be settled by arbitration administered by the
American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules ("Rules"), and judgment upon the award rendered by the
18
arbitrator(s) (and successor arbitrator(s)) may be entered in any court
having jurisdiction thereof. There shall be (a) one neutral arbitrator for
any dispute involving any claim in connection with this Agreement involving
a monetary demand for Fifty Thousand Dollars ($50,000.00) or less and (b) as
to any other dispute, three (3) neutral arbitrators selected by the AAA
pursuant to the Rules. The arbitrators shall be duly licensed attorneys and
(in the judgment of the AAA) substantially experienced in practicing
securities law. The arbitrator(s) shall apply the procedural and substantive
law of the State of Tennessee, as well as the Rules to the extent not
inconsistent with such laws, except that the law applicable to the
arbitration shall be Federal Arbitration Act, 9 U.S.C. Secs. 1 et seq. Any
award by an arbitrator or panel of arbitrators shall be issued within 270
days from the first demand for arbitration in such matter. Any dispute as to
whether a matter is arbitrable shall itself be arbitrated by the parties
pursuant to this provision. No award shall include punitive damages.
Rather, each award shall be for actual damages and out-of-pocket expenses.
In the discretion of the arbitrator, or a majority of the arbitrators as the
case may be, the award may include, as compensable damages and out-of-pocket
expenses, all or part of a party's attorneys fees and other out-of-pocket
expenses. The award for attorneys fees and costs to the prevailing party may
be prorated as the arbitrator or a majority of the arbitrators shall deem
just and proper. The Arbitrator(s) shall permit limited, non-abusive
discovery in the form of depositions and the production of documents and
records and shall, on application by a party, enter appropriate orders
granting extraordinary relief to preserve the rights of the parties pending
the issuance of the award.
11. Best Efforts. The requirement that a party use its best efforts
shall not require such party to assume unduly expensive, unduly burdensome,
or otherwise commercially unreasonable obligations. However, it does require
that such a party shall seek to perform the required duty with the same
determination and diligence that it would use to obtain its own important
business objectives.
12. Resolution of Issues, Etc. In the event that a Person,
including a Managing Underwriter, shall recommend to the Company that a
lesser number of Registrable Securities be registered (or shall make other
recommendations relative to a registration of Registrable Securities) than
has been requested by the Shareholders, the Company shall promptly send a
copy of the Recommendation to the Shareholders and shall afford the
Shareholders a reasonable opportunity to resolve any problems raised by such
Person (including a Managing Underwriter), in whole or in part, with a view
to resolving the problems raised by such Person and/or maximizing the number
of Registrable Securities (and the price thereof) that can be sold pursuant
to such registration.
13. Counterparts. This Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
19
EACH OF THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGES, THAT AFTER CONSULTATION
WITH COUNSEL, SUCH PARTY HAS WAIVED SUCH PARTY'S RIGHT TO A TRIAL BY JURY AND
CONSENTS TO THE ARBITRATION PROVISIONS OF THIS AGREEMENT AS TO ALL ISSUES.
THIS IS A SPECIFIC INDUCEMENT TO EACH PARTY TO ENTER INTO THIS AGREEMENT AND
A MATERIAL PART OF THE CONSIDERATION THEREFOR.
In witness whereof the parties hereto have executed this Agreement to be
effective as of the date first above written.
THE COMPANY:
INTERNATIONAL COMFORT PRODUCTS
CORPORATION
By: /s/ David P. Cain
Title:
THE SHAREHOLDERS:
WATSCO COMPONENTS, INC.
By: /s/ Barry S. Logan
Title: VP-Finance
P.E./DEL MAR, INC.
By: /s/ Barry S. Logan
Title: VP-Finance
20
SCHEDULE A
Share Holdings
Watsco Components ............................................ 1,398,872
P.E./Del Mar, Inc............................................. 89,290
---------
1,488,162
21
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Richard W. Snyder
--------------------------------------
Print Name
/s/ Richard W. Snyder
--------------------------------------
Signature
13 July 1999
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
W. Michael Clevy
--------------------------------------
Print Name
/s/ W. Michael Clevy
--------------------------------------
Signature
7-12-99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Richard C. Barnett
--------------------------------------
Print Name
/s/ Richard C. Barnett
--------------------------------------
Signature
July 9, 1999
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Stanley Beck
--------------------------------------
Print Name
/s/ Stanley Beck
--------------------------------------
Signature
9 July / 99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
William G. Davis
--------------------------------------
Print Name
/s/ William G. Davis
--------------------------------------
Signature
July 13/ 99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
John F. Fraser
--------------------------------------
Print Name
/s/ John F. Fraser
--------------------------------------
Signature
July 13/ 99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Marvin G. Marshall
--------------------------------------
Print Name
/s/ Marvin G. Marshall
--------------------------------------
Signature
7-9-99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Ernest C. Mercier
--------------------------------------
Print Name
/s/ Ernest C. Mercier
--------------------------------------
Signature
July 9/ 99
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
David H. Morris
--------------------------------------
Print Name
/s/ David H. Morris
--------------------------------------
Signature
July 12, 1999
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
David A. Rattee
--------------------------------------
Print Name
/s/ David A. Rattee
--------------------------------------
Signature
July 13, 1999
--------------------------------------
Date
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby severally
constitutes and appoints Stephen L. Clanton and David P. Cain and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments (including pre-
effective and post-effective amendments) to this Registration Statement on
Form S-3 and all documents relating thereto and to file the same with all
exhibits thereto and other documents in connection therewith with the United
States Securities and Exchange Commission and each state securities
regulatory authority, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming
all that said attorneys-in-fact and agents or his substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
William A. Wilson
--------------------------------------
Print Name
/s/ William A. Wilson
--------------------------------------
Signature
7/12/99
--------------------------------------
Date
