SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
---------------------
Date of report: June 18, 1998
(Date of earliest event reported)
SIRCO INTERNATIONAL CORP.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
0-4465 13-2511270
(Commission File No.) (I.R.S. Employer
Identification No.)
24 Richmond Hill Avenue
Stamford, Connecticut 06901
(Address of principal executive offices; zip code)
(203) 359-4100
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed Since Last Report)
Page 1 of 5 Pages
<PAGE>
Item 5. Other Events.
On June 18, 1998, Sirco International Corp. (the "Registrant")
completed a private placement offering pursuant to Section 4(2) of the
Securities Act of 1933, as amended, to certain individual shareholders (the
"Private Placement Shareholders"), of the following securities: (i) an aggregate
of 700 shares of Series A preferred stock, par value $.10 per share (the
"Preferred Stock"), of the Registrant, and (ii) stock purchase warrants (the
"Warrants") for the purchase of an aggregate of 27,500 shares of common stock,
par value $.10 per share (the "Common Stock"), of the Registrant. The Warrants
have an exercise price of $4.00 per share, subject to adjustment, expire on June
30, 2001 and were issued pursuant to the terms of a Warrant Agreement in the
form filed as Exhibit 4.3 hereto. The aggregate purchase price paid by the
Private Placement Shareholders to the Registrant for the shares of Preferred
Stock and the Warrants was $658,000.
Each share of Preferred Stock is convertible into a number of shares of
Common Stock in accordance with the following formula:
1,000
-----
Conversion Price
where:
Conversion
Price = (A) prior to May 31, 1999, $3.33 or (B)
on or after May 31, 1999, the lesser of
(i) $3.33 or (ii) the average closing
share price of the Common Stock, as
reported by NASDAQ, for the twenty (20)
trading days immediately preceding May 31,
1999; provided, however, that in no event
shall the Conversion Price be less than
$1.66.
The shares of Common Stock issuable upon conversion of the Preferred
Stock and upon exercise of the Warrants are subject to the registration rights
set forth in a Shareholders' Agreement, dated as of June 18, 1998, among the
Registrant and the Private Placement Shareholders. The shares of Preferred Stock
issued to the Private Placement Shareholders are subject to the rights, terms
and provisions set forth in the Certificate of Designation, dated June 18, 1998,
of the Registrant.
Page 2 of 5 Pages
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) None.
(b) None.
(c) Exhibits.
Exhibit
Number Exhibit Title
- ------ -------------
4.1 Certificate of Designation of Series A Preferred Stock of the
Registrant.
4.2 Shareholders' Agreement, dated June 18, 1998, between the Registrant
and the Private Placement Shareholders.
4.3 Form of Warrant Agreement, dated June 18, 1998, from the Registrant
to the Private Placement Shareholders.
Page 3 of 5 Pages
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 26, 1998
SIRCO INTERNATIONAL CORP.
(Registrant)
By: /s/ Paul H. Riss
---------------------------
Paul H. Riss
Chief Financial Officer
Page 4 of 5 Pages
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Title
- ------ -------------
4.1 Certificate of Designation of Series A Preferred Stock of the
Registrant.
4.2 Shareholders' Agreement, dated June 18, 1998, between the Registrant
and the Private Placement Shareholders.
4.3 Form of Warrant Agreement, dated June 18, 1998, from the Registrant
to the Private Placement Shareholders.
Page 5 of 5 Pages
EXHIBIT 4.1
-------------------------------------------
CERTIFICATE OF DESIGNATION
OF
SERIES A PREFERRED STOCK
OF
SIRCO INTERNATIONAL CORP.
--------------------------------------------
Series A Preferred Stock
------------------------
A series of 700 shares of preferred stock, par value $0.10 per share,
of Sirco International Corp. (the "Company") shall be created and be designated
"Series A Preferred Stock" having the following rights and preferences:
DESIGNATION OF SERIES A PREFERRED STOCK. The rights,
preferences, powers, privileges and restrictions, qualifications and limitations
granted to or imposed upon the Series A Preferred Stock (referred to hereinafter
sometimes as the "Designations") shall be as set forth below. Subject to the
limitations set forth below, the Company may issue other additional series of
preferred stock whose rights, preferences, powers, privileges and restrictions,
qualifications and limitations regarding Distributions (as hereinafter defined)
and/or liquidation that are either subordinate to, or pari passu with, the
Designations of the Series A Preferred Stock. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Company's
Certificate of Incorporation, dated as of July 22, 1964, as amended (the
"Certificate of Incorporation"). The Certificate of Incorporation is on file at
the principal place of business of the Company and copies will be made available
on request and without cost to any shareholder of the Company so requesting.
SECTION 1. Dividends and Distributions. Commencing from the date of
initial issuance of shares of Series A Preferred Stock (the "Date of Issuance"),
the holder of each issued and outstanding share of Series A Preferred Stock
shall be entitled to receive, out of assets at the time legally available for
such purpose, dividends and distributions, whether in cash or property or in
securities of the Company, including subscription or other rights to purchase or
acquire securities of the Company ("Distributions"), when and as declared by the
Board of Directors of the Company (each such date, a "Dividend Payment Date") on
the shares of common stock, par value $0.10 per share (the "Common Stock"), of
the Company, such that when and as a Distribution is declared, paid and made on
shares of Common Stock, the Board of Directors shall also declare a Distribution
at the same rate and in like kind on the shares of Series A Preferred Stock, so
that the Series A Preferred Stock will participate equally with the Common
Stock, share for share, in such Distribution. In connection therewith, each
share of Series A Preferred Stock shall entitle the holder thereof to such
Distributions based upon the number of shares of Common Stock into which such
share of Series A Preferred Stock is then convertible, rounded to the nearest
one tenth of a share. If on any Dividend Payment Date the Company shall not be
lawfully permitted under New York law to pay all or a portion of any such
declared Distributions, the Company shall take such action as may be lawfully
permitted in order to enable the Company, to the extent permitted by New York
law, lawfully to pay such Distributions.
SECTION 2. Liquidation. (a) In the event of any liquidation,
dissolution or winding-up of the Company, either voluntary or involuntary (a
"Liquidation"), the holders of shares of Series A Preferred Stock then issued
and outstanding shall be entitled to be paid out of the assets of the Company
available for distribution to its shareholders, whether from capital, surplus or
earnings, before any payment shall be made to the holders of shares of Common
Stock or upon any other series of preferred stock of the Company with a
liquidation preference subordinate to the liquidation preference of the Series A
Preferred Stock, an amount equal to one thousand dollars ($1,000) per share. If,
upon any Liquidation of the Company, the assets of the Company available for
distribution to its shareholders shall be insufficient to pay the holders of
shares of the Series A Preferred Stock, and the holders of any other series of
preferred stock with a liquidation preference equal to the liquidation
preference of the Series A Preferred Stock, the full amounts to which they shall
respectively be entitled, the holders of shares of Series A Preferred Stock and
the holders of any other series of preferred stock with liquidation preference
equal to the liquidation preference of the Series A Preferred Stock shall
receive all of the assets of the Company available for distribution and each
such holder of shares of Series A Preferred Stock and the holders of any other
series of preferred stock with a liquidation preference equal to the liquidation
preference of the Series A Preferred Stock shall share ratably in any
distribution in accordance with the amounts due such shareholders. After payment
shall have been made to the holders of shares of the Series A Preferred Stock of
the full amount to which they shall be entitled, as aforesaid, the holders of
shares of Series A Preferred Stock shall be entitled to no further distributions
thereon and the holders of shares of Common Stock and of shares of any other
series of stock of the Company shall be entitled to share, according to their
respective rights and preferences, in all remaining assets of the Company
available for distribution to its shareholders.
(b) A merger or consolidation of the Company with or into any
other corporation, or a sale, lease, exchange or transfer of all or any part of
the assets of the Company which shall not in fact result in the liquidation (in
whole or in part) of the Company and the distribution of its assets to its
shareholders shall not be deemed to be a voluntary or involuntary liquidation
(in whole or in part), dissolution or winding-up of the Company.
SECTION 3. Conversion of Series A Preferred Stock. The holders of
Series A Preferred Stock shall have the following conversion rights:
(a) Optional Right to Convert. Each share of Series A
Preferred Stock shall be convertible at the option of the holder (an "Optional
Conversion") into fully paid and non-assessable shares of Common Stock at any
time after the original issuance of the Series A Preferred Stock (such date
being referred to as a "Conversion Date") at the conversion price (the
"Conversion Price") set forth below.
(b) Mechanics of Conversion. Each holder of Series A Preferred
Stock who desires to convert the same into shares of Common Stock shall provide
written notice (a "Conversion Notice") via confirmed facsimile to the Company at
its principal executive offices. The original Conversion Notice and the
certificate or certificates representing the Series A Preferred Stock for which
conversion is elected, duly endorsed in blank or accompanied by proper
instruments of transfer, shall be delivered to the Company at its principal
executive offices by overnight domestic courier or by international courier. The
date upon which a Conversion Notice is properly received by the Company shall be
a "Notice Date".
(c) Conversion Price. Each share of Series A Preferred Stock
shall be convertible into a number of shares of Common Stock determined in
accordance with the following formula (the "Conversion Formula"):
1,000
-----
Conversion Price
where:
Conversion
Price = (A) prior to May 31, 1999, $3.33 or (B) on
or after May 31, 1999, the lesser of (i)
$3.33 or (ii) the average closing share
price of the Common Stock, as reported by
NASDAQ, for the twenty (20) trading days
immediately preceding May 31, 1999;
provided, however, that in no event shall
the Conversion Price be less than $1.66.
(d) Mandatory Conversion. At any time after May 31, 1999, the
Company may cause the conversion (a "Mandatory Conversion") of the Series A
Preferred Stock outstanding into fully paid and non-assessable shares of Common
Stock pursuant to the Conversion Formula, based upon the Conversion Price then
in effect.
To effect a Mandatory Conversion, the Company shall issue to
each holder of record of the Series A Preferred Stock a notice stating that the
Company is effecting a Mandatory Conversion with regard to the Series A
Preferred Stock. Such notice shall contain a statement indicating the number of
shares of Series A Preferred Stock subject to the Mandatory Conversion, the
number of shares of Common Stock to be received by holders upon conversion and
the effective date of such conversion (the "Conversion Date"). As soon as
practicable after the Conversion Date, each holder of Series A Preferred Stock
shall surrender certificates for all shares being converted duly endorsed in
blank or accompanied by proper instruments of transfer and the Company shall
deliver to such holder or such holder's nominee certificates representing the
number of shares of Common Stock to which such holder shall be entitled. The
Mandatory Conversion of Series A Convertible Stock shall be deemed to have
occurred on the Conversion Date without regard to the time of surrender of such
shares of Series A Preferred Stock and (i) such shares of Series A Preferred
Stock shall no longer be deemed outstanding and all rights whatsoever with
respect to such shares shall terminate (except the right of a holder to receive
certificates representing the number of shares of Common Stock to which such
holder is entitled, together with a cash payment in lieu of any fractional
shares of Common Stock) and (ii) holders entitled to receive shares of Common
Stock deliverable upon conversion of such shares of Series A Preferred Stock
shall be treated for all purposes as the holder of record of such shares of
Common Stock on the Conversion Date notwithstanding that the share register of
the Company shall then be closed or the certificates representing the shares of
Common Stock shall not then be actually delivered to such holder.
(e) Fractional Shares. No fractional share shall be issued
upon the conversion of any of the Series A Preferred Stock. All shares of Common
Stock (including fractions thereof) issuable upon conversion of the Series A
Preferred Stock by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of a fraction of a share of Common Stock, the Company
shall, in lieu of issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the closing price per share of
the Common Stock, as reported by NASDAQ, on the Notice Date multiplied by such
fraction.
(f) Reservation of Common Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of shares of Common
Stock free of preemptive rights as shall be sufficient to effect the conversion
of all shares of Series A Preferred Stock then outstanding; and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Series A
Preferred Stock, the Company will take such action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(g) Adjustment of Conversion Price.
(i) If, prior to the conversion of all outstanding
shares of Series A Preferred Stock, the Company shall reclassify, subdivide or
combine its outstanding shares of Common Stock into a greater or smaller number
of shares by a stock split, stock dividend or other similar event, then in each
such case the Conversion Price shall be adjusted to that price which will permit
the number of shares of Common Stock into which Series A Preferred Stock may be
converted to be increased or reduced in the same proportion as are the number of
shares of Common Stock.
(ii) If, prior to the conversion of all of the
outstanding shares of Series A Preferred Stock, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Company shall
be changed into the same or a different number of shares of the same or another
class or classes of stock or securities of the Company or another entity, then
the holders of shares of Series A Preferred Stock shall thereafter have the
right to purchase and receive upon conversion of the Series A Preferred Stock,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such share of stock and/or securities as may be issued or payable with respect
to or in exchange for the number of shares of Common Stock immediately
theretofore purchasable and receivable upon the conversion of the Series A
Preferred Stock held by such holders had such merger, consolidation, exchange of
shares, recapitalization or reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the holders of the Series A Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the
Conversion Price and of the number of shares issuable upon conversion of the
Series A Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities thereafter
deliverable upon the exercise hereof. The Company shall not effect any
transaction described in this subsection unless the resulting successor or
acquiring entity (if not the Company) assumes by written instrument the
obligation to deliver to the holders of the Series A Preferred Stock such shares
of stock and/or securities as, in accordance with the foregoing provisions, the
holders of the Series A Preferred Stock may be entitled to purchase.
(iii) If any adjustment under this subsection would
create a fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall be disregarded and the number
of shares of Common Stock issuable upon conversion shall be the next higher
number of shares.
(h) The Company will pay any and all issue or other taxes that
may be payable in respect of any issue or delivery of shares of Common Stock on
conversion of shares of Series A Preferred Stock pursuant hereto. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue or delivery of Common Stock in a name
other than that in which the shares of Series A Preferred Stock so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Company the amount of such tax,
or has established, to the satisfaction of the Company, that such tax has been
paid.
SECTION 4. Status of Converted Shares. In the event any shares of
Series A Preferred Stock shall be converted as contemplated by this Certificate
of Designation, the shares so converted shall be canceled, shall return to the
status of authorized but unissued preferred stock, par value $0.10 per share, of
the Company, of no designated class or series, and shall not be issuable by the
Company as Series A Preferred Stock.
SECTION 5. Voting Rights. (a) Except as otherwise specifically provided
by the Business Corporation Law of the State of New York or as otherwise
provided herein, the holders of Series A Preferred Stock shall be entitled to
vote on any matters required or permitted to be submitted to the holders of
shares of Common Stock for their approval, and such holders of shares of Series
A Preferred Stock and holders of shares of Common Stock shall vote as a single
class, with the holders of shares of Series A Preferred Stock having the number
of votes to which they would be entitled if the Series A Preferred Stock were
converted into shares of Common Stock in accordance with the Conversion Formula.
(b) So long as Series A Preferred Stock is outstanding, the
Company shall not, without the affirmative vote or consent of the holders of at
least a majority (or such higher percentage, if any, as may then be required by
applicable law) of all outstanding shares of Series A Preferred Stock, voting
separately as a class, amend any provision of the Certificate of Incorporation
of the Company so as to change the preferences, conversion or other rights,
voting powers, restrictions or limitations as to dividends or other
distributions of the Series A Preferred Stock.
SECTION 6. Rank and Limitations of Preferred Stock. All shares of
Series A Preferred Stock shall rank equally with each other share of Series A
Preferred Stock and shall be identical in all respects.
<PAGE>
IN WITNESS WHEREOF, the undersigned hereby executes this Certificate of
Designation as of this 18th day of June, 1998.
SIRCO INTERNATIONAL CORP.
By: /s/ Joel Dupre
-----------------------------------
Name: Joel Dupre
Title: Chairman of the Board and
Chief Executive Officer
EXHIBIT 4.2
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of June 18, 1998, among SIRCO
INTERNATIONAL CORP., a New York corporation (the "Corporation"), and each of the
undersigned holders of issued and outstanding Series A Preferred Stock of the
Corporation (hereinafter collectively referred to as the "Shareholders" and each
individually referred to as a "Shareholder").
W I T N E S S E T H:
WHEREAS, on June 18, 1998, the Shareholders acquired an aggregate of
700 shares of Series A Preferred Stock (as defined in Section 1.01 of this
Agreement); and
WHEREAS, the Corporation and the Shareholders desire to restrict the
disposition by the Shareholders of the shares of Series A Preferred Stock issued
to the Shareholders and any shares of Common Stock (as defined in Section 1.01
of this Agreement) issuable upon conversion of such Series A Preferred Stock,
and to provide for the registration of such shares of Common Stock for offer and
sale under the Securities Act of 1933, as amended;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of the parties hereto, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. Whenever used in this Agreement, unless there is
something in the subject matter or context inconsistent herewith, the following
terms shall have the following respective meanings:
(a) "Agreement" shall mean this Shareholders' Agreement, any
agreement which is supplementary to or in amendment or confirmation of this
agreement, and any schedules hereto or thereto.
(b) "Common Stock" shall mean the Common Stock, par value $.10
per share, of the Corporation.
(c) "Disposition" shall have the meaning assigned in Section
2.01.
(d) "Person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a joint venture, limited
liability company, a trust, a foundation, any other organization or entity, a
government or any agency or political subdivision thereof.
(e) "Series A Preferred Stock" shall mean the Series A
Preferred Stock, par value $.10 per share, of the Corporation.
(f) "Shareholder" or "Shareholders" shall mean one or more of
the holders of Shares who have executed a counterpart of this Agreement and
their respective heirs, executors, legatees, distributees under the laws of
intestacy, administrators, trustees and legal representatives.
(g) "Shares" shall mean the shares of Series A Preferred
Stock, as well as: (i) any shares of the Corporation into which such shares then
authorized may be converted (including shares of Common Stock), reclassified,
redesignated, subdivided, consolidated or otherwise changed; (ii) any shares of
the Corporation or any successor or other body corporate which may be received
by the holders of such shares on a merger, amalgamation or other reorganization
of or including the Corporation; and (iii) any securities which may be issued as
a dividend on such shares.
1.02 Extended Meanings. Words importing the singular number include the
plural and vice versa, and words importing gender include all genders.
ARTICLE TWO
DISPOSITION OF SHARES; SHORT SALES
2.01 Restriction on Transfer of Shares.
For a period of twelve (12) months from the date of this
Agreement, no Shareholder may sell, assign, transfer, mortgage, alienate,
pledge, hypothecate, create or permit to exist a security interest in or lien
on, place in trust or in any other way encumber or otherwise dispose of (any of
the foregoing being herein referred to as a "Disposition") any Shares or any
interest therein without first obtaining the prior written consent of the
Corporation. The Corporation shall have no obligation to recognize or accede to
any Disposition by a Shareholder or to register any transfer of Shares by a
Shareholder on its books unless such Disposition is effected in accordance with
the terms and provision of this Section. No Person who purports to be a holder
of Shares acquired in violation of the terms and provisions of this Agreement
shall be entitled to any rights with respect to such Shares, including any
rights to vote such Shares, to convert such Shares, to receive any dividends
declared thereon, or to receive any notice with respect thereto under this
Agreement or otherwise.
2.02 Legend on Shares.
During the time that any Share is subject to the restrictions
on Disposition set forth in Section 2.01, the certificate representing such
Share owned of record by any Shareholder shall have stamped, typewritten or
printed thereon the following legend in addition to any legend required by
applicable federal or state securities laws or regulations:
"The sale, transfer, pledge or hypothecation of the shares
represented by this Certificate is subject to and restricted by the
terms of a Shareholders' Agreement dated as of June 18, 1998, a copy of
which may be examined at the offices of the Corporation."
2.03 Restriction on Short Sales.
No Shareholder may, nor shall any Shareholder authorize,
direct or request any affiliate or related person to, prior to May 31, 1999,
effect a short sale of the Common Stock or take any other action with the intent
or purpose of lowering or otherwise adversely affecting the then current market
price of the Common Stock.
ARTICLE THREE
REGISTRATION RIGHTS
3.01 Certain Definitions. As used in this Article Three, the following
terms have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(c) "Holder" shall mean any registered holder, from time to
time, of Registrable Securities.
(d) "Initiating Holders" shall mean any Holder or Holders who,
in the aggregate, are Holders of Registrable Securities representing at least
fifty percent (50%) of the Registrable Securities then outstanding, and who
initiate a request pursuant to Section 3.02(a) below for the registration of all
or part of such Holder or Holders' Registrable Securities.
(e) "Register", "registered" and "registration" shall, except
with respect to paragraph 3.01 (d) hereof, refer to a registration effected by
preparing and filing a registration statement with the Commission in compliance
with the Securities Act and applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such registration statement by
the Commission.
(f) "Registrable Securities" shall mean shares of Common Stock
issued or issuable upon the conversion of Series A Preferred Stock; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities have been disposed of in accordance with such registration statement,
(ii) such securities shall have been sold as permitted by Rule 144 (or any
successor provision) under the Securities Act, (iii) such securities shall be
eligible for sale pursuant to Rule 144(k) (or any successor provision) under the
Securities Act as confirmed in a written opinion of counsel to the Corporation
addressed to the Ho1ders, (iv) such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Corporation and subsequent public
distribution of such securities shall not require registration of such
securities under the Securities Act, or (v) such securities shall have ceased to
be outstanding. For purposes of this Agreement, a Person will be deemed to be a
Holder of Registrable Securities whenever such Person has the unqualified right
to acquire such Registrable Securities (by conversion, redemption or otherwise,
but disregarding any legal restrictions upon the exercise of such right) whether
or not such acquisition has actually been effected.
(g) "Registration Expenses" shall mean all expenses incurred
by the Corporation in compliance with this Agreement, excluding underwriters'
discounts and commissions but including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Corporation, all blue sky fees and expenses, and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Corporation, which shall be paid in any
event by the Corporation).
(h) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
(i) "Selling Expenses" shall mean all underwriting discounts
and commissions applicable to the sale of Registrable Securities; provided,
however, that if Company Shares, Additional Shares or Other Securities are sold
in the same registration statement as Registrable Securities, the Selling
Expenses shall equal the product of (A) the underwriting discounts and
commissions applicable to the offering pursuant to such registration statement
multiplied by (B), a fraction, the numerator of which is the fair market value
of the Registrable Securities being sold thereunder and the denominator of which
is the fair market value of the Registrable Securities, Company Shares,
Additional Shares and Other Securities being sold thereunder.
(j) Certain Other Defined Terms. The following terms shall
have the meanings ascribed to them in the sections indicated below:
Defined Term Section
------------ -------
Additional Shares 3.02(b)
Company Offering 3.02(a)
Company Shares 3.02(b)
Demand Registration Notice 3.02(a)
Indemnified Party 3.06(c)
Indemnifying Party 3.06(c)
Other Securities 3.03(a)
Other Shareholders 3.02(e)
3.02. Requested Registration.
(a) Request for Registration. At any time after May 31, 1999,
upon written notice from Initiating Holders requesting that the Corporation
effect any registration with respect to all or part of the Registrable
Securities held by such Initiating Holders, the Corporation shall:
(i) promptly give written notice of the proposed
registration to all other Holders (the "Demand Registration Notice")
and
(ii) as soon as practicable but not later than sixty
(60) days after receipt of the request from the Initiating Holders, use
its best efforts and take all appropriate action to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualification under the blue sky or other state securities laws
requested by Initiating Holders and appropriate compliance with
applicable regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and distribution
of all or such portion of such Registrable Securities as are specified
in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are
specified in a written request given within thirty (30) days after
receipt of the Demand Registration Notice; provided, however, that:
(A) in no event shall the Corporation be required to
effect, or to take any action to effect, any such registration
pursuant to this Section 3.02(a) after the first such
registration pursuant to this Section 3.02(a) has been
declared or ordered effective;
(B) if, upon receipt of a registration request
pursuant to this Section 3.02(a), the Corporation is advised
in writing by a nationally recognized independent investment
banking firm selected by the Corporation to act as lead
underwriter in connection with a public offering of securities
by the Corporation (a "Company Offering") that, in such firm's
opinion, a registration at the time and on the terms requested
would materially adversely affect such Company Offering that
had been contemplated by the Corporation prior to the notice
of the Initiating Holders, the Corporation shall not be
required to effect a registration pursuant to this Section
3.02(a) until the earliest of (1) three months after the
completion of such Company Offering, (2) the termination of
any "black out" period, if any, required by the underwriters
to be applicable to any Holder who has requested to have any
Registrable Securities registered in connection with such
registration, (3) promptly after abandonment of such Company
Offering or (4) four months after the date of written notice
from the Initiating Holders demanding registration pursuant to
this Section 3.02(a); and
(C) if, while a registration request is pending
pursuant to this Section 3.02(a), the Corporation determines,
in the good faith judgment of the Board of Directors of the
Corporation, with the advice of counsel, that the filing of a
registration statement would require the disclosure of
nonpublic material information the disclosure of which would
have a material adverse effect on the Corporation or would
otherwise adversely affect a material financing, acquisition,
disposition, merger or other significant transaction, the
Corporation shall deliver a certificate to such effect signed
by its Chief Executive Officer or any Vice President to the
proposed selling Holders and the Corporation shall not be
required to effect a registration pursuant to this Section
3.02(a) until the earlier of (1) the date upon which such
material information is disclosed to the public or ceases to
be material or (2) 90 days after the Corporation makes such
good faith determination.
(b) Additional Shares to be Included. The registration
statement filed pursuant to the request of the Initiating Holders may, subject
to the provisions of Section 3.02(e) below, include (i) other securities of the
Corporation (the "Additional Shares") which are held by officers or directors of
the Corporation or which are held by Persons who, by virtue of agreements with
the Corporation, are entitled to include their securities with the Holders
referred to in Section 3.02(a) above, and (ii) securities of the Corporation
being sold for the account of the Corporation (the "Company Shares").
(c) Withdrawal of Registration. If the Initiating Holders
inform the Corporation by written notice that they are withdrawing their
registration request made pursuant to Section 3.02(a) above and the Initiating
Holders pay all of the Corporation's out-of-pocket expenses with respect to such
registration incurred to the date of such notice, then the registration
statement need not be filed and all efforts pursuant to this Agreement will not
count as a registration (or an exercise of rights) under this Section 3.02;
provided, however, that if the Corporation decides to go forward with the
registration on its own behalf, or on behalf of any other shareholders, then the
Initiating Holders shall not be required to pay any of the Corporation's
out-of-pocket expenses and such registration will not count as a registration
(or an exercise of rights) under this Section 3.02.
(d) Underwriting.
(i) If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Corporation as a part of their
request made pursuant to this Section 3.02 and the Corporation shall
include such information in the Demand Registration Notice, and such
Demand Registration Notice shall also state that inclusion of each
Holder's Registrable Securities in the registration to which such
Demand Registration Notice applies shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent
provided herein and subject to the limitations provided herein. A
Holder may elect to include in such underwriting all or a part of such
Holder's Registrable Securities.
(ii) If the Registrable Securities are to be
distributed by means of an underwriting, the Corporation shall
(together with all Holders, officers, directors and Other Shareholders
proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders.
(e) Limitations on Shares to be Included.
(i) Notwithstanding any other provision of this
Section 3.02, if the representative of the underwriters advises the
Corporation or the Initiating Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten or that
the inclusion of Additional Shares or Company Shares may adversely
affect the sale price (of the shares to be registered) that may be
obtained, first the Additional Shares shall be excluded from such
registration to the extent so required by such limitation, then the
Company Shares shall be excluded from such registration to the extent
so required by such limitation, and if a limitation of the number of
shares is still required, the number of shares that may be included in
the registration and underwriting shall be allocated among all Holders
in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities which they have requested to be included in such
registration statement.
(ii) If the Corporation or any Holder of Registrable
Securities, or holder of Additional Shares (collectively, the "Other
Shareholders") who has requested inclusion in such registration as
provided above disapproves of the terms of any such underwriting, such
Person may elect to withdraw such Person's Registrable Securities,
Additional Shares or Company Shares therefrom by written notice to the
Corporation, the underwriter and the Initiating Holders. If the
withdrawal of any Registrable Securities, Additional Shares or Company
Shares would allow, within the marketing limitations set forth above,
the inclusion in the underwriting of a greater number of shares of
Registrable Securities, Company Shares or Additional Shares, then, to
the extent practicable and without delaying the underwriting, the
Corporation shall offer first to the Holders and second to the Other
Shareholders an opportunity to include additional shares of Registrable
Securities, Company Shares or Additional Shares, as the case may be, in
the proportions discussed above.
3.03 Company Registration.
(a) If the Corporation shall determine to register any of its
shares of Common Stock or other securities ("Other Securities") issued by it
having terms substantially similar to the Common Stock, either for its own
account or the account of a security holder or holders exercising any demand
registration rights, other than a registration relating solely to employee
benefit plans or a registration relating solely to a Rule 145 (under the
Securities Act) transaction, the Corporation will:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the
Corporation intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests made by any Holder within twenty (20)
days after receipt of the written notice from the Corporation described
in clause (a) above, except as set forth in Section 3.03(c) below. Such
written request may specify all or a part of a Holder's Registrable
Securities.
(b) Underwriting. If the registration of which the Corporation
gives notice is for a registered public offering involving an underwriting, the
Corporation shall so advise the Holders as a part of the written notice given
pursuant to Section 3.03(a)(i). The right of any Holder to require registration
pursuant to this Section 3.03 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Corporation and any officers, directors or Other Shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Corporation.
(c) Limitations on Shares to be Included. With respect to
Company registrations, notwithstanding any other provision of this Section 3.03,
if the representative of the underwriters advises the Corporation in writing
that marketing factors require a limitation or elimination on the number of
shares to be underwritten, the representative may (subject to the allocation
priority set forth below) limit the number of Registrable Securities to be
included in the registration and underwriting. The Company shall so advise all
Holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated as follows: first, to the Corporation for securities being
sold for its own account or to the security holder or holders exercising any
demand registration rights on such security holder or holders' account, second,
among all such Holders requesting registration, and third, among all Other
Shareholders requesting registration pursuant to the exercise of piggyback
registration rights, in each case in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities or Additional Shares which they
had requested to be included in such registration at the time of filing the
registration statement. If any Holder of Registrable Securities or any Other
Shareholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Corporation and the underwriter.
(d) Withdrawal from Registration. Any Holder requesting
inclusion of Registrable Securities pursuant to this Section 3.03 may, at any
time prior to the effective date of the registration statement relating to such
registration, revoke such request by delivering written notice of such
revocation to the Corporation; provided, however, that if the Corporation, in
consultation with its financial and legal advisors, determines that such
revocation would materially delay the registration or otherwise require a
recirculation of the prospectus contained in the registration statement, then
such Holder shall have no such right to revoke its request. If the withdrawal of
any Registrable Securities or Additional Shares would allow, within the
marketing limitations set forth above, the inclusion in the underwriting of a
greater number of shares of Registrable Securities or Additional Shares, then,
to the extent practicable and without delaying the underwriting, the Corporation
shall offer to the Holders and to the Other Shareholders an opportunity to
include additional shares of Registrable Securities or Additional Shares, as the
case may be, in the proportions discussed in Section 3.03(c) above.
(e) Termination or Withdrawal by Company. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 3.03 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration.
3.04 Expenses of Registration. All Registration Expenses incurred in
connection with the registration or qualification of, or compliance with, any
registration statement under Sections 3.02 and 3.03 of this Agreement shall be
borne by the Corporation. All Selling Expenses shall be borne pro rata by each
Holder in accordance with the number of shares sold.
3.05 Registration Procedures.
(a) In the case of each registration to be effected by Company
pursuant to this Agreement, the Corporation will keep each Holder advised in
writing as to the initiation of each registration and all amendments thereto and
as to the completion thereof, advise any such Holder, upon request, of the
progress of such proceedings, use its best efforts to effect the registration of
any Registrable Securities under the Securities Act, and will, at its expense:
(i) Prepare and file with the Commission a
registration statement covering such Registrable Securities and use its
best efforts to cause such registration statement to be declared
effective by the Commission and to keep such registration effective for
a period of three hundred sixty-five (365) days or until the Holder or
Holders have completed the distribution described in the registration
statement relating thereto, whichever first occurs; provided, however,
that the Corporation shall keep such registration effective for longer
than three hundred sixty-five (365) days if the costs and expenses
associated with such extended registration are borne entirely by the
selling Holders;
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement until
such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement;
(iii) Furnish to each seller of Registrable
Securities covered by such registration statement and each Holder two
conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, as such seller or Holder, as the case
may be, may reasonably request;
(iv) Promptly notify each seller of Registrable
Securities covered by such registration statement and each Holder at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or incomplete in the light
of the circumstances then existing, and at the request of any such
seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(v) Use its best efforts (A) to register or qualify
all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration statement shall reasonably request, (B) to keep such
registration or qualification in effect for so long as such
registration statement remains in effect and (C) to take any other
action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers; provided, however, that the
Corporation shall not for any such purpose be required to (1) qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this clause (v) be
obligated to be so qualified, (2) subject itself to taxation in any
such jurisdiction or (3) consent to general service of process in any
such jurisdiction; and provided, further, however, that the Corporation
shall not be required to register or qualify Registrable Securities
covered by a registration statement pursuant to Section 3.03 hereof in
any jurisdiction that is not included in the list provided as part of
the written notice given pursuant to Section 3.03(a)(i) unless the
Corporation is registering other securities covered by such
registration statement in such jurisdiction;
(vi) Use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Corporation and counsel to the seller or sellers of Registrable
Securities to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vii) Use its best efforts to list all such
Registrable Securities registered in such registration on each
securities exchange or automated quotation system on which the Common
Stock of the Corporation is then listed;
(viii) Provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities and a CUSIP number
for all such Registrable Securities, in each case not later than the
effective date of such registration;
(ix) Make available for inspection by any seller of
Registrable Securities and each Holder, any underwriter participating
in any disposition pursuant to such registration statement, and any
attorney or accountant retained by any such seller, Holder or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Corporation, and cause the
Corporation's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, Holder, underwriter, attorney or accountant in connection with
such registration statement, which information shall be subject to
reasonable restrictions concerning confidentiality and non-disclosure;
(x) Furnish to each selling Holder upon request a
signed counterpart, addressed to the selling Holder, of:
(A) an opinion of counsel for the
Corporation, dated the effective date of the registration
statement and in form reasonably acceptable to the Corporation
and such Holder, and
(B) "comfort" letters signed by the
Corporation's independent public accountants who have examined
and reported on the Corporation's financial statements
included in the registration statement, to the extent
permitted by the standards of the American Institute of
Certified Public Accountants,
in the case of (A) and (B) covering substantially the same
matters with respect to the registration statement (and the
prospectus included therein) and in the case of the
accountants' "comfort" letters with respect to events
subsequent to the date of the financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' "comfort" letters delivered to the underwriters
in underwritten public offerings of securities;
(xi) Furnish to each selling Holder a copy of all
correspondence from or to the Commission in connection with any such
offering;
(xii) In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Securities included in
such registration statement for sale in any jurisdiction, the
Corporation will use its reasonable best efforts promptly to obtain the
withdrawal of such order; and
(xiii) Otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and, if
required, make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the
first month after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder.
(b) It shall be a condition precedent to the obligations of
the Corporation to take any action pursuant to this agreement that the Holders
proposing to register Registrable Securities shall furnish to the Corporation
such information regarding them, the Registrable Securities held by them, and
the intended method of distribution of such Registrable Securities as the
Corporation shall reasonably request and as shall be required in connection with
the action to be taken by the Corporation.
(c) In connection with the preparation and filing of each
registration statement under this Agreement, the Corporation will give the
Holders on whose behalf such Registrable Securities are to be registered and
their underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each such Holder such
access to the Corporation's books and records and such opportunities to discuss
the business of the Corporation with its officers, its counsel and the
independent public accountants who have certified the Corporation's financial
statements, as shall be necessary, in the opinion of such Holders or such
underwriters or their respective counsel, in order to conduct a reasonable and
diligent investigation within the meaning of the Securities Act. Without
limiting the foregoing, each registration statement, prospectus, amendment,
supplement or any other document filed with respect to a registration under this
Agreement shall be subject to review and reasonable approval by the Holders
registering Registrable Securities in such registration and by their counsel.
3.06 Indemnification.
(a) Indemnification by the Corporation. In the event of any
registration of any securities of the Corporation under the Securities Act, the
Corporation will indemnify and hold harmless each Holder, each of its officers,
directors, partners, employees, agents, attorneys and consultants and each
Person controlling such Holder, and each underwriter, if any, and each Person
who controls any underwriter, against all claims, losses, damages and
liabilities, joint and several (or actions, proceedings or settlements in
respect thereof) arising out of or based upon any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based upon any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Corporation of the Securities
Act or any rule or regulation thereunder applicable to the Corporation and
relating to action or inaction required of the Corporation in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder, each of its officers, directors and partners, and each Person
controlling such Holder, each such underwriter and each Person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability or action; provided, however, that the Corporation will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission made in reliance upon and based upon written information furnished to
the Corporation by such Holder or underwriter and expressly stated to be
specifically for use therein.
(b) Indemnification by the Holders. Each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
severally and not jointly, indemnify the Corporation, each of its directors and
officers and each underwriter, if any, of the Corporation's securities covered
by such a registration statement, each Person who controls the Corporation
(other than such Holder) or such underwriter within the meaning of the
Securities Act and the rules and regulations thereunder, each other such Holder
and each of their officers, directors and partners, and each Person controlling
such Holder or other stockholder, against all claims, losses, damages, expenses
and liabilities (or actions in respect thereof) arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Corporation, each of its directors and
officers, each underwriter or control Person, each other Holder and each of
their officers, directors and partners and each Person controlling such Holder
or other shareholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Corporation by such Holder and expressly stated to be
specifically for use therein; provided, however, that the liability of any such
Holder under this Section 3.06(b) shall be limited to the amount of proceeds
received by such Holder in the offering giving rise to such liability.
(c) Notices of Claims, Procedures etc.Each party entitled to
indemnification under this Section 3.06 (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;
provided, that counsel for the Indemnifying Party who shall conduct the defense
of such claim or any litigation resulting therefrom shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense; provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 3.06 unless such failure is prejudicial to the
ability of the Indemnifying Party to defend such claim or action.
Notwithstanding the foregoing, such Indemnified Party shall have the right to
employ its own counsel in any such litigation, proceeding or other action if (i)
the employment of such counsel has been authorized by the Indemnifying Party, in
its sole and absolute discretion, or (ii) the named parties in any such claims
(including any impleaded parties) include any such Indemnified Party and the
Indemnified Party and the Indemnifying Party shall have been advised in writing
(in suitable detail) by counsel to the Indemnified Party either (A) that there
may be one or more legal defenses available to such Indemnified Party which are
different from or additional to those available to the Indemnifying Party, or
(B) that there is a conflict of interest by virtue of the Indemnified Party and
the Indemnifying Party having common counsel, in any of which events, the legal
fees and expenses of a single counsel for all Indemnified Parties with respect
to each such claim, defense thereof, or counterclaims thereto, shall be borne by
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement (1) which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation, or (2) which requires action other than the payment of money by the
Indemnifying Party. Each Indemnified Party shall cooperate to the extent
reasonably required and furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) Contribution. If the indemnification provided for in this
Section 3.06 shall for any reason be held by a court to be unavailable to an
Indemnified Party under Section 3.06(a) or 3.06(b) hereof in respect of any
loss, claim, damage or liability, or any action in respect thereof, then, in
lieu of the amount paid or payable under Section 3.06(a) or 3.06(b), the
Indemnified Party and the Indemnifying Party under Section 3.06(a) or 3.06(b)
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Corporation and the prospective sellers of Registrable
Securities covered by the registration statement which resulted in such loss,
claim, damage or liability, or action or proceeding in respect thereof, with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action or proceeding in respect thereof, as well as any
other relevant equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as shall
be appropriate to reflect the relative benefits received by the Corporation and
such prospective sellers from the offering of the securities covered by such
registration statement; provided, that for purposes of this clause (ii), the
relative benefits received by the prospective sellers shall be deemed not to
exceed the amount of proceeds received by such prospective sellers. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. Such prospective sellers'
obligations to contribute as provided in this Section 3.06(d) are several in
proportion to the relative value of their respective Registrable Securities
covered by such registration statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
3.07 Information by Holder. Each Holder of Registrable Securities shall
furnish to the Corporation such information regarding such Holder and the
distribution proposed by such Holder as the Corporation may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
3.08 Transfer or Assignment of Registration Rights. The rights with
respect to any Registrable Securities to cause the Corporation to register such
securities granted to a Holder by the Corporation under this Agreement may be
transferred or assigned by a stockholder, in whole or in part, to a transferee
or assignee of any Registrable Securities and, in such case, the Corporation
shall be given written notice stating the name and address of said transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned.
3.09 Rule 144 and Rule 144A. At such time as the Corporation becomes
subject to the reporting requirements of the Exchange Act, the Corporation shall
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder,
and will take all actions reasonably necessary to enable holders of Registrable
Securities to sell such securities without registration under the Securities Act
within the limitation of the provisions of (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, (b) Rule 144A under the
Securities Act, as such Rule may be amended from time to time, if applicable or
(c) any similar rules or regulations hereafter adopted by the Commission. Upon
the request of any holder of Registrable Securities, the Corporation will
deliver to such holder a written statement as to whether it has complied with
such requirements.
3.10 Specific Performance. Each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
3.11 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement.
Without limiting the generality of the foregoing, the Corporation will not
hereafter enter into any agreement with respect to its securities which grants,
or modify any existing agreement with respect to its securities to grant, to the
holder of its securities in connection with an incidental registration of such
securities equal or higher priority to the rights granted to the Investors under
Section 3.03 of this Agreement.
ARTICLE FOUR
MISCELLANEOUS
4.01 Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given at the time when delivered personally or when mailed
by certified mail, return receipt requested, addressed to the Corporation at 24
Richmond Hill Avenue, Stamford, Connecticut 06901, Attention: Chief Executive
Officer, with a copy to Eric M. Hellige, Esq., Pryor Cashman Sherman & Flynn
LLP, 410 Park Avenue, New York, New York 10022, and to the Shareholders at such
addresses as are set forth in the stock registration books of the Corporation,
or to such changed address as such party may have fixed by notice; provided,
however, that any notice of change of address shall be effective only upon
receipt by the party to be charged therewith.
4.02 Waiver, Amendment or Modification. No waiver, amendment or
modification of this Agreement, or of any covenant, condition or limitation
herein contained, shall be valid except with respect to the specific instance
and unless evidenced by a writing duly executed by the party to be charged
therewith, and no evidence of any waiver, amendment or modification shall be
offered or received in evidence in any proceeding, arbitration or litigation
between the parties hereto arising out of or affecting this Agreement or the
rights or obligations of any party hereunder, unless such waiver, amendment or
modification is in writing, duly executed as aforesaid. Notwithstanding the
foregoing, the provisions of Article Three hereof may be waived, amended or
modified in any manner by a written instrument executed by the Corporation and
the Shareholders of a majority of the Registrable Securities then held by the
Shareholders (and, in the case of any waiver, amendment or modification which
adversely affects any Shareholders of Registrable Securities differently from
any of the other Shareholders of Registrable Securities, the written consent of
such Shareholders).
4.03 Governing Law. This Agreement is made (irrespective of the place
where it is signed) in, and shall be governed, construed and controlled by and
under the laws of, the State of New York.
4.04 Specific Performance and Injunctive Relief. As the parties hereto
agree that the non-defaulting parties hereto will be irreparably damaged and
will not have an adequate remedy at law in the event of a breach or threatened
breach hereof, this Agreement shall be specifically enforceable in a court of
equity by a decree of specific performance. Should any dispute arise concerning
the sale or other disposition of any Shares, or concerning any other provision
of this Agreement, appropriate injunctive relief may be applied for and granted
in connection therewith. Such remedies shall, however, be cumulative and not
exclusive, and shall be in addition to any and all other remedies which any of
the parties hereto may have.
4.05 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and any Person to whom Shares may be
transferred without violation of the provisions of this Agreement, and their
respective heirs, executors, administrators, representatives, successors and
assigns.
4.06 Captions. The captions and paragraph headings used in this
Agreement are for convenience only, and shall not in any manner affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
4.07 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.
4.08 Sole and Entire Agreement. This Agreement constitutes the sole and
entire agreement and understanding between the parties hereto as to the subject
matter hereof, and supersedes all prior discussions, agreements and
understandings of every kind and nature between them with respect to such
subject matter. The parties hereto acknowledge and agree that none of them has
made any representations except such as are specifically set forth herein, and
that any statement or representations that may heretofore have been made by any
of them are void and of no effect, and that none of the parties has relied
thereon in connection with his dealings with regard to this Agreement and the
subject matter hereof. The parties further acknowledge that each of them has
relied on his own judgment in entering into this Agreement.
4.09 Severability. If any provision, or any portion of any provision,
of this Agreement or the application of any provision hereof or portion thereof
to any Person or circumstance is held void or voidable, the remainder of this
Agreement and the application of such provision or portion thereof to other
persons or circumstances shall nevertheless be binding with the same force and
effect as though the void or voidable part or application were deleted, unless,
however, such holding shall substantially impair the benefit of the remaining
portion of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Shareholders have hereunto set their hands, and
the Corporation has caused this Agreement to be executed by an officer hereunto
duly authorized as of the date first above written.
SIRCO INTERNATIONAL CORP.
By: /s/ Joel Dupre
-----------------------------------
Name: Joel Dupre
Title: Chairman of the Board and
Chief Executive Officer
SHAREHOLDERS:
/s/Walter Zipfel
---------------------------------------
WALTER ZIPFEL
/s/Eric M. Hellige
---------------------------------------
ERIC M. HELLIGE
EXHIBIT 4.3
[FORM OF]
WARRANT AGREEMENT
THIS AGREEMENT, made as of this 18th day of June 1998, by and between
SIRCO INTERNATIONAL CORP., having its principal office at 24 Richmond Hill
Avenue, Stamford, Connecticut 06901 (the "Company") and _______________________,
having its principal office at _________________________________________________
(the "Holder").
W I T N E S S E T H:
WHEREAS, the Company has agreed to transfer and deliver to the Holder a
warrant (the "Warrant") to purchase up to ______________ shares of the Company's
Common Stock, par value $.10 per share ("Common Stock").
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties agree as follows:
1. Grant of Warrant. Subject to all terms and conditions of this
Agreement, the Company hereby grants to the Holder the right to purchase up to
20,000 shares (the "Shares") of Common Stock at a purchase price of $4.00 per
share.
2. Expiration. The Warrant may not be exercised after June 30, 2001
(the "Expiration Date").
3. Exercise of Warrant. The Warrant may be exercised, in whole or in
part, at any time prior to the Expiration Date or the earlier termination of the
Warrant. If the Warrant is not exercised to the maximum extent permissible, it
shall be exercisable, in whole or in part, with respect to all Shares not so
purchased at any time prior to the Expiration Date or the earlier termination of
the Warrant.
4. Payment of Purchase Price Upon Exercise. The Warrant may be
exercised in whole or in part by the Holder by delivering or mailing to the
Company at its principal office, or such other place as the Company may
designate, written notice of exercise duly signed by the Holder. Such exercise
shall be effective upon (a) receipt of such written notice by the Company
pursuant to Section 5 hereof and (b) payment to the Company of the full purchase
price for the shares purchased in cash.
5. Issuance and Delivery. The Holder's written notice to the Company
shall state the number of Shares with respect to which the Warrant is being
exercised and specify a date, not less than five (5) or more than fifteen (15)
days after the date of the mailing of such notice, on which the Shares will be
taken and payment made therefor. On the date specified in the notice of
exercise, the Company shall deliver, or cause to be delivered, to the Holder (or
its representative, as the case may be) stock certificates for the number of
Shares with respect to which the Warrant is being exercised, against receipt of
payment therefor. Certificates evidencing the Shares issued upon exercise of the
Warrant may contain such legends reflecting any restrictions upon transfer of
the Shares evidenced thereby as in the opinion of counsel to the Company may be
necessary for the lawful and proper issuance of such certificates. Delivery of
the Shares may be made at the office of the Company or at the office of a
transfer agent appointed for the transfer of shares of Common Stock.
6. No Rights as a Shareholder. Neither the Holder nor its legal
representative shall be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any of the Shares, unless and until
certificates representing such Shares shall have been issued and delivered to
the Holder (or its legal representative) pursuant to the terms hereof.
7. Adjustment. (a) In case, prior to the expiration of the Warrant by
exercise or by its terms, the Company shall issue any shares of its Common Stock
as a stock dividend or subdivide the number of outstanding shares of Common
Stock into a greater number of shares, then, in either of such cases, the
purchase price per share of the Shares issuable upon exercise of the Warrant in
effect at the time of such action shall be proportionately reduced and the
number of Shares at that time purchasable pursuant to the Warrant shall be
proportionately increased; and conversely, in the event the Company shall
contract the number of outstanding shares of Common Stock by combining such
shares into a smaller number of shares, then, in such case, the purchase price
per share of the Shares issuable upon exercise of the Warrant in effect at the
time of such action shall be proportionately increased and the number of Shares
at that time purchasable pursuant to Warrant shall be proportionately decreased.
Any dividend paid or distributed upon the Common Stock in stock of any other
class of securities convertible into shares of Common Stock shall be treated as
a dividend paid in Common Stock to the extent that shares of Common Stock are
issuable upon the conversion thereof.
(b) In case, prior to the expiration of this Warrant by
exercise or by its terms, there shall be a recapitalization, whether by
reorganization, reclassification or otherwise of the capital of the Company, or
the Company or a successor corporation shall be consolidated or merge with or
convey all or substantially all of its or of any successor corporation's
property and assets to any other corporation or corporations (any such
corporation being included within the meaning of the term "successor
corporation" in the event of any consolidation or merger of any such corporation
with, or the sale of all or substantially all of the property of any such
corporation to, another corporation or corporations), in exchange for stock or
securities of a successor corporation, the Holder shall thereafter have the
right to purchase upon the terms and conditions and during the time specified in
this Warrant, in lieu of the Shares theretofore purchasable upon the exercise of
this Warrant, the kind and amount of shares of stock and other securities
receivable upon such recapitalization or consolidation, merger or conveyance by
a holder of the number of shares of Common Stock which the Holder might have
purchased immediately prior to such recapitalization or consolidation, merger or
conveyance.
8. Compliance with Law and Regulations. The Warrant and the obligation
of the Company to sell and deliver Shares hereunder shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any governmental or regulatory agency as may be required. The Company shall
not be required to issue or deliver any certificates for Shares prior to (i) the
listing of such Shares on any stock exchange on which the Common Stock may then
be listed and (ii) the completion of any registration or qualification of such
Shares under any federal or state law, or any rule or regulation of any
government body which the Board of Directors of the Company shall, in its sole
discretion, determine to be necessary or advisable. Moreover, the Warrant may
not be exercised if its exercise, or the receipt of Shares pursuant thereto,
would be contrary to applicable law.
9. Investment Representation. The Board of Directors of the Company may
require the Holder to furnish to the Company, prior to the issuance of any
Shares upon the exercise of the Warrant, an agreement (in such form as the Board
of Directors may specify) in which the Holder represents that the Shares
acquired by the Holder upon exercise are being acquired for investment and not
with a view to the sale or distribution thereof.
10. Notices. Any notice hereunder to the Company shall be addressed to
it at its offices, 24 Richmond Hill Avenue, Stamford, Connecticut 06901.
Attention: Mr. Joel Dupre, Chief Executive Officer, and any notice hereunder to
Holder shall be addressed to it at the address set forth in the introductory
paragraph hereof, subject to the right of either party to designate at any time
hereafter in writing some other address.
11. Governing Law. This Agreement shall be interpreted, and the rights
and liabilities of the parties hereto determined, in accordance with the
internal laws of the State of New York, without regard to the conflicts of law
principles thereof.
12. Counterparts. This Agreement may be executed in two counterparts
each of which shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have signed this Agreement as of
the date and year first above written.
SIRCO INTERNATIONAL CORP.
By: ________________________________
Name: Paul Riss
Title: Chief Financial Officer
[HOLDER]
By:________________________________
Name:
Title:
