EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and
entered into as of this 2nd day of February, 1998 by and among GRAHAM PACKAGING
HOLDINGS COMPANY, a Pennsylvania limited partnership (formerly known as Graham
Packaging Company, the "Partnership"); GPC CAPITAL CORP. II, a Delaware
corporation and a wholly-owned subsidiary of the Partnership (the "Company");
GRAHAM CAPITAL CORPORATION, a Pennsylvania corporation ("Capital"); GRAHAM
FAMILY GROWTH PARTNERSHIP, a Pennsylvania limited partnership ("Family
Growth"); BLACKSTONE CAPITAL PARTNERS III MERCHANT BANKING FUND L.P., a
Delaware limited partnership, BLACKSTONE OFFSHORE CAPITAL PARTNERS III L.P., a
Cayman Islands exempted limited partnership, and BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III L.P., a Delaware limited partnership (collectively, the
"Blackstone Funds"); BCP/GRAHAM HOLDINGS, L.L.C., a Delaware limited liability
company ("BCP"); BMP/GRAHAM HOLDINGS CORPORATION, a Delaware corporation
("BMP").
BACKGROUND
1. This Agreement is made pursuant to the Agreement and Plan
of Recapitalization, Redemption and Purchase dated as of December 18, 1997 by
and among the Partnership, Capital, Family Growth, Graham Engineering
Corporation ("Engineering"), Graham Recycling Corporation ("Recycling"), Graham
Packaging Corporation ("GP Corp"), Donald C. Graham ("DCG"), BCP and BMP (the
"Recapitalization Agreement"). The Blackstone Funds, BCP and BMP are
collectively referred to herein as "Blackstone," and Family Growth and Capital
are collectively referred to herein as the "Graham Partners."
2. After the date hereof, the Partnership may (i) transfer
all or substantially all of its assets and liabilities to the Company for the
purpose of effecting an initial public offering of shares of common stock
("Common Stock") of the Company pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and (ii) in connection therewith,
effect a dissolution of the Partnership and the distribution to its partners of
all of the shares of Common Stock held by the Partnership (the "IPO
Reorganization").
3. In order to induce BCP, BMP, Capital, Family Growth,
Engineering, Recycling, GP Corp and DCG to enter into the Recapitalization
Agreement, the Partnership and the Company have agreed to provide Blackstone,
Capital and Family Growth with the registration rights set forth in this
Agreement.
4. The execution of this Agreement by the Partnership is a
condition to the consummation of the transactions contemplated under the
Recapitalization Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained in this Agreement, the parties
hereto, intending to be legally bound, agree as follows:
1. CERTAIN DEFINITIONS.
In addition to the other terms defined in this Agreement, the
following terms shall have the following meanings, applicable to both the
singular and plural forms thereof:
"Business Day" means any day on which the New York Stock
Exchange ("NYSE") is open for trading.
"Closing Date" means February 2, 1998.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
"Holders" means Blackstone, Capital and Family Growth, for so
long as (and to the extent that) each owns any Registrable Securities, and each
of their respective successors, assigns, and direct and indirect transferees
who become registered owners of Registrable Securities or securities
exercisable, exchangeable or convertible into Registrable Securities in
accordance with the Partnership Agreement.
"IPO" means the first underwritten public offering pursuant
to an effective registration statement of the Company under the Securities Act
covering the offering and sale of Common Stock of the Company.
"Outstanding" means with respect to any securities as of any
date, all such securities theretofore issued, except any such securities
theretofore converted, exercised or canceled or held by the issuer or any
successor thereto (whether in its treasury or not) or any affiliate of the
issuer or any successor thereto. For purposes of this definition, Holders shall
not be considered affiliates of the issuer.
"Partnership Agreement" means the Fifth Amended and Restated
Agreement of Limited Partnership of the Partnership dated the date hereof, as
amended from time to time.
"Person" means an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business
trust, cooperative, association or other form of business organization, whether
or not regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
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"Registrable Security(ies)" means any shares of Common Stock
of the Company received by the Holders in the IPO Reorganization in respect of
(i) any partnership interests or other equity securities of the Partnership
held by the Holders on the date hereof under the Partnership Agreement and (ii)
any additional partnership interests or other equity securities of the
Partnership issued or issuable after the Closing Date in respect of any such
equity securities (or other equity securities issued in respect thereof) by way
of a dividend, distribution or split, in connection with a combination,
exchange, reorganization, recapitalization or reclassification of Partnership
securities, or pursuant to a merger, division, consolidation or other similar
business transaction or combination involving the Partnership; provided that:
as to any particular Registrable Securities, such securities shall cease to
constitute Registrable Securities (i) when a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of thereunder; or
(ii) when and to the extent such securities are permitted to be publicly sold
without limitation as to amount pursuant to Rule 144(k) (or any successor
provision to such Rule) under the Securities Act or are otherwise freely
transferrable to the public without further registration under the Securities
Act; or (iii) when such securities shall have ceased to be issued and
outstanding.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (i) the
fees, disbursements and expenses of the Company's counsel(s), accountants, and
experts in connection with the registration under the Securities Act of
Registrable Securities; (ii) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary prospectus
or final prospectus, any other offering document and amendments and supplements
thereto, and the mailing and delivering of copies thereof to the underwriters
and dealers, if any; (iii) the cost of printing or producing any agreement(s)
among underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements, and any other documents in connection with
the offering, sale or delivery of Registrable Securities to be disposed of;
(iv) any other expenses in connection with the qualification of Registrable
Securities for offer and sale under state securities laws, including the fees
and disbursements of counsel for the underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(v) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of Registrable
Securities to be disposed of and any blue sky registration or filing fees, and
(vi) the fees and expenses incurred in connection with the listing of
Registrable Securities on each securities exchange (or The NASDAQ National
Market) on which the securities of the Company of the same class are then
listed; provided, however, that Registration Expenses with respect to any
registration pursuant to this Agreement shall not include (x) expenses incurred
by any Holder in connection with any offering, including the fees and expenses
of counsel, accountants, and experts retained by such Holder (other than the
fees and expenses of one counsel for the Holders as and to the extent provided
in Section 11, or (y) any underwriting discounts or commissions attributable to
Registrable Securities.
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"SEC" means the United States Securities and Exchange
Commission, or such other federal agency at the time having the principal
responsibility for administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
"Trading Day" means a day on which the principal securities
exchange or stock market on which the applicable security is traded is open for
the transaction of business.
2. DEMAND REGISTRATION.
(a) (i) A Holder or Holders other than Blackstone ("Graham
Holders") may request (at any time after the Company completes an IPO) by
written notice delivered to the Company that the Company register under the
Securities Act all or any portion of the Registrable Securities then held by
such Graham Holder or Graham Holders (the "Requesting Graham Holders"),
representing in the aggregate not less than fifty percent (50%) of the
Registrable Securities held by the Graham Holders, for sale in the manner
specified in such notice (including, but not limited to, an underwritten public
offering). In each such case, such notice shall specify the number of
Registrable Securities for which registration is requested, the proposed manner
of disposition of such securities, and the minimum price per share at which the
Requesting Graham Holders would be willing to sell such securities in an
underwritten offering. The Company shall, within five (5) Business Days after
its receipt of any Requesting Graham Holders' notice under this Section
2(a)(i), give written notice of such request to all other Graham Holders and
afford them the opportunity of including in the requested registration
statement such of their Registrable Securities as they shall specify in a
written notice given to the Company within twenty (20) days after their receipt
of the Company's notice. Within ten (10) Business Days after the expiration of
such twenty (20) day period, the Company shall notify all Graham Holders
requesting registration of (A) the aggregate number of Registrable Securities
proposed to be registered by all Graham Holders, (B) the proposed filing date
of the registration statement, and (C) such other information concerning the
offering as any Holder may have reasonably requested. If the Graham Holders of
a majority in aggregate amount of the Registrable Securities to be included in
such offering shall have requested that such offering be underwritten, the
managing underwriter for such offering shall be chosen by the Graham Holders of
a majority in aggregate amount of the Registrable Securities being registered,
with the consent of the Company, which consent shall not be unreasonably
withheld, not less than thirty (30) days prior to the proposed filing date
stated in the Company's notice, and the Company shall thereupon promptly notify
such Graham Holders as to the identity of the managing underwriter, if any, for
the offering. On or before the 30th day prior to such anticipated filing date,
any Graham Holder may give written notice to the Company and the managing
underwriter specifying either that (A) Registrable Securities of such Graham
Holder are to be included in the underwriting, on the same terms and conditions
as the securities otherwise being sold through the underwriters under such
registration or (B) such Registrable Securities are to be registered pursuant
to such registration statement and
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sold in the open market without any underwriting, on terms and conditions
comparable to those normally applicable to offerings in reasonably similar
circumstances, regardless of the method of disposition originally specified in
Holder's request for registration.
(ii) Blackstone and its affiliates may request at any
time, and from time to time, that the Company register under the Securities Act
all or any portion of the Registrable Securities held by them for sale by
written notice delivered to the Company in the manner specified in such notice
(including, but not limited to, an underwritten public offering). If such
manner is an underwritten public offering, the managing underwriter shall be
selected by Blackstone.
(iii) The Company shall use all commercially
reasonable efforts to file with the SEC within eighty (80) days (thirty (30)
days if the Company may use a Registration Statement on Form S-3 to register
such Registrable Securities) after the Company's receipt of the initial
Requesting Graham Holders' or Blackstone's written notice pursuant to Section
2(a)(i) or (ii), a registration statement for the public offering and sale, in
accordance with the method of disposition specified by such Holders, of the
number of Registrable Securities specified in such notice, and thereafter use
all commercially reasonable efforts to cause such registration statement to
become effective within sixty (60) days after its filing. Such registration
statement may be on Form S-1 or another appropriate form (including Form S-3)
that the Company is eligible to use and that is reasonably acceptable to the
managing underwriter.
(iv) The Company shall not have any obligation
hereunder (A) to permit or participate in more than two offerings pursuant to
this Section 2(a)(i), except as and to the extent provided by Section 2(a)(vi)
or Section 7(b), or (B), except in connection with any one registration
pursuant to Section 2(a)(vi), to register any Registrable Securities under
Section 2(a)(i) unless it shall have received requests from Holders to register
at least five percent (5%) of the Outstanding Registrable Securities.
(v) If the Company is required to use all
commercially reasonable efforts to register Registrable Securities in a
registration initiated upon the demand of any Holder pursuant to Section
2(a)(i) or (ii) of this Agreement and the managing underwriters for such
offering advise that the inclusion of all securities sought to be registered
pursuant to Section 2 or 3 hereof may interfere with an orderly sale and
distribution of or may materially adversely affect the price of such offering,
then the Company will include in such offering (x) first, the aggregate number
of Registrable Securities requested to be included by the Holders pursuant to
Section 2(a)(i) or (ii), as the case may be, and Section 3 which the managing
underwriters advise will not likely have such effect, allocated pro rata based
on the number of securities duly requested to be included in such registration
and (y) second, all other securities requested to be included in such
registration.
(vi) If all of the Registrable Securities of the
Graham Holders requested to be included in any registration pursuant to Section
2(a)(i) are not included in such registration as a result of the inclusion of
any Registrable Securities in such registration pursuant to Section 3, the
Graham Holders shall have one additional registration right under Section
2(a)(i).
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(b) Notwithstanding any other provision of this Agreement,
the Company shall have the right to defer or suspend the filing or
effectiveness of a registration statement relating to any registration
requested under Section 2(a) for a reasonable period of time not to exceed 90
days if a prior registration statement of the Company for an underwritten,
primary public offering by the Company of its securities was declared effective
by the SEC less than 120 days prior to the anticipated effective date of the
requested registration.
(c) No registration of Registrable Securities under this
Article 2 shall relieve the Company of its obligation (if any) to effect
registrations of Registrable Securities pursuant to Article 3.
3. INCIDENTAL REGISTRATION.
(a) Until all securities subject to this Agreement have
ceased to be Registrable Securities, if the Company proposes, including
pursuant to Article 2 hereof, to register any equity securities of the Company
(collectively, "Other Securities") for public sale under the Securities Act
(whether proposed to be offered for sale by the Company or by any other Person)
on a form and in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will give prompt
written notice (which notice shall specify the intended method or methods of
disposition) to the Holders of its intention to do so, and upon the written
request of any Holder delivered to the Company within five (5) Business Days
after the giving of any such notice (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder) the Company
will use all commercially reasonable efforts to effect, in connection with the
registration of the Other Securities, the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register by the Holders; provided, however, that:
(i) if, at any time after giving such written notice
of its intention to register Other Securities and prior to the effective date
of the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such Other Securities,
the Company may, at its election, give written notice of such determination to
the Holders requesting registration and thereupon the Company shall be relieved
of its obligation to register such Registrable Securities in connection with
the registration of such Other Securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection therewith as
provided in Article 11), without prejudice, however, to the rights (if any) of
the Holders to request that such registration be effected as a registration
under Article 2; and
(ii) the Company will not be required to effect any
registration of Registrable Securities pursuant to this Article 3 if the
Company shall have been advised (with a copy to the Holders requesting
registration if such notice is in writing) by a nationally recognized
investment banking firm (which may be the managing underwriter for the
offering) selected by the Company that, in such firm's opinion, a registration
of Registrable Securities at that time may interfere with an orderly sale and
distribution of the securities being sold in such offering or materially and
adversely affect the price of such securities; provided, however, that if an
offering of some but not all of the Registrable Securities requested to be
registered by the Holders and all other Persons having rights to include
securities held by them in such registration
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would not adversely affect the distribution or price of the securities to be
sold in the offering in the opinion of such firm or are included in such
offering notwithstanding any such opinion, then the Company will include in
such offering: (x) first, the Other Securities (other than securities requested
to be registered pursuant to Section 2), (y) second, the Registrable Securities
requested to be registered pursuant to Section 2 and 3, allocated pro rata
among such Holders based on the number of securities duly requested to be
included therein by each such Holder and (z) third, all other securities
requested to be included in such registration; and
(iii) The Company shall not be required to give
notice of, or effect any registration of Registrable Securities under this
Article 3 incidental to, the registration of any of its securities in
connection with mergers, consolidations, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock options or other
employee benefit or compensation plans.
(iv) Notwithstanding anything to the contrary in
this Section 3, the Graham Holders shall not have the right to have any of
their Registrable Securities registered pursuant to this Section 3 in
connection with the IPO unless Blackstone is registering any of its Registrable
Securities in the IPO.
(b) No registration of Registrable Securities effected under
this Article 3 shall relieve the Company of its obligations (if any) to effect
registrations of Registrable Securities pursuant to Article 2.
4. HOLDBACKS AND OTHER RESTRICTIONS.
(a) Each Holder hereby covenants and agrees with the Company
that such Holder shall not effect, if requested by the managing underwriters in
an underwritten offering that includes such Holder's Registrable Securities,
any public sale or distribution of equity securities of the Company, including
a sale pursuant to Rule 144(k) under the Securities Act (except pursuant to
this Agreement) during the ten (10) day period prior to, and during the ninety
(90) day period (or such longer period of not more than one hundred eighty
(180) days if such longer period is also required of the Company and all other
Persons having securities included in such registration) beginning on, the
effective date of the registration statement relating to the underwritten
offering of equity securities of the Company, to the extent timely notified in
writing by the Company or the managing underwriters.
(b) The Company covenants and agrees with the Holders not to
effect any public or private sale or distribution of equity securities of the
Company (other than distributions pursuant to employee benefit plans) of its
securities, including a sale pursuant to Regulation D under the Securities Act
(or Section 4(2) thereof), during the ten (10) day period prior to, and during
the ninety (90) day period beginning with, the effective date of a registration
statement filed under Section 2(a) hereof, to the extent timely requested in
writing by the managing underwriters, if any, or, if there be none, by the
Holders of a majority in aggregate amount of the Registrable Securities
included on such registration statement for such registration, except pursuant
to registrations on Form S-4, Form S-8 or any successor forms.
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5. REGISTRATION PROCEDURES.
If and whenever the Company is required by the provisions of this
Agreement to use all commercially reasonable efforts to effect or cause a
registration as provided in this Agreement, the Company will:
(a) Use all commercially reasonable efforts to prepare and
file with the SEC, a registration statement within the time periods specified
herein, and use its commercially reasonable efforts to cause such registration
statement to become effective as promptly as practicable and to remain
effective under the Securities Act until the earlier of such time as all
securities covered thereby are no longer Registrable Securities or twelve (12)
months after such registration statement becomes effective with respect to
registrations pursuant to Section 2(a), in every case as any such period may be
extended pursuant to Section 5(h) or Article 7 hereto;
(b) Prepare and file with the SEC such amendments,
post-effective amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for such period of time required by Section
5(a) above, as such period may be extended pursuant to Section 5(h) or Article
7 hereto;
(c) Comply in all material respects with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such registration statement during the period during which any such
registration statement is required to be effective;
(d) Furnish to any Holder and any underwriter of Registrable
Securities, (i) such number of copies (including manually executed and
conformed copies) of such registration statement and of each amendment thereof
and supplement thereto (including all annexes, appendices, schedules and
exhibits), (ii) such number of copies of the prospectus, used in connection
with such registration statement (including each preliminary prospectus, any
summary prospectus and the final prospectus), and (iii) such number of copies
of other documents, in each case as such Holder or such underwriter may
reasonably request;
(e) Use all commercially reasonable efforts to register or
qualify all Registrable Securities covered by such registration statement under
the securities or "blue sky" laws of states of the United States as any Holder
or any underwriter shall reasonably request, and do any and all other acts and
things which may be reasonably requested by such Holder or such underwriter to
consummate the offering and disposition of Registrable Securities in such
jurisdictions; provided, however, that the Company shall not be required to
qualify generally to do business as a foreign corporation or as a dealer in
securities, subject itself to taxation, or consent to general service of
process in any jurisdiction wherein it is not then so qualified or subject;
(f) Use, as soon as practicable after the effectiveness of
the registration statement, commercially reasonable efforts to cause the
Registrable Securities covered by such registration statement to be registered
with, or approved by, such other United States public, governmental or
regulatory authorities, if any, as may be required in connection with the
disposition of such Registrable Securities;
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(g) Use its commercially reasonable best efforts to list the
securities covered by such registration statement on any securities exchange
(or if applicable, The NASDAQ National Market) on which any securities of the
Company is then listed, if the listing of such Registrable Securities are then
permitted under the applicable rules of such exchange (or if applicable, The
NASDAQ National Market);
(h) Notify each Holder as promptly as practicable and, if
requested by any Holder, confirm such notification in writing, (i) when a
prospectus or any prospectus supplement has been filed with the SEC, and, with
respect to a registration statement or any post-effective amendment thereto,
when the same has been declared effective by the SEC, (ii) of the issuance by
the SEC of any stop order or the coming to the Company's attention of the
initiation of any proceedings for such or a similar purpose, (iii) of the
receipt by the Company of any notification with respect to the suspension of
the qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) of the occurrence of any event which requires the making of any
changes to a registration statement or related prospectus so that such
documents will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (and the Company shall promptly prepare and furnish to each
Holder a reasonable number of copies of a supplemented or amended prospectus
such that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading), and (v) of the Company's determination
that the filing of a post-effective amendment to the Registration Statement
shall be necessary or appropriate. Upon the receipt of any notice from the
Company of the occurrence of any event of the kind described in clause (iv) or
(v) of this Section 5(h), the Holders shall forthwith discontinue any offer and
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until all Holders shall have received
copies of a supplemented or amended prospectus which is no longer defective
and, if so directed by the Company, shall deliver to the Company, at the
Company's expense, all copies (other than permanent file copies) of the
defective prospectus covering such Registrable Securities which are then in the
Holders' possession. If the Company shall provide any notice of the type
referred to in the preceding sentence, the period during which the registration
statements are required to be effective as set forth under Section 5(a) shall
be extended by the number of days from and including the date such notice is
provided, to and including the date when Holders shall have received copies of
the corrected prospectus; and
(i) Enter into such agreements and take such other
appropriate actions as are customary and reasonably necessary to expedite or
facilitate the disposition of such Registrable Securities, and in that regard,
deliver to the Holders such documents and certificates as may be reasonably
requested by any Holder of the Registrable Securities being sold or, as
applicable, the managing underwriters, to evidence the Company's compliance
with this Agreement including, without limitation, using all commercially
reasonable efforts to cause its independent accountants to deliver to the
Company (and to the Holders of Registrable Securities being sold in any
registration) an accountants' comfort letter substantially similar to that in
scope delivered in an underwritten public offering and covering audited and
interim financial statements included in the registration statement or, if such
letter can not be obtained through the exercise of all
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commercially reasonable efforts, cause its independent accountants to deliver
to the Company (and to the Holders of Registrable Securities being sold in any
registration) a comfort letter based on negotiated procedures providing comfort
with respect to the Company's financial statements included or incorporated by
reference in the registration statement at the highest level permitted to be
given by such accountants under the then applicable standards of the
Association of Independent Certified Accountants with respect to such
registration statement. In addition, the Company shall furnish to the Holders
of Registrable Securities being included in any registration hereunder an
opinion of counsel in substance and scope to that customarily delivered to
underwriters in public offerings.
6. UNDERWRITING.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration hereunder, the
Company will enter into and perform its obligations under an underwriting
agreement with the underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, customary provisions
relating to indemnities and contribution and the provision of opinions of
counsel and accountants' letters.
(b) If any registration pursuant to Article 3 hereof shall
involve, in whole or in part, an underwritten offering, the Company may require
Registrable Securities requested to be registered pursuant to Article 3 to be
included in such underwriting on the same terms and conditions as shall be
applicable to the securities being sold through underwriters under such
registration. In such case, each Holder requesting registration shall be a
party to any such underwriting agreement. Such agreement shall contain such
representations and warranties by the Holders requesting registration and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, provisions relating to indemnities and contribution.
(c) In any offering of Registrable Securities pursuant to a
registration hereunder, each Holder requesting registration shall also enter
into such additional or other agreements as may be customary in such
transactions, which agreements may contain, among other provisions, such
representations and warranties as the Company or the underwriters of such
offering may reasonably request (including, without limitation, those
concerning such Holder, its Registrable Securities, such Holder's intended plan
of distribution and any other information supplied by it to the Company for use
in such registration statement), and customary provisions relating to
indemnities and contribution.
7. INFORMATION BLACKOUT.
(a) Upon written notice from the Company to the Holders that
the Company has determined in good faith that sale of Registrable Securities
pursuant to the registration statement would require disclosure of non-public
material information not otherwise required to be disclosed under applicable
law (A) which disclosure would have a material adverse effect on the Company or
(B) relating to a material business transaction involving the Company (an
"Information Blackout"), the Company may postpone the filing of effectiveness
of any registration statement required hereunder and, if such registration
statement has become effective,
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the Company shall not be required to maintain the effectiveness of such
registration statement and all Holders shall suspend sales of Registrable
Securities pursuant to such registration statement, in each case, until the
earlier of:
(i) forty-five (45) days after the Company makes
such good faith determination, and
(ii) such time as the Company notifies the Holders
that such material information has been disclosed to the public or has
ceased to be material or that sales pursuant to such registration
statement may otherwise be resumed (the number of days from such
notice from the Company until the day when the Information Blackout
terminates hereunder is hereinafter called a "Blackout Period").
(b) Any delivery by the Company of notice of an Information
Blackout during the forty-five (45) days immediately following effectiveness of
any registration statement effected pursuant to Section 2(a) hereof shall give
the Holders of a majority in aggregate amount of Registrable Securities being
sold the right, by written notice to the Company within twenty (20) Business
Days after the end of such Blackout Period, to cancel such registration, in
which event the Graham Holders shall have one additional registration right
under Section 2(a)(i) hereof (a "Blackout Termination Right").
(c) If there is an Information Blackout and the cancellation
right, if any, pursuant to (b) above, is not available or exercised, the time
period set forth in clause (ii) of Section 5(a) shall be extended for a number
of days equal to the number of days in the Blackout Period.
(d) Notwithstanding the foregoing, there shall be no more
than two (2) Information Blackouts during the term of this Agreement and no
Blackout Period shall continue for more than forty-five (45) consecutive days.
8. RULE 144.
The Company shall use all commercially reasonable efforts to
take all actions necessary to comply with the filing requirements described in
Rule 144(c)(1) or any successor thereto so as to enable the Holders to sell
Registrable Securities without registration under the Securities Act. Upon the
written request of any Holder, the Company will deliver to such Holder a
written statement as to whether it has complied with the filing requirements
under Rule 144(c)(1) or any successor thereto.
9. PREPARATION; REASONABLE INVESTIGATION; INFORMATION.
In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act, (a) the Company will give the Holders and the underwriters, if any, and
their respective counsel and accountants, drafts of such registration statement
for their review and comment prior to filing and (during normal business hours
and subject to such reasonable limitations as the Company may impose to prevent
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disruption of its business) such reasonable and customary access to its books
and records and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the reasonable opinion of the
Holders of a majority in aggregate amount of the Registrable Securities being
registered and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act and (b) as a
condition precedent to including any Registrable Securities of any Holder in
any such registration, the Company may require such Holder to furnish the
Company such information regarding such Holder and the distribution of such
securities as the Company may from time to time reasonably request in writing
or as shall be required by law or the SEC in connection with any registration;
provided, however, that, upon the reasonable request of the supplier of any
such information, the recipient thereof shall enter into a confidentiality
agreement respecting such information in customary form for an underwritten
public offering.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, the Company shall indemnify and hold harmless
each Holder, its officers, directors and affiliates, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act ("Holder
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating any claims and
defending any actions, insofar as such losses, claims, damages, liabilities or
actions, shall arise out of, or should be based upon, any violation or alleged
violation by the Company of the Securities Act, or shall arise out of, or shall
be based upon, any untrue statement or alleged untrue statement of a material
fact contained in the registration statement (or in any preliminary or final
prospectus included therein) relating to the offering and sale of such
Registrable Securities, or any amendment thereof or supplement thereto, or in
any document incorporated by reference therein, 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; provided, that the
Company shall not be liable to any Holder Indemnitee in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information furnished to the Company in writing by or on
behalf of such Holder specifically for use in the preparation of the
registration statement (or in any preliminary or final prospectus included
therein), or any amendment thereof or supplement thereto. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Holder and shall survive the transfer of such securities. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Holder Indemnitee.
(b) In the case of each offering of Registrable Securities
made pursuant to this Agreement, each Holder, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and affiliates, and each
Person, if any, who controls any of the foregoing
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within the meaning of the Securities Act and (if requested by the underwriters)
each underwriter who participates in the offering and each Person, if any, who
controls any such underwriter within the meaning of the Securities Act (the
"Company Indemnitees"), from and against any and all claims, liabilities,
losses, damages, expenses and judgments, joint or several, to which they or any
of them may become subject, under the Securities Act or otherwise, including
any amount paid in settlement of any litigation commenced or threatened, and
shall promptly reimburse them, as and when incurred, for any legal or other
expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages, liabilities
or actions shall arise out of, or shall be based upon, any violation or alleged
violation by such Holder of the Securities Act, any blue sky laws, securities
laws or other applicable laws of any state or country in which the Registrable
Securities are offered and relating to action taken or action or inaction
required of such Holder in connection with such offering, or shall arise out
of, or shall be based upon, any untrue statement or alleged untrue statement of
a material fact contained in the registration statement (or in any preliminary
or final prospectus included therein) relating to the offering and sale of such
Registrable Securities or any amendment thereof or supplement thereto, 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, but
in each case only to the extent that such untrue statement is contained in, or
such fact is omitted from, information furnished in writing to the Company by
or on behalf of such Holder specifically for use in the preparation of such
registration statement (or in any preliminary or final prospectus included
therein). The liability of each Holder under such indemnity provision shall be
limited to an amount equal to the total net proceeds received by such Holder
from such offering. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company and shall
survive the transfer of such securities. The foregoing indemnity is in addition
to any liability which Holder may otherwise have to any Company Indemnitee.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to this Article 10, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing. Indemnification
provided for in Section 10(a) or (b) shall not be available to any person who
shall fail to give notice as provided in this Section 10(c) to the extent the
indemnifying party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was prejudiced by the failure to
give such notice, but the failure to give such notice shall not relieve the
indemnifying party for contribution or otherwise than on account of the
provision of Section 10(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing,
the indemnifying party shall pay as incurred the fees and expenses of one
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel, in the
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written opinion of such counsel, would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Holders of a majority of the
Registrable Securities held by such Holders in the case of parties indemnified
pursuant to Section 10(a) and by the Company in the case of parties indemnified
pursuant to Section 10(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgement for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Article 10 is
unavailable in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) in proportion as is appropriate
to reflect not only both the relative benefits received by such party (as
compared to the benefits received by all other parties) from the offering in
respect of which indemnity is sought, but also the relative fault of all
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by a party shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by it bear to the total amounts (including, in the case of any underwriter,
underwriting commission and discounts) received by each other party. Relative
fault 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 party and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 10(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity provided for hereunder shall not inure to
the benefit of any indemnified party to the extent that such indemnified party
failed to comply with the applicable prospectus delivery requirements of the
Securities Act as then applicable to the person asserting the loss, claim,
damage or liability for which indemnity is sought.
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11. EXPENSES.
In connection with any registration under this Agreement, the
Company shall pay all Registration Expenses. In addition, in connection with
each registration, the Company shall pay the reasonable fees and expenses of
one counsel to represent the interests of the Holders selling Registrable
Securities in such registration.
12. NOTICES.
Except as otherwise provided below, whenever it is provided
in this Agreement that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties hereto, or whenever any of the parties hereto desires to provide
to or serve upon the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person,
mailed by registered or certified mail (return receipt requested) or sent by
overnight courier service or via facsimile transmission (which is confirmed),
as follows:
(a) if to either Capital or Family Growth, to:
Graham Capital Corporation
1420 Sixth Avenue
York, PA 17403
Attn: William H. Kerlin, Jr.
Facsimile: (717) 848-5951
(b) if to Blackstone, BCP, BMP or IPO Corporation, to:
Blackstone Management Associates III LLC
c/o Blackstone Capital Partners III
Merchant Banking Fund LP
345 Park Avenue
New York, New York 10154
Attention: Howard A. Lipson
Facsimile: (212) 754-8703
The furnishing of any notice required hereunder may be waived
in writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration or other communication hereunder shall
be deemed to have been duly furnished or served on the party to which it is
addressed, in the case of delivery in person or by facsimile, on the date when
sent, in the case of overnight mail, on the day after it is sent and in all
other cases, five business days after it is sent. Failure or delay in
delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to the persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
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13. ENTIRE AGREEMENT.
This Agreement represents the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter; and this Agreement can be amended, supplemented or changed, and
any provision hereof can be waived or a departure from any provision hereof can
be consented to, only by a written instrument making specific reference to this
Agreement signed by the Company, Blackstone, the Graham Partners (or any entity
controlled by or is an affiliate of a Graham Partner as long as such entity
holds Registrable Securities) and the Holders of at least 50% of the
Registrable Securities then outstanding; provided that any amendment that
adversely affects the rights of any Holder must be signed by the adversely
affected Holder; provided further that any waiver must be signed by the party
entitled to the benefit of the term or matter being waived.
14. PARAGRAPH HEADINGS.
The paragraph headings contained in this Agreement are for
general reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
15. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of New York applicable to contracts to
be made, executed, delivered and performed wholly within such state and, in any
case, without regard to the conflicts of law principles of such state.
16. SEVERABILITY.
If at any time subsequent to the date hereof, any provision
of this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
17. EQUITABLE REMEDIES.
The parties hereto agree that irreparable harm would occur in
the event that any of the agreements and provisions of this Agreement were not
performed fully by the parties hereto in accordance with their specific terms
or conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining and quantifying the amount of damage that will be suffered by the
parties hereto in the event that this Agreement is not performed in accordance
with its terms or conditions or is otherwise breached. It is accordingly hereby
agreed that the parties hereto shall be entitled to an injunction or
injunctions to restrain, enjoin and prevent breaches of this Agreement by the
other parties and to enforce specifically the terms and provisions hereof in
any court of the
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United States or any state having jurisdiction, such remedy being in addition
to and not in lieu of, any other rights and remedies to which the other parties
are entitled to at law or in equity.
18. NO WAIVER.
The failure of any party at any time or times to require
performance of any provision hereof shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no breach of
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
19. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same original instrument.
20. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding
upon the successors, assigns and transferees of each of the parties hereto
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in
violation of the terms of the Partnership Agreement or applicable law. If any
transferee of any Holder shall acquire Registrable Securities prior to the IPO,
in any manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the rights and obligations of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement. Notwithstanding anything herein
to the contrary, if any transferee of any Holder shall acquire Registrable
Securities in any manner, whether by operation of law or otherwise, at any time
after the Company completes an IPO, then such Registrable Securities held by
such transferee shall not be held subject to, or have the rights set forth in,
this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written.
GRAHAM PACKAGING HOLDLINGS COMPANY
By: Graham Packaging Corporation,
its General Partner
By: /s/ William H. Kerlin, Jr.
--------------------------
Name: William H. Kerlin, Jr.
Title: Chief Executive Officer
GRAHAM CAPITAL CORPORATION
By:/s/ William H. Kerlin, Jr.
---------------------------
Name: William H. Kerlin, Jr.
Title: President
GRAHAM FAMILY GROWTH PARTNERSHIP
By: Graham Packaging Corporation,
its General Partner
By:/s/ William H. Kerlin Jr.
---------------------------
Name: William H. Kerlin, Jr.
Title: Chief Executive Officer
BLACKSTONE CAPITAL PARTNERS III
MERCHANT BANKING FUND L.P.
By: Blackstone Management Associates III LLC,
its General Partner
By:/s/ Howard A. Lipson
---------------------------
Name: Howard A. Lipson
Title: Member
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BLACKSTONE OFFSHORE CAPITAL
PARTNERS III L.P.
By: Blackstone Management Associates III LLC,
its General Partner
By: /s/ Howard A. Lipson
-----------------------
Name: Howard A. Lipson
Title: Member
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III L.P.
By: Blackstone Management Associates III LLC,
its General Partner
By: /s/ Howard A. Lipson
-----------------------
Name: Howard A. Lipson
Title: Member
GPC CAPITAL CORP. II
By: /s/ John E. Hamilton
-----------------------
Name: John E. Hamilton
Title:
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