EXHIBIT 10.10
EXECUTION COPY
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AMENDED AND RESTATED
REGISTRATION AND PARTICIPATION AGREEMENT
BY AND AMONG
RACI HOLDING, INC.
THE CLAYTON & DUBLIER PRIVATE EQUITY FUND IV LIMITED PARTNERSHIP
AND
BRUCKMANN, ROSSER, SHERRILL & CO. II, L.P.
Dated as of February 12, 2003
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Table of Contents
Page
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1. Background.................................................................1
2. Definitions................................................................3
3. Registration...............................................................7
3.1 Registration on Request...........................................7
3.2 Incidental Registration..........................................10
3.3 Registration Procedures..........................................12
3.4 Underwritten Offerings...........................................16
3.5 Preparation; Reasonable Investigation............................19
3.6 Other Registrations..............................................19
3.7 Indemnification..................................................20
3.8 No Other Registration Rights.....................................23
4. Participation Rights......................................................23
5. Take-Along Rights.........................................................25
5.1 Take-Along Notice................................................25
5.2 Conditions to Take-Along.........................................26
5.3 Remedies.........................................................26
5.4 Public Market....................................................27
6. Miscellaneous.............................................................27
6.1 Rule 144; Legended Securities; etc...............................27
6.2 Amendments and Waivers...........................................27
6.3 Nominees for Beneficial Owners...................................27
6.4 Successors, Assigns and Transferees..............................28
6.5 Notices..........................................................28
6.6 Descriptive Headings.............................................30
6.7 Governing Law....................................................30
6.8 Time of the Essence Computation of Time..........................30
6.9 Entire Agreement.................................................30
6.10 Counterparts.....................................................30
6.11 No Inconsistent Agreements.......................................30
6.12 Severability.....................................................30
6.13 Remedies; Attorneys' Fees........................................30
6.14 Stock Splits, etc................................................31
6.15 Term.............................................................31
6.16 No Third Party Beneficiaries.....................................31
6.17 Consent to Jurisdiction..........................................31
6.18 Waiver of Jury Trial.............................................31
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EXECUTION COPY
AMENDED AND RESTATED
REGISTRATION AND PARTICIPATION AGREEMENT
AMENDED AND RESTATED REGISTRATION AND PARTICIPATION AGREEMENT, dated as of
February 12 2003, among RACI Holding, Inc., a Delaware corporation (the
"Company"), The Clayton & Dubilier Private Equity Fund IV Limited Partnership, a
Connecticut limited partnership (the "C&D Fund") and Bruckmann, Rosser, Sherrill
& Co. II, L.P., a Delaware limited partnership (the "BRS Fund"), which amends
and restates the Registration and Participation Agreement, dated as of November
30, 1993 in its entirety.
1. Background.
(a) The Company, pursuant to a Stock Purchase Agreement, dated as of
November 30, 1993, between the Company and the C&D Fund, issued an aggregate
750,000 shares of Class A Common Stock to the C&D Fund in connection with the
acquisition by Remington Arms Company, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Remington") of certain businesses
pursuant to an Asset Purchase Agreement, dated as of November 24, 1993, with
E.I. du Pont de Nemours and Company, a Delaware corporation (the "Acquisition").
(b) In connection with the Acquisition, the Company and the C&D Fund
entered into a Registration and Participation Agreement, dated as of November
30, 1993 (the "Original Agreement").
(c) Pursuant to an Investment Agreement, dated as of December 19,
2002 (the "BRS Investment Agreement"), by and among the Company, the C&D Fund
and the BRS Fund, pursuant to which, among other things, the Company has issued
to the BRS Fund 135,954 shares of Class A Common Stock for a cash purchase price
equal to $220.31 per share (the "Share Purchase Price") for an aggregate
purchase price of 29,952,025 (the "BRS Investment").
(d) In connection with the Investment, the Company repurchased (the
"Repurchase") 722,981 of its outstanding shares of Class A Common Stock for a
combination of cash, senior notes of the Company with an interest rate of 12%
per annum (the "RACI A Senior Notes") and senior notes of Holding with an
interest rate of 15% per annum (the "RACI B Senior Notes", and together with the
RACI A Senior Notes, the "RACI Senior Notes").
(e) Following the consummation of the BRS Investment and the
Repurchase, the C&D Fund owns 28.8% and the BRS Fund owns 66.4% of the
outstanding shares of Class A Common Stock, and the C&D Fund owns all of the
RACI Senior Notes.
(f) The Company has issued and sold and may in the future issue or
sell shares of Class A Common Stock to certain Individual Investors pursuant to
appropriate forms of stock subscription agreements (the "Individual Investor
Stock Subscription Agreements") or
certain non-employee directors or other purchasers (the "Subsequent Purchasers")
pursuant to appropriate forms of stock subscription agreements (the "Director
Stock Subscription Agreements"), including (i) the Stock Subscriptions, dated as
of the date of this Agreement, each between the Company and an Affiliate of B.
Charles Ames, an existing director of the Company, for the issuance and sale to
the Affiliates of Mr. Ames of $803,250.20 of shares of Class A Common Stock at a
purchase price equal to the Share Purchase Price (the "Ames Investment"), (ii)
the Stock Subscription, dated as of the date of this Agreement, between the
Company and Julie Frist for the issuance and sale to Ms. Frist of $38,995 of
shares of Class A Common Stock at a purchase price equal to the Share Purchase
Price (the "Frist Investment"), (iii) the Stock Subscription, dated as of the
date of this Agreement, between the Company and Marilena Tibrea for the issuance
and sale to Ms. Tibrea of approximately $8,813 of shares of Class A Common Stock
at a purchase price equal to the Share Purchase Price (the "Tibrea Investment"),
and (iv) the Stock Subscription, dated as of the date of this Agreement, between
the Company and James Prall for the issuance and sale to Mr. Prall of $50,010.37
of shares of Class A Common Stock at a purchase price equal to the Share
Purchase Price (the "Prall Investment", and together with the Ames Investment,
the Frist Investment and the Tibrea Investment, the "Other Investments", and the
Stock Subscription Agreements for such Other Investments, the "Other Investment
Agreements"). The Company or the C&D Fund has issued or sold and, subject to
compliance with the terms of the Shareholders Agreement, the Company, the C&D
Fund and the BRS Fund may in the future issue or sell shares of Class A Common
Stock to certain key executives and employees of the Company or one of its
subsidiaries ("Subsequent Management Purchasers") or, subject to compliance with
the terms of the Shareholders Agreement, the Company may in the future grant
options to purchase shares of Class A Common Stock to Subsequent Management
Purchasers or Subsequent Purchasers, in each case pursuant to appropriate forms
of stock subscription agreements (the "Subsequent Stock Subscription
Agreements") or stock option agreements, plans or arrangements (the "Subsequent
Stock Option Agreements").
(g) The Subsequent Management Purchasers, the Subsequent Purchasers
and any trusts holding shares of Class A Common Stock or options to purchase
shares of Class A Common Stock for the benefit of relatives of any Subsequent
Management Purchaser or Subsequent Purchaser who is an employee of the Company
or one of its subsidiaries are referred to herein collectively as the
"Management Stockholders." The Fund Stock Subscription Agreement, the BRS
Investment Agreement, the Other Investment Agreements, the Individual Investor
Stock Subscription Agreements, the Director Stock Subscription Agreements, the
Subsequent Stock Subscription Agreements and the Subsequent Stock Option
Agreements are referred to herein collectively as the "Stock Subscription
Agreements").
(h) Pursuant to Section 7.2 of the Original Agreement, the C&D Fund,
as a holder of a majority of the Registrable Securities under the Original
Agreement, has consented to the amendment and restatement of the Original
Agreement as set forth in this Agreement, which consent is evidenced by the
execution by the C&D Fund of this Agreement.
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(i) This Agreement is effective as of the date of the Original
Agreement with respect to any Registrable Securities issued or sold or upon the
issuance or sale of Common Stock to any party pursuant to any Stock Subscription
Agreement that provides such Common Stock shall be Registrable Securities, it
being understood that, with respect to Registrable Securities to be issued in
the future, any such Stock Subscription Agreement will provide that the shares
of Class A Common Stock sold thereunder are entitled to the rights and subject
to the obligations created hereunder, provided that such issuance or sale shall
have been approved by the Board of Directors of the Company in accordance with
the Shareholders Agreement, dated as of the date of this Agreement, among the
Company, the C&D Fund and the BRS Fund, as amended from time to time in
accordance with the terms thereof (the "Shareholders Agreement").
(j) It is a condition to the closing of the BRS Investment that the
parties enter into this Agreement.
(k) In consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereby agree as follows.
2. Definitions. For purposes of this Agreement, the following terms shall
have the following respective meanings:
"Acquisition": See Section 1.
"Affiliate": any Person directly or indirectly Controlling, Controlled
by or under common Control with such first Person, provided that (i) any other
investment fund managed by, and any employee of, Clayton, Dubilier & Rice, Inc.,
or Bruckmann, Rosser, Sherrill & Co., L.L.C., as the case may be, is deemed to
be an Affiliate of the C&D Fund or the BRS Fund, as the case may be, (ii) each
of Michael I. Dubilier, Hubbard C. Howe and Leon J. Hendrix, Jr. and each person
who is a partner of Clayton & Dubilier Associates IV Limited Partnership as at
the date of this Agreement is deemed to be an Affiliate of the C&D Fund and of
each other, and (iii) each person who is a partner of BRSE, L.L.C. as at the
date of this Agreement is deemed to be an Affiliate of the BRS Fund and of each
other.
"Affiliate Transferee": See the definition specified in the
Shareholders Agreement.
"Ames Investment": See Section 1.
"BRS Fund": See the introduction to this Agreement.
"BRS Investment": See Section 1.
"BRS Investment Agreement": See Section 1.
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"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close.
"C&D Fund": See the introduction to this Agreement.
"Class A Common Stock": The Class A Common Stock, par value $.01 per
share, of the Company.
"Class B Common Stock": The Class B Common Stock, par value $.01 per
share, of the Company.
"Common Stock": The Class A Common Stock and the Class B Common Stock.
"Company": See the introduction to this Agreement.
"Control": The power to direct the affairs of a Person by reason of
ownership of voting stock, by contract or otherwise.
"Custodian": See Section 5.2.
"Director Stock Subscription Agreements": See Section 1.
"Excess Number": See Section 4(b).
"Exchange Act": The Securities Exchange Act of 1934, as amended, or
any successor Federal statute, and the rules and regulations thereunder which
shall be in effect at the time. Any reference to a particular section thereof
shall include a reference to the corresponding section, if any, of any such
successor Federal statute, and the rules and regulations thereunder.
"Frist Investment": See Section 1.
"Fund": See Section 4.
"Fund Distributee": See the definition specified in the Shareholders
Agreement.
"Fund Stock Subscription Agreement": See Section 1.
"Individual Investors": Directors or senior executives of corporations
in which entities managed or sponsored by Clayton, Dubilier & Rice, Inc. or
Bruckmann, Rosser, Sherrill & Co. L.L.C. have made equity investments.
"Individual Investor Stock Subscription Agreement": See Section 1.
"Management Stockholders": See Section 1.
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"NASD": National Association of Securities Dealers, Inc.
"NASDAQ": The NASD Automated Quotation System.
"100% Buyer": see Section 5.1.
"Original Agreement": See Section 1.
"Other Investment Agreements": See Section 1.
"Other Investments": See Section 1.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, trust, business association, governmental entity or
other entity.
"Public Market": A "Public Market" for the Company's Common Stock
shall be deemed to have been established at such time as 20% of the Common Stock
(on a fully diluted basis) has been sold to the public pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144, other
than a Special Registration.
"Qualifying Number": as at any time, 5% of the then outstanding shares
of Class A Common Stock (excluding any sales or transfers by the C&D Fund or the
BRS Fund to any Management Stockholders).
"Qualifying Sale": See Section 4(b).
"Registrable Securities": (a) Any Common Stock issued or issuable to
BRS Fund, C&D Fund and any of their respective Affiliate Transferees, Fund
Distributees or Third Party Transferees, (b) any Class A Common Stock or Class B
Common Stock issued or to be issued pursuant to the Stock Subscription
Agreements (including upon exercise of options granted pursuant to the
Subsequent Stock Option Agreements), that provides that such Common Stock shall
be Registrable Securities, subject to Section 1(i), (c) any Class A Common Stock
issued upon conversion of the Class B Common Stock referred to in clause (a)
above, (d) any Class B Common Stock issued in exchange for the Class A Common
Stock referred to in clauses (a) or (b) above, (e) any shares of Common Stock
issued pursuant to the terms of, and under the circumstances set forth in, the
Shareholders Agreement, and (f) any securities issued or issuable with respect
to any Common Stock referred to in the foregoing clauses (i) upon any conversion
or exchange thereof, (ii) by way of stock dividend or stock split, (iii) in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or (iv) otherwise, in all cases subject to the
penultimate paragraph of Section 3.3. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (A) a registration statement (other than a Special Registration pursuant to
which such securities were issued by the Company) with respect to the sale of
such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance
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with such registration statement, (B) such securities shall have been
distributed to the public pursuant to Rule 144, (C) subject to the provisions of
the second paragraph of Section 6.1, such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, or (D) such securities
shall have ceased to be outstanding.
"Registration Expenses": All expenses incident to the Company's
performance of its obligations under or compliance with Section 3, including
without limitation, all registration and filing fees, all fees and expenses of
complying with securities or blue sky laws, all fees and expenses associated
with listing securities on exchanges or NASDAQ, all fees and other expenses
associated with filings with the NASD (including, if required, the fees and
expenses of any "qualified independent underwriter" and its counsel), all
printing expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, and the expenses of any special audits made
by such accountants required by or incidental to such performance and compliance
and fees and disbursements of one counsel selected by the holders of a majority
(by number of shares) of the Registrable Securities requested to be included in
such registration, but not including (a) fees and disbursements of counsel
retained by the holders of Registrable Securities except as otherwise provided
herein, or (b) any underwriting discounts or commissions or any transfer taxes.
"Remington": See Section 1.
"Requisite Percentage of Stockholders": The holder or holders of at
least (a) as to the initial request under Section 3.1, 50% (by number of shares)
of the Registrable Securities at the time outstanding or (b) as to any other
request, 20% (by number of shares) of the Registrable Securities at the time
outstanding.
"Rule 144": Rule 144 (or any successor provision) under the Securities
Act.
"Sale of the Company": See Section 5.1.
"Sale Notice": See Section 4(a).
"Securities Act": The Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations thereunder which shall
be in effect at the time. Any reference to a particular section thereof shall
include a reference to the corresponding section, if any, of any such successor
Federal statute, and the rules and regulations thereunder.
"Securities and Exchange Commission": The Securities and Exchange
Commission or any other Federal agency at the time administering the Securities
Act or the Exchange Act.
"Selling Holder": see Section 5.1.
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"Shareholders Agreement": See Section 1.
"Special Registration": The registration of equity securities and/or
options or other rights in respect thereof solely on Form S-4 or S-8 or any
similar or successor form.
"Stock Subscription Agreements": See Section 1.
"Subsequent Management Purchasers": See Section 1.
"Subsequent Purchasers": See Section 1.
"Subsequent Stock Option Agreements": See Section 1.
"Subsequent Stock Subscription Agreements": See Section 1.
"Subsidiary": With respect to any Person, any Person, a majority of
the outstanding voting securities of which is owned, directly or indirectly, by
that Person.
"Take-Along Holders": see Section 5.1.
"Take-Along Notice": see Section 5.1.
"Take-Along Offer": see Section 5.1.
"Tibrea Investment": See Section 1.
"Third Party Transferees": See the definition specified in the
Shareholders Agreement.
3. Registration.
3.1 Registration on Request.
(a) Requests. Subject to the provisions of Section 3.6, at any time
or from time to time the Requisite Percentage of Stockholders shall have the
right to make one or more written requests that the Company effect the
registration under the Securities Act of all or part of the Registrable
Securities of the holder or holders making such request, which requests shall
specify the intended method of disposition thereof (including, without
limitation, whether such registration is to be underwritten or otherwise) by
such holder or holders the approximate number of Registrable Securities
requested to be registered and the anticipated price range for the offering, and
upon any such request the Company will promptly give written notice of such
requested registration to all holders of Registrable Securities, and thereupon
will use its best efforts to effect the registration (subject to the terms of
this Agreement) under the Securities Act of,
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(i) the Registrable Securities which the Company has been so
requested to register, and
(ii) all other Registrable Securities which the Company has
been requested to register by the holders thereof by written request given
to the Company within 30 days after the giving of such written notice by
the Company (which request shall specify the intended method of disposition
of such Registrable Securities),
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered, provided that the Company shall not be required under this Section
3.1(a) to effect a registration under the Securities Act if the Registrable
Securities proposed to be included in such registration would not yield at least
$5,000,000 of net proceeds to the sellers of such Registrable Securities.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in its good faith judgment, after consultation with a firm of
nationally recognized underwriters, that there will be a material adverse effect
on (x) a then contemplated initial public offering of the Common Stock unless
such offering is solely a primary offering or (y) any proposal or plan by the
Company or any of its Subsidiaries to engage in any acquisition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer, reorganization or similar transaction, then (i) the Requisite Percentage
of Stockholders shall be given notice of such fact, (ii) the filing or the
effectiveness of a registration statement related to such request may be
postponed by 90 days, (iii) the holders of Registrable Securities shall be
entitled to withdraw their request under this Section 3.1, and (iv) such
registration shall not be deemed to have been effected or requested pursuant to
this Section 3.1; provided that the Company may postpone a registration request
made pursuant to Section 3.1(a) only once in any 365 day period.
(b) Registration Statement Form. Each registration requested
pursuant to this Section 3.1 shall be effected by the filing of a registration
statement on Form S-1, Form S-2 or Form S-3 (or any other form which includes
substantially the same information as would be required to be included in a
registration statement on such forms as presently constituted), unless the use
of a different form is (i) required by law or (ii) permitted by law and agreed
to in writing by holders holding at least a majority (by number of shares) of
the Registrable Securities as to which registration has been requested pursuant
to this Section 3.1. At any time after the Company has issued and sold any
shares of its capital stock registered under an effective registration statement
under the Securities Act, or after the Company shall have registered any class
of equity securities pursuant to Section 12 of the Exchange Act, it will use its
best efforts to qualify for registration on Form S-2 or Form S-3 (or any other
comparable form hereinafter adopted). If the holders of a majority (by number of
shares) of the Registrable Securities proposed to be sold in such registration
(or, if such registration involves an underwritten public offering, the managing
underwriter) shall notify the Company in writing that, in the judgment of such
holders (or, if applicable, such managing underwriter), the inclusion of
additional information not required by Form S-2 or Form S-3 as specified in such
notice is of material
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importance to the success of the public offering of such Registrable Securities,
such information shall be so included.
(c) Expenses. The Company will pay all Registration Expenses in
connection with the first five registrations which are effected as requested
under Section 3.1(a) and all Registration Expenses in connection with requests
made under Section 3.1(a), which are withdrawn or nullified under Section
3.1(a). The Registration Expenses in connection with each other registration, if
any, requested under this Section 3.1 shall be apportioned among the holders
whose Registrable Securities are then being registered, on the basis of the
respective amounts (by number of shares) of Registrable Securities then being
registered by them or on their behalf. However, in the case of all registrations
requested under Section 3.1(a), the Company shall pay all amounts in respect of
(i) any allocation of salaries of personnel of the Company and its Subsidiaries
or other general overhead expenses of the Company and its Subsidiaries or other
expenses for the preparation of financial statements or other data normally
prepared by the Company and its Subsidiaries in the ordinary course of its
business, (ii) the expenses of any officers' and directors' liability insurance,
(iii) the expenses and fees for listing the securities to be registered on each
exchange on which similar securities issued by the Company are then listed or,
if no such securities are then listed, on an exchange selected by the Company
and (iv) all fees associated with filings required to be made with the NASD
(including, if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules and regulations of
the NASD). Notwithstanding the provisions of this Section 3.1(c) or of Section
3.2, each seller of Registrable Securities shall pay all Registration Expenses
to the extent required to be paid by such seller by applicable law and for which
the Company is not permitted to reimburse such seller for such expenses.
(d) Inclusion of Other Securities. The Company shall not register
securities (other than Registrable Securities) for sale for the account of any
Person other than the Company in any registration requested pursuant to Section
3.1(a) unless permitted to do so by the written consent of holders holding at
least a majority (by number of shares) of the Registrable Securities proposed to
be sold in such registration.
(e) Effective Registration Statement. A registration requested
pursuant to Section 3.1(a) will not be deemed to have been effected unless it
has become effective for the period specified in Section 3.3(b), provided that a
registration which does not become effective after the Company has filed a
registration statement with respect thereto solely by reason of the refusal to
proceed of the holders of Registrable Securities requesting the registration
shall be deemed to have been effected by the Company at the request of such
holders.
(f) Pro Rata Allocation. If the holders of a majority (by number of
shares) of the Registrable Securities for which registration is being requested
pursuant to Section 3.1(a) determine, based on consultation with the managing
underwriters or, in an offering which is not underwritten, with an investment
banker of national standing, that the number of securities to be sold in any
such offering should be limited due to market conditions or otherwise, then (x)
all
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holders of Registrable Securities proposing to sell their securities in such
registration shall share pro rata in the number of securities being offered (as
determined by the holders holding a majority (by number of shares) of the
Registrable Securities for which registration is being requested in consultation
with the managing underwriters or investment banker, as the case may be) and
registered for their account, such sharing to be based on the number of
Registrable Securities as to which registration was requested by such holders,
respectively and (y) thereafter, if permitted hereunder, other securities
requested to be included in such request shall be included in a manner
determined by the Company.
3.2 Incidental Registration. If the Company at any time proposes to
register any of its equity securities (as defined in the Exchange Act) under the
Securities Act (other than pursuant to Section 3.1 or pursuant to a Special
Registration), whether or not for sale for its own account, it will each such
time give prompt written notice to all holders of Registrable Securities of its
intention to do so and of such holders' rights under this Section 3.2. Upon the
written request of any holder of Registrable Securities given to the Company
within 30 days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use its best efforts
to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the holders
thereof, to the extent required to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities so to
be registered, provided that:
(a) if such registration shall be in connection with the initial
public offering of Common Stock, the Company shall not include any Registrable
Securities in such proposed registration if the Company's Board of Directors
shall have determined, after consultation with the managing underwriters for
such offering, that it is not in the best interests of the Company to include
all or any portion of the Registrable Securities in such registration; provided,
that if any portion of the Registrable Securities is included in such
registration, such Registrable Securities shall be included in accordance with
Section 3.2(c);
(b) if, at any time after giving written notice of its intention to
register any 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 securities, the Company may, at
its election, give written notice of such determination to each holder of
Registrable Securities that was previously notified of such registration and,
thereupon, shall not register any Registrable Securities in connection with such
registration (but shall nevertheless pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities to request that a registration be effected under
Section 3.1;
(c) if the Company shall be advised in writing by the managing
underwriters (or, in connection with an offering which is not underwritten, by
an investment banker of national standing), and the Company shall so advise each
holder of Registrable Securities
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requesting registration of such advice, that in their or its opinion the number
of securities requested to be included in such registration (whether by the
Company, pursuant to this Section 3.2 or pursuant to any other rights granted by
the Company to a holder or holders of its securities to request or demand such
registration or inclusion of any such securities in any such registration)
exceeds the number of such securities which can be sold in an orderly manner in
such offering within a price range acceptable to the Company or the holders
initially requesting such registration, as applicable, and without affecting the
marketability of the offering,
(i) the Company shall include in such registration the number
(if any) of Registrable Securities so requested to be included which in the
opinion of such underwriters or investment banker, as the case may be, can
be sold and shall not include in such registration any other securities
(other than securities being sold by the Company, which shall have priority
in being included in such registration) so requested to be included unless
all Registrable Securities requested to be so included are included
therein, and
(ii) if in the opinion of such underwriters or investment
banker, as the case may be, some but not all of the Registrable Securities
may be so included, all holders of Registrable Securities requested to be
included therein shall share pro rata in the number of shares of
Registrable Securities included in such public offering on the basis of the
number of Registrable Securities requested to be included therein by such
holders; provided that, in the case of a registration initially requested
or demanded by a holder or holders of securities other than Registrable
Securities, the holders of the Registrable Securities requested to be
included therein and the holders of such other securities shall share pro
rata (based on the number of shares if the requested or demanded
registration is to cover only Common Stock and, if not, based on the
proposed offering price of the total number of securities included in such
public offering requested to be included therein),
and the Company shall so provide in any registration agreement hereinafter
entered into with respect to any of its securities; and
(d) prior to executing the underwriting agreement, or, if none,
prior to the effective date of the registration statement filed in connection
with such registration, each such holder shall have the right to withdraw its
request to have its Registrable Securities included in such registration
statement.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 3.2.
No registration effected under this Section 3.2 shall relieve the Company from
its obligation to effect registrations upon request under Section 3.1.
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3.3 Registration Procedures. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 3.1 and 3.2, the Company will
promptly:
(a) prepare and file (in the case of a registration pursuant to
Section 3.1(a), not more than 60 days after request therefore) with the
Securities and Exchange Commission a registration statement with respect to such
securities, make all required filings with the NASD and use best efforts to
cause such registration statement to become effective;
(b) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith and such other documents 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
securities covered by such registration statement until such time as all of such
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, but in no event for a period of more than six months after such
registration statement becomes effective;
(c) furnish to counsel (if any) selected by the holders of a
majority (by number of shares) of the Registrable Securities covered by such
registration statement copies of all documents proposed to be filed with the
Securities and Exchange Commission in connection with such registration, which
documents will be subject to the review and comment of such counsel, and
promptly notify and furnish such counsel of the receipt by the Company of any
written comments received from the SEC;
(d) furnish to each seller of such securities, without charge, such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits and
documents filed therewith (other than those filed on a confidential basis),
except that the Company shall not be obligated to furnish any seller of such
securities with more than two copies of such exhibits and documents), such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus) in conformity
with the requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the disposition of the
securities owned by such seller;
(e) use its best efforts (i) to register or qualify such securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as each seller shall request, (ii) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and (iii) to do any and all other acts and things
which may be necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller, except
that the Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it
12
is not so qualified, subject itself to taxation in any jurisdiction wherein it
is not so subject, or take any action which would subject it to general service
of process in any jurisdiction wherein it is not so subject;
(f) in connection with an underwritten public offering only, furnish
to each seller a signed counterpart, addressed to the sellers, of
(i) an opinion of counsel for the Company experienced in
securities law matters dated the effective date of the registration
statement (and, if such registration includes an underwritten public
offering, dated the date of closing under the underwriting agreement), and
(ii) a "comfort" letter, dated the effective date of the
registration statement (and, if such registration includes an underwritten
public offering, dated the date of closing under the underwriting
agreement), signed by the independent public accountants who have issued an
audit report on the Company's financial statements included in the
registration statement, subject to such seller having executed and
delivered to the independent public accountants such certificates and
documents as such accountants shall reasonably request and provided that
such accountants shall be permitted by the standards applicable to
certified public accountants to deliver a "comfort" letter to such seller,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten public
offerings of securities;
(g) (i) promptly notify each holder of Registrable Securities
covered by such registration statement if such registration statement, at the
time it or any amendment thereto became effective, contained (x) an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading upon
discovery by the Company of such material misstatement or omission or (y) upon
discovery by the Company of the happening of any event as a result of which the
Company believes there would be such a material misstatement or omission and, as
promptly as practicable, prepare and file with the Securities and Exchange
Commission a post-effective amendment to such registration statement and use
best efforts to cause such post-effective amendment to become effective as
promptly as practicable such that such registration statement, as so amended,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
13
make the statements therein not misleading, and (ii) notify each holder of
Registrable Securities covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, if 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, in light of the circumstances under which they were
made, upon discovery by the Company of such material misstatement or omission or
upon discovery by the Company of the happening of any event as a result of which
the Company believes there would be a material misstatement or omission, and, as
promptly as is practicable, prepare and furnish to such holder 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 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 not misleading, in light of the circumstances under which
they were made;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement of the Company (complying with the provisions of Section
11(a) of the Securities Act and Rule 158 under the Securities Act) covering the
period of at least 12 months, but not more than 18 months, beginning with the
first month after the effective date of the registration statement;
(i) notify each seller of any securities covered by such
registration statement (i) when such registration statement, or any
post-effective amendment to such registration statement, shall have become
effective, or any amendment of or supplement to the prospectus used in
connection therewith shall have been filed, (ii) of any request by the
Securities and Exchange Commission to amend such registration statement or to
amend or supplement such prospectus or for additional information, (iii) of the
issuance by the Securities and Exchange Commission of any stop order suspending
the effectiveness of such registration statement or of any order preventing or
suspending the use of any preliminary prospectus, and (iv) of the suspension of
the qualification of such securities for offering or sale in any jurisdiction,
or of the institution of any proceedings for any of such purposes;
(j) use its best efforts (i) (A) to list such securities on any
securities exchange on which the Common Stock is then listed or, if no Common
Stock is then listed, on an exchange selected by the Company, if such listing is
then permitted under the rules of such exchange or (B) if such listing is not
practicable or the Board determines that quotation as a NASDAQ National Market
System security is preferable, to secure designation of such securities as a
NASDAQ "national market system security" within the meaning of Rule 11Aa2-1
under the Exchange Act or, failing that, to secure NASDAQ authorization for such
securities, and, without limiting the foregoing, to arrange for at least two
market makers to register as such with respect to such securities with the NASD,
and (ii) to provide and cause to be maintained a transfer agent and registrar
for such Registrable Securities not later than the effective date of such
registration statement;
(k) use its best efforts to obtain the lifting of any stop order
that might be issued suspending the effectiveness of such registration statement
or of any order preventing or suspending the use of any preliminary prospectus
or suspending the qualification of any
14
securities included in such registration statement for sale in any jurisdiction,
provided that if the Company is unable to obtain the lifting of any such stop
order in connection with a registration pursuant to Section 3.1(a), the request
for registration shall not be deemed exercised for purposes of determining
whether such registration has been effected for purposes of Section 3.1(a) or
3.1(c).
(l) enter into such customary agreements and take all such other
actions as the holders of a majority of the Registrable Securities may
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares); provided, that no holder of Registrable Securities
shall have any indemnification obligations inconsistent with Section 3.7 hereof;
(m) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, material financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information, and participate in due diligence sessions, in each case reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(n) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel and the Company and its counsel should be
included; and
(o) use its commercially reasonable best efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of such
Registrable Securities.
The Company may require each seller of any securities as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder not materially
misleading.
The Company agrees not to file or make any amendment to any registration
statement with respect to any Registrable Securities, or any amendment of or
supplement to the prospectus used in connection therewith, which refers to any
seller of any securities covered thereby by name, or otherwise identifies such
seller as the holder of any securities of the Company, without
15
the consent of such seller, such consent not to be unreasonably withheld, unless
such disclosure is required by law, in which case (i) such seller shall be
promptly informed of any impending filing or amendment and (ii) no such consent
shall be required.
By acquisition of Registrable Securities, each holder of such Registrable
Securities shall be deemed to have agreed that upon receipt of any notice from
the Company pursuant to Section 3.3(g), such holder will promptly discontinue
such holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
3.3(g). If so directed by the Company, each holder of Registrable Securities
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, in such holder's possession of the prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
that the Company shall give any such notice, the period mentioned in Section
3.3(b) shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of any Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 3.3(g).
Although shares of Class A Common Stock issuable upon the exercise of
options and shares of Class B Common Stock are included in the definition of
Registrable Securities, the Company shall, in respect of any such Registrable
Securities requested to be registered pursuant hereto, be required to include in
any registration statement only shares of Class A Common Stock issuable upon
conversion of or pursuant to such Registrable Securities and only if the Company
has received assurances, reasonably satisfactory to it, in the case of shares
issuable upon exercise of options, that such options will be exercised and in
the case of Class B Common Stock that such Registrable Securities will be
converted into shares of Class A Common Stock, in each case, promptly after such
registration statement has become effective or the sale to an underwriter has
been consummated so that only Class A Common Stock shall be distributed to the
public under such registration statement.
Notwithstanding any other provision of this Agreement, the parties hereto
acknowledge that the Company shall have no obligation to prepare or file any
registration statement prior to the time that financial information required to
be included therein is available for inclusion therein; provided, that the
Company shall use its best efforts to cause such financial information to be
available on a timely basis.
3.4 Underwritten Offerings. The provisions of this Section 3.4 do not
establish additional registration rights but instead set forth procedures
applicable, in addition to those set forth in Sections 3.1 through 3.3, to any
registration which is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a registration
requested pursuant to Section 3.1(a) is for an underwritten offering, only
securities which are to be distributed by the underwriters may be included in
the registration. No Person may participate in
16
any registration hereunder which is underwritten unless such Person (a) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements reasonably approved by the Person or Persons entitled hereunder to
approve such arrangements pursuant to this Section 3.3 (which will include the
making of representations and warranties and the granting of indemnification
rights customary for a selling stockholder in the circumstances of such Person),
and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents that are standard and
customary for similarly situated Persons and are reasonably required under the
terms of such underwriting arrangements; provided, that no holder of Registrable
Securities included in any underwritten registration shall be required to make
any representations or warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's intended
method of distribution and no holder of Registrable Securities will have any
indemnification obligations inconsistent with Section 3.7 hereof.
(b) Underwriting Agreement. If requested by the underwriters for any
underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Section 3.1(a), the Company (and, if thereby
requested by the holders of a majority of the Registrable Securities to be
registered, Remington) shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the holders of a majority (by number of shares) of the
Registrable Securities to be covered by such registration and to the
underwriters and to contain such representations and warranties by the Company
(and, if requested, Remington) and such other terms and provisions as are
customarily contained in agreements of this type, including without limitation,
(i) indemnities to the effect and to the extent provided in Section 3.7, (ii)
provisions for the delivery of officers' certificates, (iii) opinions of counsel
and (iv) accountants' "comfort" letters and hold-back arrangements. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the agreements on the
part of, the Company (and, if requested, Remington) to and for the benefit of
such underwriters be made to and for the benefit of such holders of Registrable
Securities and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement shall also be conditions
precedent to the obligations of such holders of Registrable Securities. In the
event that any condition to the obligations under any such underwriting
agreement are not met or waived, and such failure to be met or waived is not
attributable to the fault of the selling stockholders requesting a demand
registration pursuant to Section 3.1(a), such request for registration shall not
be deemed exercised for purposes of determining whether such registration has
been effected for purposes of Section 3.1(a) or 3.1(c).
(c) Selection of Underwriters. Whenever a registration requested
pursuant to Section 3.1(a) is for an underwritten offering, the Company will
have the right to select the managing underwriters to administer the offering
and the managing underwriters shall be of nationally recognized standing, which
selection by the Company shall be subject to approval by holders of a majority
of the Registrable Securities proposed to be included in such registration
17
and such approval shall not be unreasonably withheld. If the Company at any time
proposes to register any of its securities under the Securities Act for sale for
its own account and such securities are to be distributed by or through one or
more underwriters, the Company will have the right to select the managing
underwriters, and the managing underwriters shall be of nationally recognized
standing, which selection by the Company shall be subject to approval by holders
of a majority of the Registrable Securities proposed to be included in such
registration and such approval shall not be unreasonably withheld.
(d) Incidental Underwritten Offerings. Subject to the provisions of
the proviso to the first sentence of Section 3.2, if the Company at any time
proposes to register any of its equity securities under the Securities Act
(other than pursuant to Section 3.1 or pursuant to a Special Registration),
whether or not for its own account, and such securities are to be distributed by
or through one or more underwriters, the Company will give prompt written notice
to all holders of Registrable Securities of its intention to do so and will use
its best efforts, if requested by any holder of Registrable Securities, to
arrange for such underwriters to include the Registrable Securities to be
offered and sold by such holder among those to be distributed by such
underwriters. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
(and, if applicable, Remington) and such underwriters and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company (and, if applicable, Remington) to and
for the benefit of such underwriters shall also be made to and for the benefit
of such holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of the underwriters under such underwriting
agreement shall also be conditions precedent to the obligations of such holders
of Registrable Securities. Such holders of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company, Remington or the underwriters other than (i) representations,
warranties or agreements regarding such holder and such holder's intended method
of distribution and (ii) any other representations required by applicable law;
provided, that no holder of Registrable Securities shall have any
indemnification obligations inconsistent with Section 3.7 hereof.
(e) Hold Back Agreements. If and whenever the Company proposes to
register any of its equity securities under the Securities Act for its own
account (other than pursuant to a Special Registration), or is required to use
its best efforts to effect the registration of any Registrable Securities under
the Securities Act pursuant to Section 3.1 or 3.2, each holder of Registrable
Securities agrees by acquisition of such Registrable Securities not to effect
any public sale or distribution, including any sale pursuant to Rule 144, of any
equity securities of the Company or any securities convertible into or
exchangeable or exercisable for any equity securities of the Company (other than
as part of such public offering) during the 20 days prior to, and for the 180
days after, the effective date of such registration statement, or for such
shorter period as agreed (which agreement shall be equally applicable to all
holders of Registrable Securities) to by the underwriters of such public sale or
distribution. The Company agrees to cause each holder of any equity security, or
of any security convertible into or exchangeable or
18
exercisable for any equity security, of the Company purchased from the Company
at any time (other than in a registered public offering of Common Stock) to
enter into a similar agreement with the Company. In no event shall the BRS Fund
or its Affiliate Transferees be subject to a longer lockup period than any other
holder of Registrable Securities. The Company further agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration)
any public sale or distribution, or to file any registration statement (other
than such registration or a Special Registration) covering any, of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, within 20 days prior to and 180 days after the effective
date of such registration statement or for such shorter period as agreed to by
the underwriters of such public sale or distribution.
(f) Cooperation. In connection with any underwritten offering that
includes any of the Registrable Securities, the Company shall participate fully,
and use its best efforts to cause its management to participate fully, in
efforts to sell the Registrable Securities under the offering (including,
without limitation, participating in "roadshow" meetings with prospective
investors) that would be customary for underwritten primary offerings of a
comparable amount of equity securities by the Company.
3.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give the holders of such
Registrable Securities so 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 Securities and Exchange Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and cause its officers, directors, employees and the independent public
accountants who have issued audit reports on its financial statements to supply
all information as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel or accountant, in connection with such
registration statement.
3.6 Other Registrations. If and whenever the Company is required to use
its best efforts to effect the registration of any Registrable Securities under
the Securities Act pursuant to Section 3.1 or 3.2, and if such registration
shall not have been withdrawn or abandoned, the Company shall not be obligated
to and shall not effect any registration of any of its securities (including
Registrable Securities) under the Securities Act (other than a Special
Registration), whether of its own accord or at the request or demand of any
holder or holders of such securities, until a period of six months shall have
elapsed from the effective date of such previous registration in which at least
80% of the Registrable Securities requested to be included in such previous
registration were included; and the Company shall so provide in any registration
agreement with respect to any of its securities.
19
3.7 Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1
or 3.2, the Company will, and will cause each of its Subsidiaries to agree to,
indemnify and hold harmless each holder of such securities, its directors,
officers, principals, members, partners, agents, advisors, representatives,
affiliates and employees, each other person who participates as an underwriter,
broker or dealer in the offering or sale of such securities and each other
person, if any, who controls such holder or any such participating person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages, expenses or
liabilities, joint or several ("Losses"), to which such holder or any such
director, officer, principals, members, partners, agents, advisors,
representatives, affiliates, employee, participating person or controlling
person may become subject under the Securities Act or otherwise (including,
without limitation, the reasonable fees and expenses of legal counsel incurred
in connection with any Loss), insofar as such Losses (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a fact contained in any registration statement under
which such securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein or related
thereto, or any amendment or supplement thereto, together with any document
incorporated therein by reference, (ii) any omission or alleged omission to
state a fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company or any of its Subsidiaries of any federal, state, foreign or common law
rule or regulation and relating to action or inaction in connection with any
such registration, disclosure document or other document; and the Company will
reimburse such holder and each such director, officer, principals, members,
partners, agents, advisors, representatives, affiliates, employee, participating
person and controlling person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such Loss,
action or proceeding, provided that the Company shall not be liable in any such
case to a holder or participating person to the extent that any such Loss arises
out of or is based upon an untrue statement or omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such holder or
participating person expressly for use in the preparation thereof or that arises
out of or is based on such holder's or participating person's failure to deliver
a copy of the registration statement or prospectus or any amendment or
supplement thereto after the Company has furnished such holder or participating
person with a sufficient number of same, and provided, further, that the Company
shall not be liable in any such case to a holder or a participating person to
the extent that any such Loss arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission in the prospectus,
if such untrue statement or alleged untrue statement or omission or alleged
omission is completely corrected in an amendment or supplement to the prospectus
and such holder or participating person of Registrable Securities thereafter
fails to deliver such prospectus as so amended or supplemented prior to or
concurrently with the sale of Registrable Securities to the person
20
asserting such Loss after the Company had furnished such holder or participating
person with a sufficient number of copies of the same or if such holder or
participating person received notice from the Company of the existence of such
untrue statement or alleged untrue statement or omission or alleged omission and
such holder or participating person continued to dispose of Registrable
Securities prior to the time of the receipt of either (A) an amended or
supplemented prospectus which completely corrected such untrue statement or
omission or (B) a notice from the Company that the use of the existing
prospectus may be resumed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or
participating person or any such director, officer, employee, participating
person or controlling person and shall survive the transfer of such securities
by such holder or participating person.
(b) Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 3.3, that the Company shall have received an
undertaking satisfactory to it from each of the prospective sellers of such
securities, to indemnify and hold harmless (in the same manner and to the extent
as set forth in Section 3.7(a)) the Company, each director of the Company, each
officer of the Company who shall sign such registration statement, each other
person who participates as an underwriter, broker or dealer in the offering or
sale of such securities and each other person, if any, who controls the Company
or any such participating person within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all Losses,
joint or several, to which the Company or any such director, officer,
principals, members, partners, agents, advisors, representatives, affiliates,
employee, participating person or controlling person may become subject under
the Securities Act or otherwise (including, without limitation, the reasonable
fees and expenses of legal counsel incurred in connection with any claim for
indemnity hereunder), insofar as such Losses (or actions or proceedings in
respect thereof) arise out of or are based upon any statement in or omission
from such registration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by such holder or participating person expressly for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement, provided that the
liability of each such holder or participating person will (i) be individual,
not joint and several and (ii) be in proportion to and limited to the net amount
received by such seller (after deducting any underwriting discount and expenses)
from the sale of Registrable Securities pursuant to such registration statement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling person and shall survive the transfer of such securities by such
seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of a claim or the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 3.7,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of such
21
claim or commencement of such action or proceeding, provided that the failure of
any indemnified party to give notice as provided therein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 3.7 to the extent such failure has not prejudiced the indemnifying
party. In case any such claim, action or proceeding is made or brought against
an indemnified party, the indemnifying party will be entitled to participate
therein and to assume the defense thereof, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the latter in connection
with the defense thereof, provided that if such indemnified party and the
indemnifying party reasonably determine, based upon advice of their respective
independent counsel, that a conflict of interest may exist between the
indemnified party and the indemnifying party with respect to such claim, action
or proceeding and that it is advisable for such indemnified party to be
represented by separate counsel, such indemnified party may retain other
counsel, reasonably satisfactory to the indemnifying party, to represent such
indemnified party, and the indemnifying party shall pay all reasonable fees and
expenses of such counsel. No indemnifying party, in the defense of any such
claim, action, proceeding or litigation, shall, except with the consent of such
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement 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.
(d) Other Indemnification. Indemnification similar to that specified
in the preceding paragraphs of this Section 3.7 (with appropriate modifications)
shall be given by (i) the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of such Registrable
Securities under any Federal or state law or regulation of governmental
authority other than the Securities Act and (ii) Remington upon request by the
holders of a majority of the Registrable Securities to be registered with
respect to any such registration or qualification, or any registration of such
securities under the Securities Act pursuant to Section 3.1 or 3.2.
(e) Other Remedies. If for any reason the foregoing indemnity under
Section 3.7(a), 3.7(b) or 3.7(d) is unavailable, or is insufficient to hold
harmless an indemnified party, other than by reason of the exceptions provided
therein, then the indemnifying party and the indemnified party under Section
3.7(a), 3.7(b) or 3.7(d) shall contribute to the amount paid or payable by the
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other from the offering of
Registrable Securities (taking into account the portion of the proceeds of the
offering realized by each such party) or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or provides a lesser sum to
the indemnified party than the amount hereinafter calculated, in such proportion
as is appropriate to reflect not only the relative benefits received by the
indemnifying party on the one
22
hand and the indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. 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. Any party's obligation to contribute pursuant to this Section
3.7(e) is several (in proportion to the relative value of their Registrable
Securities covered by a registration statement) and not joint with the
obligations of any other party. No party shall be liable for contribution under
this Section 3.7(e) except to the extent and under such circumstances as such
party would have been liable to indemnify under this Section 3.7 if such
indemnification were enforceable under applicable law.
(f) Officers and Directors. As used in this Section 3.7, the terms
"officers" and "directors" shall include the partners of the holders of
Registrable Securities which are partnerships.
(g) Indemnification Payments. The indemnification and contribution
required by this Section 3.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred; provided that in the
event it is ultimately determined that any amounts so paid were not subject to
indemnification or contribution hereunder, the recipient thereof shall promptly
return such amounts to payor thereof.
3.8 No Other Registration Rights. The Company shall not, except as
provided in this Agreement, without the prior written consent of holders of at
least 66% (by number of shares) of the Registrable Securities, grant to any
Person (i) the right to request the Company to register any securities of the
Company, or any securities convertible or exchangeable into or exercisable for
such securities or (ii) any rights to the extent such rights conflict with, or
are adverse to, the rights of holders of the Registrable Securities.
4. Participation Rights. So long as any Registrable Securities remain
outstanding and a Public Market has not been established with respect to the
Common Stock, each of the C&D Fund and the BRS Fund (each, a "Fund") hereby
agrees not to make any sale or transfer of Common Stock owned by such Fund which
would constitute a Qualifying Sale, except pursuant to the following provisions
of this Section 4:
(a) Procedures for Qualifying Sales. At least 20 Business Days prior
to making any sale or transfer of Common Stock which would constitute a
Qualifying Sale, such Fund will deliver a written notice (the "Sale Notice") to
the Company and the holders of Registrable Securities (excluding the other Fund,
its Affiliate Transferees and Fund Distributees). The Sale Notice will fully
disclose the identity of the prospective transferee and the terms and conditions
of the proposed transfer, including the number of shares of Common Stock that
the prospective transferee is willing to purchase and the intended consummation
date of such Qualifying Sale. Such Fund agrees not to consummate any such
transfer until at least 20
23
Business Days after the Sale Notice has been delivered to such holders, unless
such Fund has received notices from each such holder of Registrable Securities
indicating whether or not such holder has elected to participate in such
Qualifying Sale and the number of shares to be sold by each such holder so
electing to participate has been finally determined pursuant hereto prior to the
expiration of such 20 Business Day-period. The holders of Registrable Securities
may elect to participate in the contemplated sale by delivering written notice
to such Fund and the Company within 20 Business Days after their receipt of the
Sale Notice. If such a holder of Registrable Securities elects to participate in
such sale, such holder will be entitled to sell (pro rata on the basis of the
number of shares of Registrable Securities then held by such holder, unless all
such holders otherwise agree among themselves to a different allocation) in the
contemplated sale, at the same price and on the same terms, a number of shares
of Registrable Securities equal to the product of (i) the quotient determined by
dividing (A) the percentage of Registrable Securities then held by the holders
so electing to participate by (B) the aggregate percentage of the Registrable
Securities represented by the Registrable Securities then held by such Fund and
the holders of Registrable Securities so electing to participate plus the
aggregate number of Registrable Securities then held by other holders electing
to participate in such sale pursuant to the Shareholders Agreement and (ii) the
number of shares of Registrable Securities such transferee has agreed to
purchase in the contemplated sale (or, in the case of a "Qualifying Sale" within
the meaning of Section 4(b)(ii), the Excess Number of shares which such
transferee has agreed to purchase). Any Registrable Security proposed to be
included in any such contemplated sale that is not, but is convertible into,
Common Stock of the same class as that proposed to be sold by such Fund shall be
converted into Common Stock of such class prior to the time of the actual sale.
(b) Qualifying Sale Defined. The term "Qualifying Sale" shall mean,
in relation to each Fund, (i) any sale or transfer of Common Stock proposed to
be made by such Fund at any time after February 12, 2003 when such Fund has sold
or transferred in the aggregate at least the Qualifying Number of shares of
Common Stock or (ii) in the event that prior to the sale or transfer by such
Fund of an aggregate of the Qualifying Number of shares of Common Stock, such
Fund proposes to sell or transfer a number of shares of Common Stock after
February 12, 2003, which when combined with any prior sales or transfers of such
shares by such Fund exceeds the Qualifying Number, the sale or transfer of a
number of shares (the "Excess Number") equal to the excess of (A) the sum of any
shares previously sold or transferred by such Fund and the aggregate number of
shares proposed to be sold or transferred in such contemplated sale, over (B)
the Qualifying Number of shares. In determining whether there is a "Qualifying
Sale", equitable adjustments shall be made to reflect any stock split, stock
dividend, stock combination, recapitalization or similar transaction.
(c) Exclusion from Qualifying Sale. The obligation of each Fund and
the rights of the holders of Registrable Securities pursuant to this Section 4
will not apply to (i) any sale or transfer by such Fund pursuant to a
distribution to the public (whether pursuant to a registered public offering of
Common Stock or pursuant to Rule 144 or otherwise (but not pursuant to Rule 144A
under the Securities Act or any successor provision)), (ii) any sale or
24
transfer by such Fund of Registrable Securities to any of its Affiliates
pursuant to Section 4(a)(i) of the Shareholders Agreement, (iii) any
distribution by such Fund of Registrable Securities to its Fund Distributees
pursuant to Section 4(a)(ii) of the Shareholders Agreement, (iv) any sale or
transfer by the BRS Fund, its Affiliate Transferees and Fund Distributees to the
C&D Fund or any of its Affiliates pursuant to Section 4(a)(vi) of the
Shareholders Agreement, and (v) any sale by such Fund of Registrable Securities
pursuant to Section 4(a)(vii) of the Shareholders Agreement. Any shares referred
to, or covered by any sale, transfer or distribution referred to, in the
preceding sentence shall not be included in the computation of "Qualifying
Sale."
(d) The only Registrable Securities eligible to participate in the
sale contemplated by Section 4(a) shall be shares of Class A Common Stock and
shares of Class B Common Stock.
(e) Public Market. In the event that a Public Market has been
established, the provisions of this Section 4 shall terminate and cease to have
further effect.
5. Take-Along Rights.
5.1 Take-Along Notice. So long as the BRS Fund, together with its
Affiliate Transferees and Fund Distributees, hold a number of shares of Common
Stock equal to at least one-third of the Common Stock originally purchased by
the BRS Fund at the closing of the BRS Investment, if the BRS Fund intends to
effect a sale of more than 50% of the outstanding voting securities of the
Company that has been approved by the Company's board of directors (such sale, a
"Sale of the Company") to a third party (a "Buyer"), or if the BRS Fund,
together with its Affiliate Transferees and Fund Distributees, no longer hold a
number of shares of Common Stock equal to at least one-third of the Common Stock
originally purchased by the BRS Fund at the closing of the BRS Investment,
holders of a majority of the then outstanding Registrable Securities intend to
effect a Sale of the Company (the BRS Fund together with its affiliate
Transferees and Fund Distributees, or such holders of a majority of the then
outstanding Registrable Securities, the "Selling Holder"), and elects to
exercise its rights under this Section 5, the Selling Holder shall deliver
written notice (a "Take-Along Notice") to all the holders of Registrable
Securities other than the C&D Fund (collectively, the "Take-Along Holders"),
which notice shall (a) state (i) that the Selling Holder wishes to exercise its
rights under this Section 5 with respect to such transfer, (ii) the name and
address of the Buyer, (iii) the per share amount and form of consideration the
Selling Holder proposes to receive for its shares of Common Stock and (iv) the
terms and conditions of payment of such consideration and all other material
terms and conditions of such transfer, (b) contain an offer (the "Take-Along
Offer") by the Buyer to purchase from the Take-Along Holders a pro rata portion
of the outstanding capital stock of the Company held by the Take-Along Holders
(including their Registrable Securities) on and subject to the same terms and
conditions offered to the Selling Holder and (c) state the anticipated time and
place of the closing of the Sale of the Company (a "Section 5 Closing"), which
(subject to such terms and conditions) shall occur not fewer than five (5) days
nor more than two hundred and ten (210) days after the date such Take-Along
Notice is delivered, provided that if such
25
Section 5 Closing shall not occur prior to the expiration of such 210-day
period, the Selling Holder shall be entitled to deliver another Take-Along
Notice with respect to such Sale of the Company.
5.2 Conditions to Take-Along. Upon delivery of a Take-Along Notice, the
Take-Along Holders shall have the obligation to transfer a pro rata portion of
the outstanding capital stock of the Company held by the Take-Along Holders
(including their Registrable Securities) pursuant to the Take-Along Offer, as
the same may be modified from time to time, provided that the Selling Holder
transfers the same pro rata portion of the outstanding capital stock of the
Company held by the Selling Holder (including its Registrable Securities) to the
Buyer at the Section 5 Closing. Within 10 days of receipt of the Take-Along
Notice, each Take-Along Holders shall (a) execute and deliver to the Selling
Holder a power of attorney and a letter of transmittal and custody agreement in
favor of, and in form and substance satisfactory to, the Selling Holder
constituting (i) the BRS Fund, Bruckmann, Rosser, Sherrill & Co., L.L.C. or one
or more of their respective affiliates designated by the BRS Fund, where the
Selling Holder is the BRS Fund and/or any of its Affiliate Transferees or Fund
Distributees, or (ii) another Person nominated by the Selling Holder, where the
Selling Holder is composed of holders of a majority of the then outstanding
Registrable Securities (the "Custodian"), the true and lawful attorney-in-fact
and custodian for such Take-Along Holder, with full power of substitution, and
authorizing the Custodian to take such actions as the Custodian may deem
necessary or appropriate to effect the Sale of the Company to the Buyer, upon
receipt of the purchase price therefor at the Section 5 Closing, free and clear
of all security interests, liens, claims, encumbrances, charges, options,
restrictions on transfer, proxies and voting and other agreements of whatever
nature, and to take such other action as may be necessary or appropriate in
connection with such sale, including consenting to any amendments, waivers,
modifications or supplements to the terms of the sale (provided that the Selling
Holder also so consents, and sells and transfers its Registrable Securities on
the same terms as so amended, waived, modified or supplemented), (b) deliver to
the Selling Holder certificates representing shares of capital stock of the
Company (including Registrable Securities), together with all necessary duly
executed stock powers and (c) shall raise no objection to such sale or the
process pursuant to which the sale was conducted. Each Take-Along Holder will
take all other necessary actions in connection with the consummation of the Sale
of the Company, including without limitation, executing any applicable purchase
agreement and exercising any outstanding options held by such Take-Along Holder,
provided that such Take-Along Holder is required to participate in such Sale of
Company only on the same terms and conditions as the Selling Holder.
5.3 Remedies. Each Take-Along Holder acknowledges that the Selling Holder
would be irreparably damaged in the event of a breach or a threatened breach by
such Take-Along Holder of any of its obligations under this Section 5 and such
Take-Along Holder agrees that, in the event of a breach or a threatened breach
by such Take-Along Holder of any such obligation, the Selling Holder shall, in
addition to any other rights and remedies available to it, in respect of such
breach, be entitled to an injunction from a court of competent jurisdiction
granting it specific performance by such Take-Along Holder of its obligations
under this Section 5. In the
26
event that the Selling Holder shall file suit to enforce the covenants contained
in this Section 5 (or obtain any other remedy in respect of any breach thereof),
the prevailing party in the suit shall be entitled to recover, in addition to
all other damages to which it may be entitled, the costs incurred by such party
in conducting the suit, including reasonable attorney's fees and expenses.
5.4 Public Market. In the event that a Public Market has been established,
the provisions of this Section 5 shall terminate and cease to have further
effect.
6. Miscellaneous.
6.1 Rule 144; Legended Securities; etc. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act relating to any class of equity securities (other than a
registration statement pursuant to a Special Registration) the Company covenants
that it will 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 Securities
and Exchange Commission thereunder (or, if the Company is not required to file
such reports, it will, upon the request of any holder of Registrable Securities,
make publicly available such information as necessary to permit sales pursuant
to Rule 144), and will take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, as such Rule may be amended from time to time, or (b)
any successor rule or regulation hereafter adopted by the Securities and
Exchange Commission.
The Company agrees that it will not issue new certificates for shares of
Registrable Securities without a legend restricting further transfer unless such
shares have been sold to the public pursuant to an effective registration
statement under the Securities Act or Rule 144, or unless otherwise permitted
under the Securities Act and the holder of such shares expressly so requests in
writing.
6.2 Amendments and Waivers. This Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of at least a majority (by number of shares) of the Registrable
Securities. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 6.2,
whether or not such Registrable Securities shall have been marked to indicate
such consent.
6.3 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election and unless notice is otherwise
given to the Company by the record owner, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any
27
holder or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
6.4 Successors, Assigns and Transferees. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Company shall also be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities, subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities required in order to be entitled
to certain rights, or take certain actions, contained herein.
6.5 Notices. All notices, requests, demands or other communications
provided for hereunder shall be in writing and shall be deemed to have been duly
given to any party (a) when delivered personally (by courier service or
otherwise), (b) when delivered by facsimile and confirmed by receipt of the
proper facsimile confirmation, (c) five days after being mailed by first class
mail, postage prepaid (registered or certified mail, return receipt requested),
(d) when receipt acknowledged, if telecopied, or (e) the next business day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery, in each case to the applicable address set forth beneath its
name on the schedules hereto, or to such other address as such party may have
designated to the Company in writing, or if to any other holder of Registrable
Securities at the address of such holder in the stock record books of the
Company, and if to the Company or the C&D Fund to the following addresses:
(i) if to the Company, to:
RACI Holding, Inc.
c/o Remington Arms Company, Inc.
870 Remington Drive
P.O. Box 700
Madison, North Carolina 27025-0700
Fax Number: (336) 548-7779
Attention: Chief Executive Officer
(ii) if to the C&D Fund, to:
The Clayton & Dubilier Private Equity
Fund IV Limited Partnership
270 Greenwich Avenue
Greenwich, Connecticut 06830
28
Attention: Clayton & Dubilier Associates IV
Limited Partnership
Attention: Joseph L. Rice, III
or at such other address or addresses as the C&D Fund may have designated in
writing to each holder of Registrable Securities at the time outstanding. Copies
of any notice or other communication given under the Agreement shall also be
given to:
Clayton, Dubilier & Rice, Inc.
375 Park Avenue
New York, New York 10152
Fax Number: (212) 893-7050
Attention: Michael G. Babiarz
and
Debevoise & Plimpton
919 Third Avenue
New York, New York 10022
Fax Number: (212) 909-6836
Attention: Paul S. Bird, Esq.
(iii) if to the BRS Fund to:
Bruckmann, Rosser, Sherrill & Co. II, L.P.
c/o Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56th Street
New York, New York 10022
Fax Number: (212) 521-3799
Attention: Stephen C. Sherrill
or at such other address or addresses as the BRS Fund may have designated in
writing to each holder of Registrable Securities at the time outstanding. Copies
of any notice or other communication given under the Agreement shall also be
given to:
Kirkland & Ellis
Citigroup Center
153 East 53rd Street
New York, New York 10022-4675
Fax Number: (212) 446-4900
Attention: Kim Taylor, Esq.
29
6.6 Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
6.7 Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
internal laws of the State of New York without regard to principles of conflicts
of laws.
6.8 Time of the Essence Computation of Time. Time is of the essence for
each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge of any duty hereunder shall fall upon
a day which is not a business day, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular business day.
6.9 Entire Agreement. Except as otherwise specifically provided in this
Agreement, this Agreement embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and pre-empts any prior understandings, agreements or representations
by or among the parties, written or oral, including the Original Agreement,
which may have related to the subject matter hereof in any way.
6.10 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, and by different parties on separate counterparts, each of
which shall be deemed an original, but all of such counterparts shall together
constitute one and the same instrument.
6.11 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 by this Agreement.
6.12 Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
6.13 Remedies; Attorneys' Fees. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein or 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 any provision of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate. In any
action or proceeding brought to enforce any provision of this Agreement, the
successful party shall be entitled to recover reasonable attorneys' fees in
addition to its costs and expenses and other available remedy.
30
6.14 Stock Splits, etc. Each holder of Registrable Securities agrees that
it will vote to effect a stock split or combination with respect to any
Registrable Securities in connection with any registration of such Registrable
Securities hereunder, if the managing underwriter shall advise the Company in
writing (or, in connection with an offering that is not underwritten, if an
investment banker of national standing shall advise the Company in writing) that
in their or its opinion such a stock split or combination would facilitate or
increase the likelihood of success of the offering. Each holder of Registrable
Securities agrees that any number of shares of Common Stock referred to in this
Agreement shall be equitably adjusted to reflect any stock split, stock
dividend, stock combination, recapitalization or similar transaction.
6.15 Term. This Agreement shall be effective as of the date hereof and
shall continue in effect thereafter until the earliest of (a) its termination by
the consent of the parties hereto or their respective successors in interest,
(b) the date on which no Registrable Securities remain outstanding and (c) the
dissolution, liquidation or winding up of the Company.
6.16 No Third Party Beneficiaries. Except as provided in Sections 1(i),
3.7, 4 and 5.1, nothing in this Agreement shall confer any rights upon any
Person other than the parties and each such party's respective heirs, successors
and permitted assigns.
6.17 Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby (and agrees not to
commence any such suit, action or proceeding except in such courts). Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any such suit, action or proceeding. Each party
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding in (i) the Supreme Court of the State of New
York, New York County, and (ii) the United States District Court for the
Southern District of New York, that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
6.18 Waiver of Jury Trial. Each party hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any suit, action or proceeding arising out of this Agreement or any
transaction contemplated hereby. Each party (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties have been induced to enter into the Agreement by, among other things,
the mutual waivers and certifications in this Section 6.18.
31
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
RACI HOLDING, INC.
By: /s/ Mark A. Little
------------------------------------------
Name: Mark A. Little
Title: Chief Financial Officer
THE CLAYTON & DUBILIER PRIVATE EQUITY
FUND IV LIMITED PARTNERSHIP
By: Clayton & Dubilier Associates IV Limited
Partnership, its general partner
By: /s/ Donald J. Gogel
------------------------------------------
Name: Donald J. Gogel
Title: General Partner
BRUCKMANN, ROSSER, SHERRILL & CO. II, L.P.
By: BRSE, LLC, its general manager
By: /s/ Stephen Sherrill
------------------------------------------
Name: Stephen Sherrill
Title: Managing Director
32
Acknowledgment and Consent
The undersigned hereby acknowledges,
consents to and agrees to perform all of
the obligations relating to the
undersigned arising under or
contemplated by Sections 3.4(b) and 3.7
of the foregoing Agreement, and any
similar obligations that it may be
requested to undertake in connection
with any offering and issuance of equity
securities by RACI Holding, Inc.
REMINGTON ARMS COMPANY, INC.
By: /s/ Samuel G. Grecco
--------------------------------
Name: Samuel G. Grecco
Title: Secretary
33