EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June 28,
2002 by and among Acorn Products, Inc., a Delaware corporation (the "Company"),
and the Shareholders listed on Exhibit A to this Agreement (the "Shareholders").
W I T N E S S E T H
WHEREAS, the Shareholders are holders of shares of unregistered Common
Stock;
WHEREAS, the Company believes that unorganized sales of shares of
Common Stock by the Shareholders in the public market could have an adverse
effect on prevailing market prices for the Common Stock and could adversely
impact the Company's ability to participate in the capital markets;
WHEREAS, in order to provide for the orderly distribution of the shares
of Common Stock held by the Shareholders, the Company has agreed to grant
registration rights to the Shareholders with respect to the shares of Common
Stock as set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
(a) As used in this Agreement the following terms shall
have the following meanings:
"Act": the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.
"Additional Registration Rights Holder": as defined in Section 3(c).
"Additional Securities": as defined in Section 4(d).
"Agreement": as defined in the preamble.
"Commission": the Securities and Exchange Commission or any other
federal agency at the time administering the Act.
"Common Stock": the common stock, $0.001 par value, of the Company.
"Company": as defined in the preamble.
"Demand Notice": as defined in Section 4(b).
"Estimated Effective Date": as defined in Section 2.
"Exchange Act": the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"Holder": a Shareholder or a Permitted Transferee.
"Initiating Holders": means one or more Holders who, singularly or in
the aggregate, hold 25% or more of the Registrable Securities.
"Indemnified Person": as defined in Section 8(a).
"Permitted Transferee": any transferee that receives Registrable
Securities who agrees in writing to become bound by the terms of this Agreement.
"Person": an individual, partnership, joint venture, corporation,
trust, unincorporated organization or a government or any department or agency
thereof.
"Piggyback Notice": as defined in Section 2.
"Prospective Seller": with respect to any registration, a Holder that
proposes to include shares of Registrable Securities in such registration.
"Register," "Registered" and "Registration": a registration effected by
preparing and filing a registration statement in compliance with the Act, the
declaration or ordering of effectiveness of such registration statement by the
Commission and the compliance with all applicable state securities or blue sky
laws which will permit the sale of Registrable Securities to the public.
"Registrable Securities": those shares of Common Stock now owned or
hereafter acquired by the Shareholders. Each share of Registrable Securities
shall cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such stock shall have become effective under the Act and
such stock shall have been disposed of in accordance with such registration
statement, (b) such stock ceases to be outstanding, (c) such stock has been sold
pursuant to Rule 144(k) under the Act or (d) such stock is no longer held by a
Holder.
"Registration Expenses": as defined in Section 7.
"Shareholders": as defined in the preamble.
"Underwritten Offering": a registration in which securities of the
Company are sold to an underwriter for reoffering to the public.
(b) Unless otherwise specified herein, all terms defined
in this Agreement shall have the defined meanings when used in any certificate
or document made or delivered pursuant hereto.
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(c) As used herein and in any certificate or other
documents made or delivered pursuant hereto, accounting terms not defined in
Section l(a) and accounting terms partly defined in Section l(a) to the extent
not defined, shall have the respective meanings given to them under GAAP.
(d) Any reference to any provision of or rule under the
Act or the Exchange Act shall encompass any successor provision or rule.
(e) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
(f) The meanings given to terms defined herein shall be
equally applicable to the singular and plural forms of such terms.
2. Incidental Registration. If the Company proposes to register
any of its securities for sale (other than a registration relating to the sale
of securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan including a registration statement on Form S-8, an
exchange offer, a transaction subject to Rule 145 of the Act or in connection
with the acquisition of the assets or shares of or merger or consolidation with
another company), and the registration form to be used also may be used for the
registration of the Registrable Securities, then it shall give written notice (a
"Piggyback Notice"), at its expense, to all Holders of Registrable Securities of
its intention to do so at least 10 business days prior to the filing of a
registration statement with respect to such registration with the Commission.
The Company shall specify in the Piggyback Notice the form and manner of, and
the other relevant facts involved in, such proposed registration, including the
estimated effective date of the registration statement for such registration
(the "Estimated Effective Date"). If any Holder desires to dispose of all or
part of its Registrable Securities in such registration, it shall deliver to the
Company, within 10 business days after receipt of the Piggyback Notice, written
notice of such request stating the number of shares of Registrable Securities so
proposed to be sold by such Holder. Any Holder may withdraw its request for
inclusion at any time prior to 15 business days prior to the Estimated Effective
Date. The Company shall use its commercially reasonable efforts to cause all
shares of Registrable Securities specified in such written notice to be included
in such registration, subject, however, to the limitations set forth in Section
3 and provided that, for purposes of this sentence, commercially reasonable
efforts shall not require the Company or any other seller of securities of the
Company (other than a Holder of Registrable Securities), to reduce the amount or
sale price of such securities proposed to be so registered.
3. Limitations on Incidental Registration.
(a) If the registration for which the Company gives
notice pursuant to Section 2 is for the purpose of permitting a disposition of
securities pursuant to an Underwritten Offering, the Piggyback Notice shall so
state, and, if requested to do so by the managing underwriter of the offering,
the Company shall have the right to limit the aggregate size of the offering or
the number of shares of Registrable Securities to be included therein by the
Holders in accordance with the provisions of Section 3(b) below.
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(b) Whenever the number of shares of Registrable
Securities that may be registered pursuant to Section 2 is limited by the
provisions of Section 3(a) above, the Company or any other seller of securities
of the Company for whom such registration was initiated, as the case may be,
shall have priority as to sales over the Holders, and each Holder hereby agrees
that it shall withdraw its securities from such registration to the extent
necessary to allow the Company or such other seller of securities of the Company
to include all the shares it desires to include in such registration, and
thereafter the number of shares of Registrable Securities to be included in such
registration shall be allocated pro rata among Holders of Registrable Securities
(with such allocation to be made on the basis of the number of shares requested
to be included in such registration by such Holders) and any person other than a
Holder who holds registration rights with respect to securities of the Company
(each such person, an "Additional Registration Rights Holder") to the extent
provided in the relevant agreement between the Company and the Additional
Registration Rights Holder.
(c) Nothing in this Section 3 shall be construed as
creating an obligation on the part of the Company to register Registrable
Securities if the Board of Directors of the Company shall have determined in its
sole discretion not to proceed with a registration of its securities whether or
not a Piggyback Notice shall have previously been sent by the Company.
4. Registration on Request.
(a) The Initiating Holders may by written notice make a
request that the Company effect the registration under the Act of all or part of
such Initiating Holders' Registrable Securities, specifying the intended method
or methods of disposition thereof, including, without limitation, on a delayed
or continuous basis pursuant to Rule 415 of the Act; provided that the
Shareholders, collectively, are entitled to an aggregate of four such
registrations pursuant to this Section 4(a). Notwithstanding the provisions of
this Section 4(a), the Company shall not be obligated to effect a registration
under the Act of the designated Registrable Securities if in the preceding 180
days the Company shall have previously effected a registration under the Act of
the Company's securities.
(b) Upon receipt of the request of the Initiating Holders
pursuant to Section 4(a), the Company shall give written notice of the requested
registration (a "Demand Notice"), at its expense, to all Holders of Registrable
Securities within 15 business days of receipt of such Initiating Holders'
request and thereupon shall use its commercially reasonable efforts to effect
the registration under the Act of:
(i) the Registrable Securities that the Company
has been so requested to register by the Initiating Holders for
disposition in accordance with the intended method or methods of
disposition stated in such request; and
(ii) all other Registrable Securities that the
Company has been requested to register by the Holders thereof by
written request delivered to the Company within 15 business days after
the giving of the Demand Notice (which request shall specify the
intended method or methods of disposition of such Registrable
Securities);
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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.
(c) Whenever the Company shall effect a registration of
Registrable Securities pursuant to this Section 4, subject to Section
4(d) below, (i) any Additional Registration Rights Holder shall have
the right to include in the registration made pursuant to this Section
4, to the extent provided in the relevant agreement between the Company
and the Additional Registration Rights Holder, the securities held by
such Additional Registration Rights Holders to which such registration
rights relate and (ii) the Company shall have the right to include in
the registration made pursuant to this Section 4 any securities to be
issued by the Company (the securities referred to in clause (i) and
(ii) above are hereinafter referred to as "Additional Securities").
(d) Each registration requested pursuant to this Section
4 shall be effected by the filing of a registration statement on the
applicable form, as reasonably determined by the Company.
(e) If the managing underwriter of any Underwritten
Offering undertaken pursuant to this Section 4 shall advise the Company
in writing (with a copy to each holder of Registrable Securities
requesting registration) that, in its opinion, the number or type of
securities requested to be included in such registration (including any
Additional Securities) is a number or type which would adversely affect
such offering, then the number of shares of Registrable Securities to
be included in such registration shall be allocated pro rata among
Holders of Registrable Securities (with such allocation to be made on
the basis of the number of shares requested to be included in such
registration by such Holders) and, thereafter, pro rata among the
Company and the Additional Registration Rights Holders (such limited
number to be allocated between the Company and the affected Additional
Registration Rights Holders as the Company shall determine).
(f) If the Company determines, in its reasonable
judgment, that a registration requested pursuant to this Section 4
would interfere with or require public disclosure of any financing,
acquisition, disposition, corporate reorganization or other transaction
involving the Company or its subsidiaries which would have a material
adverse effect on such transaction, the Company shall be entitled to
postpone for a reasonable period of time (not to exceed 90 days) the
filing, supplementing or amending of any such registration statement.
Upon such determination, the Company shall give the holders of
Registrable Securities requesting registration written notice of such
determination and an estimate of the anticipated delay. The Company
shall not, within 120 days of the expiration of any such postponement,
exercise again its right of postponement pursuant to this Section 4(f).
If the Company shall so postpone the filing of a registration
statement, such holders of Registrable Securities may withdraw their
request for registration by giving written notice to the Company within
15 days of receipt of the notice of postponement and such withdrawn
request shall not constitute a request for registration pursuant to
Section 4(a).
(g) Notwithstanding anything in this Section 4 to the
contrary, in no event shall the Company be required to effect a
registration pursuant to this Section 4 in which
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the estimated aggregate gross proceeds from the sale of Registrable
Securities included therein is less than $3 million.
5. Underwritten Offerings.
(a) Selection of Underwriters. Whenever a registration
requested pursuant to Section 4 hereof is for an Underwritten Offering, the
Initiating Holders shall select managing underwriter(s) of recognized standing
to administer the offering, subject to approval by the Company with such
approval not to be unreasonably withheld, and each Holder requesting
registration of its Registrable Securities for disposition in an Underwritten
Offering agrees to include such Registrable Securities such Underwritten
Offering and shall be bound by the provisions of this Section 5.
(b) Underwriting Agreement. If requested by the
underwriters for any Underwritten Offering of Registrable Securities pursuant to
a registration requested under Section 4 hereof, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain representations and warranties by the Company and other terms and
provisions not inconsistent with this Agreement as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities to the effect and to the extent provided in
Section 8 hereof; and the Company will cooperate with such Holders of
Registrable Securities to the end that the conditions precedent to the
obligations of such Holders of Registrable Securities under such underwriting
agreement shall not include conditions that are not customary in underwriting
agreements with respect to secondary distributions and shall be otherwise
reasonably satisfactory to such Holders. The Holders on whose behalf shares of
Registrable Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such Holders selling Registrable Securities. Such Holders shall not be required
by the Company to make any representations or warranties to or agreements with
the Company or the underwriters (including any restrictions on sales
inconsistent with Section 5(c) hereof) other than reasonable representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method or methods of disposition and any
other representation required by law. If requested by the underwriters for any
Underwritten Offering of Registrable Securities pursuant to a registration under
Section 2 hereof, the Holders on whose behalf shares of Registrable Securities
are to be distributed by such underwriters shall execute and deliver to such
underwriters and the Company an Underwriting Agreement, subject to the
limitations set forth in the preceding two sentences.
(c) Restrictions on Sales by Holders. If any registration
subject to Section 2 or 4 shall be in connection with an Underwritten Offering
on a firm commitment basis, each Holder agrees, if and to the extent requested
in writing by the managing underwriter, not to effect any public sales or
distribution (other than as part of such Underwritten Offering pursuant to
Section 2 or 4, respectively) of Common Stock, any securities of the Company
similar to Common Stock or any securities of the Company convertible,
exchangeable or exercisable for Common Stock, including a sale pursuant to Rule
144 or pursuant to a registered offering not being distributed on a firm
commitment basis by or through one or more underwriters, within the
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period from seven days prior to the effective date of such registration
statement up to 90 days after the effective date of such registration statement
or such other period not to exceed 120 days after the effective date of such
registration statement as may be required by such managing underwriter.
(d) Restrictions on Sales by the Company. The Company
agrees not to effect any public sale or distribution of any Common Stock, any
securities of the Company similar to Common Stock or any securities of the
Company convertible, exchangeable or exercisable for Common Stock (including
pursuant to a registered offering not being distributed on a firm commitment
basis by or through one or more underwriters) within the period from seven days
prior to the effective date of any registration statement that includes
Registrable Securities to be distributed by or through one or more underwriters
on a firm commitment basis up to 90 days after the effective date of such
registration statement or such other period not to exceed 180 days after the
effective date of such registration statement as may be required by such
managing underwriter unless such sale or distribution is pursuant to such
registration statement (or a separate registration statement filed
concurrently); provided, however, that the foregoing shall not prevent the
conversion or exchange of any securities pursuant to their terms into or for
other securities or the offer or sale of securities by the Company pursuant to a
dividend reinvestment plan or to its employees or directors pursuant to an
employee benefit plan.
6. Registration Procedures.
(a) Each Prospective Seller shall furnish to the Company
such information as the Company may reasonably require for inclusion in the
registration statement (and the prospectus included therein).
(b) The Prospective Sellers shall not (until further
notice) effect sales of the shares covered by the registration statement after
receipt of telegraphic or written notice from the Company to suspend sales to
permit the Company to correct or update a registration statement or prospectus.
7. Expenses of Registration. All expenses of registration
pursuant to either Section 2 or 4, including, without limitation, all
registration and filing fees, printing expenses (including reasonable expenses
of printing prospectuses), expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications or registrations (or the obtaining of exemptions
therefrom) of Registrable Securities), fees and disbursements of counsel,
auditors or experts for the Company, expenses of any audits incidental to or
required by any such registration, expenses of all marketing and promotional
efforts requested by the managing underwriter (collectively, "Registration
Expenses") shall be borne by the Company; provided, however, that each
Prospective Seller shall bear all underwriting discounts, commissions or fees
and all brokerage fees or commissions relating to the sale of its Registrable
Securities and the fees and expenses of counsel for such Prospective Seller.
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8. Indemnification.
(a) Indemnification by the Company. In connection with
any registration statement filed pursuant to Section 2 or 4 hereof, the Company
shall indemnify and hold harmless each Holder selling Registrable Securities
covered by such registration statement, its directors, officers, employees,
agents, each other Person who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls such Holder
or such underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities or expenses (including reasonable costs of investigation
and reasonable legal expenses), joint or several, to which such Person may
become subject, insofar as such losses, claims, damages, liabilities or expenses
(or actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment thereof or supplement
thereto, or any document incorporated by reference therein, or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration, and the Company shall
reimburse such Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding, provided that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense (or action or proceeding in respect thereof) arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged 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 about such Indemnified
Person furnished to the Company through an instrument duly executed by such
Indemnified Person specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Indemnified Person and shall survive the transfer of such securities by such
seller. The Company shall agree to a provision for contribution relating to such
indemnity as shall be reasonably requested by any seller of Registrable Shares
or the underwriters.
(b) Indemnification by the Prospective Sellers. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2 or 4 hereof, that the
Company shall have received an undertaking satisfactory to it from each
Prospective Seller to indemnify and hold harmless such Person, each director of
such Person, each officer of such Person who shall sign such registration
statement, each Person who participates as an underwriter (if such underwriter
so requests) in the offering or sale of such securities and each other Person,
if any, who controls the Company or any such underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any losses,
claims, damages, liabilities or expenses (including reasonable costs of
investigation and reasonable legal expenses), to which such Person may become
subject, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings in respect
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thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment thereof or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such actual or alleged statement or omission
described in (i) or (ii) above was made in reliance upon and in conformity with
written information about such Prospective Seller furnished to such Person
through an instrument duly executed by such Prospective Seller specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. The indemnification obligations of any Prospective Seller shall not
be greater than the dollar amount of the net proceeds received by such
Prospective Seller upon the sale of the Registrable Securities giving rise to
such obligation. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Person or any such director,
officer, participating Person or controlling Person and shall survive the
transfer of such securities by such Prospective Seller.
(c) Notice of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action, proceeding,
investigation or threat involving a claim referred to in Section 8(a) or 8(b),
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, proceeding, investigation or threat; provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 8 except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless a conflict of interest between
such indemnified and indemnifying parties exists in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may wish, and after notice from the indemnifying party to such
indemnified party of its elections so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the consent of the indemnified party, which consent shall
not be unreasonably withheld or delayed, consent to entry of any judgment or
enter into any settlement that 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 subdivisions of this Section 8 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
such Registrable Securities under any state securities or blue sky law or
regulation of a governmental authority other than the Act.
(e) Contribution. If the indemnification provided for in
Section 8(a) or 8(b) above is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
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indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
parties on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.
Such relative fault shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party, or by the indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph; provided that the Company and each holder of Registrable Securities
shall agree with each other and the underwriters of the Registrable Securities,
if requested by such underwriters, that the underwriter's portion of such
contribution shall not exceed the underwriting discount. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities or actions in respect thereof referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
The contribution obligations of any Prospective Seller shall not be greater than
the excess of (i) the dollar amount of the net proceeds received by such
Prospective Seller upon the sale of the Registrable Securities giving rise to
such contribution obligation over (ii) the dollar amount of any damages that
such Holder has otherwise been required to pay by reason of the untrue or
alleged untrue statement or omission or alleged omission giving rise to such
obligation. No Person guilty of fraudulent misrepresentations (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
(f) Indemnification Payments. The indemnification
required by this Section 8 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.
9. Miscellaneous.
(a) Notices. Any notice or other communication required
or permitted to be given hereunder shall be in writing and shall be sent by
overnight courier service; or delivered (in person or by telecopy) against
receipt, in each case to the party to whom it is given: (i) if to the Company,
to it at 390 West Nationwide Boulevard, Columbus, Ohio 43125, with a copy to
John G. Jacob, Chief Financial Officer and (ii) if to the Holders, to each c/o
Oaktree Capital Management, LLC, 1301 Avenue of the Americas, 34th Floor New
York, New York 10019, Attention: Vincent J. Cebula.
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Any notice or other communication given hereunder shall be deemed given
when sent, except for a notice changing a party's address, which shall be deemed
given at the time of receipt thereof.
(b) Assignment. Except with respect to Permitted Transferees,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by the Company or the Holders without the prior written
consent of the other party, and any purported assignment shall be void.
(c) Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Company and the Holders and their
respective successors and permitted assigns.
(d) Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any Person not a
party to this Agreement other than any assignee with respect to whom the
respective assignment was made in accordance with the terms hereof.
(e) Effectiveness. This Agreement shall be effective as of the
date first written above.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Governing Law. This Agreement and the rights and obligations
of the parties under this Agreement shall be governed by, and construed and
interpreted in accordance with, the substantive law of the State of Delaware
without regard to principles of choice or conflicts of laws.
(h) Attorney's Fees. In the event of litigation arising between
the parties respecting the subject matter hereof, the prevailing party shall be
entitled to recover its reasonable attorney's fees and costs.
(i) Expenses. Except as otherwise specifically set forth herein,
each party shall bear its own costs and expenses incurred in connection with
this Agreement or the transactions herein contemplated.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement or caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first written above.
ACORN PRODUCTS, INC.
By: /s/ A. Corydon Meyer
---------------------------------------------
Name: A. Corydon Meyer
Title: President and Chief Executive Officer
TCW SPECIAL CREDITS, as general partner and
investment manager of the funds and accounts set forth
on Exhibit A hereto
By: TCW ASSET MANAGEMENT COMPANY,
its Managing General Partner
By: /s/ Richard Masson
---------------------------------------------
Name: Richard Masson
Title: Authorized Signatory
By: /s/ Matthew Barrett
---------------------------------------------
Name: Matthew Barrett
Title: Authorized Signatory
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EXHIBIT A
SCHEDULE OF SHAREHOLDERS
TCW SPECIAL CREDITS FUND III
TCW SPECIAL CREDITS FUND IIIB
TCW SPECIAL CREDITS TRUST IIIB
THE COMMON FUND FOR BOND INVESTMENTS, INC.
DELAWARE STATE EMPLOYEES' RETIREMENT FUND
WEYERHAEUSER COMPANY MASTER RETIREMENT TRUST (TCW)
TCW SPECIAL CREDITS TRUST
TCW SPECIAL CREDITS TRUST IV
TCW SPECIAL CREDITS TRUST IV-A
TCW SPECIAL CREDITS FUND IV
TCW SPECIAL CREDITS PLUS FUND
13
EXHIBIT B
SCHEDULE OF FUND INVESTORS
14