EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
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This Agreement dated as of November 26, 1997 is entered into by and
among Holmes Products Corp., a Massachusetts corporation (the "Company"), those
persons listed on Schedule 1 hereto (the "Berkshire Investors"), those persons
listed on Schedule 2 hereto (the "Management Stockholders") and Asco Investments
Ltd., a Bahamas corporation ("Asco;" and at times, together with the Berkshire
Investors and the Management Stockholders, the "Stockholders").
WHEREAS, the Berkshire Investors own an aggregate of 327.17887 shares
of Common Stock, $0.01 par value per share (the "Common Stock") of the Company,
following (i) the consummation of the transactions contemplated by the Stock
Purchase and Redemption Agreement, dated as of October 24, 1997, by and among
the Company, Holmes Acquisition LLC and the other parties named therein (the
"Purchase Agreement") and (ii) that certain Stock Purchase Agreement dated as of
October 24, 1997 by and between Jordan A. Kahn and Holmes Acquisition LLC;
WHEREAS, the Management Stockholders own an aggregate of 121.60271
shares of Common Stock and Asco owns an aggregate of 24.11787 shares of Common
Stock;
WHEREAS, the Stockholders have required, as a condition to the
consummation of the transactions contemplated by the Purchase Agreement, that
the Company provide for certain arrangements with respect to the registration of
the shares of Common Stock under the Securities Act of 1933, as amended, and the
parties are willing to execute this Agreement and to be bound by the provisions
hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Common Stock" means the common stock, $.01 par value per share, of the
Company.
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 7.
"Registrable Shares" means (i) any shares of Common Stock now owned or
hereafter acquired by the Stockholders and (ii) any shares of Common Stock
issued in respect of such shares (because of stock splits, stock dividends,
reclassification, recapitalizations, or similar events); provided, however, that
shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares (x) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (y) upon any sale in any manner to a person
or entity which, by virtue of Section 19 of this Agreement, is not entitled to
the rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
2. Demand Registrations.
(a) If, either (i) prior to the initial public offering of
equity securities of the Company, or (ii) after 180 days following a public
offering of equity securities of the Company, the Company shall receive a
written request (specifying that it is being made pursuant to this Section 2(a))
from the Berkshire Investors requesting that the Company file a registration
statement under the Securities Act or a similar document pursuant to any other
statute then in effect corresponding to the Securities Act, covering the
registration of Registrable Shares then owned by such Berkshire Investors, then
the Company shall not later than one hundred eighty (180) days after receipt by
the Company of such a written request, file a registration statement with the
Commission relating to such Registrable Shares as to which such request for a
demand registration relates and the Company shall use its best efforts to cause
the offering of such Registrable Shares to be registered under the Securities
Act. The Company shall be obligated to effect only two (2) registrations
pursuant to this Section 2(a); provided, however, that (i) no registration
initiated hereunder shall count as a registration initiated hereunder unless and
until it shall have been declared effective by the Commission and (ii) the
Berkshire Investors shall only have the right to request a registration pursuant
to this Section 2(a) if (A) at the time of any such request, the Berkshire
Investors hold in the aggregate an amount equal to at least fifteen percent
(15%) of the Registrable Shares or (B) any such request is a request to register
at least 50% of the Registrable Shares then owned by the Berkshire Investors.
(b) If, pursuant to Section 3, the total amount of Registrable
Shares that all Stockholders request to be included in an offering made pursuant
to this Section 2 exceeds the
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amount of securities that the underwriters reasonably believe compatible with
the success of the offering, then the Company will include in such registration
only the number of securities which, in the good faith opinion of such
underwriters, can be sold, in the following order: first, the Registrable Shares
requested to be included by the Berkshire Investors; second, that number of
shares which the Company desires to include pursuant to Section 2(d); and third,
the Registrable Shares requested to be included by all Stockholders pursuant to
Section 3 hereof pro rata based on the number of Registrable Shares each of them
owns.
(c) The underwriter of any registration requested under this
Section 2 shall be selected by the Berkshire Investors and shall be reasonably
acceptable to the Company.
(d) The Company may include shares in any registration
requested under this Section 2 if the inclusion of such shares would not limit
the number of Registrable Shares sought to be included by the Berkshire
Investors making the demand or reduce the offering price thereof; provided that
if the number of shares sold by the Berkshire Investors is less than one-half of
the number of shares subject to such registration as a result of the shares
included by the Company, then such registration shall be deemed to have been
effected under Section 3 hereof and shall not count as one of the two
registrations which may be requested by the Berkshire Investors making the
demand pursuant to this Section 2.
3. Piggyback Registration. If, at any time, the Company determines to
register any of its equity securities (excluding the registration of any equity
security issued to non-affiliates of the Company as part of a bona fide debt
offering of units comprised of such equity security and a debt security of the
Company) for its own account or for the account of others under the Securities
Act in connection with the public offering of such securities, the Company
shall, at each such time, promptly give each Stockholder written notice of such
determination no later than fifteen (15) business days before the effective date
of any such registration. Upon the written request of any Stockholder received
by the Company within ten (10) business days after the giving of any such notice
by the Company, the Company shall use its best efforts to cause to be registered
under the Securities Act all of the Registrable Shares of each Stockholder that
such Stockholder has requested be registered. If the total amount of Registrable
Shares that are to be included by the Company (or other person (including any
Stockholder) for whose account the registration is made) for its own account and
at the request of Stockholders pursuant to this Section 3 exceeds the amount of
securities that the underwriters reasonably believe compatible with the success
of the offering, then the Company will include in such registration only the
number of securities which in the opinion of such underwriters can be sold, in
the following order:
(i) first, the equity securities of the Company (or other
person at whose request the registration is made);
(ii) second, if the registration is not for the account of the
Company, the equity securities of the Company; and
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(iii) third, the Registrable Shares requested to be included
by the Stockholders pro rata based on the number of Registrable Shares
which each of them owns; provided, however if an underwriter who is not
an affiliate of any Stockholder or the Company, in good faith, requests
for the success of the offering that the number of Registrable Shares
to be sold by any of the Stockholders exercising piggyback rights
pursuant to this Section 3 be apportioned or excluded, such number of
Registrable Shares of such Stockholders shall be reduced or not
included to the extent so requested by said underwriter.
4. Registration on Form S-3. The Company shall use its best efforts to
qualify for registration on Form S-3 or any comparable or successor form; and to
that end the Company shall register (whether or not required by law to do so)
the Common Stock under the Exchange Act in accordance with the provisions of the
Exchange Act following the effective date of the first registration of any
securities of the Company on Form S-1 or any comparable or successor form. After
the Company has qualified for the use of Form S-3, in addition to the rights
contained in Section 2 hereof, the Stockholders shall have the right to request
an unlimited number of registrations on Form S-3 (such requests shall be in
writing and shall state the number of shares of Registrable Shares to be
disposed of and the intended methods of disposition of such shares by such
Stockholder or Stockholders), provided that in no event shall the Company be
required to register shares with an aggregate market value of less than Three
Million Dollars ($3,000,000) and the Company shall not be required to register
Shares under this Section 4 more than twice in any twelve (12) month period.
5. Obligations of the Company.
(a) Whenever required under Sections 2 or 3 hereof to use its
best efforts to effect the registration of any Registrable Shares, the Company
shall:
(1) Prepare and file with the Commission a registration
statement with respect to such Registrable Shares and use its best
efforts to cause such registration statement to become and remain
effective, including, without limitation, filing of post-effective
amendments and supplements to any registration statement or prospectus
necessary to keep the registration statement current;
(2) as expeditiously as reasonably possible, prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement and to keep each
registration and qualification under this Agreement effective (and in
compliance with the Securities Act) by such actions as may be necessary
or appropriate for a period of up to 180 days (if, in the reasonable
discretion of the Stockholders owning securities covered by such
registration statement, such period of time is necessary for the
successful completion of
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the offering of such securities) after the effective date of such
registration statement, all as requested by such Stockholders;
(3) as expeditiously as reasonably possible furnish to the
Stockholders such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Shares owned by
them;
(4) as expeditiously as reasonably possible use its best
efforts to register and qualify the securities covered by such
registration statement under such securities or "blue sky" laws of such
jurisdictions as shall be reasonably appropriate for the distribution
of the securities covered by the registration statement, provided that
the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such jurisdiction, and further
provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any
jurisdiction in which the securities shall be qualified shall require
that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling stockholders, then
such expenses shall be payable by selling stockholders pro rata, to the
extent required by such jurisdiction;
(5) use its best efforts to cause all Registrable Shares
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 seller or sellers thereof to consummate the
disposition or such Registrable Shares;
(6) notify each seller of Registrable Shares covered by such
registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made, and at the request of any such seller or
Stockholders promptly prepare to furnish to such seller or Stockholders
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 the light of the circumstances under which
they were made;
(7) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as
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reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with
the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and will furnish to
each such seller of Registrable Shares at least two (2) business days
prior to the filing thereof a copy of any post-effective amendment or
supplement to such registration statement or prospectus and shall not
file any thereof to which any such seller shall have reasonably
objected, except to the extent required by law, on the grounds that
such amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or of the rules or
regulations thereunder;
(8) provide and cause to be maintained a transfer agent and
registrar for all Registrable Shares covered by such registration
statement from and after a date not later than the effective date of
such registration statement; and
(9) use its best efforts to list all Registrable Shares
covered by such registration statement on any securities exchange on
which any class of Registrable Shares is then listed.
(b) The Company will furnish to each Stockholder on whose
behalf Registrable Shares have been registered pursuant to this Agreement a
signed counterpart, addressed to such Stockholder, an opinion of counsel for the
Company dated the effective date of such registration statement, and such
opinion of counsel shall cover those matters which are customarily covered in
opinions of issuer's counsel delivered to underwriters in connection with
underwritten public offerings of securities.
(c) To the extent then permitted under applicable professional
guidelines and standards, obtain a comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by comfort letters and an opinion from the Company's counsel
in customary form and covering such matters of the type customarily covered in a
public issuance of securities, in each case addressed to the Stockholder, and
provide copies thereof to the Stockholders;
(d) Except as otherwise set forth in Section 3, if the Company
at any time proposes to register any of its equity securities under the
Securities Act, whether or not for sale for its own account, and such securities
are to be distributed by or through one or more underwriters, then the Company
will make reasonable efforts, if requested by any Stockholder who requests
registration of Registrable Shares in connection therewith pursuant to Section 2
or 3 hereof, to arrange for such underwriters to include such Registrable Shares
among the securities to be distributed by or through such underwriters.
(e) In connection with the preparation and filing of each
registration statement registering Registrable Shares under this Agreement, the
Company will give the Stockholders on
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whose behalf such Registrable Shares are to be so registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such access
to its books and records and such opportunities to discuss the business of the
Company with its officers, its counsel and the independent public accountants
who have certified its financial statements, as shall be necessary, in the
opinion of such Stockholders or such underwriters or their respective counsel,
in order to conduct a reasonable and diligent investigation within the meaning
of the Securities Act.
6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Stockholders shall furnish to the Company such information regarding them,
the Registrable Shares held by them, and the intended method of disposition of
such securities as the Company shall reasonably request and as shall be required
in connection with the action to be taken by the Company.
7. Expenses of Registration. All expenses incurred in connection with a
registration pursuant to Sections 2 or 3 hereof (excluding underwriters'
discounts and commissions, which shall be borne by the sellers), including
without limitation all registration and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Stockholders
(which counsel shall be selected by a majority in interest of such Stockholders)
shall be borne by the Company; provided, however, that the Stockholders
requesting a demand registration pursuant to Sections 2(a) or 2(b) may withdraw
such request, in which event so long as such Stockholders agree to pay all
expenses incurred by the Company in connection with such requested registration,
such withdrawn request shall be deemed for all purposes herein not to have been
made.
8. Underwriting Requirements. In connection with any registration of
Registrable Shares under this Agreement, the Company will, if requested by the
underwriters for any Registrable Shares included in such registration, enter
into an underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company, and
such other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, provisions relating to indemnification and contribution. The
Stockholders on whose behalf Registrable Shares 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 be also made to and
for the benefit of such Stockholders. The Company shall use its reasonable best
efforts to cause the underwriting agreement to comply with Section 9 to this
Agreement.
9. Indemnification. In the event any Registrable Shares are included in
a registration statement as provided in this Agreement:
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(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Stockholder requesting or joining in a
registration, any underwriter (as defined in the Securities Act) for
it, and each person, if any, who controls such Stockholder or such
underwriter within the meaning of the Securities Act, from and against
any losses, claims, damages, expenses (including reasonable attorneys'
fees and expenses and reasonable costs of investigation) or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or
are based on any untrue or alleged untrue statement of any material
fact contained in such registration statement including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or
arise out of any alleged violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the
Company and relating to action or inaction required of the Company in
connection with any such registration; provided, however, that the
indemnity agreement contained in this Section 9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable to anyone for any such loss claim, damage,
liability or action to the extent that it arises out of or is based
upon an untrue statement or omission made in connection with such
registration statement, preliminary prospectus, final prospectus or
amendments or supplements thereto in reliance upon and in conformity
with written information furnished expressly for use in connection with
such registration by such Stockholder, underwriter or control person.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Stockholder, underwriter or
control person and shall survive the transfer of such securities by
such Stockholder.
(b) To the fullest extent permitted by law, each Stockholder
requesting or joining in a registration will indemnify and hold
harmless the Company, as the case may be, each of its directors, each
of its officers who has signed the registration statement, each person,
if any, who controls the Company within the meaning of the Securities
Act, and each agent and any underwriter for the Company and any person
who controls any such agent or underwriter and each other Stockholder
and any person who controls such Stockholder (within the meaning of the
Securities Act) against any losses, claims, damages or liabilities to
which the Company or any such director, officer, control person, agent,
underwriter, or other Stockholder may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based
upon an untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto,
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or
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necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
omission was made in such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and
in conformity with written information furnished by such Stockholder
with respect to such Stockholder expressly for use in connection with
such registration; and such Stockholder will reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, control person, agent, underwriter, or other Stockholder in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided however, the indemnity obligation
of each such Stockholder hereunder shall be limited to and shall not
exceed the net proceeds actually received by such Stockholder upon a
sale of Registrable Shares pursuant to a registration statement
hereunder; and provided, further that the indemnity agreement contained
in this Section 9(b) shall not apply to amounts paid in settlements
effected without the consent of such Stockholder (which consent shall
not be unreasonably withheld). 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, Stockholder, underwriter
or control person and shall survive the transfer of such securities by
such Stockholder.
(c) Any person seeking indemnification under this Section 9
will (i) give prompt notice to the indemnifying party of any claim with
respect to which it seeks indemnification (but the failure to give such
notice will not affect the right to indemnification hereunder, unless
the indemnifying party is materially prejudiced by such failure) and
(ii) unless in such indemnified party's reasonable judgment a conflict
of interest may exist between such indemnified and indemnifying parties
with respect to such claim, permit such indemnifying party, and other
indemnifying parties similarly situated, jointly to assume the defense
of such claim with counsel reasonably satisfactory to the parties. In
the event that the indemnifying parties cannot mutually agree as to the
selection of counsel, each indemnifying party may retain separate
counsel to act on its behalf and at its expense. The indemnified party
shall in all events be entitled to participate in such defense at its
expense through its own counsel. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent
will not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation. An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such additional counsel.
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(d) If for any reason the foregoing indemnification is
unavailable to any party or insufficient to hold it harmless as and to
the extent contemplated by the preceding paragraphs of this Section 9,
then each indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim,
damage expense or liability in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand,
and the applicable indemnified party, as the case may be, on the other
hand, and also the relative fault of the Company and any applicable
indemnified party, as the case may be, as well as any other relevant
equitable considerations.
10. Lock-Up Agreement. If required by the underwriter, each Stockholder
agrees not to sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by such Stockholder (other than securities
included in the applicable registration statement or shares purchased in the
public market after the effective date of registration) or any interest or
future interest therein during such period (not to exceed 180 days if such
registration is the Company's initial public offering and not to exceed 90 days
if such registration is other than the Company's initial public offering) as is
acceptable to the underwriter following the effective date of each registration
statement of the Company filed under the Securities Act which includes
securities to be sold to the public in an underwritten offering. The Company may
impose stop transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of said period.
11. No Inconsistent Agreements. The Company agrees that it has not
entered into, and it will not hereafter enter into, any Agreement with respect
to the registration of its securities that is inconsistent with (or superior to)
the rights granted to the Stockholders in this Agreement.
12. Stock Split. If, on or after the receipt by the Company of a
request for registration of a public offering pursuant to Section 2 hereof, the
proposed managing underwriter or underwriters of such offering reasonably
believes that the number of shares to be registered is less than the minimum
number necessary for the success of such offering, the Company shall use its
best efforts to cause each share of its outstanding Common Stock to be converted
into such number of shares of such Common Stock so that the number of shares of
Registrable Shares to be registered is equal to the minimum number which such
managing underwriter or underwriters reasonably believes is necessary for the
success of such offering. If necessary in connection therewith, the Company
shall use its best efforts to cause to be recommended, approved and adopted by
its Board of Directors and approved and adopted by its stockholders, and, if so
approved and adopted, file and cause to become effective, an amendment to its
certificate of incorporation increasing the number of shares of Common Stock
which the Company is authorized to issue. Each Stockholder hereby agrees to vote
the shares of Common Stock held by it in favor of adopting such amendment.
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13. Rule 144 Requirements. After the earlier of (i) the closing of the
sale of securities of the Company pursuant to a Registration Statement or (ii)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, the Company agrees:
(a) to comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(b) to use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) to furnish to any holder of Registrable Shares upon
request (i) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company, and (iii) such other reports and documents of the Company
as such holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities without
registration.
14. Mergers, Etc. The Company shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Shares" shall be deemed to be references to
the securities which the Stockholders would be entitled to receive in exchange
for Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Section 14 shall not apply in the
event of any merger, consolidation or reorganization in which the Company is not
the surviving corporation if the Stockholders are entitled to receive in
exchange for their Registrable Shares consideration consisting solely of (i)
cash, (ii) securities of the acquiring corporation which may be immediately sold
to the public without registration under the Securities Act, or (iii) securities
of the acquiring corporation which the acquiring corporation has agreed to
register within (90) days of completion of the transaction for resale to the
public pursuant to the Securities Act.
15. Exception to Registration. The Company shall not be required to
effect a registration under this Agreement if (i) in the written opinion of
counsel for the Company, which counsel and the opinion so rendered shall be
reasonably acceptable to the Stockholders holding Registrable Shares, such
Stockholders may sell without registration under the Act all Registrable Shares
for which they requested registration under the provisions of the Act and in the
manner and in the quantity in which the Registrable Shares were proposed to be
sold or (ii) if the Company determines in its good faith judgment that the use
of any prospectus would require the disclosure of material information that the
Company has a bona fide business purpose for preserving as confidential or the
disclosure of which would impede the Company's ability to
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consummate a transaction which the Company is not otherwise required by
applicable securities laws or regulations to disclose, upon written notice of
such determination by the Company, the rights of the Stockholders to offer, sell
or distribute any Registrable Shares or to require the Company to take action
with respect to the registration or sale of any Registrable Shares pursuant to
this Agreement shall be suspended until the date upon which the Company notifies
the Stockholders in writing (the "Suspension Termination Notice") that
suspension of such rights for the grounds set forth in this Section 15 is no
longer necessary. The Company agrees to give Suspension Termination Notice as
promptly as practicable following the date that such suspension of rights is no
longer necessary (but in any event any such suspension shall be effective for a
period not in excess of 180 days in any calendar year). If the Company shall
give any Suspension Termination Notice, the time periods set forth in Section 2
above shall be extended by the number of days during which the period from and
including the date of the giving of such notice of suspension to and including
the date the Company delivers the Suspension Termination Notice.
The Stockholders each agree not to offer, sell, contract to sell or
otherwise dispose of any Registrable Shares, or any securities convertible into
or exchangeable or excisable for such securities during any period when, and to
the same extent that, any officers of the Company are restricted in connection
with an offering of securities by the Company. The Company shall give reasonable
advance notice to each such Stockholder of such offering.
16. Listing Application. If shares of any class of stock of the Company
shall be listed on a national securities exchange, the Company shall, at its
expense, include in its listing application all of the shares of the listed
class then eligible for listing owned by any Stockholder.
17. Damages. The Company recognizes and agrees that the holder of
Registrable Shares shall not have an adequate remedy if the Company fails to
comply with the provisions of this Agreement, and that damages will not be
readily ascertainable, and the Company expressly agrees that in the event of
such failure any Stockholder shall be entitled to seek specific performance of
the Company's obligations hereunder.
18. Termination. All of the Company's obligations to register
Registrable Shares under this Agreement shall terminate on the fifteenth
anniversary of this Agreement.
19. Transfers of Rights. This Agreement, and the rights and obligations
of each Stockholder hereunder, may be assigned by such Stockholder to any person
or entity acquiring Registrable Shares owned by such Stockholder, and such
transferee shall be deemed a "Stockholder" for purposes of this Agreement. Any
Registrable Shares owned by a transferee hereunder who acquired such Registrable
Shares pursuant to a Permitted Transfer (as such term is defined in the
Company's Stockholders' Agreement), shall be deemed to be owned, for all
purposes of this Agreement, by a member of the Stockholder group of which the
transferring Stockholder is or was a member.
- 12 -
20. General.
(a) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company or a Berkshire Investor, c/o Berkshire Partners LLC,
One Boston Place, Boston, Massachusetts 02108, Attention: Richard K. Lubin, or
at such other address or addresses as may have been furnished in writing by the
Company to the Stockholders, with a copy to Hutchins, Wheeler & Dittmar, A
Professional Corporation, 101 Federal Street, Boston, Massachusetts 02110,
Attention: James Westra, Esq.
If to a Management Stockholder, at such address or addresses as may
have been furnished to the Company in writing by such Management Stockholder,
with a copy to Posternak, Blankstein & Lund, L.L.P. 100 Charles River Plaza,
Boston, Massachusetts 02114, Attention:
Donald H. Siegel, P.C.
If to an Other Stockholder, at the address set forth on Schedule 3
hereto.
Notices provided in accordance with this Section 20(a) shall be deemed
delivered upon personal delivery or two (2) business days after deposit in the
mail.
(b) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
(c) Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, modified, amended or terminated except by a
written agreement signed by the parties hereto; provided, however, that
Stockholders owning at least 80% of the Registrable Shares owned by all
Stockholders may effect any such waiver, modification, amendment or termination
on behalf of all of the Stockholders; provided, further, that, without the
consent of all parties to this Agreement who own Registrable Shares, no
amendment or addition to this Agreement may be made which (i) modifies this
Section 20(c) or (ii) would affect the holders of Registrable Shares in a
disproportionate manner; and provided, further, that no amendment or addition to
this Agreement which affects any Stockholder's rights under Section 2 or 3
hereof may be made without the consent of such Stockholder. For purposes hereof,
the term "disproportionate manner" shall refer to any event which would impair
the rights of one Stockholder while not impairing similar rights held by another
Stockholder. No waiver of any breach or default hereunder shall be considered
valid unless in writing, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature.
- 13 -
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which shall be one and the same document.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the law of The Commonwealth of Massachusetts
(regardless of the laws that might otherwise govern under applicable
Massachusetts principles of conflicts of law) as to all matters, including, but
not limited to, matters of validity, construction, effect, performance and
remedies.
[Remainder of Page Intentionally Left Blank]
- 14 -
HOLMES PRODUCTS CORP.
REGISTRATION RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
COMPANY:
HOLMES PRODUCTS CORP.
/s/ Jordan A. Kahn
----------------------------------
Name: Jordan A. Kahn
Title: President
ASCO:
ASCO INVESTMENT LTD.
By: /s/ James B. Carlson
------------------------------
Name: James B. Carlson
Title: Attorney-In-Fact
S-1
HOLMES PRODUCTS CORP.
REGISTRATION RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
BERKSHIRE INVESTORS:
BERKSHIRE FUND IV, L.P.
By: Fourth Berkshire Associates, L.L.C.
By: /s/ Richard K. Lubin
----------------------------------
Name: Richard K. Lubin
Title: Managing Member
BERKSHIRE INVESTORS LLC
By: /s/ Richard K. Lubin
----------------------------------
Name: Richard K. Lubin
Title: Managing Member
FSC CORP.
By: /s/ Mary Josephs Reilly
----------------------------------
Name: Mary Josephs Reilly
Title: Vice President
BAIN SECURITIES, INC.
By: /s/ Gary Wilkinson
----------------------------------
Name: Gary Wilkinson
Title: Treasurer
SQUAM LAKE INVESTORS II, L.P.
By: GPI, Inc., its General Partner
By: /s/ Gary Wilkinson
----------------------------------
Name: Gary Wilkinson
Title: Treasurer
S-2
HOLMES PRODUCTS CORP.
REGISTRATION RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
BERKSHIRE INVESTORS (continued):
THE PANGAEA GROUP, INC.
By: /s/ Gordon Pan
----------------------------------
Name: Gordon Pan
Title: President
S-3
HOLMES PRODUCTS CORP.
REGISTRATION RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
MANAGEMENT STOCKHOLDERS:
/s/ Jordan A. Kahn
----------------------------------
Jordan A. Kahn
/s/ Stanley Rosenzweig
---------------------------------
Stanley Rosenzweig
/s/ Gregory F. White
---------------------------------
Gregory F. White
/s/ Liu Woon Fai
---------------------------------
Liu Woon Fai
S-4