Document:

ex10-9.htm

Exhibit 10.9

 

REORGANIZATION AGREEMENT

 

This is a REORGANIZATION AGREEMENT, dated as of May 2, 2012 (the “Agreement”), by and among Edgen Group Inc., a Delaware corporation (“Edgen Group”), Edgen Murray II, L.P., a Delaware limited partnership (“EM II LP”), Bourland & Leverich Holdings, LLC, a Delaware limited liability company (“B&L”), EDG Holdco LLC, a Delaware limited liability company (“EDG LLC”), and EM Holdings LLC, a Delaware limited liability company (“EM Holdings”).

 

WHEREAS, Edgen Group was incorporated on December 15, 2011 for the purpose of engaging in an initial public offering (the “Initial Public Offering”) of its equity securities;

 

WHEREAS, on December 29, 2011, Edgen Group filed with the Securities and Exchange Commission a Registration Statement on Form S-1 (File No. 333-178790) to effect the Initial Public Offering (the “Registration Statement”);

 

WHEREAS, on April 26, 2012, the Registration Statement became effective;

 

WHEREAS, on April 26, 2012, Edgen Group entered into the Underwriting Agreement with the underwriters named in the Registration Statement;

 

WHEREAS, on April 27, 2012, Edgen Group amended and restated its certificate of incorporation to, among other things: (a) authorize Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), which has economic rights and one vote per share; (b) authorize Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), which has no economic rights and one vote per share; (c) authorize preferred stock that is undesignated; and (d) convert its one outstanding share of common stock (which is owned by Edgen Holdings LLC, a Delaware limited liability company) to one share of Class A Common Stock;

 

WHEREAS, EM II LP owns all of the issued and outstanding equity interests of EMGH Limited, a limited company organized under the laws of England and Wales (“EMGH”), and all of the issued and outstanding shares of capital stock of Edgen Murray Corporation, a Nevada corporation (“EMC”);

 

WHEREAS, B&L owns all of the membership units of Bourland & Leverich Supply Co. LLC, a Delaware limited liability company (“B&L Supply”);

 

WHEREAS, Edgen Group formed EDG LLC on March 27, 2012 and is its sole member;

 

WHEREAS, EDG LLC formed EM Holdings on March 27, 2012 and is its sole member;

 

  

  

  

WHEREAS, conditioned upon the closing of the Initial Public Offering (the “Closing”), the parties hereto desire to consummate a reorganization (the “Reorganization”) in accordance with the Plan of Reorganization attached as Schedule 1 hereto (the “Plan”);

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.           Definitions.  The following definitions shall be for all purposes applied to the terms used in this Agreement (including the Plan), unless otherwise clearly indicated to the contrary.

 

(a)            “Agreement” has the meaning set forth in the preamble of this Agreement.

 

(b)           “Assignee” has the meaning set forth in Section 11 of this Agreement.

 

(c)           “Assignor” has the meaning set forth in Section 11 of this Agreement.

 

(d)           “B&L” has the meaning set forth in the preamble of this Agreement.

 

(e)           “B&L Indemnitee” shall mean (i) B&L and its Representatives, (ii) the Representatives of each Person referred to in clause (i), and (iii) the successors, heirs, personal representatives and assigns of each Person referred to in clauses (i) and (ii).

 

(f)           “B&L Supply” has the meaning set forth in the preamble of this Agreement.

 

(g)           “Class A Common Stock” has the meaning set forth in the preamble of this Agreement.

 

(h)           “Class B Common Stock” has the meaning set forth in the preamble of this Agreement.

 

(i)           “Closing” has the meaning set forth in the preamble of this Agreement.

 

(j)           “Edgen Group” has the meaning set forth in the preamble of this Agreement.

 

(k)           “EDG LLC” has the meaning set forth in the preamble of this Agreement.

 

(l)           “EM II LP” has the meaning set forth in the preamble of this Agreement.

 

(m)           “EM II LP Indemnitee” shall mean (i) EM II LP and its Representatives, (ii) the Representatives of each Person referred to in clause (i), and (iii) the successors, heirs, personal representatives and assigns of each Person referred to in clauses (i) and (ii).

 

(n)           “EMC” has the meaning set forth in the preamble of this Agreement.

 

(o)           “EMGH” has the meaning set forth in the preamble of this Agreement.

 

  

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(p)           “EM Holdings” has the meaning set forth in the preamble of this Agreement.

 

(q)           “Indemnitees” shall mean EM II LP Indemnitees and B&L Indemnitees.

 

(r)           “Initial Public Offering” has the meaning set forth in the preamble of this Agreement.

 

(s)           “Liabilities” shall mean, with respect to any Person as of any time of determination, all of the debts, liabilities and obligations of any nature whatsoever (whether known or unknown, accrued or fixed, absolute or contingent, matured or unmatured, determined or indeterminable) (i) of such Person as of such time of determination or (ii) arising after the time of determination if resulting from acts or omissions of such Person, or the conduct of such Person’s business, on or before the time of determination.

 

(t)           “Losses” shall mean all losses, Liabilities, damages (including punitive damages), penalties, obligations, awards, judgments, settlements, fines, deficiencies, demands, interest, claims (including third party claims whether or not meritorious), costs and expenses whatsoever (including reasonable attorneys’, consultants’ and other professional fees and disbursements of every kind, nature and description).

 

(u)           “Parties” means Edgen Group, EM II LP, B&L and EDG LLC.

 

(v)           “Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated organization, association (including any group, organization, co-tenancy, plan, board, council or committee), government (including a country, state, county, or any other governmental or political subdivision, agency or instrumentality thereof) or other entity (or series thereof).

 

(w)           “Plan” has the meaning set forth in the preamble of this Agreement.

 

(x)           “Registration Statement” has the meaning set forth in the preamble of this Agreement.

 

(y)           “Reorganization” has the meaning set forth in the preamble of this Agreement.

 

(z)           “Representatives” shall mean, with respect to any Person, the partners (general and/or limited), members, equity holders, managers, directors, officers, employees, attorneys, agents and other representatives and affiliates of such Person.

 

(aa)           “Sale Transaction” has the meaning set forth in Section 15 of this Agreement.

 

(bb)           “Transaction Documents” shall mean this Agreement and any agreement or instrument delivered pursuant hereto.

 

2.           The Reorganization.  Each party hereto shall carry out the Reorganization steps to be carried out by it set forth in the Plan as and when set forth in the Plan. If the Closing does not occur within ten (10) days after the date hereof, this Agreement, including the Plan, shall be void ab initio and of no further force or effect.

 

  

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3.           Representations and Warranties of Edgen Group.  Edgen Group represents and warrants to each of the other Parties hereto as follows:

 

(a)           Edgen Group is a corporation validly existing and in good standing under the laws of the State of Delaware;

 

(b)           Edgen Group has full corporate power and corporate authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions to be carried out by Edgen Group as provided for herein;

 

(c)           The execution and delivery of this Agreement by Edgen Group and the consummation by Edgen Group of the transactions contemplated hereby to be carried out by Edgen Group have been duly and validly authorized by all necessary corporate action on the part of Edgen Group, and no other proceedings on the part of Edgen Group are necessary to authorize this Agreement or to consummate the transactions contemplated hereby to be carried out by Edgen Group;

 

(d)           This Agreement constitutes the legal, valid and binding obligation of Edgen Group, enforceable against Edgen Group in accordance with the terms hereof.

 

4.           Representations and Warranties of EM II LP.  EM II LP represents and warrants to each of the other parties hereto has follows:

 

(a)           EM II LP is a limited partnership validly existing and in good standing under the laws of the State of Delaware;

 

(b)           EM II LP has full limited partnership power and limited partnership authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions to be carried out by EM II LP as provided for herein;

 

(c)           The execution and delivery of this Agreement by EM II LP and the consummation by EM II LP of this Agreement and the transactions contemplated hereby to be carried out by EM II LP have been duly and validly authorized by all necessary partnership action on the part of EM II LP, and no other proceedings on the part of EM II LP  are necessary to authorize this Agreement or to consummate the transactions contemplated hereby to be carried out by EM II LP; and

 

(d)           This Agreement constitutes the legal, valid and binding obligation of EM II LP, enforceable against EM II LP in accordance with the terms hereof.

 

5.           Representations and Warranties of B&L.  B&L represents and warrants to each of the other parties hereto has follows:

 

  

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(a)           B&L is a limited liability company validly existing and in good standing under the laws of the State of Delaware;

 

(b)           B&L has full limited liability company power and limited liability company authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions to be carried out by B&L as provided for herein;

 

(c)           The execution and delivery of this Agreement by B&L and the consummation by B&L of this Agreement and the transactions contemplated hereby to be carried out by B&L have been duly and validly authorized by all necessary limited liability company action on the part of B&L, and no other proceedings on the part of B&L are necessary to authorize this Agreement or to consummate the transactions contemplated hereby to be carried out by B&L; and

 

(d)           This Agreement constitutes the legal, valid and binding obligation of B&L, enforceable against B&L in accordance with the terms hereof.

 

6.           Representations and Warranties of EDG LLC.  EDG LLC represents and warrants to each of the other parties hereto has follows:

 

(a)           EDG LLC is a limited liability company validly existing and in good standing under the laws of the State of Delaware;

 

(b)           EDG LLC has full limited liability company power and limited liability company authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions to be carried out by EDG LLC as provided for herein;

 

(c)           The execution and delivery of this Agreement by EDG LLC and the consummation by EDG LLC of this Agreement and the transactions contemplated hereby to be carried out by EDG LLC have been duly and validly authorized by all necessary limited liability company action on the part of EDG LLC, and no other proceedings on the part of EDG LLC are necessary to authorize this Agreement or to consummate the transactions contemplated hereby to be carried out by EDG LLC; and

 

(d)           This Agreement constitutes the legal, valid and binding obligation of EDG LLC, enforceable against EDG LLC in accordance with the terms hereof.

 

7.           Exclusive Representations and Warranties; Exculpation; Release.  Each Party hereto acknowledges and agrees that: (a) except for the representations and warranties expressly made by the parties hereto, respectively, in this Agreement or any other Transaction Document, none of the parties hereto has made or makes any representations or warranties, including, without limitation, any implied representations or warranties, to any other Party hereto with respect to the subject matter hereof, (b) each of the parties hereto hereby disclaims any such other or implied representations or warranties with respect to the subject matter hereof, (c) such Party is not relying on any representations, warranties, statements or information with respect to the subject matter hereof except for the representations and warranties expressly made to such Party by the parties hereto, respectively, in this Agreement or the other Transaction Documents, and (d) no Party hereto shall have any liability to any other Party hereto in connection with the transactions contemplated hereby, except for any liability that may arise out of (1) any failure by such Party to perform such Party’s obligations under this Agreement or the other Transaction Documents or (2) any breach of any representation or warranty made by such Party in this Agreement or the other Transaction Documents that survives the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (clauses (1) and (2), the “Liability Exceptions”).  In furtherance of the foregoing, each Party hereto hereby waives and releases, to the fullest extent permitted by applicable law, any and all rights, claims and causes of action (including rights of contribution, if any) known or unknown, foreseen or unforeseen, which exist or may arise in the future, that it may have against any other Party or any other Party’s affiliates, with respect to the subject matter of this Agreement or in connection with the transactions contemplated hereby, other than with respect to the Liability Exceptions.

 

  

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8.           Survival of Representations and Warranties.  All representations, warranties, covenants and agreements set forth in this Agreement will survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, regardless of any investigation made by a Party or on its behalf.

 

9.           Expense Reimbursement.  From and after the Closing, Edgen Group shall provide, or cause its subsidiaries to provide, each of EM II LP and B&L with such accounting, legal, tax and administrative services as EM II LP or B&L, as the case may be, shall reasonably request from time to time in connection with its investment in Edgen Group and EDG LLC, including such functions as are currently performed in respect of its pre-Reorganization investments. The quality of the services provided shall be substantially equivalent to the quality with which Edgen Group performs such functions on its own behalf.  From and after the Closing, Edgen Group shall reimburse each of EM II LP and B&L for all reasonable accounting, legal, tax reporting, franchise tax, administrative and general operating and overhead costs and expenses incurred in connection with its investment in Edgen Group and EDG LLC (to the extent not directly incurred by Edgen Group or a subsidiary of Edgen Group).  All payments to be made by Edgen Group pursuant to this Section 9 shall be made by Edgen Group promptly upon or as soon as practicable after presentation by EM II LP or B&L, as the case may be, to Edgen Group of a statement in connection therewith, by wire transfer of immediately available funds to one or more accounts designated by EM II LP or B&L, as the case may be.

 

10.           Amendment; Waiver.  No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in a writing specifically referring to this Agreement and signed by each of the Parties hereto.  No failure or delay in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

 

  

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11.           Addresses and Notices. Except as otherwise expressly provided herein, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be personally delivered or sent by overnight delivery by reputable delivery service or courier, or by facsimile (confirmed with a copy sent by one of the aforementioned methods), to the intended Party at the address or facsimile number of such Party set forth below or at such other address or facsimile number as shall be designated by such Party in a written notice to the other Party hereto. All such notices, requests, claims, demands and other communications shall be deemed to have been delivered and received (i) when delivered personally to the recipient, (ii) upon transmission by facsimile if received during normal business hours of the recipient and, if not, the next Business Day after transmission, as evidenced by confirmation of transmission from the sender’s facsimile machine or (iii) on the date of delivery set forth in the applicable proof of delivery if sent by reputable delivery service or courier.

 

If to Edgen Group, EDG LLC or EM Holdings to:

Edgen Group

18444 Highland Road

Baton Rouge, Louisiana 70809

Attention:  Chief Executive Officer

Facsimile:  (225) 756-7953

If to EM II LP to:

Edgen Murray II, L.P.

c/o Jefferies Capital Partners IV L.P.

520 Madison Avenue

10th Floor

New York, NY 10022

Attention:  Nicholas Daraviras

Facsimile:  (212) 284-1717

If to B&L to:

Bourland & Leverich Holdings LLC

c/o Jefferies Capital Partners IV L.P.

520 Madison Avenue

10th Floor

New York, NY 10022

Attention:  Nicholas Daraviras

Facsimile:  (212) 284-1717

12.           Further Action.  Each Party agrees to execute and deliver all such documents and take or refrain from taking all such actions as may be reasonably requested by any other Party hereto in furtherance of the purposes of this Agreement.

 

  

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13.           Binding Nature; Successors and Assigns; Appointment of Representative.

 

(a)           This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns and executors, administrators and heirs. No Party may assign, delegate, transfer or otherwise dispose of any of its rights or obligations under this Agreement in whole or in part without, in each case, obtaining the prior written consent of the other Parties hereto; provided that, from and after the Closing, each of EM II LP and B&L may from time to time assign, transfer or otherwise dispose of any of its rights under this Agreement in whole or in part to any one or more Persons without consent. If EM II LP or B&L makes any such assignment, transfer or other disposition, it shall have the right to specify the extent thereof and any terms or conditions applicable thereto, including limitations on transfer, assignment or exercise of rights under this Agreement or the other Transaction Documents. Each Party agrees that each of EM II LP and B&L shall have the right to appoint a representative to exercise any of its rights under this Agreement or designate a process for appointing and removing such a representative. The other Parties shall not be required to recognize any purported assignee or transferee as such unless such purported assignee or transferee provides the Parties with evidence reasonably satisfactory to the Parties of the assignment or transfer to such purported assignee or transferee.

 

(b)           Edgen Group agrees not to consummate a merger, consolidation or sale or other disposition (whether by asset sale, equity sale, statutory division, merger or otherwise, and whether in one or more transactions) of all or substantially all of its assets (a “Sale Transaction”) without first delivering to EM II LP and B&L a written agreement of the surviving, resulting, successor or transferee Person that such Person shall be bound by the terms of this Agreement and that provides that EM II LP and B&L are intended third-party beneficiaries of such agreement.  If Edgen Group delivers such an agreement, then, notwithstanding the first sentence of this Section 13, it shall be permitted to consummate the applicable Sale Transaction.

 

(c)           A reference to any party to this Agreement or another agreement or document includes the party’s successors and permitted assigns.

 

(d)           Any purported assignment in violation of this Section 13 shall be void and unenforceable ab initio.

 

14.           No Third Party Beneficiaries. Except as expressly set forth in Section 13, nothing in this Agreement, express or implied, is intended to or shall confer upon anyone other than the Parties and their respective successors and permitted assigns any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

15.           Interpretation. Unless expressly provided for elsewhere in this Agreement, this Agreement shall be interpreted in accordance with the following provisions:

 

(a)           Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine, or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

 

  

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(b)           Any headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

(c)           All references in this Agreement to articles, sections or subdivisions thereof shall refer to the corresponding article, section or subdivision thereof of this Agreement unless specific reference is made to such articles, sections, or subdivisions of another document or instrument.

 

(d)           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 article, section, subsection, schedule and exhibit references are to this Agreement unless otherwise specified.

 

(e)           The word “including” shall mean including without limitation.

 

(f)           The word “or” will have the inclusive meaning represented by the phrase “and/or”.

 

(g)           No presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

(h)           The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

 

16.           Severability. If any provision of this Agreement is illegal, invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law: (i) the other provisions hereof will remain in full force and effect in such jurisdiction and will be liberally and equitably construed in order to carry out as nearly as possible the purpose and intent of this Agreement; (ii) the illegality, invalidity or unenforceability of any such provision in such jurisdiction will not affect the legality, validity or enforceability of such provision in any other jurisdiction; and (iii) in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible so as to be enforceable to the maximum extent compatible with applicable law.

 

17.           Integration.  This Agreement, together with the other Transaction Documents, constitutes the entire agreement and supersedes any and all other prior agreements and undertakings, both written and oral, between or among the Parties with respect to the subject matter hereof.

 

18.           Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal law of the State of Delaware applicable to contracts entered into and to be performed entirely within the State of Delaware by citizens of the State of Delaware, without giving effect to conflicts of laws provisions or any other principles or rules that would require or permit the application of the laws of any other jurisdiction.

 

  

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19.           Submission to Jurisdiction; Waiver of Jury Trial. (a) To the fullest extent permitted by applicable law, each of the Parties hereby irrevocably and unconditionally (i) submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such court is unavailable, any state or federal court located in Wilmington, Delaware, as well as to the appellate jurisdiction of all courts to which an appeal may be taken from such courts, in any action, suit, proceeding or claim arising out of or relating to this Agreement or the transactions contemplated hereby, including the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement, (ii) agrees that all claims in respect of any such action, suit, proceeding or claim shall be brought, heard and determined exclusively in such courts, (iii) agrees that such for a have a reasonable relation to this Agreement, and to the relationship of the Parties with one another; (iv) waives and agrees not to assert any objection that it may now or hereafter have to the laying of venue of any action, suit, proceeding or claim arising out of or relating to this Agreement or the transactions contemplated hereby in any such court, (v) consents to the service of any and all process in any such action, suit, proceeding or claim by the mailing of copies of such process to such Person at its address specified herein or in any other manner permitted by applicable law, (vi) waives to the fullest extent permitted by applicable law any and all rights to a trial by jury in connection with any such action, suit, proceeding or claim, (vii) agrees that a final judgment in any such action, suit, proceeding or claim shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law, and (viii) agrees that performance under this Agreement shall continue if reasonably possible during any such action, suit, proceeding or claim.

 

20.           Counterparts. This Agreement may be executed and delivered in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by facsimile or other electronic transmission will be as effective as physical delivery of a manually executed counterpart hereof.

 

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

 

	 	EDGEN GROUP INC.	 
	 	 	 
	 	 	 	 
	 	
By: 

	/s/ David L. Laxton, III	 
	 	 	Name:  David L. Laxton, III	 
	 	 	Title:  Executive Vice President and Chief Financial Officer	 
	 	 	 	 
	 	 	 	 

	 	

EDG HOLDCO LLC

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ David L. Laxton, III	 
	 	 	Name:  David L. Laxton, III	 
	 	 	Title:  Executive Vice President, Chief Financial Officer and Secretary	 
	 	 	 	 
	 	 	 	 

	 	

EM HOLDINGS LLC

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ David L. Laxton, III	 
	 	 	

Name:  David L. Laxton, III

	 
	 	 	

Title:  Executive Vice President, Chief Financial Officer and Secretary

	 
	 	 	 	 
	 	 	 	 

	 	

EDGEN MURRAY II, L.P.

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ David L. Laxton, III	 
	 	 	Name:  David L. Laxton, III	 
	 	 	Title:  Executive Vice President and Chief Financial Officer	 
	 	 	 	 
	 	 	 	 

	 	

BOURLAND & LEVERICH HOLDINGS LLC

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Robert F. Dvorak	 
	 	 	Name:  Robert F. Dvorak	 
	 	 	

Title:  President and Chief Executive Officer

	 

 

[Signature Page to Reorganization Agreement]

  

  

  

 

Schedule 1

 

Plan of Reorganization

 

This Plan is adopted as of the date first written above by the Parties.

 

The U.S. federal income tax consequences of Step 1 below are intended to be a tax-free exchange pursuant to and governed by Section 351(a) or Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”).  The U.S. federal income tax consequences of Steps 4(a), 6 and 8 below, in connection with the Initial Public Offering, are intended to be governed by Section 351(a) of the Code.  The U.S. federal income tax consequences of each of Steps 4(b)(i), 5, 7, and 10 below are intended to be governed by Section 721(a) of the Code.

 

This Plan consists of the following steps (the “Steps”) all of which shall take place concurrently with the Closing and shall be deemed to occur simultaneously in the following order:

 

1.           Transfer of EMGH Limited by EM II LP to EMC.  EM II LP shall transfer all of the issued and outstanding equity interests of EMGH to EMC (which is EM II LP’s wholly owned subsidiary) in exchange for additional shares of EMC that EMC shall issue to EM II LP, and thereby EMGH shall become a wholly owned subsidiary of EMC.  EMGH shall consent to this share exchange.

 

2.           Assumption of Seller Note by B&L Supply.  B&L Supply shall assume, indemnify B&L against and agree to fully pay, discharge, satisfy and perform all of the Liabilities of B&L under the Contingent Junior Subordinated Note, dated August 19, 2010, made by B&L to Bourland & Leverich Supply Co., L.C. (the “Seller Note”).

 

3.           Redemption of EMC’s Interest in B&L.  In complete redemption of EMC’s entire limited liability company interest in B&L, B&L shall distribute to EMC units it holds in B&L Supply such that EMC owns 13.6% of all of the B&L Supply units following the completion of Step 15.

 

4.           Restricted Units.

 

(a)           For each then outstanding restricted partnership unit of EM II LP granted by EM II LP (each, an “EM Restricted Unit”), Edgen Group shall issue to the holder of such EM Restricted Unit 69.9 shares of restricted Class A Common Stock (the “Restricted Shares”).  Each then outstanding restricted Class B membership unit granted by B&L (the “BL Class B Membership Units”) shall be converted into 0.5737 restricted Class A membership units of B&L.  For each outstanding restricted Class A membership unit of B&L granted by B&L or outstanding as a result of the conversion of BL Class B Membership Units (each, a “BL Restricted Unit” and, together with the EM Restricted Units, the “Restricted Units”), Edgen Group shall issue to the holder of such BL Restricted Unit 213.2 Restricted Shares.

 

  

  

  

(b)           In consideration of the steps described hereinafter:

 

(i)            Edgen Group shall be deemed contribute the Restricted Units to EDG LLC and EDG LLC shall be deemed accept the contribution of the Restricted Units.

 

(ii)           EDG LLC shall be deemed to return the EM Restricted Units to EM II LP and EM II LP shall cancel the EM Restricted Units. EDG LLC shall be deemed to return the BL Restricted Units to B&L and B&L shall cancel the BL Restricted Units.

 

(c)           The Restricted Shares shall contain substantially all of the same terms as the Restricted Units (e.g., vesting, etc.), except to the extent such terms are rendered inoperative by reason of the Reorganization and the Restricted Shares shall not give the holder thereof additional benefits that such holder did not have under the Restricted Unit.

 

5.           Contribution of EMC by EM II LP to EDG LLC.  EM II LP shall contribute 99.9% of the issued and outstanding capital stock of EMC to EDG LLC and EDG LLC shall accept this contribution. In exchange therefor, (a) EDG LLC shall (i) assume, indemnify EM II LP against and agree to fully pay, discharge, satisfy and perform all of the Liabilities of EM II LP as of the Closing and (ii) issue 12,615,230 membership units of EDG LLC to EM II LP, which such units shall be validly issued, fully-paid and non-assessable and free and clear of any mortgage, lien, pledge, charge, equitable interest, security interest, preemptive right, right of first refusal or similar restriction or right, option, title defect or encumbrance of any kind (“Lien”), other than restrictions on transfer generally applicable under securities laws and (b) EM II LP shall be admitted as a member of EDG LLC.

 

6.           Contribution of EMC by EM II LP to Edgen Group.   EM II LP shall contribute 0.1% of the issued and outstanding capital stock of EMC to Edgen Group and Edgen Group shall accept this contribution.  In exchange therefor, Edgen Group shall issue 12,615,230 shares of Class B Common Stock to EM II LP, which such shares shall be validly issued, fully-paid and non-assessable and free and clear of any Lien, other than restrictions on transfer generally applicable under securities laws.

 

7.           Contribution of B&L Supply by B&L to EDG LLC.  B&L shall contribute 99.9% of the issued and outstanding limited liability company interests of B&L Supply held by B&L to EDG LLC and EDG LLC shall accept this contribution.  In exchange therefor, (a) EDG LLC shall (i) assume, indemnify B&L against and agree to fully pay, discharge, satisfy and perform all of the Liabilities of B&L as of the Closing and (ii) issue 11,727,908 membership units of EDG LLC to B&L, which such units shall be validly issued, fully-paid and non-assessable and free and clear of any Lien, other than restrictions on transfer generally applicable under securities laws and (b) B&L shall be admitted as a member of EDG LLC.

 

8.           Contribution of B&L Supply by B&L to Edgen Group.   B&L shall contribute 0.1% of the limited liability company interests of B&L Supply held by B&L to Edgen Group and Edgen Group shall accept this contribution.  In exchange therefor, Edgen Group shall issue 11,727,908 shares of Class B Common Stock to B&L, which such shares shall be validly issued, fully-paid and non-assessable and free and clear of any Lien, other than restrictions on transfer generally applicable under securities laws.

 

  

  

  

9.           Amended and Restated Limited Liability Company Agreement of EDG LLC.  Edgen Group, EM II LP, B&L and EDG LLC shall enter into the Amended and Restated Limited Liability Company Agreement of EDG LLC substantially in the form attached to the Registration Statement at the time it was declared effective.

 

10.           Issuance of EDG LLC Membership Units to Edgen Group.  Edgen Group shall contribute (a) all of the issued and outstanding capital stock of EMC received by Edgen Group in Step 6, (b) all of the issued and outstanding limited liability company interests of B&L Supply received by Edgen Group in Step 8, and (c) $153,862,500 to EDG LLC.  EDG LLC shall accept these contributions and the contribution of Restricted Units in Step 4 and, in exchange therefor, issue 15,000,000 new membership units of EDG LLC to Edgen Group.

 

11.           Exchange Agreements and TRA Agreements.  Edgen Group and EM II LP shall enter into an Exchange Agreement and a Tax Receivable Agreement, each substantially in the form attached to the Registration Statement at the time it was declared effective.  Edgen Group and B&L shall enter into an Exchange Agreement and a Tax Receivable Agreement, each substantially in the form attached to the Registration Statement at the time it was declared effective.  EDG LLC shall also enter into each of those Exchange Agreements.

 

12.           Options.

 

For each then outstanding option to purchase a partnership unit of EM II LP granted by EM II LP (each, an “EM Option”), Edgen Group shall grant to the holder of such EM Option an option to purchase 69.9 shares of Class A Common Stock (each a “New Option”) and EM II LP shall cancel the EM Option.  For each outstanding option to purchase a membership unit of B&L granted by B&L (each, a “BL Option” and, together with the EM Options, the “Old Options”), Edgen Group shall grant to the holder of such BL Option a New Option to purchase 213.2 shares of Class A Common Stock and B&L shall cancel the BL Option.

 

(a)           With respect to any Old Option and the New Option granted in respect thereof:

 

(i)           the excess of the aggregate fair market value (which shall be deemed to be the Initial Public Offering price) of the shares subject to such New Option immediately after the grant of such New Option over the aggregate exercise price of such New Option shall be equal to the excess of the aggregate fair market value (as determined by the Parties in good faith) of all partnership units or membership units, as the case may be, subject to such Old Option immediately before the grant of such New Option over the aggregate exercise price of such Old Option (i.e., the aggregate spread on the New Option must not exceed the aggregate spread on the Old Option); and

 

  

  

  

(ii)           the ratio of the exercise price to the fair market value (as determined by the Parties in good faith) of the New Option immediately after the grant of the New Option shall be equal to the ratio of the exercise price to the fair market value (as determined by the Parties in good faith) of the Old Option immediately before the cancelation of the Old Option.

 

(b)           The New Option shall contain substantially all of the same terms as the Old Option (e.g., vesting, etc.), except to the extent such terms are rendered inoperative by reason of the Reorganization and the New Option shall not give the option holder additional benefits that the option holder did not have under the Old Option.

 

13.           Surrender of Outstanding Class A Common Stock.  Edgen Holdings LLC shall surrender its one share of Class A Common Stock to Edgen Group without consideration.

 

14.           Contribution of EMC by EDG LLC to EM Holdings.  EDG LLC shall contribute all of the capital stock of EMC to EM Holdings.

 

15.           B&L Supply Debt Repayment.  EDG LLC shall contribute $125,444,366.17 million of proceeds to B&L Supply.  B&L Supply shall accept such contribution and issue new membership units of B&L Supply to EDG LLC such that EDG LLC owns 86.4% of all of the membership units of B&L Supply following the completion of Steps 3 and 15.  B&L Supply shall (a) pay off the Credit Agreement, dated as of August 19, 2010, among B&L, B&L Supply, the Subsidiary Guarantors (as defined therein), the lenders party thereto and Jefferies Finance LLC, (b) pay down borrowings outstanding under the Credit Agreement, dated as of August 19, 2010, by and among B&L Supply, B&L, the Guarantors party thereto, the Lenders party thereto, Regions Bank, RBS Business Capital and Jefferies Finance LLC and (c) pay down borrowings outstanding under the Seller Note.

 

16.           EMC Debt Repayment.  EDG LLC shall contribute $26,418,133.83 million of proceeds to EM Holdings.  EM Holdings shall accept such contribution and contribute such amount to EMC. EMC shall accept such contribution and shall pay down borrowings outstanding under the Credit Agreement, dated as of May 11, 2007, by and among EMC, Edgen Murray Canada, Inc. and Edgen Murray Europe Limited, the other Loan Parties party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., JPMorgan Chase Bank N.A., Toronto Branch and J.P. Morgan Europe Limited.

 

17.           Purchase of B&L Supply Units.  If EM II LP so elects, EM Holdings shall purchase such number of EMC’s B&L Supply membership units as EM II LP shall elect for fair market value in cash or, if EMC so elects, a note from EM Holdings in such amount. Fair market value shall be determined by EM II LP and EM Holdings in good faith.  Any payments made pursuant to the Tax Receivable Agreement between Edgen Group and EM II LP referred to in Step 11 above on account of any purchase of B&L Units in this Step 17 shall be treated as additional proceeds paid for the stock of EMC in connection with Step 5 above.ex10-10.htm

Exhibit 10.10

 

______________________________________________________________________________

 

 

INVESTORS AND REGISTRATION RIGHTS AGREEMENT

 

by and among

 

EDGEN GROUP INC.

 

and

 

THE INVESTORS NAMED HEREIN

 

Dated as of May 2, 2012

 

______________________________________________________________________________

 

 

 

 

	
1.

	
Definitions 

	
1

 

	
2.

	
Registrable Securities 

	
4

 

	
3.

	
180 Day Registration 

	
4

 

	
4.

	
Incidental Registration 

	
5

 

	
  

	
(a)

	
Right to Include Registrable Securities 

	
5

 

	
  

	
(b)

	
Priority in Incidental Registrations 

	
6

 

	
  

	
(c)

	
Expenses 

	
6

 

	
  

	
(d)

	
Liability for Delay 

	
6

 

	
  

	
(e)

	
Participation in Underwritten Registrations 

	
6

 

	
5.

	
Demand Registration 

	
7

 

	
  

	
(a)

	
Right to Demand Registration 

	
7

 

	
  

	
(b)

	
Number of Demand Registrations 

	
7

 

	
  

	
(c)

	
S-3 Registrations 

	
7

 

	
  

	
(d)

	
Requests for Shelf Registration 

	
7

 

	
  

	
(e)

	
Priority on Demand Registration 

	
8

 

	
6.

	
Registration Procedures 

	
9

 

	
7.

	
Indemnification 

	
11

 

	
  

	
(a)

	
Indemnification by the Company 

	
11

 

	
  

	
(b)

	
Indemnification by the Investors Holding Registrable Securities Which Are Registered 

	
12

 

	
  

	
(c)

	
Conduct of Indemnification Proceedings 

	
12

 

	
  

	
(d)

	
Contribution 

	
13

 

	
8.

	
Restrictions on Public Sale by the Company and Others 

	
14

 

	
9.

	
Public and Underwritten Offerings 

	
14

 

	
10.

	
Rights in Respect of the Board 

	
14

 

	
11.

	
Limitation on Subsequent Registration Rights 

	
15

 

	
12.

	
Miscellaneous 

	
15

 

	
  

	
(a)

	
Amendment; Waiver 

	
15

 

	
  

	
(b)

	
Addresses and Notices 

	
15

 

	
  

	
(c)

	
Further Action 

	
16

 

	
  

	
(d)

	
Binding Nature; Successors and Assigns; Appointment of Representative16

 

	
  

	
(e)

	
No Third Party Beneficiaries 

	
17

 

	
  

	
(f)

	
Interpretation 

	
17

 

 

 

 

 

	
  

	
(g)

	
Severability 

	
18

 

	
  

	
(h)

	
Integration 

	
18

 

	
  

	
(i)

	
Governing Law 

	
18

 

	
  

	
(j)

	
Submission to Jurisdiction; Waiver of Jury Trial 

	
18

 

	
  

	
(k)

	
Counterparts 

	
19

 

	
  

	
(l)

	
Remedies 

	
19

 

	
  

	
(m)

	
Current Public Information 

	
20

 

	
  

	
(n)

	
Recapitalization, Exchange, Etc 

	
20

 

 

iii

 

DEFINED TERMS

	
180 Day Registration

	
1, 5

	
Affiliate

	
1

	
Agreement

	
1

	
B&L

	
1

	
Business Day

	
2

	
Class A Common Stock

	
1, 2

	
Class B Common Stock

	
1, 2

	
Company

	
1, 2

	
Confidential Information

	
2

	
Damages

	
12

	
Demand Registration

	
2, 7

	
Demand Registration Request

	
2, 7

	
EDG

	
1, 2

	
EM II LP

	
1, 2

	
Exchange Act

	
2

	
Exchange Agreements

	
1, 2

	
Exchanges

	
1, 2

	
Incidental Registration

	
2, 6

	
Initial Public Offering

	
1, 2

	
Investor

	
1

	
Investors

	
1, 3

	
Notice

	
3, 5

	
Parties

	
3

	
Person

	
3

	
Prospectus

	
3

	
Public Offering

	
3

	
Registrable Securities

	
3

	
Registration Expenses

	
3

	
Registration Statement

	
3

	
Representative

	
4, 14

	
S-3 Registration

	
7

	
S-3 Registration Request

	
7

	
Sale Transaction

	
4, 16

	
Securities

	
4

	
Securities Act

	
4

	
Shelf Registration Statement

	
4, 8

	
Shelf Request

	
4, 8

	
Special Registration Statement

	
5

	
Threshold Amount

	
5, 14

	
Underwritten Offering

	
5

	
Underwritten Registration

	
5

 

iv

 

 

INVESTORS AND REGISTRATION RIGHTS AGREEMENT

 

THIS IS AN INVESTORS AND REGISTRATION RIGHTS AGREEMENT, dated as of May 2, 2012 (the “Agreement”), by and among Edgen Group Inc., a Delaware corporation (the “Company”), Edgen Murray II, L.P., a Delaware limited partnership (“EM II LP”), and Bourland & Leverich Holdings LLC, a Delaware limited liability company (“B&L” and, together with EM II LP, the “Investors” ).  Each of the Investors are sometimes referred to herein individually as an “Investor”.

 

WHEREAS, on the date hereof the Company is consummating an initial public offering (the “Initial Public Offering”) of its Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”);

 

WHEREAS, pursuant to two separate exchange agreements (the “Exchange Agreements”) each Investor shall have the right from time to time to exchange one (1) share of the Company’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), together with one (1) membership unit of EDG Holdco LLC (“EDG”), for one (1) share of Class A Common Stock (the “Exchanges”);

 

WHEREAS, the parties hereto desire to provide for certain registration rights with respect to the Class A Common Stock, as well as certain board observer rights, all on the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.           Definitions.

 

As used in this Agreement, the following capitalized terms shall have the following meanings:

 

“180 Day Registration” has the meaning set forth in Section 3(a) of this Agreement.

 

 “Agreement” has the meaning set forth in the Preamble to this Agreement.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the Rules promulgated under the Exchange Act.

 

“B&L” has the meaning set forth in the Preamble to this Agreement.

 

“Business Day” means a day other than a Saturday, Sunday, federal or New York State holiday or other day on which commercial banks in New York City are authorized or required by law to close.

 

“Class A Common Stock” has the meaning set forth in the Preamble to this Agreement.

 

 

 

 

“Class B Common Stock” has the meaning set forth in the Preamble to this Agreement.

 

“Company” has the meaning set forth in the Preamble of this Agreement.

 

“Confidential Information” means any information concerning the Company and its current or future subsidiaries or the financial condition, business, operations or prospects of the Company and its current or future subsidiaries furnished to an Investor pursuant to Section 10(a); provided that the term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by the Investor in violation of this Agreement, (ii) is or was available to the Investor on a non-confidential basis or (iii) was or becomes available to the Investor from a source other than the Company.

 

“Demand Registration” has the meaning set forth in Section 5(a) of this Agreement.

 

“Demand Registration Request” has the meaning set forth in Section 5(a) of this Agreement.

 

“EDG” has the meaning set forth in the Preamble to this Agreement.

 

“EM II LP” has the meaning set forth in the Preamble to this Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“Exchange Agreements” has the meaning set forth in the Preamble to this Agreement.

 

“Exchanges” has the meaning set forth in the Preamble of this Agreement.

 

“Incidental Registration” has the meaning set forth in Section 4(a)(1) of this Agreement.

 

“Initial Public Offering” has the meaning set forth in the Preamble to this Agreement.

 

“Investors” has the meaning set forth in the Preamble of this Agreement.

 

“Notice” has the meaning set forth in Section 4(a)(1) of this Agreement.

 

“Parties” means the Investors and the Company.

 

“Person” means an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof or any other entity of any kind.

 

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

 

 

2

 

“Public Offering” means a successfully completed firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act (other than a Special Registration Statement) in respect of the offer and sale of Securities of the Company for the account of the Company.

 

“Registration Expenses” means the costs and expenses of all registrations and qualifications under the Securities Act, and of all other actions the Company is required to take in order to effect the registration of Registrable Securities under the Securities Act pursuant to this Agreement (including all federal and state registration and filing fees, printing expenses, fees and disbursements of counsel for the Company and the fees and expenses of the Company’s independent public accountants (including the expenses of any special audit and “cold comfort” letters required by or incident to such registration)) other than the costs and expenses of any Investor whose Registrable Securities are to be registered pursuant to this Agreement comprising underwriters’ commissions, brokerage fees, transfer taxes and the fees and expenses of any accountants or other representatives retained by any Investor; provided, however, that the term “Registration Expenses” shall include the fees and expenses of one counsel for the Investors designated by the Investor holding a majority of Registrable Securities being registered, or proposed to be registered, in any offering that is the subject of this Agreement.

 

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Registrable Securities” means (i) the Class A Common Stock delivered or deliverable to the Investors pursuant to the Exchange Agreements, (ii) any other Security of the Company or any successor thereto (including, without limitation, security of an entity resulting from a reorganization or recapitalization of the Company) into which any such shares of Class A Common Stock are converted or for which any such shares of Class A Common Stock are exchanged and (iii) any other Securities issued or issuable directly or indirectly with respect to the Securities referred to in clauses (i) or (ii) above by way of a dividend, distribution or equity split or in connection with an exchange or a combination of equity interests, recapitalization, reclassification, merger, consolidation or other reorganization.  For purposes of this Agreement; provided that the term “Registrable Securities” shall not include securities of an Investor that would otherwise constitute Registrable Securities when (a)(x) a Registration Statement covering such securities has been declared effective under the Securities Act by the SEC and such securities have been disposed of pursuant to such effective Registration Statement and (y) such Investor is not an affiliate (as defined in Rule 144 under the Securities Act) of the Company, (b) the entire amount of such securities proposed to be sold by such Investor in a single sale constitutes less than 1% of the then outstanding shares of Class A Common Stock or (c) such securities have been sold in a sale made pursuant to Rule 144 under the Securities Act and such Investor is not an affiliate (as defined in Rule 144 under the Securities Act) of the Company.

 

 

3

 

“Representative” has the meaning set forth in Section 10(a) of this Agreement.

 

“Sale Transaction” has the meaning set forth in Section 11(d)(ii) of this Agreement.

 

“Securities” means (i) any Class B Common Stock, (ii) Class A Common Stock, (iii) any other equity security of the Company or any successor thereto (including, without limitation, security of an entity resulting from a reorganization or recapitalization of the Company) and (iv) any other equity securities issued or issuable directly or indirectly with respect to the securities referred to in clauses (i) (ii) or (iii) above by way of a dividend, distribution or equity split or in connection with an exchange or a combination of equity interests, recapitalization, reclassification, merger, consolidation or other reorganization.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“Shelf Request” has the meaning set forth in Section 5(d) of this Agreement.

 

“Shelf Registration” has the meaning set forth in Section 5(d) of this Agreement.

 

“Shelf Registration Statement” has the meaning set forth in Section 5(d) of this Agreement.

 

“Special Registration Statement” means a registration statement on Form S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company’s employees or security holders or to security holders of a corporation or other entity being acquired by, or merged with, the Company or used to offer or sell a combination of debt and equity securities of the Company in which (i) not more than 10% of the gross proceeds from such offering is attributable to the equity securities and (ii) after giving effect to such offering, the Company does not have a class of equity securities required to be registered under the Securities Exchange Act of 1934, as amended.

 

“Threshold Amount” has the meaning set forth in Section 10(a) of this Agreement.

 

“Underwritten Registration” or “Underwritten Offering” means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.

 

2.           Registrable Securities.  The securities entitled to the benefits of this Agreement are the Registrable Securities.

 

3.           180 Day Registration.

 

(a)           The Company shall use its best efforts to cause to be declared effective under the Securities Act, on or prior to October 29, 2012, a registration statement relating to the following (“180 Day Registration”): all Registrable Securities to be delivered to the Investors by the Company in respect of the Exchanges pursuant to the Exchange Agreements (including the transactions constituting the Exchanges) and all other Registrable Securities of the Investors.  At any time prior to the filing of the registration statement relating to the 180 Day Registration, the Investors may, at their option, make a Shelf Request (as defined below) and elect to have the Company file a Shelf Registration Statement (as defined below) covering both the 180 Day Registration and the subsequent resale by the Investors pursuant to Rule 415 of the Securities Act of all Registrable Securities to be delivered to the Investors by the Company in respect of the Exchanges pursuant to the Exchange Agreements and all other Registrable Securities of the Investors.

 

 

4

 

(b)           The Company shall be liable for and pay all Registration Expenses in connection with any 180 Day Registration, regardless of whether such registration is effected.

 

4.           Incidental Registration.

 

(a)           Right to Include Registrable Securities.  Without in any way limiting the provisions of Section 3, if at any time after completion of the Initial Public Offering, the Company proposes to register any offer or sale of its Securities under the Securities Act (other than on a Special Registration Statement, but expressly including a Demand Registration pursuant to Section 5(a) hereof, an S-3 Registration under Section 5(c) hereof or a Shelf Registration under Section 5(d) hereof), whether or not for sale for its own account on a form and in a manner which would permit registration of the Registrable Securities held by the Investors for sale to the public under the Securities Act, it will give at least 15 Business Days prior written notice (the “Notice”) to all Investors of its intention to file a registration statement under the Securities Act and of each Investor’s rights under this Section 4.  Upon the written request of any Investor made within 10 Business Days of the date of the Notice (which request shall specify the aggregate number of the Registrable Securities to be registered and will also specify the intended method of disposition thereof), the Company will use its best efforts to effect the registration under the Securities Act of the offer and sale of all Registrable Securities which the Company has been so requested to register by the applicable Investor (an “Incidental Registration”), to the extent required to permit the public disposition (in accordance with such intended methods thereof) of the Registrable Securities subject to such requests; provided, however, that (i) if, any time after giving written notice of its intention to register the offer and sale of 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 the Company’s Securities, the Company shall give written notice of such determination to each Investor and, thereupon, shall be relieved of its obligation to register any offer and sale of Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), (ii) if a registration undertaken pursuant to this Section 4 shall involve an Underwritten Offering, any Investor requesting to be included in such registration may elect, in writing any time prior to the effective date of the registration statement filed in connection with such registration, not to register the offer and sale of such Investor’s Registrable Securities in connection with such registration, and (iii) if, at any time after the 180-day or shorter period specified in Section 6(b), the sale of the Securities has not been completed, the Company may withdraw from the registration on a pro rata basis (based on the number of Registrable Securities requested by each Investor to be subject to such registration) of the offer and sale of the Registrable Securities of which the Company has been requested to register and which have not been sold.

 

 

5

 

(b)           Priority in Incidental Registrations.  If a registration pursuant to Section 4(a) (other than a Demand Registration, S-3 Registration or Shelf Registration, it being understood the priority for such registrations is set forth in Section 5(e)) involves an Underwritten Offering and the managing underwriter or underwriters advise the Company in writing that, in its or their opinion, the total number of Securities to be included in such registration, including the Registrable Securities requested to be included pursuant to this Section 4, exceeds the maximum number of Securities specified by the managing underwriter or underwriters that may be distributed without materially and adversely affecting the price, timing or distribution of such Securities, then the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters, can be sold in the following order of priority:  (i) first, all of  the Securities that the Company proposes to sell for its own account, if any, and (ii) second, the Registrable Securities of the Investor(s) that are requested to be included in such Incidental Registration.  To the extent that the Registrable Securities to be included in the Incidental Registration must be allocated among the Investor(s) pursuant to clause (ii) above, such Registrable Securities shall be allocated pro rata among the Investors based on the relative number of Registrable Securities then owned by such Investors; provided, however, that if the Incidental Registration is an Underwritten Offering, the managing underwriter or underwriters may select Registrable Securities for inclusion in such Incidental Registration from the Investors on a basis other than such pro rata basis if, in the reasonable opinion of such underwriter or underwriters, selection on such other basis would be material to the success of the offering.

 

(c)           Expenses.  The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 4.

 

(d)           Liability for Delay.  The Company shall not be held responsible for any delay in the filing or processing of a registration statement which includes any Registrable Securities due to requests by Investors pursuant to this Section 4 nor for any delay in requesting the effectiveness of such registration statement.

 

(e)           Participation in Underwritten Registrations.  No Investor may participate in any Underwritten Registration hereunder unless such Investor (i) agrees to sell his, her or its Registrable Securities on the basis provided in any underwriting arrangements approved by the persons who have selected the underwriter and (ii) accurately completes in a timely manner and executes all questionnaires, powers of attorney, escrow agreements, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements; provided, however, that no Investor will be required to provide representations and warranties or indemnities or otherwise become subject to liabilities or obligations in any such underwriting agreement that are not customary for investors of its type in such transaction.

 

5.           Demand Registration.

 

(a)           Right to Demand Registration.  Subject to Section 5(b) below, each Investor shall be entitled to make a written request (a “Demand Registration Request”) (which Demand Registration Request shall specify the intended number of Registrable Securities to be disposed of by such Investor and the intended method of disposition thereof) to the Company for registration with the Commission under and in accordance with the provisions of the Securities Act of the offer and sale of all or part of the Registrable Securities owned by them (a “Demand Registration”).

 

 

6

 

(b)           Number of Demand Registrations.  Each Investor shall be entitled to make three Demand Registration Requests under Section 5(a) above provided that no such Demand Registration Request is made within six months of any Demand Registration.  In any Demand Registration, all Registration Expenses shall be borne by the Company.

 

(c)           S-3 Registrations.  In addition to the rights under paragraph (a) above and without in any way limiting the rights of the Investors under Section 5(d) below, upon written request (a “S-3 Registration Request”) of an Investor, the Company shall use its best efforts to effect the registration of all or part of the Registrable Securities held by the Investor making a request pursuant to this paragraph (c) (a “S-3 Registration”); provided, however, that the Company shall be obligated to use best efforts to effect a registration requested pursuant to this paragraph (c) only if the Company is then eligible to file the related registration statement on Form S-3 (or any successor form) under the Securities Act.  Each Investor shall be entitled to make an unlimited number of S-3 Registration Requests.  The Company shall pay all Registration Expenses related to each registration requested pursuant to this Section 5(c).  If and to the extent that any Investor shall have, at the time of delivery of the written request referred to in this paragraph, no present intention of selling or distributing such Registrable Securities, the Company shall be obligated to effect the registration of such Registrable Securities of such Investor only if and to the extent, in each case, that such registration is at the time permitted by the applicable statutes or rules and regulations thereunder or the practices of the governmental authority concerned.

 

(d)           Requests for Shelf Registration.  At any time after the date hereof, upon the written request of an Investor (each such request, a “Shelf Request”), the Company shall use best efforts to, as promptly as practicable, file a registration statement (which, if permitted, shall be an “automatic shelf registration statement” as defined in Rule 405 under the Securities Act) on Form S-3 providing for the resale pursuant to Rule 415 from time to time of all or part (as specified in the written request of the applicable Investor) of the Registrable Securities held by such Investor (a “Shelf Registration”) (including the prospectus, amendments and supplements to the shelf registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such shelf registration statement, the “Shelf Registration Statement”).  Without in any way limiting the rights of the Investors under Section 5(c) above, if the Company files any Shelf Registration Statement for its own benefit or for the benefit of the holders of any of its securities other than an Investor, the Company agrees that it shall use its best efforts to include in such Shelf Registration Statement such disclosures as may be required by Rule 430B under the Securities Act in order to ensure that the Investors may be added to such Shelf Registration Statement at a later time through the filing of a prospectus rather than a post-effective amendment.  The Company shall use best efforts to cause the Shelf Registration Statement to be declared effective by the SEC as promptly as practicable following such filing.  The Company shall maintain the effectiveness of the Shelf Registration Statement for the maximum period permitted by SEC rules.  Notwithstanding the foregoing, to the extent any Investor makes a Shelf Request prior to the Company being eligible to register Registrable Securities on Form S-3 (or a successor form) such that the Shelf Registration Statement is not on Form S-3 (or a successor form), such Shelf Request shall be deemed to be a Demand Registration Request for the purposes of Section 5(b) of this Agreement unless such Shelf Request is made pursuant to Section 3(a) above.

 

 

7

 

(e)           Priority on Demand Registration.  If any of the Registrable Securities subject to a Demand Registration, an S-3 Registration or a Shelf Registration are to be sold in a firm commitment Underwritten Offering and the managing underwriter or underwriters of a Demand Registration, an S-3 Registration or a Shelf Registration advise the Company and the Investors in writing that in its or their opinion the number of Securities proposed to be sold in such Demand Registration, S-3 Registration or Shelf Registration exceeds the maximum number of shares specified by the managing underwriter that may be distributed without materially and adversely affecting the price, timing or distribution of the Registrable Securities, the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such managing underwriter can be sold in the following order of priority:  (i) first, the Registrable Securities requested to be included in such Demand Registration, S-3 Registration or Shelf Registration, as the case may be, by the Investors pursuant to this Section 5(e) and the other Investors pursuant to Section 4 and (ii) second, the Securities to be offered by the Company in such Demand Registration, S-3 Registration or Shelf Registration.  To the extent that the Registrable Securities to be included in the Demand Registration, S-3 Registration or Shelf Registration must be allocated among the Investors pursuant to clause (i) above, such Registrable Securities shall be allocated pro rata among the Investors based on the relative number of Registrable Securities then actually owned by the Investors; provided, however, that if the Demand Registration, S-3 Registration or Shelf Registration is an Underwritten Offering, the managing underwriter or underwriters may select Registrable Securities for inclusion in such Demand Registration, S-3 Registration or Shelf Registration from the Investors on a basis other than on such pro rata basis if, in the reasonable opinion of such underwriter or underwriters, selection on such other basis would be material to the success of the offering.

 

(f)           A Demand Registration, S-3 Registration or Shelf Registration requested pursuant to this Section 5 will not be deemed to have been effected unless it has become effective under the Securities Act; provided, however, that if after a Demand Registration, S-3 Registration or Shelf Registration has so become effective, the offering of Registrable Securities pursuant to such Demand Registration, S-3 Registration or Shelf Registration is terminated, suspended or interfered with (so as to prevent the sale of more than 25% of the Registrable Securities requested to be registered thereunder) by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court, such Demand Registration, S-3 Registration or Shelf Registration Statement will be deemed not to have been effected.

 

6.           Registration Procedures.  If and whenever the Company is required to use its best efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement (including pursuant to a Demand Registration Request given under Section 5(a)), the Company will, as expeditiously as reasonably possible:

 

 

8

 

(a)           prepare and file with the Commission a registration statement with respect to such Registrable Securities, and use its best efforts to cause such registration statement to become effective and to keep the sellers of Registrable Securities advised in writing of the initiation and progress of proceedings regarding such registration, provided, however, that the Company may discontinue any registration of its securities which is being effected pursuant to Sections 4 or 5 herein at any time prior to the effective date of the registration statement relating thereto (but only to the extent set forth in the proviso contained in Section 4(a));

 

(b)           prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days(or such longer period as may be required in connection with a Shelf Registration Statement)  or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the 90-day period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; provided, however, that prior to filing with the Commission any such registration statement, prospectus or amendment or supplement thereto, the Company shall furnish copies thereof to counsel for the sellers of Registrable Securities under such registration statement, which document will be subject to reasonably prompt review by such counsel;

 

(c)           furnish to each Investor selling Registrable Securities such number of copies of such registration statement and of each such amendment and supplement thereof (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and 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 Registrable Securities by such seller;

 

(d)           use its best efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, and 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 Registrable Securities owned by such selling Investor; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject or subject itself to general taxation in any jurisdiction where it is not then so subject;

 

(e)           immediately notify each Investor selling Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Act within the appropriate period mentioned in clause (b) of this Section 6, of the Company becoming aware that 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 the light of the circumstances then existing, and within ten days prepare and furnish to all sellers a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

 

 

9

 

(f)           use commercially reasonable efforts to list such Registrable Securities on any securities exchange on which the Company’s equity securities are then listed or quoted, if such Registrable Securities are not already so listed or quoted, and provide an independent transfer agent and registrar for such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

 

(g)           furnish to each Investor selling Registrable Securities covered by such registration statement a signed counterpart, addressed to such seller (and the underwriters, if any) of:

 

(i)           an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the Investor selling such Registrable Securities (and the managing underwriter, if any); and

 

(ii)           a “comfort” letter, dated the effective date of such registration statement (or, if such registration involves an underwritten Public Offering, dated the date of the underwriting agreement and a “bring down” letter dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements included in such registration statement, covering such matters with respect to such registration statement as are customarily covered in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities as may reasonably be requested by the Investors selling such Registrable Securities (and the managing underwriter, if any);

 

(h)           Subject to the execution of confidentiality agreements satisfactory in form and substance to the Company in the exercise of its good faith judgment, the Company will give to the Investor selling Registrable Securities, its counsel and accountants (i) reasonable and customary access to its books and records and (ii) such opportunities to discuss the business of the Company with its directors, officers, employees, counsel and the independent public accountants who have certified its financial statements, as shall be appropriate, in the reasonable judgment of counsel, to the Investors selling Registrable Securities, to enable such Investor to exercise its due diligence responsibility; and

 

(i)           in the case of an Underwritten Offering, enter into and perform its obligations under an underwriting agreement in customary form.

 

 

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The Company may require each Investor selling Registrable Securities as to which any registration is being effected promptly to furnish to the Company (i) an opinion of counsel for such Investor dated the effective date of the registration statement relating to such Investor’s Registrable Securities (or, if such registration involves an underwritten Public Offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the Company (and the managing underwriter, if any) and (ii) such information regarding the distribution of such Registrable Securities as may be legally required.  Such information shall be furnished in writing and shall state that it is being furnished for use in the registration statement.

 

Each Investor agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (e) of this Section 6, such Investor will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Investor’s receipt of the supplemented or amended prospectus contemplated by clause (e) of this Section 6, and, if so directed by the Company, such Investor will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of the Company’s notice.  In the event the Company shall give any such notice, the period mentioned in clause (b) of this Section 6 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (e) of this Section 6 and including the date when each Investor covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 6.

 

7.           Indemnification.

 

(a)           Indemnification by the Company.  The Company hereby agrees to indemnify and hold harmless each Investor owning Registrable Securities which shall have been registered under the Securities Act, and such Investor’s officers, directors, employees and agents and each other Person, if any, who controls such Investor within the meaning of the Securities Act and each other Person (including underwriters) who participates in the offering of such Registrable Securities against any losses, claims, damages, liabilities, reasonable attorneys’ fees, costs or expenses (collectively, the “Damages”), joint or several, to which such Investor or controlling Person or participating Person may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact made by the Company or its agents contained in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein, in any “issuer free writing prospectus” as defined in Rule 433 under the Securities Act relating to such Registrable Securities, or in any amendment or supplement thereof, 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, and will reimburse such Investor or such controlling Person or participating Person in connection with investigating or defending any such Damages or proceeding; provided, however, that the Company will not be liable in any such case to the extent that any such Damages arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, said preliminary or final prospectus, said issuer free writing prospectus or said amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such Investor or such controlling or participating Person, as the case may be, specifically for use in the preparation thereof; or (ii) an untrue statement or alleged untrue statement, omission or alleged omission in a prospectus if such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the prospectus which amendment or supplement is delivered to such Investor in a timely manner and such Investor thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of such Registrable Securities to the Person asserting such Damages.

 

 

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(b)           Indemnification by the Investors Holding Registrable Securities Which Are Registered.  It shall be a condition of the Company’s obligations under this Agreement to effect any registration under the Securities Act that there shall have been delivered to the Company an agreement or agreements duly executed by each Investor holding Registrable Securities to be so registered, whereby each such Investor agrees to indemnify and hold harmless the Company, its directors, officers, employees and agents and each other Person, if any, which controls the Company within the meaning of the Securities Act against any Damages, severally, but not jointly, to which the Company, or such other Person or such Person controlling the Company may become subject under the Securities Act or otherwise, but only to the extent that such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein, in any “issuer free writing prospectus” as defined in Rule 433 under the Securities Act relating to such Registrable Securities or in any amendment or supplement 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, which, in each such case, has been made in or omitted from such registration statement, said preliminary or final prospectus, said issuer free writing prospectus or said amendment or supplement in reliance upon, and in conformity with, written information furnished to the Company by such Investor specifically for use in the preparation thereof.  The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above, with respect to information furnished in writing by such Persons specifically for inclusion in any prospectus or registration statement.

 

(c)           Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of the commencement of any action or proceeding involving a claim referred to in the preceding paragraphs of this Section 7 (provided the failure of any indemnified party to give such notice shall not relieve the indemnifying party of its obligations under this Section 7 except to the extent of any damages caused solely by such failure), and (ii) unless the indemnified party has been advised by its counsel that a conflict of interest exists or may exist between such indemnified and indemnifying parties under applicable standards of professional responsibility, with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.  Whether or not such defense is 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 the 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; provided, however, that no indemnifying party will consent to the entry of any judgment or enter into any settlement (other than for the payment of money only) without the consent of the indemnified party (which consent will not be unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume the defense of the 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 exists or may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels.

 

 

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(d)           Contribution.  If for any reason the indemnification provided for in the preceding Sections 7(a) or 7(b) is unavailable to an indemnified party in respect of any Damages referred to therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Damages in such proportion as is appropriate to reflect the relative benefits received by, and the relative fault of, the indemnified party and the indemnifying party, as well as any other appropriate equitable considerations; provided, however, that in no event shall the liability of any selling Investor hereunder (whether in respect of indemnification or contribution obligations) be greater in amount than the difference between the dollar amount of the net proceeds received by such Investor upon the sale of the Registrable Securities giving rise to such contribution obligation and all amounts previously contributed by such Investor with respect to such Damages.  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 fraudulent misrepresentation.

 

8.           Restrictions on Public Sale by the Company and Others.  The Company shall (i) not effect any public sale or distribution of any of its Securities for its own account during the 10-day period prior to, and during the 90-day period beginning on, the effective date of a Registration Statement filed pursuant to Sections 4 or 5, and (ii) use reasonable efforts to cause each holder of Securities purchased from the Company at any time after the date of this Agreement (other than in a registered public offering) to agree not to effect any public sale or distribution of any such securities during such period, including a sale pursuant to Rule 144 under the Securities Act (except as part of such Underwritten Registration, if permitted).

 

9.           Public and Underwritten Offerings.

 

(a)           If any of the Registrable Securities covered by any Incidental Registration that is not also a Demand Registration or S-3 Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer and underwrite the offering will be selected by the Company.  In any Demand Registration or S-3 Registration, such underwriters shall be selected by the Investor initiating such Demand Registration or S-3 Registration.

 

 

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(b)           Notwithstanding anything herein to the contrary, no Person may participate in any Public Offering hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (b) accurately completes and executes all questionnaires, powers of attorney, indemnities, custody agreements, underwriting agreements and other customary documents required under the terms of such underwriting arrangements; provided, however, that no Investor will be required to provide representations and warranties or indemnities or otherwise become subject to liabilities or obligations in any such underwriting agreement that are not customary for investors of its type in such transaction.

 

10.           Rights in Respect of the Board.

 

(a)           For so long as an Investor beneficially owns in the aggregate at least five percent (5%) of the Company’s issued and outstanding voting securities (the “Threshold Amount”), such Investor shall have the right to designate a representative (the “Representative”) to attend each meeting of the board of directors of the Company (and each meeting of any committee thereof) as a non-voting observer at the Company’s sole expense, whether such meeting is in person or by teleconference; provided that any Representative who attends a meeting of the audit committee must qualify as “independent” from the Company, as such term is defined in Section 303A.02 of the NYSE Listed Company Manual (or any successor provision).  The Company shall cause the Representative to be provided with all communications and materials that are provided by the Company or its consultants to the members of such board of directors generally, at the same time and in the same manner that such communications and materials are provided to such members, including all notices, board packages, reports, presentations, minutes and consents.  Notwithstanding the foregoing, the Company reserves the right to exclude any Representative attending a meeting of the audit committee from access to any material or portion of a meeting of the audit committee to the extent necessary to allow the Company to refrain from identifying the Representative as a member of the board of directors of the Company or the audit committee in any initial, interim, annual or other affirmation submitted by the Company to the New York Stock Exchange pursuant to Section 303A of the  NYSE Listed Company Manual (or any successor provision).

 

(b)           Each Investor agrees that it will not disclose any Confidential Information to any person, provided that Confidential Information may be disclosed (i) to the partners, directors, officers, employees, agents, counsel, advisers and representatives of the Investor or any of its Affiliates, (ii) to the extent required by applicable law, rule or regulation (including to comply with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which such Investor is subject) or (iii) if such Investor obtains the prior written consent of the board of directors of the Company.

 

11.           Limitation on Subsequent Registration Rights.  From and after the date of this Agreement the Company shall not, without the prior written consent of the Investors, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are equivalent to or more favorable than the registration rights granted to the Investors hereunder, or which would reduce the amount of Registrable Securities the Investors can include in any Registration Statement filed pursuant to Section 5 hereof, unless such rights are subordinate to those of the Investors.

 

 

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12.           Miscellaneous.

 

(a)           Amendment; Waiver.  No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in a writing specifically referring to this Agreement and signed by each Investor and the Company.  No failure or delay in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

 

(b)           Addresses and Notices.  Except as otherwise expressly provided herein, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be personally delivered or sent by overnight delivery by reputable delivery service or courier, or by facsimile (confirmed with a copy sent by one of the aforementioned methods), to the intended Party at the address or facsimile number of such Party set forth below or at such other address or facsimile number as shall be designated by such Party in a written notice to the other Party hereto. All such notices, requests, claims, demands and other communications shall be deemed to have been delivered and received (i) when delivered personally to the recipient, (ii) upon transmission by facsimile if received during normal business hours of the recipient and, if not, the next Business Day after transmission, as evidenced by confirmation of transmission from the sender’s facsimile machine or (iii) on the date of delivery set forth in the applicable proof of delivery if sent by reputable delivery service or courier.

 

If to the Company:

 

Edgen Group, Inc.

18444 Highland Road

Baton Rouge, LA  70809

Attn: Chief Executive Officer

Fax: (225) 756-7953

 

If to EM II LP:

 

Edgen Murray II, L.P.

c/o Jefferies Capital Partners

520 Madison Avenue, 10th Floor

New York, NY  10022

Attention:     Nicholas Daraviras

Telephone:   (212) 284-1700

Fax:                (212) 284-1717

 

 

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If to B&L:

 

Bourland & Leverich Holdings, LLC

c/o Jefferies Capital Partners

520 Madison Avenue, 10th Floor

New York, NY  10022

Attention:     Nicholas Daraviras

Telephone:   (212) 284-1700

Fax:                (212) 284-1717

 

(c)           Further Action.  Each Party agrees to execute and deliver all such documents and take or refrain from taking all such actions as may be reasonably requested by the other Party in furtherance of the purposes of this Agreement.

 

(d)           Binding Nature; Successors and Assigns; Appointment of Representative.

 

(i)           This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns and executors, administrators and heirs. The Company may not assign, delegate, transfer or otherwise dispose of any of its rights or obligations under this Agreement in whole or in part without, in each case, obtaining the prior written consent of the Investors (which consent may be withheld in the sole discretion of the Investors).  The Investors may from time to time assign, delegate, transfer or otherwise dispose of any of its rights or obligations under this Agreement in whole or in part to any one or more Persons without consent.  If an Investor makes any such assignment, delegation, transfer or other disposition, it shall have the right to specify the extent thereof and any terms or conditions applicable thereto, including limitations on transfer, assignment or exercise of rights under this Agreement and assignment of rights as to payment but reservation as to other rights.  Each Party agrees that each Investor shall have the right to appoint a representative to perform any of the rights or obligations of such Investor under this Agreement or designate a process for appointing and removing such a representative. The Company shall not be required to recognize any purported assignee, delegatee or transferee as such unless such purported assignee, delegatee or transferee provides the Company with evidence reasonably satisfactory to the Company of the assignment, delegation or transfer to such purported assignee, delegatee or transferee.

 

(ii)           The Company agrees not to consummate a merger, consolidation or sale or other disposition (whether by asset sale, equity sale, statutory division, merger or otherwise, and whether in one or more transactions) of all or substantially all of its assets (a “Sale Transaction”) without first delivering to the Investors a written agreement of the surviving, resulting, successor or transferee Person that such Person shall be bound by the terms of this Agreement and that provides that the Investors are intended third-party beneficiaries of such agreement.  If the Company delivers such an agreement, then, notwithstanding the second sentence of this Section 11(d), it shall be permitted to consummate the applicable Sale Transaction.

 

 

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(iii)           A reference to any party to this Agreement or another agreement or document includes the party’s successors and permitted assigns.

 

(iv)           Any purported assignment, delegation, transfer or other disposition in violation of this Section 11(d) shall be void and unenforceable ab initio.

 

(e)           No Third Party Beneficiaries.  Except as expressly set forth in Section 11(d), nothing in this Agreement, express or implied, is intended to or shall confer upon anyone other than the Parties and their respective successors and permitted assigns any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

(f)           Interpretation.  Unless expressly provided for elsewhere in this Agreement, this Agreement shall be interpreted in accordance with the following provisions:

 

(i)           Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine, or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

 

(ii)           Any headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

(iii)           All references in this Agreement to articles, sections or subdivisions thereof shall refer to the corresponding article, section or subdivision thereof of this Agreement unless specific reference is made to such articles, sections, or subdivisions of another document or instrument.

 

(iv)           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 article, section, subsection, schedule and exhibit references are to this Agreement unless otherwise specified.

 

(v)           The word “including” shall mean including without limitation.

 

(vi)           The word “or” will have the inclusive meaning represented by the phrase “and/or”.

 

(vii)           No presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

(viii)           The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

 

 

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(ix)           Whenever the context may require, any pronouns used herein shall be deemed also to include the corresponding neuter, masculine or feminine forms.

 

(g)           Severability.  If any provision of this Agreement is illegal, invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law: (i) the other provisions hereof will remain in full force and effect in such jurisdiction and will be liberally and equitably construed in order to carry out as nearly as possible the purpose and intent of this Agreement; (ii) the illegality, invalidity or unenforceability of any such provision in such jurisdiction will not affect the legality, validity or enforceability of such provision in any other jurisdiction; and (iii) in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible so as to be enforceable to the maximum extent compatible with applicable law.

 

(h)           Integration.  This Agreement, together with the Exchange Agreements, constitutes the entire agreement and supersedes any and all other prior agreements and undertakings, both written and oral, between any of the Parties with respect to the subject matter hereof.

 

(i)           Governing Law.  This Agreement shall be governed by, and construed in accordance with, the internal law of the State of Delaware applicable to contracts entered into and to be performed entirely within the State of Delaware by citizens of the State of Delaware, without giving effect to conflicts of laws provisions or any other principles or rules that would require or permit the application of the laws of any other jurisdiction.

 

(j)           Submission to Jurisdiction; Waiver of Jury Trial.  To the fullest extent permitted by applicable law, each of the Parties hereby irrevocably and unconditionally (i) submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such court is unavailable, any state or federal court located in Wilmington, Delaware, as well as to the appellate jurisdiction of all courts to which an appeal may be taken from such courts, in any action, suit, proceeding or claim arising out of or relating to this Agreement or the transactions contemplated hereby, including the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement, (ii) agrees that all claims in respect of any such action, suit, proceeding or claim shall be brought, heard and determined exclusively in such courts, (iii) agrees that such for a have a reasonable relation to this Agreement, and to the relationship of the Parties with one another; (iv) waives and agrees not to assert any objection that it may now or hereafter have to the laying of venue of any action, suit, proceeding or claim arising out of or relating to this Agreement or the transactions contemplated hereby in any such court, (v) consents to the service of any and all process in any such action, suit, proceeding or claim by the mailing of copies of such process to such Person at its address specified herein or in any other manner permitted by applicable law, (vi) waives to the fullest extent permitted by applicable law any and all rights to a trial by jury in connection with any such action, suit, proceeding or claim, (vii) agrees that a final judgment in any such action, suit, proceeding or claim shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law, and (viii) agrees that performance under this Agreement shall continue if reasonably possible during any such action, suit, proceeding or claim.

 

 

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(k)           Counterparts. This Agreement may be executed and delivered in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by facsimile or other electronic transmission will be as effective as physical delivery of a manually executed counterpart hereof.

 

(l)           Remedies.  The Parties hereto acknowledge that the rights of each Party hereunder are unique and recognizes and affirms that in the event of a breach or threatened breach of this Agreement by any Party, money damages may be inadequate and the non-breaching Party may have no adequate remedy at law. Accordingly, in the event of a breach or a threatened breach by any Party to this Agreement of its obligations hereunder, any Party injured or to be injured by such breach, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement, it being agreed by the Parties that the remedy at law, including monetary damages, for breach of such provision will be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. The Parties agree that such non-breaching Party shall have the right, in addition to any other rights and remedies existing in its favor at law or in equity, to enforce its rights and the other Party’s obligations hereunder not only by an action or actions for damages but also by an action or actions for specific performance, injunctive or other equitable relief (without posting of bond or other security). Each Party waives and agrees not to assert the defense of adequate remedy at law and further agrees that the only permitted objection that it may raise in response to any action for equitable relief is that it contests the existence of a breach or threatened breach of this Agreement.

 

(m)           Current Public Information.  At all times after the Company has filed a registration statement with the Commission pursuant to the requirements of either the Securities Act or the Exchange Act, and as long as the Investors shall hold any Registrable Securities, the Company will file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will take such further action as any Investor may reasonably request, all to the extent required to enable such Investors pursuant to Rule 144 under the Securities Act (as such rule may be amended from time to time) or any similar rule or regulation hereafter adopted by the Commission.

 

(n)           Recapitalization, Exchange, Etc. Affecting the Company’s Securities.  The provisions of this Agreement shall apply, to the full extent set forth herein, with respect to any and all Securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for, or in substitution of, the Securities, including without limitation in connection with a reorganization and a recapitalization, and shall also apply to the entity resulting from a reorganization or recapitalization that is the issuer of such Securities.

 

[Remainder of Page Intentionally Left Blank]

 

 

19

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed as of the date first above written.

 

 

	 	EDGEN GROUP INC.	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ David L. Laxton, III	 
	 	 	Name:  David L. Laxton, III	 
	 	 	

Title:  Executive Vice President, Chief Financial Officer and Secretary

	 
	 	 	Address:	 

 

[Signature Page to Investors and Registration Rights Agreement]

  

  

  

 

Confirmed and accepted as of the date first above written:

 

 

EDGEN MURRAY II, L.P.

 

 

 

 

By:  /s/ David L. Laxton, III                                                                

Name:  David L. Laxton, III

Title:  Executive Vice President and Chief Financial Officer

Address:

 

BOURLAND & LEVERICH HOLDINGS LLC

 

 

 

By:  /s/ Robert F. Dvorak                                                                

Name:  Robert F. Dvorak

Title:  President and Chief Executive Officer

Address:

 

[Signature Page to Investors and Registration Rights Agreement]

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