UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Delaware 333-45226 03-0366218
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
P.O. Box C, Route 66
Catamount Industrial Park
Randolph, Vermont 05060
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(Address of principal executive offices) (Zip Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
SUMMARY OF TRANSACTION
On October 5, 2000 (the "Effective Time"), Vermont Pure Holdings, Ltd. and Crystal Rock Spring Water Company, a Connecticut corporation, consummated a transaction combining the two companies as provided in the Agreement and Plan of Merger and Contribution among those parties and others dated May 5, 2000 and amended on August 28, 2000 and September 20, 2000 (as amended, the "Merger Agreement").
As a result of this transaction, the privately held Crystal Rock Spring Water Company and the publicly traded company then known as Vermont Pure Holdings, Ltd. both became wholly owned subsidiaries of a new publicly traded holding company, originally known as VP Merger Parent, Inc. The former public holding company changed its name to Platinum Acquisition Corp. Simultaneously, the new public holding company changed its name to Vermont Pure Holdings, Ltd.
Pursuant to the Merger Agreement, each share of common stock of the former public holding company was automatically converted into one share of common stock of the new public holding company. Shareholders of common stock of the former public holding company are not required to send in their stock certificates because such certificates are legally considered to represent the same number of shares of the new public holding company's common stock. All outstanding stock options and warrants to purchase common stock of the former public holding company were automatically converted into options or warrants to purchase the same number of shares, on the same terms, of the new public holding company's common stock.
At the Effective Time, the seven shareholders of Crystal Rock, all of whom were members of the Baker family or related family trusts, contributed all of the outstanding shares of Crystal Rock common stock to VP Merger Parent in exchange for consideration in the aggregate amount of $64,222,004, consisting of $10,522,007 in cash, VP Merger Parent's 12% Subordinated Promissory Notes due 2007 in the face amount of $22,600,000 and shares of VP Merger Parent's common stock valued at $31,099,997 for purposes of the transaction.
At the Effective Time, the new holding company owned 100% of the outstanding stock of the old holding company and 100% of the outstanding stock of Crystal Rock. The Crystal Rock shareholders, consisting of members of the Baker family and related family trusts, owned 49.0% of the outstanding common stock of the new holding company. The existing shareholders of the old holding company owned the remaining shares of VP Merger Parent. The shares issued to the former shareholders of Crystal Rock are subject to a Lock-up Agreement dated October 5, 2000, which, with limited exceptions, prohibits the sale or transfer of such shares until October 5, 2001. The former shareholders of Crystal Rock have the right to cause Vermont Pure to register their shares under the Securities Act of 1933 at that time.
The shares of VP Merger Parent common stock issued in connection with the business combination are listed on the American Stock Exchange under the new name of Vermont Pure Holdings, Ltd. and trade under the symbol "VPS."
The consideration paid for the Crystal Rock shares was determined in arm's-length negotiations between Vermont Pure's management and that of Crystal Rock, and was based upon management's perceptions of the relative value of the businesses to the combined entity. Duff & Phelps, LLC rendered an opinion to the shareholders of Vermont Pure as to the fairness, from a financial point of view, of the transaction.
SOURCE OF FINANCING
In connection with the transaction, Vermont Pure refinanced its existing debt to provide funds to pay the Crystal Rock shareholders the cash portion of the consideration owed to them for their shares, and also to finance the operations of the combined companies. The aggregate amount of the financing is $36,000,000 of senior debt obtained from Webster Bank of Waterbury, Connecticut. The loan provides for a term loan of $31,000,000 to consolidate Vermont Pure's existing debt and to fund the payments to the former Crystal Rock shareholders. The loan also provides for a line of credit of $5,000,000 to support the working capital needs of the combined companies. Within the working capital line of credit, there is a separate limit of $750,000 for the issuance of letters of credit. All of the subsidiaries of Vermont Pure Holdings, Ltd., the new holding company, are guarantors of the senior debt.
The loans and subordinated notes are secured by substantially all of Vermont Pure's assets.
Prior to the business combination, there was no material relationship between Vermont Pure and Crystal Rock. In connection with the transaction, Peter K. Baker, John B. Baker and Henry E. Baker, who were shareholders, officers and directors of Crystal Rock, and Ross Rapaport, who was a shareholder of Crystal Rock, became shareholders, officers and directors of Vermont Pure. At the Effective Time, the board of directors of the new holding company consisted of nine directors: Timothy G. Fallon, Chairman and Chief Executive Officer; David R. Preston; Norman E. Rickard; Robert C. Getchell; Beat Schlagenhauf; Phillip Davidowitz (these six individuals all being former directors of the old holding company); Henry E. Baker, Chairman Emeritus; Peter K. Baker, President and Director; and Ross S. Rapaport. In addition, John B. Baker became Executive Vice President of the new holding company.
BUSINESS OF CRYSTAL ROCK
Crystal Rock is a bottled water manufacturer focusing on the still, non-carbonated segment of the bottled water industry. Crystal Rock's primary business is the marketing and distribution of Crystal Rock brand of purified and mineralized drinking water to the home and office delivery markets. Crystal Rock also sells coffee and other refreshment products and vending services in Connecticut, New York and Massachusetts. Crystal Rock's business is complementary to Vermont Pure, and Vermont Pure believes that the combined organization will be able to capitalize on synergistic opportunities in product development, marketing and distribution.
For more information about the business combination and the financing thereof, see the Merger Agreement.
ITEM 5. OTHER EVENTS.
Successor Registrant
Pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended, the common stock of Vermont Pure Holdings, Ltd., the new holding company that was known as VP Merger Parent, Inc., prior to the transaction described in Item 2 above, is deemed to be registered under Section 12(b) of the Securities Exchange Act of 1934. The common stock is listed on the American Stock Exchange.
Vermont Pure Holdings, Ltd., the new holding company, is the successor issuer to Platinum Acquisition Corp., the current name of the former holding company which is now a wholly owned subsidiary of Vermont Pure Holdings, Ltd.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired:
The financial statements required by this Item are incorporated by reference from the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226, beginning on page F-21.
(b) Pro Forma Financial Information:
The pro forma financial statements required by this Item are incorporated by reference from the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226, beginning on page 86.
(c) Exhibits:
2.1 Agreement and Plan of Merger and Contribution by and among Vermont Pure Holdings, Ltd., Crystal Rock Spring Water Company, VP Merger Parent, Inc., VP Acquisition Corp. and the stockholders named therein, dated May 5, 2000, as amended as of August 28, 2000. (Incorporated by reference from APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
2.2 Amendment to Agreement and Plan of Merger and Contribution by and among Vermont Pure Holdings, Ltd., Crystal Rock Spring Water Company, VP Merger Parent,
Inc., VP Acquisition Corp. and the stockholders named therein, dated as of September 20, 2000.
4.1 Certificate of Incorporation of VP Merger Parent, Inc. (Incorporated by reference from Exhibit B of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
4.2 Certificate of Amendment of Certificate of Incorporation of VP Merger Parent, Inc. dated October 4, 2000.
4.3 By-laws of VP Merger Parent, Inc. (Incorporated by reference from Exhibit C of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
4.4 Certificate of Merger of VP Acquisition Corp. into Vermont Pure Holdings, Ltd. dated October 5, 2000.
4.5 Lock-Up Agreement. (Incorporated by reference from Exhibit N of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226. The Lock-Up Agreements are dated October 5, 2000 and executed by Henry E. Baker, John B. Baker, Peter K. Baker, Ross Rapaport, Trustee U/T/A dated 12/16/91 F/B/O Joan Baker et al., Peter K. Baker Life Insurance Trust and John B. Baker Life Insurance Trust).
4.6 Registration Rights Agreement dated October 5, 2000 by and among VP Merger Parent, Inc. and the former shareholders of Crystal Rock Spring Water Company named therein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VERMONT PURE HOLDINGS, LTD.
By: /s/ Bruce S. MacDonald
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Bruce S. MacDonald
Chief Financial Officer, Vice
President of Finance and Treasurer
Date: October 19, 2000
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger and Contribution by and among Vermont Pure Holdings, Ltd., Crystal Rock Spring Water Company, VP Merger Parent, Inc., VP Acquisition Corp. and the stockholders named therein, dated May 5, 2000, as amended as of August 28, 2000. (Incorporated by reference from APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
2.2 Amendment to Agreement and Plan of Merger and Contribution by and among Vermont Pure Holdings, Ltd., Crystal Rock Spring Water Company, VP Merger Parent, Inc., VP Acquisition Corp. and the stockholders named therein, dated as of September 20, 2000.
4.1 Certificate of Incorporation of VP Merger Parent, Inc. (Incorporated by reference from Exhibit B of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
4.2 Certificate of Amendment of Certificate of Incorporation of VP Merger Parent, Inc. dated October 4, 2000.
4.3 By-laws of VP Merger Parent, Inc. (Incorporated by reference from Exhibit C of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226).
4.4 Certificate of Merger of VP Acquisition Corp. into Vermont Pure Holdings, Ltd. dated October 5, 2000.
4.5 Lock-Up Agreement. (Incorporated by reference from Exhibit N of APPENDIX A to the Proxy Statement included in the Registration Statement on Form S-4 filed by VP Merger Parent, Inc. dated September 6, 2000, File No. 333-45226. The Lock-Up Agreements are dated October 5, 2000 and executed by Henry E. Baker, John B. Baker, Peter K. Baker, Ross Rapaport, Trustee U/T/A dated 12/16/91 F/B/O Joan Baker et al., Peter K. Baker Life Insurance Trust and John B. Baker Life Insurance Trust).
4.6 Registration Rights Agreement dated October 5, 2000 by and among VP Merger Parent, Inc. and the former shareholders of Crystal Rock Spring Water Company named therein.
Exhibit 2.2
AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION
This is an Amendment to Agreement and Plan of Merger and Contribution, dated as of September 20, 2000 (the "Amendment"), by and among
VERMONT PURE HOLDINGS, LTD., a publicly traded Delaware corporation ("Holdings"),
VP MERGER PARENT, INC., a Delaware corporation with no outstanding capital stock ("Parent"),
VP ACQUISITION CORP., a Delaware corporation and wholly-owned subsidiary of Parent ("Merger Sub"),
CRYSTAL ROCK SPRING WATER COMPANY, a Connecticut corporation (the "Company"), and
HENRY E. BAKER, JOHN B. BAKER, PETER K, BAKER and the other stockholders of the Company listed on EXHIBIT D to the Merger Agreement (as defined hereinafter), being all of the stockholders of the Company (the "Stockholders").
RECITALS
The parties listed and referred to above have entered into an Agreement and Plan of Merger and Contribution dated as of May 5, 2000 and an Amendment to Agreement and Plan of Merger and Contribution dated as of August 28, 2000 (as so amended, the "Merger Agreement") and now wish to amend the Merger Agreement as set forth below. Capitalized terms used in this Amendment and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.
The purpose of this Amendment is to reflect the fact that the name DIAMOND ACQUISITION CORP. is not currently available for a Delaware corporation. Accordingly, the parties have agreed upon the name PLATINUM ACQUISITION CORP., which, under the Merger Agreement as amended hereby, will at the Effective Time be and become the name of the corporation now known as Vermont Pure Holdings, Ltd. To effect these amendments, Holdings, Parent, Merger Sub, the Company and the Stockholders hereby agree as follows:
I. Section 2.2.1 of the Merger Agreement is hereby amended by deleting the word DIAMOND wherever it appears in Section 2.2.1 and replacing it in each case with the word PLATINUM.
II. Section 2.2.2 of the Merger Agreement is hereby amended by deleting the word DIAMOND wherever it appears in Section 2.2.1 and replacing it in each case with the word PLATINUM.
III. All other references to DIAMOND ACQUISITION CORP. in the Merger Agreement or in the Exhibits to the Merger Agreement, including, without limitation and to the fullest extent applicable, the references contained in Exhibit A, Attachment 1 to Exhibit A, and Exhibits I, J, K, L, M, N and O, are hereby amended by deleting the word DIAMOND wherever it appears and replacing it in each case with the word PLATINUM.
IV. The parties hereby ratify and confirm the Merger Agreement in all other respects. Except as expressly modified hereby, the Merger Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as an agreement under seal as of the date first above written.
VERMONT PURE HOLDINGS, LTD.
By: /s/ Timothy M. Fallon
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Title: CEO & President
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VP MERGER PARENT, INC.
By: /s/ Timothy M. Fallon
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Title: CEO & President
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VP ACQUISITION CORP.
By: /s/ Timothy M. Fallon
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Title: CEO & President
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CRYSTAL ROCK SPRING WATER COMPANY
By: /s/ Henry E. Baker
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Title: Chairman
/s/ Henry E. Baker
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HENRY E. BAKER
/s/ Joan A. Baker
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JOAN A. BAKER
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/s/ Peter K. Baker ---------------------------------- PETER K. BAKER /s/ John B. Baker ---------------------------------- JOHN B. BAKER /s/ Peter K. Baker ----------------------------------- PETER K. BAKER LIFE INSURANCE TRUST, ROSS RAPAPORT, TRUSTEE (AND NOT INDIVIDUALLY) /s/ John B. Baker ----------------------------------- JOHN B. BAKER LIFE INSURANCE TRUST, ROSS RAPAPORT, TRUSTEE (AND NOT INDIVIDUALLY) /s/ Ross Rapaport ----------------------------------- ROSS RAPAPORT, TRUSTEE U/T/A/ DATED 12/16/91 F/B/O JOAN BAKER ET AL. (AND NOT INDIVIDUALLY) |
LIST OF EXHIBITS
Exhibit O Form of Registration Rights Agreement
Ex 4.2
STATE OF DELAWARE PAGE 1
OFFICE OF THE SECRETARY OF STATE
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "VP MERGER PARENT, INC.", CHANGING ITS NAME FROM "VP MERGER PARENT, INC." TO
"VERMONT PURE HOLDINGS, LTD.", FILED IN THIS OFFICE ON THE FIFTH DAY OF OCTOBER,
A.D. 2000, AT 1:15 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDED OF DEEDS.
[SECRETARY'S OFFICE SEAL]
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
3215737 8100 AUTHENTICATION: 0718605
001504057 DATE: 10-05-00
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CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
VP MERGER PARENT, INC.
BEFORE RECEIPT OF PAYMENT FOR STOCK
VP Merger Parent, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Company"), does hereby certify:
1. That the Certificate of Incorporation of the Company be and hereby is amended so that Article I shall be and read as follows:
Article I. The name of the Corporation is Vermont Pure Holdings, Ltd.
2. That the Company has not received any payment for any of its stock,
and that this amendment was duly adopted in accordance with the provisions of
Section 241 of the General Corporation Law of the State of Delaware.
In witness whereof, VP Merger Parent, Inc. has caused this Certificate to be executed by its President this 4th day of October, 2000.
VP MERGER PARENT, INC.
By: /s/ Timothy Fallon
--------------------------------
Timothy Fallon, President
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Ex 4.4
STATE OF DELAWARE
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER,
WHICH MERGES:
"VP ACQUISITION CORP.", A DELAWARE CORPORATION,
WITH AND INTO "VERMONT PURE HOLDINGS, LTD." UNDER THE NAME OF PLATINUM
ACQUISITION CORP.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE FIFTH DAY OF
OCTOBER, A.D. 2000, AT 1:15 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SECRETARY'S OFFICE SEAL]
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
2219226 8100M AUTHENTICATION: 0718608
001504055 DATE: 10-05-00
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CERTIFICATE OF MERGER
of
VP ACQUISITION CORP.
with and into
VERMONT PURE HOLDINGS, LTD.
The undersigned corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware DOES HEREBY CERTIFY:
FIRST: The name and state of incorporation of each of the constituent corporations of the merger is as follows:
NAME STATE OF INCORPORATION
---- ----------------------
Vermont Pure Holdings, Ltd. Delaware
VP Acquisition Corp. Delaware
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SECOND: An agreement of merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of the General Corporation Law of the State of Delaware.
THIRD: The corporation currently known as Vermont Pure Holdings, Ltd. shall be the surviving corporation and shall upon the filing of this certificate of merger be renamed PLATINUM ACQUISITION CORP.
FOURTH: The certificate of incorporation of the surviving corporation, VERMONT PURE HOLDINGS, LTD., as in effect immediately prior to the merger, shall be amended and restated in its entirety so that, as so amended, it reads as set forth on Attachment 1 hereto.
FIFTH: The executed agreement of merger is on file at the principal place of business of the surviving corporation. The address of the principal place of business of the surviving corporation is Route 66, Catamount Industrial Park, Randolph, Vermont 05060.
SIXTH: A copy of the agreement of merger will be furnished by the surviving corporation, on request and without cost to any stockholder of either constituent corporation.
IN WITNESS WHEREOF, Vermont Pure Holdings, Ltd. has caused this Certificate of Merger to be executed by its President this 5th day of October, 2000.
VERMONT PURE HOLDINGS, LTD.
By: /s/ Timothy Fallon
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Timothy Fallon, President
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ATTACHMENT 1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PLATINUM ACQUISITION CORP.
FIRST: The name of the corporation (the "Corporation") is Platinum Acquisition Corp.
SECOND: The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, Wilmington, Delaware, County of New Castle, and the name of its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of capital stock that the Corporation shall have the authority to issue shall be 100 shares of common stock, each of which shall have a par value of $0.01, amounting to an aggregate par value of $1.00.
FIFTH: The Board of Directors is authorized to make, alter or repeal the by-laws of the Corporation. Election of directors need not be by written ballot.
SIXTH: The Corporation shall indemnify each person who at any time is, or shall have been, a director or officer of the Corporation and was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement incurred in connection with any such action, suit or proceeding, to the maximum extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. The foregoing right of indemnification shall in no way be exclusive of any other rights of indemnification to which any such director or officer may be entitled, under any by-law, agreement, vote of directors or stockholders or otherwise. No amendment to or repeal of the provisions of this Article SIXTH shall deprive a director of officer of the benefit hereof with respect to any act or failure to act occurring prior to such amendment or repeal.
SEVENTH: No director of the Corporation shall be personally liable to the Corporation or to any of its stockholders for monetary damages arising out of such director's breach of fiduciary duty as a director of the Corporation, except to the extent that the elimination or limitation of such liability is not permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. No amendment to or repeal of the provisions of this Article SEVENTH shall deprive any director of the Corporation of the benefit
hereof with respect to any act or failure to act of such director occurring prior to such amendment or repeal.
EIGHTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.
Ex. 4.6
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") dated as of October
5, 2000, is by and among VP Merger Parent, Inc. (the "COMPANY"), a Delaware
corporation that is expected to change its name to "Vermont Pure Holdings,
Ltd." pursuant to the Merger Agreement referred to below; Henry E. Baker, John
B. Baker, Peter K. Baker, and Joan A. Baker, each of whom is an individual;
and Ross S. Rapaport, not individually but as Trustee (i) U/T/A dated 12/16/91
F/B/O Joan Baker et al., (ii) of the John B. Baker Life Insurance Trust, and
(iii) of the Peter K. Baker Life Insurance Trust, respectively (excluding the
Company, all of the foregoing parties, collectively, the "CRYSTAL
STOCKHOLDERS").
The parties and certain others are parties to an Agreement and Plan of Merger and Contribution (as amended by any and all amendments thereto, the "MERGER AGREEMENT") dated as of May 5, 2000, pursuant to which, among other things, the Company will issue and sell certain shares of its Common Stock to the Crystal Stockholders.
1. DEFINITIONS. As used in this Agreement:
"HOLDERS" means the holders of Registrable Securities, and "HOLDER" means any one of the Holders.
"REGISTERED" and "REGISTRATION" (regardless of whether capitalized) refer to a registration of securities effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering by the SEC of effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means all shares of the Company's Common Stock issued to the Crystal Stockholders pursuant to the Merger Agreement, and any additional shares issued in respect of such original shares by way of stock split, stock dividend, or similar occurrence.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.
2. FILING AND EFFECTIVENESS OF REGISTRATION STATEMENT. Not later than the first anniversary of the "Effective Time" referred to above, the Company will file with the SEC a registration statement (the "REGISTRATION STATEMENT") on Form S-3 or other appropriate form for the purpose of registering the Registrable Securities for resale by the Holders, and thereafter
the Company will use commercially reasonable efforts to cause the Registration Statement to become effective as promptly as practicable and to remain effective for at least six months.
3. OTHER OBLIGATIONS. From time to time after the effective date of the Registration Statement, the Company will:
(i) Subject to Section 4 hereof, promptly prepare and file with the SEC such amendments to the Registration Statement and amendments or supplements to the prospectus included therein as may be necessary to comply with the provisions of the Securities Act with respect to the sale or other disposition of the Registrable Securities.
(ii) Promptly furnish to each Holder such number of copies of any prospectus (including any amended or supplemented prospectus) in conformity with the requirements of the Securities Act as such Holder reasonably may request in order to effect the offering and sale of the Registrable Securities.
(iii) Use commercially reasonable efforts promptly to register or qualify the Registrable Securities under the securities or blue sky laws of such United States jurisdictions as any Holder reasonably may request (provided, that the Company will not be required in connection therewith or as a condition thereto to subject itself to taxation, quality to do business, or file a general consent to service of process in any such jurisdiction).
(iv) use commercially reasonable efforts to list the Registrable Securities on each securities exchange and quotation system on which similar securities of the Company are then traded or listed.
(v) Notify each Holder, promptly after the Company receives notice thereof, of the date and time the Registration Statement and each post-effective amendment to the Registration Statement becomes effective or a supplement to any prospectus forming a part of the Registration Statement has been filed.
(vi) Promptly authorize and instruct its transfer agent to reissue unlegended certificates at the request of any Holder upon such Holder's delivery of original certificates representing Registrable Securities sold pursuant to the Registration Statement, and promptly respond to any brokers' inquiries made of the Company in connection with such sales, in each case with a view to assisting Holders to complete sales of the Registrable Securities.
4. RIGHTS OF COMPANY TO SUSPEND SALES. Notwithstanding the foregoing or any other provision of this Agreement, the Company may suspend the rights of Holders to sell Registrable Securities pursuant to the Registration Statement if the Company has delivered a written notice to the Holders stating that the suspension of such sales is necessary because the Board of Directors of the Company, in its reasonable judgment, has determined in good faith that such sales would require public disclosure by the Company of material nonpublic information that is not included in the Registration Statement and that immediate disclosure of such information would be materially adverse to the Company. In this event, and if the Holders so request, the Company will use commercially reasonable efforts to take all actions necessary to permit the Holders to sell shares pursuant to the Registration Statement as promptly as practicable, including amending the Registration Statement and/or amending or supplementing the prospectus included therein, and will give the Holders prompt written notice when they may again sell shares pursuant to the Registration Statement. The six-month period referred to in Section 2 above will be extended by a period of time equal to that during which the Holders' rights to sell Registrable Securities pursuant to the Registration Statement are suspended pursuant to this section.
5. EXPENSES. The Company will pay all the expenses incurred in connection with the registration of shares pursuant to this Section 6, including without limitation all SEC, Nasdaq, stock exchange, and blue sky registration, filing, and listing fees; printing expenses; transfer agents' and registrars' fees; fees of the Company's counsel and accountants; and up to $15,000 of the reasonable fees and expenses of one counsel for the Holders.
6. TRANSFERS OF REGISTRATION RIGHTS. The rights of any Holder under this Agreement may be transferred by such Holder to the extent that prior to the effectiveness of the Registration Statement any of the Registrable Securities are transferred to any third party without violation of applicable securities law registration requirements or of any written agreement of such Holder and the Company. Before any such permitted transfer of registration rights, the transferring Holder will give the Company written notice of the proposed transfer and the name and address of the proposed transferee, and the proposed transferee will deliver to the Company a written agreement assuming the obligations of the transferor with respect to the transferred securities under this Agreement.
7. INDEMNIFICATION.
(A) BY THE COMPANY. The Company will indemnify, defend, and hold harmless each Holder from and against any and all damages, losses, claims, demands, actions, causes of action, suits, litigations, arbitrations, liabilities, costs, and expenses, including court costs and the reasonable fees and
expenses of legal counsel (collectively, "DAMAGES") related to or arising, directly or indirectly, our of or in connection with any untrue statement (or alleged untrue statement) of any material fact contained in the Registration Statement, any preliminary or final prospectus included therein, any amendment or supplement thereto, or any document incorporated by reference therein, or any omission (or alleged omission) to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company, in connection with the Registration Statement, of the Securities Act or any rule or regulation promulgated thereunder; PROVIDED, HOWEVER, that the Company will not be liable to the extent that such Damages arise out of or are based on any untrue statement or omission made in reliance upon and conformity with written information furnished by such Holder specifically for use in the Registration Statement.
(b) BY EACH HOLDER. Subject to the limitations set forth in Section 7(e), each Holder, severally, will indemnify, defend, and hold harmless the Company from and against any and all Damages related to or arising, directly or indirectly, out of or in connection with any untrue statement (or alleged untrue statement) or any material fact contained in the Registration Statement, any preliminary or final prospectus included therein, any amendment or supplement thereto, or any document incorporated by reference therein, or any omission (or alleged omission) to state therein any material fact required to be stated therein or necessary to make the statement therein not misleading, but only if and to the extent that such statement or omission was made in reliance upon and in conformity with written information furnished by such Holder specifically for use in the Registration Statement; PROVIDED, that each Holder's liability will be limited to an amount equal to the net proceeds of sale of the securities sold by such Holder pursuant to the Registration Statement, less any amount paid by such Holder as contribution pursuant to Section 7(d).
(c) CLAIMS. In the event that any party (the "INDEMNIFIED PARTY") desires to make a claim against any other party (the "INDEMNIFYING PARTY," which term includes all such other parties, if more than one) in connection with any third-party litigation, arbitration, action, suit, proceeding, claim, or demand at any time instituted against or made upon the Indemnified Party for which it may seek indemnification hereunder (a "THIRD-PARTY CLAIM"), the Indemnified Party will promptly notify the Indemnifying Party of such Third-Party Claim; PROVIDED, that failure to give such notice will not relieve the Indemnifying Party of its indemnification obligations under this section except to the extent that the Indemnifying Party is actually prejudiced thereby.
Upon receipt of such notice from the Indemnified Party, the Indemnifying Party by written notice to the Indemnified Party given within 20 days following the Indemnifying Party's receipt of the Indemnified Party's notice, will be entitled to assume the defense of the Third-Party Claim, with authority to
negotiate, compromise, and settle the Third-Party Claim. The Indemnifying Party will not agree to any settlement of any Third-Party Claim that does not include an unconditional release of all liability of each Indemnified Party with respect to the Third-Party Claim. An Indemnified Party will not agree to settle and Third-Party Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld, delayed, or conditioned.
The Indemnified Party will retain the right to employ its own counsel and to participate in the defense of any Third-Party Claim, the defense of which has been assumed by the Indemnifying Party, but the Indemnified Party will be responsible for his or its own expenses in connection with such participation, except that if the Indemnified Party reasonably determines that a conflict of interest make separate representation of the Indemnified Party by separate counsel advisable, then the Indemnifying Party will be responsible for the reasonable cost of one such separate counsel.
(d) CONTRIBUTION IN LIEU OF INDEMNIFICATION. Subject to the limitations set forth in Section 7(e), if the indemnification provided for in this Section 7 is unavailable to an Indemnified Party, or insufficient to hold harmless such Indemnified Party in respect of any Damages referred to therein, then each Indemnifying Party will, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such Damages in such proportion as is appropriate to reflect their relative fault in connection with the statements, omissions, or other matters that resulted in such Damages. Relative fault will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by PRO RATA allocation or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 7(d).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) LIMITATIONS ON INDEMNIFICATION AND CONTRIBUTION BY ANY HOLDER.
Notwithstanding the foregoing or any other provision of this Agreement, each
Holder's liability under this Agreement (i) will be several, and not joint, and
(ii) will be limited to a maximum amount equal to the net
proceeds of sale of the securities sold by such Holder pursuant to the Registration Statement.
8. MISCELLANEOUS.
(a) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY BENEFICIARIES. This Agreement will bind and inure to the benefit of the parties hereto and their respective heirs, successors, and permitted assigns. The Company will not assign any rights or delegate any obligations hereunder without the consent of the Holders, and except as expressly permitted by Section 6 hereof, no Holder will assign any rights or delegate any obligations hereunder without the consent of the Company; and any attempt to make an impermissable assignment or delegation will be void. Nothing in this Agreement is intended to or will confer any rights or remedies on any person other than the parties hereto and their respective heirs, successors, and permitted assigns.
(b) COUNTERPARTS. This Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same agreement. In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.
(c) CONSTRUCTION. The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against either party. The captions of sections or subsections of this Agreement are for reference only and will not affect the interpretation or construction of this Agreement.
(d) WAIVERS. No waiver of any breach or default hereunder will be valid unless in a writing signed by the waiving party. No failure or other delay by any party exercising any right, power, or privilege hereunder will be or operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
(e) NOTICES. All notices, requests, payments, instructions, or other documents to be given pursuant to or in connection with this Agreement will be in writing and will be deemed to have been duly given if given in accordance with Section 11.4 of the Merger Agreement.
(f) ENTIRE AGREEMENT. This Agreement contains the entire understanding and agreement among the parties, and supersedes any prior understandings or agreements among them, or between any of them, with respect to the subject matter of this Agreement.
(g) GOVERNING LAW. This Agreement will be governed by and interpreted and construed in accordance with the internal laws of the State of Delaware (without reference to principles of conflicts of choice of law).
Executed and delivered as an agreement under seal as of the date first above written.
VP MERGER PARENT, INC.
By /s/ Timothy M. Fallon
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Timothy M. Fallon
Chief Executive Officer
and President
/s/ Henry E. Baker
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Henry E. Baker
/s/ Joan A. Baker
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Joan A. Baker
/s/ John B. Baker
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John B. Baker
/s/ Peter K. Baker
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Peter K. Baker
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ROSS RAPAPORT, AS TRUSTEE
U/T/A/ 12/16/91 F/B/O
JOAN BAKER ET AL.
By /s/ Ross S. Rapaport
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Ross S. Rapaport, as Trustee
and not individually
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JOHN B. BAKER
LIFE INSURANCE TRUST
By /s/ Ross S. Rapaport
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Ross S. Rapaport, as Trustee
and not individually
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PETER K. BAKER
LIFE INSURANCE TRUST
By /s/ Ross S. Rapaport
-----------------------------
Ross S. Rapaport, as Trustee
and not individually
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