Registration Rights Agreement - Aviall Inc., J. H. Whitney Mezzanine Fund LP, Whitney Private Debt Fund LP, Whitney Limited Partner Holdings LLC, Blackstone Mezzanine Partners LP, Blackstone Mezzanine Holdings LP, Carlyle High Yield Partners LP, Oak Hill Securities Fund LP, Oak Hill Securities FUnd II LP, Lerner Enterprises LP and P & PK Family LP
EXECUTION COPY
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), dated as of March 15, 2002 by and among AVIALL, INC. (the
"COMPANY"), a Delaware corporation, J. H. Whitney Mezzanine Fund, L.P. ("WMF"),
a Delaware limited partnership, Whitney Private Debt Fund, L.P. ("WHITNEY DF"),
a Delaware limited partnership, Whitney Limited Partner Holdings, LLC, a
Delaware limited liability company ("WHITNEY LLC" and together with WMF and
Whitney DF, the "WHITNEY FUNDS"), Blackstone Mezzanine Partners L.P.
("BLACKSTONE PARTNERS"), a Delaware limited partnership, Blackstone Mezzanine
Holdings L.P. ("BLACKSTONE HOLDINGS" and together with Blackstone Partners
"BLACKSTONE"), a Delaware limited partnership, Carlyle High Yield Partners, L.P.
a Delaware limited partnership ("CARLYLE") and Oak Hill Securities Fund, L.P., a
Delaware limited partnership, Oak Hill Securities Fund II, L.P., a Delaware
limited partnership, Lerner Enterprises, L.P. and P & PK Family Limited
Partnership (collectively, "OAK HILL"). The Whitney Funds, Blackstone, Carlyle
and Oak Hill are sometimes referred to herein individually, as a "PURCHASER" and
collectively, as the "PURCHASERS."
WITNESSETH:
WHEREAS, pursuant to the terms of the Securities Purchase
Agreement (the "PURCHASE AGREEMENT"), dated as of December 17, 2001, by and
among the Company, Aviall Services, Inc. and the Purchasers, and as a condition
precedent to the Purchasers consummating the transactions in the Purchase
Agreement, the Company was required to duly execute and deliver that certain
Registration Rights Agreement by and among the Company, Aviall Services, Inc.
and the Purchasers (the "REGISTRATION RIGHTS AGREEMENT") dated as of December
21, 2001; and
WHEREAS, pursuant to the Registration Rights Agreement the
Company and the other parties thereto agreed to provide for the circumstances
under which the Company will register securities of the Company on behalf of
such other parties; and
WHEREAS, as an inducement to the Purchasers to consummate the
transactions contemplated by the Purchase Agreement and in consideration of the
premises and of the mutual covenants and obligations set forth therein, the
Company made covenants and agreed to the provisions of the Registration Rights
Agreement with the parties thereto, and with each subsequent holder of
Restricted Stock (as defined in the Registration Rights Agreement); and
WHEREAS, pursuant to a side-letter dated as of December 17,
2001 (the "SIDE LETTER") certain Holders (as such term is defined in the
Registration Rights Agreement) have elected to take Warrants (as such term is
defined herein) in lieu of Mezzanine Equity (as such term is defined in the
Purchase Agreement).
NOW THEREFORE, the parties to the Registration Rights
Agreement hereby agree to amend and restate the Registration Rights Agreement as
provided herein.
SECTION 1. DEFINITIONS. As used herein, the following terms
shall have the following respective meanings:
<PAGE>
"CARLYLE REGISTRATION RIGHTS AGREEMENT" shall mean that
certain Registration Rights Agreement dated as of December 21, 2001, by and
among the Company, Carlyle Partners III, L.P. and the other Purchasers
identified therein.
"CERTIFICATE OF INCORPORATION" shall mean the Certificate of
Incorporation of the Company, as amended, in effect on the date hereof.
"COMMISSION" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Securities
Act.
"COMMON STOCK" means the common stock, par value $.01 per
share, of the Company.
"HOLDER" shall mean each Purchaser, for so long as it holds
any Common Stock or Warrant, and each of its successors, assigns and direct and
indirect transferees who become owners of the Common Stock or any Warrant.
"PARITY STOCK" shall mean the Registrable Securities (as
defined in the Carlyle Registration Rights Agreement).
"PURCHASERS" shall have the meaning ascribed to such term in
the first paragraph of this Agreement.
"REGISTRATION EXPENSES" shall mean the expenses so described
in Section 7 hereof.
"RESTRICTED STOCK" shall mean the shares of Common Stock
issued or issuable to the Holders upon exercise of the Warrants, the
certificates for which are required to bear the legend set forth in Section 2
hereof, provided, however, a share of Common Stock is no longer Restricted Stock
if (i) it has been sold pursuant to a registration statement or (ii) it is
eligible for resale under Rule 144(k) promulgated under the Securities Act. For
the avoidance of doubt, any reference in this Agreement to Restricted Stock held
by a Holder, shall include any and all shares of Common Stock issuable upon the
exercise of any Warrant held by such Holder.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in
Section 7 hereof.
"THRESHOLD AMOUNT" shall mean those Holders holding at least
30% of the Restricted Stock then outstanding or issuable upon exercise of all
outstanding Warrants.
"WARRANTS" shall mean the warrants to purchase shares of
Common Stock issued to Holders as contemplated by the Side Letter.
SECTION 2. RESTRICTIVE LEGEND. Each certificate representing
the Restricted Stock and, except as otherwise provided in Section 3 hereof, each
certificate issued upon exchange or transfer of any such securities shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
<PAGE>
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 NOR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
SECTION 3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of any Restricted Stock (other than under the circumstances described
in Section 4 or 5 hereof), the holder thereof shall give written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel reasonably satisfactory to the
Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, whereupon such holder shall be entitled
to transfer such securities in accordance with the terms of its notice;
provided, however, that no such opinion of counsel shall be required for a
transfer by a holder of Restricted Stock which is a partnership to a partner or
employee of such holder or a retired partner or retired employee of such holder
who retires after the date hereof, or to the estate of any such partner, retired
partner, employee or retired employee, or a transfer by gift, will or intestate
succession from any holder of Restricted Stock to his or her spouse or members
of his or her or his or her spouse's family or a trust for the benefit of any of
the foregoing persons, if the transferee agrees in writing to be subject to the
terms hereof to the same extent as if such transferee were an original holder of
Restricted Stock hereunder. All Restricted Stock transferred as above provided
shall bear the legend set forth in Section 2, except that such securities shall
not bear such legend if (i) such transfer is in accordance with the provisions
of Rule 144 of the Securities Act (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act.
SECTION 4. REQUIRED REGISTRATION.
(a) A Threshold Amount of Holders may, by written
notice, request that the Company register under the Securities Act all
or any portion of the shares of Restricted Stock held by such
requesting Holders for sale in the manner specified in such notice;
provided, however, that the Company shall not be obligated to register
Restricted Stock pursuant to such request: (i) unless at the time of
such request, all of the requesting Holders shall hold (or would hold,
upon exercise of any Warrants held by them) in the aggregate 2.0% or
more of all outstanding shares of Common Stock on a fully diluted
basis; (ii) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent
to service of process in effecting such registration when it was not
then so qualified and had not filed such a consent; (iii) if counsel to
the Company opines to the requesting Holders that the filing of such a
registration statement would require the disclosure of material
non-public information about the Company, the disclosure of which could
have a material adverse effect on the business or financial condition
of the Company, in which event no such registration statement shall be
filed until the later of the lapse of 30 days from the issuance of the
opinion of Company counsel or the issuance of a subsequent opinion that
such information is no longer required to be disclosed, is not material
or non-public, or its disclosure would not have a material adverse
effect on the business or financial condition of the Company; provided,
however, that the Company may not exercise its right under this clause
(iv) more than twice in any 12-month period; or (v) the proposed
aggregate public offering price of the securities is less than
$4,000,000.
(b) Promptly following receipt of any notice under
this Section 4, the Company shall promptly give written notice to all
other Holders from whom notice has not been received and shall file and
use its commercially reasonable best efforts to have declared effective
<PAGE>
by the Commission a registration statement under the Securities Act for
the public sale, in accordance with the method of disposition specified
in such notice from requesting holders, of the number of shares of
Restricted Stock specified in such notice (and in any notices received
from other Holders of Restricted Stock within 20 days after the date of
such notice from the Company). If such method of disposition shall be
an underwritten public offering, the Company may designate the managing
underwriter of such offering, subject to the approval of the Holders
participating in such registration who own a majority in interest of
the Restricted Stock requested to be included in such registration by
such Holders, which approval shall not be unreasonably withheld. The
number of shares of Restricted Stock to be included in such an
underwriting shall be reduced (pro rata among all Holders requesting
such registration, under this Section 4, to participate in such
registration based upon the number of shares of Restricted Stock owned
by such Holders) if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the
marketing of the securities to be sold therein. For purposes of making
any such reduction, each Holder of Restricted Stock which is a
partnership, together with the affiliates, partners, employees, retired
partners and retired employees of such Holder, the estates and family
members of any such partners, employees, retired partners and retired
employees and of their spouses, and any trusts for the benefit of any
of the foregoing persons shall be deemed to be a single "person", and
any pro rata reduction with respect to such "person" shall be based
upon the aggregate number of shares of Restricted Stock owned by all
entities and individuals included as such "person," as defined in this
sentence (and the aggregate number so allocated to such "person" shall
be allocated among the entities and individuals included in such
"person" in such manner as such holder of Restricted Stock may
reasonably determine). The Company shall be obligated to register
Restricted Stock pursuant to requests made by a Threshold Amount of
Holders under this Section 4 on two occasions only (subject to
reduction under Section 5(b) below); provided, however, that the
Company's obligation as to such occasion shall be deemed satisfied only
when a registration statement covering all shares of Restricted Stock
specified in the notices received as aforesaid, for sale in accordance
with the method of disposition specified by the requesting holders,
shall have become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such shares shall
have been sold pursuant thereto.
(c) The Company shall be entitled to include in any
registration statement referred to in this Section 4 for which the
method of distribution is an underwritten public offering, for sale in
accordance with the method of disposition specified by the requesting
holders, shares of Common Stock to be sold by the Company for its own
account, except as and to the extent that, in the opinion of the
managing underwriter, such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Except as set forth in
this Section 4, no securities shall be included in any registration
statement referred to in this Section 4 without the prior written
consent of the holders of a majority in interest of the Holders'
Restricted Stock to be included in such registration. Except with
respect to registration statements on Forms S-8 and S-4, the Company
will not file with the Commission any other registration statement with
respect to its Common Stock (other than any Registration Statement
filed pursuant to the Carlyle Registration Rights Agreement) whether
for its own account or that of other stockholders, from the date of
receipt of a notice from requesting holders pursuant to this Section 4
until the date that is 120 days after the effective date of the
registration statement filed by the Company pursuant to this Section 4.
SECTION 5. INCIDENTAL REGISTRATION; FORM S-3 REGISTRATION.
(a) If the Company at any time (other than pursuant
to Section 4 hereof and other than pursuant to the Carlyle Registration
Rights Agreement) proposes to register any of
<PAGE>
its securities for cash under the Securities Act for sale to the
public, whether for its own account or for the account of other
security holders or both (except with respect to registration
statements on Form S-4 and Form S-8, any successor form thereto, or
another form not available for registering Restricted Stock for sale to
the public), each such time it will give written notice to all Holders
of its intention to do so. Upon the written request of any such Holder,
given within 20 days after the date of any such notice, to register any
of its Restricted Stock, the Company will use its commercially
reasonable efforts to cause the Restricted Stock as to which
registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be
filed by the Company, all to the extent requisite to permit the sale or
other disposition by the Holder (in accordance with its written
request) of such Restricted Stock so registered. The Company may
withdraw any such registration statement before it becomes effective or
postpone the offering of securities contemplated by such registration
statement without any obligation to any Holder. In the event that any
registration pursuant to this Section 5 shall be, in whole or in part,
an underwritten public offering of Common Stock, such Restricted Stock
shall be included in the underwriting on the same terms and conditions
as the shares of Common Stock otherwise being sold through underwriters
under such registration. The number of shares of Restricted Stock to be
included in registration for the account of the Company may be reduced
(pro rata among the requesting Holders and any holders of Parity Stock
requesting such registration) if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company
therein; provided, however, that if any shares are to be included in
such underwriting for the account of any person other than the Company
(other than any holder of any shares of Parity Stock), the number of
shares to be included by any such person shall be reduced first; and
provided further, however, that the number of any such shares held by
any person other than the Holders and holders of Parity Stock shall be
reduced before the number of any such shares held by the Holders and
holders of Parity Stock is reduced. With respect to the first proviso
of the preceding sentence, if the Company elects to reduce pro rata the
amount of Restricted Stock proposed to be offered in the underwriting
for the accounts of all persons other than the Company, for purposes of
making any such reduction, each holder of Restricted Stock or Parity
Stock which is a partnership, together with the affiliates, partners,
employees, retired partners and retired employees of such holder, the
estates and family members of any such partners, employees, retired
partners and retired employees and of their spouses, and any trusts for
the benefit of any of the foregoing persons shall be deemed to be a
single "person," and any pro rata reduction with respect to such
"person" shall be based upon the aggregate number of shares of
Restricted Stock or Parity Stock, as the case may be, owned by all
entities and individuals included as such "person", as defined in this
sentence (and the aggregate number so allocated to such "person" shall
be allocated among the entities and individuals included in such
"person" in such manner as such holder of Restricted Stock or Parity
Stock, as the case may be, may reasonably determine). Notwithstanding
anything to the contrary contained in this Section 5, in the event that
there is an underwritten offering of securities of the Company pursuant
to a registration covering Restricted Stock and a selling Holder does
not elect to sell his, her or its Restricted Stock to the underwriters
of the Company's securities in connection with such offering, such
holder shall refrain from selling such Restricted Stock not registered
pursuant to this Section 5 during the period of distribution of the
Company's securities by such underwriters and the period in which the
underwriting syndicate participates in the after market; provided,
however, that such holder shall, in any event, be entitled to sell its
Restricted Stock in connection with such registration commencing on the
180th day after the effective date of such registration statement.
(b) If, at a time when Form S-3 is available for such
registration, the Company shall receive from any Holder a written
request or requests that the Company effect a non-
<PAGE>
underwritten registration on Form S-3 of any such holder's Restricted
Stock, the Company will promptly give written notice of the proposed
registration to all other Holders and, as soon as practicable, effect
such registration and all such related qualifications and compliances
as may be requested and as would permit or facilitate the sale and
distribution of all Restricted Stock as are specified in such request
and any written requests of other Holders given within 20 days after
receipt of such notice. The Company shall not be required to file a
registration statement under Form S-3 if it would not be required to
file a registration statement under Section 4 hereof pursuant to
Section 4(a)(iii). The Company shall only be required to effect four
registrations under this Section 5(b), and each two registrations under
this Section 5(b) will count as one registration under Section 4 above.
SECTION 6. REGISTRATION PROCEDURES. If and whenever the
Company is required by the provisions of Section 5 hereof to use its
commercially reasonable best efforts to effect the registration of any shares of
Restricted Stock under the Securities Act, the Company shall promptly:
(a) prepare and file with the Commission a
registration statement (which, in the case of an underwritten public
offering pursuant to Section 4 hereof, shall be on Form S-3 or other
form of general applicability satisfactory to a majority of the Holders
of Restricted Stock to be included therein) with respect to such
securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided)
or the date on which the Holders may sell all of the Restricted Stock
covered by such registration statement without restriction pursuant to
Rule 144A;
(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 the period specified in
Section 6 (a) above and as to comply with the provisions of the
Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers'
intended method of disposition set forth in such registration statement
for such period;
(c) furnish to each seller and to each underwriter,
without charge, such number of copies of the registration statement and
the prospectus included therein (including each preliminary prospectus)
as such persons may reasonably request in order to facilitate the
public sale or other disposition of the Restricted Stock covered by
such registration statement in accordance with applicable law and the
disclosure set forth in such prospectus;
(d) use its commercially reasonable best efforts to
register or qualify the Restricted Stock covered by such registration
statement under the securities or blue sky laws of such jurisdictions
as the sellers of Restricted Stock or, in the case of an underwritten
public offering, the managing underwriter shall reasonably request in
writing;
(e) immediately notify each holder of Restricted
Stock covered by such registration statement and each underwriter, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made;
<PAGE>
(f) furnish, at the request of any Holder of
Restricted Stock, on the date that Restricted Stock is delivered to the
underwriters for sale pursuant to such registration: (i) an opinion
dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to such seller,
stating (A) that such registration statement has become effective under
the Securities Act, (B) that, to the knowledge of such counsel, no stop
order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act and (C) that the registration
statement and the related prospectus, and each amendment or supplement
thereof, comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder (except that such counsel need
not express any opinion as to financial statements contained therein),
and to such other effects as may reasonably be requested by counsel for
the underwriters or by such seller or its counsel, and (ii) a letter
dated such date from the independent public accountants retained by the
Company, addressed to the underwriters and to such seller, stating that
they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to the registration in respect of
which such letter is being given as such underwriters or such seller
may reasonably request;
(g) make available for inspection by representatives
of the Holders of a majority of the Restricted Stock being sold, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant retained by such
seller or underwriter, all relevant financial and other records,
pertinent corporate documents and properties of the Company, as shall
be reasonably deemed necessary by such Holders and its subsidiaries,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such selling Holder,
underwriter, attorney or accountant in connection with such
registration statement as is customary for similar due diligence
examinations during normal business hours at the offices where such
information is normally kept;
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(i) use its commercially reasonable best efforts to
cause all Restricted Stock covered by the registration statement to be
listed on each securities exchange or market, if any, on which similar
securities issued by the Company are then listed, provided that the
applicable listing requirements are satisfied;
(j) make available to its security holders an
earnings statement covering at least 12 months which shall satisfy the
provisions of Sections 11(a) of the Securities Act and Rule 158
thereunder;
(k) cooperate and assist in any filings required to
be made with the New York Stock Exchange and the National Association
of Securities Dealers, Inc., including in order for the Restricted
Stock to be admitted to listing on the New York Stock Exchange;
(l) notify each Holder of Restricted Stock registered
by a registration statement (i) when such registration statement has
become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the Commission or
<PAGE>
any state securities authority for post-effective amendments and
supplements to a registration statement and prospectus or for
additional information after such registration statement has become
effective, (iii) of the issuance by the Commission or any state
securities authority of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for
that purpose, (iv) in the case of a registration, if, between the
effective date of a registration statement and the closing of any sale
of Restricted Stock, the representations and warranties of the Company
contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to the offering cease to be
true and correct in all material respects; and
(m) in the event of any underwritten public offering,
use its commercially reasonable best efforts to commence a road show
(and make senior management available to participate in such road show)
in order to help facilitate the marketing of such Restricted Stock.
For purposes of Sections 6(a) and (b) above and of Section
4(c) hereof, the period of distribution of Restricted Stock in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the period
of distribution of Restricted Stock in any other registration shall be deemed to
extend until the sale of all Restricted Stock covered thereby.
In connection with each registration hereunder, the selling
holders of Restricted Stock will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
shall be necessary in order to assure compliance with Federal and applicable
state securities laws.
Any holder of Restricted Stock, and their permitted
transferees, receiving any written notice from the Company regarding the
Company's plans to file a registration statement shall treat such notice
confidentially and shall not disclose such information to any person other than
as necessary to exercise its rights under this Agreement.
In connection with each registration pursuant to Sections 4
and 5 hereof covering an underwritten public offering, the Company agrees to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of the Company's size and investment stature.
SECTION 7. EXPENSES. All expenses incurred by the Company in
complying with Sections 4 and 5 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars and costs of insurance and fees and expenses of one counsel for
the sellers of Restricted Stock, but excluding any Selling Expenses, are herein
called "Registration Expenses". All underwriting discounts and selling
commissions applicable to the sale of Restricted Stock are herein called
"Selling Expenses." The Company will pay all Registration Expenses in connection
with each registration statement filed pursuant to Section 4 or 5 hereof. All
Selling Expenses incurred in connection with any sale of Restricted Stock by any
participating seller shall be borne by such participating seller, or by such
persons other than the Company as they may agree.
SECTION 8. INDEMNIFICATION. In the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 4 or 5
hereof, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder and each other person, if any, who
<PAGE>
controls such seller within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which such seller or controlling person may become subject, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 4
or 5, any preliminary prospectus or final prospectus contained therein, or 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, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such seller and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by such seller, of
Restricted Stock or such controlling person for use in such registration
statement or prospectus.
In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Section 4 or 5 hereof, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages, expenses or liabilities, joint or several,
to which the Company or such officer or director or underwriter or controlling
person may become subject, insofar as such losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Section 4 or 5, any preliminary prospectus
or final prospectus contained therein, or 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, in light of the circumstances under which they were made,
not misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus; provided, further, however, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the proceeds received by such
seller from the sale of Restricted Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party under this Section 8. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this
<PAGE>
Section 8 for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof; provided, however, that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall
have the right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified party as aforesaid, (ii) the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or
that the interests of the indemnified party conflict with the interests of the
indemnifying party, or (iii) the indemnifying party and such indemnified party
shall have mutually agreed to the retention of such counsel. It is understood
that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. If the
indemnification provided for in the first two paragraphs of this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under such
paragraphs in respect of any losses, claims, damages or liabilities or actions
referred to therein, then each indemnifying party shall in lieu of indemnifying
such indemnified party contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
actions in such proportion as appropriate to reflect the relative fault of the
Company, on the one hand, and the sellers of such Restricted Stock, on the
other, in connection with the statement or omissions which resulted in such
losses, claims, damages, liabilities or actions, as well as any other relevant
equitable considerations including, without limitation, the failure to give any
notice under the second paragraph of this Section 8. The relative fault shall 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 Company, on the one hand,
or by the sellers of such Restricted Stock, on the other hand, and to the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the sellers of Restricted Stock agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if all of the sellers of Restricted
Stock were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
action referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
and the immediately preceding paragraph, the sellers of such Restricted Stock
shall not be required to contribute any amount in excess of the amount, if any,
by which the total price at which the Common Stock sold by each of them was
offered to the public exceeds the amount of any damages which they would have
otherwise been required to pay by reason of such untrue or alleged untrue
statement of omission. No person guilty of fraudulent misrepresentation (within
the
<PAGE>
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The indemnification of underwriters provided for in this
Section 8 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters and the indemnification
of the sellers of Restricted Stock in such underwriting shall, at the sellers'
request, be modified to conform to such terms and conditions. Upon the
reasonable request of any stockholder selling Restricted Stock pursuant to a
registration statement or any underwriter of such stock, the Company shall
obtain, if reasonably available, an insurance policy covering the risks
described above in this Section 8 in an amount and with a deductible reasonably
requested by such seller or underwriter and naming such seller, any underwriter
of such stock and any person controlling such seller or underwriter as
beneficiaries. The costs of obtaining and maintaining any such insurance shall
be borne by the Company.
SECTION 9. CHANGES IN COMMON STOCK. If, and as often as, there
are any changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof, as may be required, so that
the rights and privileges granted by this Agreement shall continue with respect
to the Common Stock as so changed.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each of the other parties hereto as follows
(which representations and warranties shall survive the execution and delivery
of this Agreement):
(a) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite
corporate action and will not violate any provision of law, any order
of any court or other agency of government, the Certificate of
Incorporation or By-laws of the Company, or any provision of any
indenture, agreement or other instrument to which it or any of its
properties or assets is bound, or conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the Company
or any of its subsidiaries.
(b) This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms
except as enforceability may be limited by applicable bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity
relating to enforceability.
SECTION 11. RULE 144 REPORTING. The Company agrees with each
of the other parties hereto as follows:
(a) The Company shall make and keep public
information available as those terms are understood and defined in Rule
144 under the Securities Act.
(b) The Company shall file with the Commission in a
timely manner all reports and other documents as the Commission may
prescribe under Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act") as and when required by the Exchange
Act.
(c) The Company shall furnish to each holder of
Restricted Securities forthwith upon reasonable request (i) a written
statement by the Company as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange
Act, (ii) a copy of
<PAGE>
the most recent annual or quarterly report of the Company, and (iii)
such other reports and documents so filed as such holder may reasonably
request to avail itself of any rule or regulation of the Commission
allowing a holder of Restricted Securities to sell any such securities
without registration.
SECTION 12. MISCELLANEOUS.
(a) The obligations under Section 3 and the rights
arising under Sections 4 and 5 shall terminate as to a Holder when (i)
such a Holder is no longer an "affiliate" as used in Rule 144 and (ii)
such a Holder is permitted to sell all Restricted Stock then held by it
pursuant to Rule 144(k).
(b) All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. Without limiting the
generality of the foregoing, the registration rights conferred herein
on the holders of Restricted Securities shall inure to the benefit of
any and all subsequent holders from time to time of the Restricted
Stock for so long as the certificates representing the Restricted Stock
shall be required to bear the legend specified in Section 2 hereof.
(c) All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall
be by registered or certified first-class mail, return receipt
requested, telecopier (with receipt confirmed), courier service or
personal delivery:
(i) if to the Company:
2750 Regent Boulevard
DFW Airport, TX 75261
Telecopier: (972) 586-1000
Attention: Jeffrey J. Murphy
with a copy to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
Telecopier No.: 214.200.0676
Attention: Janice V. Sharry
(ii) if to WMF, Whitney DF or Whitney LLC
c/o Whitney & Co.
177 Broad Street, 1st Floor
Stamford, Connecticut 06901
Telecopier No.: (203) 973-1422
Attention: Michael Salvatore
James H. Fordyce
Joseph D. Carrabino, Jr.
James A. Feeley, III
<PAGE>
with a copy to:
Chadbourne & Parke, LLP
30 Rockefeller Plaza
New York, NY 10112
Telecopier No.: (212) 541-5369
Attention: Thomas C. Meriam
(iii) if to Blackstone:
The Blackstone Mezzanine Group
345 Park Avenue
New York, NY 10154
Attention: Sal Gentile
Telecopier No.: 212.583.5482
(iv) if to Carlyle:
The Carlyle Group
250 Madison Avenue
41st Floor
New York, New York 10022
Attention: Michael Zupon
David Waxman
with a copy to:
Latham & Watkins
555 11th Street, N.W.
Suite 1000
Washington, DC 20004
Telecopier No.: (202) 637-2201
-
Attention: Daniel T. "Dan" Lennon
(v) if to Oak Hill Securities Fund, L.P.:
Oak Hill Securities Fund, L.P.
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Telecopier No.:
Attention: Scott Krase
(vi) if to the Oak Hill Securities Fund II, L.P.:
Oak Hill Securities Fund II, L.P.
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Attention: Scott Krase
<PAGE>
(viii) if to Lerner Enterprises, LP
Oak Hill Asset Management, Inc.
Park Avenue Tower
65 East 55th Street
32nd Floor
New York, NY 10022
Attention: Megan McCann
And to:
Lerner Enterprises
11501 Huff Court
Kensington, Maryland 20895-1094
Attention: Margaret Mekenie
(ix) if to P & PK Family Limited Partnership
Oak Hill Asset Management, Inc.
Park Avenue Tower
65 East 55th Street
32nd Floor
New York, NY 10022
Attention: Megan McCann
or to such other address or addresses as shall have been furnished in
writing to the other parties hereto. Each holder agrees, at all times,
to provide the Company with an address for notices hereunder.
All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial
overnight courier service; if mailed, five Business Days (as defined in
the Purchase Agreement) after being deposited in the mail, postage
prepaid; or if telecopied, when receipt is acknowledged.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN
ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED
ENTIRELY WITHIN SUCH STATE.
(e) (I) EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY
EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS
FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER
VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH
PARTY HEREBY IRREVOCABLY CONSENTS TO THE
<PAGE>
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
IN SECTION 12(C), SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH
MAILING.
(II) THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE COMPANY (X)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PURCHASER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (Y)
ACKNOWLEDGES THAT THE PURCHASERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.
(f) This Agreement and the Purchase Agreement
constitute the entire agreement of the parties with respect to the
subject matter hereof and may not be modified or amended except in
writing. For the avoidance of doubt, this Agreement supercedes the
Registration Rights Agreement and the Registration Rights Agreement
shall be of no further force or effect.
(g) Telefacsimile transmissions of any executed
original document and/or retransmission of any executed telefacsimile
transmission shall be deemed to be the same as the delivery of an
executed original. At the request of any party hereto, the other
parties hereto shall confirm telefacsimile transmissions by executing
duplicate original documents and delivering the same to the requesting
party or parties. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) The Company (on the one hand) and the Purchasers
(on the other hand) agree that any amendment to the Federal securities
laws (and regulations promulgated thereunder (and related registration
forms), and related state securities laws shall not affect the
substantive registration requirements (and other obligations of the
Company) set forth in this Agreement; and, following any such
amendment, the Company shall continue to be required to cause the
registration of Restricted Stock (and pay all Registration Expenses and
provide indemnification) under the Federal securities laws, as amended,
in a manner consistent to carry out the intent and purposes of (and on
terms as similar as practicable as the terms set forth in) this
Agreement.
(i) If any one or more of the provisions contained in
this Agreement, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in
any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions of this Agreement. The parties hereto further agree to
replace such invalid, illegal or unenforceable provision of this
Agreement with a valid, legal and enforceable provision that will
achieve, to the extent possible, the economic, business and other
purposes of such invalid, illegal or unenforceable provision.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
AVIALL, INC.
By: /s/ Jeffrey J. Murphy
----------------------------------------------------
Name: Jeffrey J. Murphy
Title: Senior Vice President, Law and Human
Resources, Secretary and General Counsel
J. H. WHITNEY MEZZANINE FUND, L.P.
By: Whitney GP, LLC,
Its General Partner
By: /s/ Joseph D. Carrabino, Jr.
----------------------------------------------------
Name: Joseph D. Carrabino, Jr.
Title: Managing Member
WHITNEY PRIVATE DEBT FUND, L.P.
By: Whitney Private Debt GP, LLC
Its General Partner
By: /s/ Joseph D. Carrabino, Jr.
----------------------------------------------------
Name: Joseph D. Carrabino, Jr.
Title: Managing Member
WHITNEY LIMITED PARTNER HOLDINGS, LLC
By: /s/ Joseph D. Carrabino, Jr.
----------------------------------------------------
Name: Joseph D. Carrabino, Jr.
Title: Managing Member
BLACKSTONE MEZZANINE PARTNERS L.P.
By: Blackstone Mezzanine Associates, L.P.
Its General Partner
By: Blackstone Mezzanine Management Associates,
L.L.C.
Its General Partner
By: /s/ Howard Gellis
----------------------------------------------------
Name: Howard Gellis
Title: Member
<PAGE>
BLACKSTONE MEZZANINE HOLDINGS L.P.
By: Blackstone Mezzanine Associates, L.P.
Its General Partner
By: Blackstone Mezzanine Management Associates,
L.L.C.
Its General Partner
By: /s/ Howard Gellis
----------------------------------------------------
Name: Howard Gellis
Title: Member
CARLYLE HIGH YIELD PARTNERS, L.P.
By: /s/ Mark Alter
----------------------------------------------------
Name: Mark Alter
Title: Managing Director
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.
Its General Partner
By: Oak Hill Securities MGP, Inc.
Its General Partner
By: /s/ Scott D. Krase
----------------------------------------------------
Name: Scott D. Krase
Title: Authorized Signatory
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.
Its General Partner
By: Oak Hill Securities MGP II, Inc.
Its General Partner
By: /s/ Scott D. Krase
----------------------------------------------------
Name: Scott D. Krase
Title: Authorized Signatory
<PAGE>
LERNER ENTERPRISES, L.P.
By: Oak Hill Asset Management, Inc.
As Advisor and Attorney-in-Fact to Lerner
Enterprises, L.P. (OHP Account)
By: /s/ Scott D. Krase
----------------------------------------------------
Name: Scott D. Krase
Title: Authorized Signatory
P & PK FAMILY LIMITED PARTNERSHIP
By: Oak Hill Asset Management, Inc.
As Advisor and Attorney-in-Fact to P & PK
Family Limited Partnership (OHP account)
By: /s/ Scott D. Krase
----------------------------------------------------
Name: Scott D. Krase
Title: Authorized Signatory
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]