Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (this "Agreement"), dated this
5th day of September, 2002, is by and between XXXXX INC., a Delaware corporation
(the "Company"), on the one hand, and the stockholders of the Company set forth
on the signature pages hereto (individually a "Stockholder" and collectively the
"Stockholders") who execute and deliver a counterpart of this Agreement.
A. WHEREAS, the Company and the Stockholders have entered into
a Purchase Agreement (the "Purchase Agreement") of even date herewith pursuant
to which the Stockholders sold to the Company and the Company purchased all of
the equity interests of Zolfo Xxxxxx LLC and its related companies (the "ZC
Interests");
B. WHEREAS, the consideration for the purchase and sale of the
ZC Interests included 2,900,000 shares of common stock, par value $.10 per
share, of the Company (the "Common Stock") and an additional 2,500,000 shares of
Common Stock may be issued and delivered to the Stockholders under certain
circumstances pursuant to the Purchase Agreement; and
C. WHEREAS, the execution and delivery of this Agreement is
required by the Purchase Agreement in connection with the closing thereunder;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations hereinafter contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Stockholders, intending legally to be bound, do hereby agree as
follows:
Section 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person who either,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person. For purposes of this definition, the term "control"
(including the terms "controlling" "controlled by" and under "common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble.
"Business Day" shall mean any day which is not a Saturday or
Sunday or a legal holiday on which banks are authorized or required to be closed
in New York, New York.
1
"Capital Stock" shall mean all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
"Delay Notice" shall have the meaning set forth in Section
6(b).
"Designated Stockholders" shall mean Xxxxxxx X. Xxxxxx,
Xxxxxxx X. France and Xxxxxxx XxXxxxxx.
"Encumbrance" means any lien, pledge, mortgage, security
interest, charge, restriction, adverse claim or other encumbrance of any kind or
nature whatsoever.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC promulgated thereunder.
"Hold-Back Election" shall have the meaning set forth in
Section 6(a).
"Indemnified Party" shall have the meaning set forth in
Section 8(a).
"Losses" shall have the meaning set forth in Section 8(a).
"Material Development Condition" shall have the meaning set
forth in Section 6(b).
"Other Holders" shall have the meaning set forth in Section
3(c).
"Person" shall mean an individual, partnership, venture,
unincorporated association, organization, syndicate, corporation, limited
liability company or other entity, trust or trustee, executor, administrator or
other legal or personal representative or any government or any agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in any
Registration Statement, as amended or supplemented by a prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Purchase Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Registrable Securities" shall mean the Common Stock acquired
by the Stockholders from the Company pursuant to the Purchase Agreement and any
other securities issued or issuable as a result of or in connection with any
stock dividend, stock split or reverse stock split, combination,
recapitalization, reclassification, merger or consolidation, exchange or
distribution or otherwise in respect of such Common Stock.
2
"Registration Expenses" shall have the meaning set forth in
Section 7.
"Registration Statement" shall mean any registration statement
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, all amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"Requesting Securityholder" shall have the meaning set forth
in Section 4.
"Restricted Security" shall have the meaning set forth in
Section 2.
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"Rule 903" shall mean Rule 903 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"Rule 904" shall mean Rule 904 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Selling Stockholder" shall mean any Stockholder whose
Registrable Securities are included in a Registration Statement.
"Shelf Registration" shall have the meaning set forth in
Section 3(a).
"Shelf Registration Period" shall have the meaning set forth
in Section 3(b).
"Stockholders" shall mean the Persons set forth on the
signature pages to this Agreement who execute and deliver a counterpart of this
Agreement, and any Person to whom the rights under this Agreement are assigned
pursuant to Section 16 hereof.
"ZC Interests" shall have the meaning set forth in the
recitals.
"Underwritten Offering" shall mean a registered offering in
which securities of the Company are sold to an underwriter pursuant to a firm
commitment underwriting agreement for reoffering to the public.
Section 2. Securities Subject to this Agreement. The
securities entitled to the benefits of this Agreement are the Registrable
Securities but, with respect to any particular
3
Registrable Security, only so long as such security continues to be a Restricted
Security. A Registrable Security that has ceased to be a Registrable Security
cannot thereafter become a Registrable Security. As used herein, a "Restricted
Security" is a Registrable Security which (a) has not been effectively
registered under the Securities Act and distributed by a Stockholder in
accordance with an effective Registration Statement, (b) has not been
distributed by a Stockholder pursuant to Rule 144, Rule 903 or Rule 904, unless,
in the case of a Registrable Security distributed pursuant to Rule 903 or 904,
any applicable restricted period has not expired or the SEC or its staff has
taken the position in a published release, ruling or no-action letter that
securities distributed under Rule 903 or 904 are ineligible for resale in the
United States under Section 4(1) of the Securities Act notwithstanding
expiration of the applicable restricted period, or (c) is not eligible for sale
without restriction as to volume or manner of sale under paragraph (k) of Rule
144.
Section 3. Shelf Registration.
(a) Filing. Subject to the provisions of Section 6(b) hereof,
the Company shall use its reasonable best efforts to file with the SEC by
November 15, 2002, a Registration Statement on Form S-3 (or any successor or
other available form) covering all Registrable Securities (the "Shelf
Registration").
(b) Effectiveness of Registration Statement. Subject to the
provisions of 6(b), the Company shall use its reasonable best efforts to (i)
cause the Shelf Registration to become effective on or before January 15, 2003,
and (ii) thereafter keep such Registration Statement effective continuously for
the period (the "Shelf Registration Period") ending on the second (2nd)
anniversary of the date hereof. In the event that the Shelf Registration has not
been declared effective by the SEC on or before January 15, 2003, the Company
shall issue pro rata to the Stockholders a number of shares of Common Stock
equal to three-quarters of one percent (0.75%) of the Registrable Securities
then outstanding for each subsequent thirty (30) day period that elapses before
the Shelf Registration is declared effective by the SEC; provided, however, that
if the Shelf Registration is not declared effective by the SEC on or before
September 30, 2003, such three-quarters of one percent (0.75%) shall be
increased to one and one-half percent (1.50%) for each thirty (30) day period
that elapses after September 30, 2003 before the Shelf Registration is declared
effective by the SEC; provided, further, however, that the Company shall not be
required to issue any additional shares pursuant to this sentence in respect of
any thirty (30) day period during which the Stockholders may not sell any
Registrable Securities pursuant to Section 9.6 of the Purchase Agreement.
(c) Inclusion of Other Securities. The Company and any other
holder of the Company's Common Stock who has registration rights ("Other
Holders") may include its securities in the Shelf Registration effected pursuant
to this Section 3, provided that, no such inclusion of the securities of Other
Holders shall restrict in any way the number of Registrable Securities which may
be included in the Shelf Registration.
(d) Underwritten Offering. In the event the Stockholders wish
to effect sales under the Shelf Registration in an underwritten offering, the
Company shall enter into an underwriting agreement with the underwriters on
customary terms and shall file such form of prospectus, prospectus supplement or
other filing to provide for such underwritten offering that is reasonably
requested by the underwriters in connection therewith. The underwriters shall be
selected by the Company and shall be reasonably acceptable to a majority in
interest of the Designated Stockholders.
Section 4. Piggyback Registrations. If the Company at any time
proposes to file a registration statement with respect to its Common Stock,
whether for its own account or for the account of an Other Holder or Other
Holders that have requested such registration (a "Requesting Securityholder"),
other than a registration statement or Form S-4 or S-8 (or any
4
successor or substantially similar form) and other than in connection with an
employee compensation plan, or securities issued pursuant to any such plan, or a
dividend reinvestment plan, then the Company shall in each case give written
notice of such proposed filing to the Stockholders at least twenty (20) days
before the anticipated filing date of any such registration statement by the
Company, and such notice shall offer to the Stockholders the opportunity to have
any or all of the Registrable Securities held by the Stockholders included in
such registration statement. If any Stockholder desires to have its Registrable
Securities registered under this Section 4, it shall so advise the Company in
writing within ten (10) days after the date of receipt of such notice (which
request shall set forth the number of Registrable Securities for which
registration is requested), and the Company shall use its commercially
reasonable efforts to include in such Registration Statement all such
Registrable Securities so requested to be included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of any such proposed
public offering advises the Company that the total number of shares of Common
Stock which the Stockholders, the Company and any other Persons intended to be
included in such proposed public offering is sufficiently large to materially
and adversely affect the success of such proposed public offering, then the
number of shares of Common Stock to be included in such registration statement
for the accounts of the Stockholders and the Other Holders shall be reduced pro
rata, based upon the aggregate number of securities to be offered for the
accounts of the Stockholders and all Other Holders (except the Company and the
Requesting Securityholder) intended to be included in such offering, to the
extent necessary to reduce the total number of securities to be included in such
proposed public offering to the number recommended by such managing underwriter
or underwriters before the securities offered by the Company or any Requesting
Securityholder are so reduced. Anything to the contrary in this Agreement
notwithstanding, the Company may withdraw or postpone a Registration Statement
referred to in this Section 4 at any time before it becomes effective or
withdraw, postpone or terminate the offering after it becomes effective without
any liability or obligation to any Stockholder.
Section 5. Registration Procedures.
(a) General. In connection with the Company's registration
obligations pursuant to Sections 3 and 4, the Company will:
(i) prepare and file with the SEC a new Registration
Statement or such amendments and post-effective amendments to an
existing Registration Statement as may be necessary to keep such
Registration Statement effective for the time period set forth in
Section 3(b); provided that no Registration Statement shall be required
to remain in effect after all Registrable Securities covered by such
Registration Statement have been distributed as contemplated by such
Registration Statement, and, provided, further, that as soon as
practicable, but in no event later than three (3) Business Days before
filing such Registration Statement, the Company shall furnish to the
Selling Stockholders copies of all such documents proposed to be filed,
which documents shall be subject to the review of the Selling
Stockholders;
(ii) notify the Selling Stockholders promptly (1)
when a new Registration Statement, Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any new Registration Statement or post-
5
effective amendment, when it has become effective, (2) of any request
by the SEC for amendments or supplements to any Registration Statement
or Prospectus or for additional information, (3) of the issuance by the
SEC of any comments with respect to any filing (and to reply thereto as
promptly as reasonably practicable), (4) of any stop order suspending
the effectiveness of any Registration Statement or the initiation of
any proceedings for that purpose (and use its commercially reasonable
efforts to obtain the withdrawal of such order), (5) of any suspension
of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and (6) if there is any misstatement or omission of any
material fact in any Registration Statement, Prospectus or any document
incorporated therein by reference or if any event occurs that requires
the making of any changes in any Registration Statement, Prospectus or
any document incorporated therein by reference in order to make the
statements therein (in the case of any Prospectus, in the light of the
circumstances under which they were made) not misleading;
(iii) if reasonably requested by a Selling
Stockholder, promptly incorporate in a Prospectus supplement or
post-effective amendment such information with respect to such
Stockholder and its proposed plan of distribution as such Stockholder
reasonably requests be included therein; and promptly make all required
filings of such Prospectus supplement or post-effective amendment;
(iv) furnish to each Selling Stockholder, without
charge, as many conformed copies as may reasonably be requested of the
then effective Registration Statement and any post-effective amendments
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(v) deliver to each Selling Stockholder, without
charge, as many copies of the then effective Prospectus (including each
prospectus subject to completion) and any amendments or supplements
thereto as such Stockholder may reasonably request;
(vi) use commercially reasonable efforts to register
or qualify or cooperate with the Selling Stockholders in connection
with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such
jurisdictions as such Stockholders reasonably request in writing;
provided, however, that the Company will not be required to (1) qualify
to do business in any jurisdiction where it would not otherwise be
required to qualify, but for this paragraph (vi), (2) subject itself to
general taxation in any such jurisdiction or (3) file a general consent
to service of process in any such jurisdiction;
(vii) cooperate with the Selling Stockholders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the Selling
Stockholders may request at least two (2) Business Days prior to any
sale of such Registrable Securities;
6
(viii) otherwise use commercially reasonable efforts
to comply in all material respects with all applicable rules and
regulations of the SEC relating to such registration and the
distribution of the securities being offered and make generally
available to its securities holders an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act;
(ix) cooperate and assist in any filings required to
be made with the National Association of Securities Dealers, Inc.; and
(x) upon reasonable notice and during normal business
hours, provide reasonable access to the Company's personnel, legal
advisors and auditors for the purpose of permitting the Selling
Stockholders to conduct due diligence in connection with any such
Registration Statement.
As a condition precedent to the participation in any
registration hereunder, the Company may require the Selling Stockholders to
furnish to the Company such information regarding such Stockholders and the
distribution of such securities as the Company may from time to time reasonably
request to comply with the applicable provisions of the Securities Act.
(b) Cessation of Sales. Each Selling Stockholder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 5(a)(ii), such Stockholder will forthwith discontinue
disposition of Registrable Securities pursuant to the then current Prospectus
until (1) such Stockholder is advised in writing by the Company that a new
Registration Statement covering the offer of Registrable Securities has become
effective under the Securities Act, or (2) such Stockholder receives copies of
any required supplemented or amended Prospectus, or until such Stockholder is
advised in writing by the Company that the use its of the Prospectus may be
resumed; provided, however, that, subject to the provisions of Section 6(b), the
Company shall use its commercially reasonable efforts to cure any such
misstatement, omission or event that is applicable to the Registration Statement
as soon as reasonably practicable after delivery of such notice pursuant to
clause (6) of Section 5(a)(ii). If so directed by the Company, on the happening
of such event, each Selling Stockholder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Stockholder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Section 6.
(a) Hold-Back Election. In the case of the registration of any
underwritten primary offering initiated by the Company, each Stockholder agrees
that if he or she is requested to do so by the managing underwriter or the
underwriters, then such Stockholder shall not effect any public sale or
distribution of Capital Stock of the Company, except as part of such
underwritten registration, during the period beginning ten (10) days prior to
the closing date of such underwritten offering and ending ninety (90) days after
such closing date; provided, however, that the provisions of this Section 6(a)
shall not be effective until the Stockholders are entitled, for a period of at
least six (6) months, to sell all of the Registrable Securities then owned by
them without restriction under the volume limitations of Rule 144 and, provided,
further that the provisions of this Section 6(a) shall not apply more than once
in any year.
7
(b) Material Development Condition. With respect to any
Registration Statement filed or to be filed pursuant to Section 3, if the Board
of Directors of the Company determines that, in its good faith judgment, it
would (because of the existence of, or in reasonable anticipation of, any
acquisition or corporate reorganization or other transaction, financing
activity, stock repurchase or other development involving the Company or any
subsidiary, or the unavailability for reasons beyond the Company's control of
any required financial statements, or any other event or condition of similar
significance to the Company or any subsidiary) be impracticable for or seriously
detrimental (a "Material Development Condition") to the Company or any
subsidiary to file such Registration Statement with the SEC, or to amend or
supplement a Registration Statement that has been filed with the SEC, then the
Company shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving to the Holders of a certificate signed by an executive
officer of the Company stating that in the good faith judgment of the Board of
Directors a Material Development Condition has occurred (a "Delay Notice"), (i)
to cause sales of Registrable Securities by the Stockholders pursuant to such
Registration Statement to cease, (ii) to cause such Registration Statement to be
withdrawn and the effectiveness of such Registration Statement terminated, or
(iii) in the event no such Registration Statement has yet been filed or declared
effective, to delay the filing of any such Registration Statement until, in the
good faith judgment of the Company, such Material Development Condition no
longer exists (notice of which the Company shall promptly deliver to the
Stockholders). Notwithstanding the foregoing provisions of this Section 6(b):
(1) in no event may such cessation or delay be, for each such Registration
Statement, for a period of more than ninety (90) consecutive days from the
giving of its Delay Notice to the Stockholder with respect to such Material
Development Condition, as above provided; (2) in the event a Registration
Statement is filed and subsequently withdrawn by reason of any existing or
anticipated Material Development Condition as provided above, the Company shall
cause a new Registration Statement covering the Registrable Securities to be
filed with the SEC as soon as practicable after such Material Development
Condition ceases to exist or, if sooner, as soon as practicable after the
expiration of such ninety (90) day period; and (3) the Company may not issue
more than one Delay Notice in any twelve month period.
(c) Limitation on Registration Rights. Anything to the
contrary contained in this Agreement notwithstanding, when in the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Designated Stockholders), registration of all Registrable Securities owned by a
Stockholder is not required by the Securities Act and other applicable
securities laws in connection with a proposed sale of all such Registrable
Securities, in one transaction, such Stockholder shall have no rights pursuant
to Section 4 to request Registrable Securities be included in a registration
statement in connection with such proposed sale and the Company shall promptly
provide to the transfer agent and such Stockholder's broker in connection with
any sale transaction a written opinion addressed to such Stockholder and the
transfer agent to the effect set forth above, reasonably sufficient in form and
substance to permit the transfer agent to issue stock certificates for such
Registrable Securities without any legend restricting transfer thereof.
Section 7. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications or registrations (or the
8
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses (including expenses of printing Prospectuses), messenger and delivery
expenses, fees and disbursements of the Company's counsel and its independent
certified public accountants, Securities Act liability insurance (if the Company
elects to obtain such insurance), fees and expenses of any special experts
retained by the Company in connection with any registration hereunder and fees
and expenses of other Persons retained by the Company (all such expenses being
referred to as "Registration Expenses"), shall be borne by the Company;
provided, however, that Registration Expenses shall include the reasonable fees
and expenses of a single counsel for the Stockholders, but shall not include
other out-of-pocket expenses incurred by the Selling Stockholders or
underwriting discounts, commissions, brokerage or other fees attributable to the
sale of the Registrable Securities.
Section 8. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, but without
duplication, each Selling Stockholder and its successors and assigns (the
"Indemnified Party") from and against any and all losses, claims, actions,
damages, liabilities and expenses (joint or several) (including reasonable
attorneys' fees and disbursements and all other reasonable expenses incurred in
investigating, preparing, compromising or defending against any such litigation,
commenced or threatened, or any claim whatsoever, and amounts paid in settlement
of any such claim or litigation) ("Losses") to which any of such Indemnified
Parties may become subject, as incurred, insofar as such Losses arise out of or
are based upon or relate to any untrue statement (or alleged untrue statement)
of a material fact in, or any omission (or alleged omission) of a material fact
required to be stated in, any Registration Statement or Prospectus or necessary
to make the statements therein (including any such statements or omissions
incorporated by reference therein) (in the case of a Prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as the
same are caused by or contained in any written information furnished to the
Company by such Selling Stockholder for use in the preparation of or inclusion
in such Registration Statement or Prospectus in respect of such Selling
Stockholder or its plan of distribution. The Company will also indemnify
underwriters participating in the distribution, their officers, directors,
employees, partners and agents, and each Person who controls such underwriters
(within the meaning of the Securities Act), to the same extent as provided above
with respect to the indemnification of the Selling Stockholders, if so
requested.
(b) Indemnification by the Selling Stockholders. In connection
with any Registration Statement, each Selling Stockholder will furnish to the
Company such information and affidavits as the Company reasonably requests for
use in connection with any such Registration Statement or Prospectus and agrees
to indemnify and hold harmless, to the full extent permitted by law, but without
duplication, the Company, its officers, directors, stockholders, employees,
advisors and agents, and each Person who controls the Company (within the
meaning of the Securities Act), from and against any and all Losses to which the
Company or any such Person may become subject, as incurred, insofar as such
Losses arise out of or are based upon or related to any untrue statement (or
alleged untrue statement) of a material fact in, or any omission (or alleged
omission) of a material fact required to be stated in, the Registration
Statement or Prospectus or necessary to make the statements therein (in the case
of a Prospectus in light of the circumstances under which they were made) not
misleading to the
9
extent (and only to the extent) that such untrue statement or omission occurs in
reliance upon any written information or affidavit furnished by such Selling
Stockholder to the Company for use in the preparation of or inclusion in such
Registration Statement or Prospectus in respect of such Selling Stockholder or
its plan of distribution. No Selling Stockholder shall be required to provide
indemnification or contribution hereunder in excess of an amount equal to the
net proceeds to such Stockholder from the disposition of the Registrable
Securities disposed of by such Stockholder pursuant to such Registration
Statement.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(but the failure to so notify an indemnifying party will not relieve it from any
liability or obligation which it may have under this Section 8 or otherwise
unless the failure to notify results in material prejudice to the indemnifying
party and will not in any event relieve the indemnifying party from any
obligations other than the indemnification provided for herein) and (ii) permit
such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in (but not control) the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
indemnified Person unless the indemnifying party shall have failed to assume the
defense of such claim and employ counsel reasonably satisfactory to the
indemnified party in a timely manner or if representation of such indemnified
party by the counsel retained by the indemnifying party would be, in the
indemnified party's reasonable view, inappropriate due to actual or potential
differing interests between such indemnified party and other party represented
by such counsel in such proceeding. The indemnifying party will not be subject
to any liability for any compromise or settlement made without its consent. No
indemnified party will be required to consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. An indemnifying party who
is not entitled to, or elects not to, assume the defense of the claim will not
be obligated to pay the fees and expenses of more than one counsel (except one
(1) local counsel if required in a specific instance) for all parties
indemnified by such indemnifying party with respect to such claim.
(d) Contribution. If for any reason the indemnification
provided for in Section 8(a) or Section 8(b) is unavailable to an indemnified
party or is insufficient to hold it harmless as contemplated by Section 8(a) and
Section 8(b), then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party and the indemnified
party, but also the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement or the omission or alleged omission relates
to information supplied by the indemnifying party or parties on the one hand, or
the indemnified party or parties on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
10
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) Conflict with Underwriting Agreement. Notwithstanding the
foregoing, to the extent that the indemnification and contribution provisions
contained in any underwriting agreement entered into in connection with any
Underwritten Offering in which the Stockholders participate, conflict with the
foregoing, the provisions of such underwriting agreement shall control.
(f) Survival. The provisions of this Section 8 shall survive
the completion of any offering of Registrable Securities and are in addition to,
and not in derogation of any other remedies any party may otherwise have.
Section 9. Participation in Underwritten Registrations. No
Stockholder may participate in any Underwritten Offering hereunder unless it (a)
agrees to sell the Registrable Securities included therein on the basis provided
in any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 9 shall be construed to create any additional rights
regarding the registration of Registrable Securities in any Person otherwise
than as set forth herein.
Section 10. Certain Covenants by the Company.
(a) The Company agrees to use its commercially reasonable
efforts to file with the SEC on a timely basis all annual, quarterly and current
repots required to be filed by the Company under the Exchange Act (including
those required by Rule 144).
(b) Upon request by any Stockholder, the Company will inform
such Stockholder whether it is in compliance with its reporting obligations
under the Exchange Act.
(c) The Company will provide all information as any
Stockholder reasonably requests in order to determine whether any rule similar
to Rule 144 permits the selling of any such securities without registration.
(d) Upon obtaining an opinion in form and substance
satisfactory to the Company from counsel to a Stockholder that is reasonable
satisfactory to the Company to the effect that such Stockholder may transfer its
Registrable Securities pursuant to Rule 144(k) without registration under the
Securities Act, the Company will instruct its transfer agent to issue to such
Stockholder a certificate representing such Registrable Securities without any
restrictive legends thereon.
Section 11. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or air-courier guaranteeing overnight
delivery:
If to a Stockholder, at the most current address given by such Stockholder to
the Company, in accordance with the provisions of this Section 11, which address
(including facsimile number)
11
initially is c/o Xxxxxxx XxXxxxxx, Xxxxx Xxxxxx, LLC, 000 Xxxxxxxxxx Xxxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000, facsimile (000) 000-0000.
(a) If to the Company, initially at 000 Xxxxx Xxxxxx, Xxx
Xxxx, XX 00000, attention: Xxxxxxx X. Xxxxx, Esq., Vice President, General
Counsel and Secretary, facsimile No.: (000) 000-0000, and thereafter at such
other address as may be designated from time to time by notice given in
accordance with the provisions of this Section 11, with copies to Xxxxxx Xxxxx
Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention:
Xxxxx X. Xxxxxxxx, Esq., facsimile No.: (000) 000-0000.
(b) All such notices and other communications shall be deemed
to have been delivered and received (i) in the case of personal delivery,
facsimile, telecopier or telegram, on the date of such delivery, (ii) in the
case of air courier, on the Business Day after the date when sent and (iii) in
the case of mailing, on the third (3rd) Business Day following such mailing.
Section 12. Entirety of Agreement. This Agreement states the
entire agreement of the parties with respect to the subject matter hereof and
merges all prior negotiations, agreements and understandings, if any, with
respect thereto.
Section 13. Amendment. This Agreement may be modified or
amended only by an instrument in writing, duly executed by the Company and the
Designated Stockholders, and when so modified or amended shall be binding upon
all of the Stockholders as so modified or amended.
Section 14. Waiver. No waiver by any party of any term,
provision, condition, covenant, agreement, representation or warranty contained
in this Agreement (or any breach thereof) shall be effective unless it is in
writing executed by the party against which such waiver is to be enforced. No
waiver shall be deemed or construed as a further or continuing waiver of any
such term, provision, condition, covenant, agreement, representation or warranty
(or breach) on any other occasion or as a waiver of any other term, provision,
condition, covenant, agreement, representation or warranty (or of the breach of
any other term, provision, condition, covenant, agreement, representation or
warranty) contained in this Agreement on the same or any other occasion.
Section 15. Counterparts; Facsimile. For the convenience of
the parties, any number of counterparts hereof may be executed, each such
executed counterpart shall be deemed an original and all such counterparts
together shall constitute one and the same instrument. Facsimile transmission of
any signed original counterpart and/or retransmission of any signed facsimile
transmission shall be deemed the same as the delivery of an original.
Section 16. Assignment; Binding Nature; No Beneficiaries. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, personal representatives,
legatees, successors and assigns. Except as otherwise expressly provided in
Section 8, this Agreement shall not confer any rights or remedies upon any
Person other than the parties hereto and their respective heirs, personal
representatives, legatees, successors and assigns.
12
Section 17. Headings. The headings in this Agreement are
inserted for convenience only and shall not constitute a part hereof or alter
the meaning of any provision hereof.
Section 18. Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of New York applicable to contracts made and to be entirely performed
therein, without regard to the principles of conflict of laws. In the event of
any controversy or claim arising out of or relating to this Agreement or the
breach or alleged breach hereof, each of the parties hereto irrevocably (a)
submits to the exclusive jurisdiction of the U.S. District Court for the
Southern District of New York or, if such court may not take jurisdiction, any
New York State Supreme Court sitting in the County of New York, (b) waives any
objection which it may have at any time to the laying of venue of any action or
proceeding brought in any such court, (c) waives any claim that such action or
proceeding has been brought in an inconvenient forum or that there is a more
convenient forum for such action or proceeding, and (d) agrees that service of
process or of any other papers upon such party by registered mail at the address
to which notices are required to be sent to such party under Section 11 shall be
deemed good, proper and effective service upon such party.
Section 19. Construction. In this Agreement (a) words denoting
the singular include the plural and vice versa, (b) "it" or "its" or words
denoting any gender include all genders, (c) the word "including" shall mean
"including without limitation," whether or not expressed, (d) any reference
herein to a Section refers to a Section of this Agreement, unless otherwise
stated, (e) all references to "$" or "dollars" mean U.S. dollars, and (g) when
calculating the period of time within or following which any act is to be done
or steps taken, the date which is the reference day in calculating such period
shall be excluded and if the last day of such period is not a Business Day, then
the period shall end on the next day which is a Business Day. Any reference in
this Agreement to "herein," "hereof," "hereby," "hereunder" or words of similar
import shall mean and refer to this Agreement as a whole and not to any
particular part hereof.
Section 20. Negotiated Agreement. The Company and the
Stockholders acknowledge that they have been advised and represented by counsel
in the negotiation, execution and delivery of this Agreement and accordingly
agree that if an ambiguity exists with respect to any provision of this
Agreement, such provision shall not be construed against any party because such
party or its representatives drafted such provision.
[SIGNATURE PAGES FOLLOW]
13
IN WITNESS WHEREOF, the Company and the Stockholders have
executed this Registration Rights Agreement as of the date first written above.
XXXXX INC.
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
STOCKHOLDERS:
---------------------------------
Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. France
---------------------------------
Xxxxxxx XxXxxxxx
XXXXX XXXXXX ACQUISITION, LLC
By:
-----------------------------
Name:
Title:
14
