Exhibit 10.5
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
DATED AS OF OCTOBER 31, 2001
BETWEEN
THE XXXXX CORPORATION
AND
KAN AM USA XIII LIMITED PARTNERSHIP
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this
"Agreement") is made and entered into as of October 31, 2001, by and among THE
XXXXX CORPORATION (the "Company"), and KAN AM USA XIII LIMITED PARTNERSHIP (the
"Holder").
WHEREAS, this Agreement is made pursuant to that certain
Contribution Agreement (the "Contribution Agreement") dated July 2, 2001 by and
among The Xxxxx Limited Partnership (the "Operating Partnership"), and the
Holder;
WHEREAS, on the date hereof the Holder is or will become the
owner of Units (as defined below) in the Operating Partnership in connection
with the transactions described in the Contribution Agreement;
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Company.
"COMPANY" shall have the meaning set forth in the preamble
hereof and also shall include the Company's successors.
"CONTRIBUTION AGREEMENT" shall have the meaning set forth in
the First Whereas clause above.
"DISPOSE OF" shall have the meaning set forth in Section 2(b)
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"HOLDER" shall have the meaning set forth in the preamble
hereof.
"LOCK-UP" shall have the meaning set forth in Section 2(a)
hereof.
"LOCK-UP PERIOD" shall have the meaning set forth in Section
2(a) hereof.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"OPERATING PARTNERSHIP" shall have the meaning set forth in
the preamble and also shall include the Operating Partnership's successors.
"PERSON" shall mean an individual, partnership, corporation,
trust, or unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean any prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, including post-effective amendments, and in each
case including all material incorporated by reference therein.
"REDEMPTION RIGHT" shall mean the right of Holder to cause
TMLP to redeem on a specified date all or a portion of the Units held by Holder,
as described in Section 9.1 of the TMLP Partnership Agreement (as defined in the
Contribution Agreement).
"REGISTRABLE SECURITIES" shall mean the Shares, excluding (i)
Shares for which a Registration Statement relating to the sale thereof shall
have become effective under the Securities Act and which have been disposed of
under such Registration Statement or (ii) Shares sold pursuant to Rule 144 under
the Securities Act (or any successor rule under the Securities Act).
"REGISTRATION EXPENSES" shall mean any and all expenses
incident to performance of or compliance with this Agreement, including, without
limitation: (i) all SEC, stock exchange or NASD registration and filing fees;
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualification of any of the Registrable
Securities and the preparation of a Blue Sky Memorandum) and compliance with the
rules of the NASD; (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement; (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges pursuant to Section 4(1)
hereof; and (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or incident to
2
such performance and compliance. Registration Expenses shall specifically
exclude underwriting discounts and commissions, the fees and disbursements of
counsel representing the selling Holder, and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by the selling Holder, all of
which shall be borne by the Holder in all cases.
"REGISTRATION NOTICE" shall have the meaning set forth in
Section 3(a) hereof.
"REGISTRATION STATEMENT" or "SHELF REGISTRATION STATEMENT"
shall mean a shelf' registration statement of the Company and any other entity
required to be a registrant with respect to such shelf registration statement
pursuant to the requirements of the Securities Act which covers Registrable
Securities on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all materials incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
"SHARES" shall mean any Common Stock issued or to be issued to
the Holder upon redemption of the Holder's Units.
"SHELF REGISTRATION" shall mean a registration required to be
effected pursuant to Section 3 hereof.
"UNITS" shall mean the limited partnership interests in the
Operating Partnership issued to the Holder on the date hereof, which interests
are redeemable for cash, or, at the Operating Partnership's option, Common
Stock.
2. LOCK-UP AGREEMENT.
The Holder hereby agrees that, from the date hereof until one
(1) year following the Closing (as that term is defined in the Contribution
Agreement) (the "Lock-up Period"), the Holder will not, without the prior
written consent of the Company, exercise or attempt to exercise its Redemption
Right with respect to any Units.
In the event Holder transfers any Units, such Units shall
remain subject to this Agreement and, as a condition of the validity of such
disposition, the transferee shall be required to execute and deliver a
counterpart of this Agreement (except that a pledgee shall not be required to
execute and deliver a counterpart of
3
this Agreement until it forecloses upon such Units). Thereafter, such transferee
shall be deemed to be a Holder for purposes of this Agreement.
3. SHELF REGISTRATION UNDER THE SECURITIES ACT.
(a) FILING OF SHELF REGISTRATION STATEMENT. Beginning after
the expiration of the Lock-up Period, the Holder shall be entitled to offer for
sale pursuant to a Registration Statement any Registrable Securities held by the
Holder, subject to the terms and conditions hereof. Upon receipt by the Company
of a written notice (a "Registration Notice") from the Holder and/or one or more
other Holders (the "Initiating Holder(s)") that the Holder and/or such other
Holder(s) propose to make a registered offer of a specified number of
Registrable Securities (which number shall not be less than 100,000), the
Company shall: (A) within five (5) days after receipt of such Registration
Notice give written notice of the proposed registration to all other Holders;
and (B) in accordance with the terms hereof, promptly cause to be filed a Shelf
Registration Statement providing for the sale by such Holder(s) of the
Registrable Securities specified in such Registration Notice, together with all
or such portion of the Registrable Securities of any Holder(s) joining in such
request as are specified in written requests received by the Company within
twenty (20) days after the date the Company mails the written notice referred to
in clause (A), and will use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable. The Company agrees to use its reasonable efforts to keep the Shelf
Registration Statement continuously effective for a period expiring on the date
on which all of the Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or
pursuant to Rule 144 under the Securities Act (or any successor rule under the
Securities Act) and, subject to Section 4(b) and Section 4(i), further agrees to
supplement or amend the Shelf Registration Statement, if and as required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registration; PROVIDED,
HOWEVER, that the Company shall not be deemed to have used its reasonable
efforts to keep a Registration Statement effective during the applicable period
if it voluntarily takes any action that would result in the selling Holder not
being able to sell such Registrable Securities during that period, unless such
action is required under applicable law or the Company has filed a
post-effective amendment to the Registration Statement and the SEC has not
declared it effective. Notwithstanding the foregoing, the Company shall not be
required to file a Registration Statement or to keep a Registration Statement
effective if the negotiation or consummation of a transaction is pending or an
event has occurred, which negotiation, consummation or event, in the good faith
judgment of a majority of the disinterested members of the Board of Directors of
the Company or in the written opinion of counsel to the Company, would require
additional disclosure by the Company in the Registration Statement of material
information which the Company has a BONA FIDE business purpose for keeping
confidential and the
4
nondisclosure of which in the Registration Statement would cause the
Registration Statement to fail to comply with the applicable disclosure
requirements, and the Company delivers to such Holder(s) a certificate signed by
the President of the Company to that effect; PROVIDED, HOWEVER, that the Company
may not during any period of 12 consecutive months, delay, suspend or withdraw a
Registration Statement for such reason for more than sixty (60) days or more
often than twice. Notwithstanding the foregoing, the Company shall use its
reasonable efforts to file with the SEC as soon as practicable after the Closing
a registration statement registering the offer and sale to the Holder of the
Shares that may be issued to the Holder upon the Holder's exercise of its
Redemption Right.
(b) EXPENSES. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 3(a). The Holder shall
pay all underwriting discounts, if any, sales and commissions, the fees and
disbursements of counsel representing the Holder, and transfer taxes, if any,
relating to the sale or disposition of the Holder's Registrable Securities
pursuant to the Shelf Registration Statement or Rule 144 under the Securities
Act.
(c) INCLUSION IN SHELF REGISTRATION STATEMENT. If the Holder
does not timely provide the information reasonably requested by the Company in
connection with the Shelf Registration Statement the Holder shall not be
entitled to have its Registrable Securities included in the Shelf Registration
Statement.
(d) REPURCHASE OPTION. In lieu of registering Registrable
Securities that the Holder seeks to register pursuant to Section 3(a) hereof,
the Company may, by delivery of written notice to the Holder within thirty (30)
days after receipt of a Registration Notice from the Holder, elect to repurchase
such Registrable Securities for cash, in an amount per Share equal to (i) the
average of the closing prices of the Common Stock on the New York Stock Exchange
(or on such other such exchange or in such other market as the Common Stock are
then listed or traded) on the ten (10) trading days preceding the Company's
receipt of such Registration Notice or, (ii) if the Common Stock has not traded
on all ten (10) of such trading days, in an amount equal to (A) the fair value
of such Registrable Securities as determined in good faith by the Board of
Directors of the Company, or (B) if the Holder objects to such determination
within ten (10) days of being informed thereof, the fair value of such
Registrable Securities as determined by an independent financial consultant
selected by Holder and the Company. The fees and expenses of any such financial
consultant shall be borne equally by Holder and the Company.
(e) VOLUNTARY REGISTRATION BY COMPANY. The Company may, in its
sole and absolute discretion, file a Shelf Registration Statement covering the
Registrable Securities then held by any Holder(s) and any other shares of Common
Stock then outstanding or to be issued by the Company, whether or not such
Holder(s) have delivered to the Company a Registration Notice. So long as such
Shelf Registration Statement remains effective, the right of the Holder(s) to
request
5
registration of Registrable Securities pursuant to Section 3(a) hereof shall be
suspended. Any such Shelf Registration Statement filed by the Company pursuant
to this Section 3(e) shall otherwise be subject to all of the terms and
conditions of this Agreement, and the Holder(s) of Registrable Securities
included in such Shelf Registration Statement shall have the same obligations
hereunder as they would have had if such Registrable Securities had been
included in a Shelf Registration Statement filed in response to a Registration
Notice pursuant to Section 3(a) hereof. The Company may require that any
Registrable Securities to be included in a Shelf Registration Statement filed
pursuant to this Agreement be sold by the Holder(s) in an underwritten public
offering. In such case, the underwriters of the offering shall be selected by
the Company in its sole and absolute discretion, and the Holder(s) shall execute
the applicable underwriting agreement and shall agree to reasonable and
customary terms applicable to selling stockholders in underwritten public
offerings.
4. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect
to the Registration Statement pursuant to Section 3 hereof, the Company shall:
(a) prepare and file with the SEC, within the time period set
forth in Section 3 hereof, a Shelf Registration Statement, which Shelf
Registration Statement (i) shall be available for the sale of the Registrable
Securities in accordance with the intended method or methods of distribution by
the selling Holder thereof, and (ii) shall comply as to form in all material
respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith. The Company shall use its
reasonable efforts to cause such Registration Statement to become effective as
promptly as practicable and remain effective as provided herein;
(b) subject to the last three sentences of this Section 4(b)
and Section 4(i) hereof, (i) prepare and file with the SEC such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable period; (ii) cause
each Prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 or any similar rule that may be
adopted under the Securities Act; (iii) respond as promptly as practicable to
any comments received from the SEC with respect to the Shelf Registration
Statement, or any amendment, post-effective amendment or supplement relating
thereto; and (iv) comply with the provisions of the Securities Act and the rules
and regulations of the SEC with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Holder. Notwithstanding anything to the contrary contained herein, the Company
shall not be required to take any of the actions described in subsections (i),
(ii) or (iii) above with respect to the Holder of
6
Registrable Securities unless and until the Company has received a notice from
the Holder that the Holder intends to make offers or sales under the
Registration; PROVIDED, HOWEVER, that the Company shall have ten (10) business
days to prepare and file any such amendment or supplement after receipt of such
notice. Once the Holder has delivered such a notice to the Company, the Holder
shall promptly provide to the Company such information as the Company reasonably
requests in order to identify the Holder and the method of distribution in a
post-effective amendment to the Registration Statement or a supplement to the
Prospectus. The Holder also shall notify the Company in writing upon completion
of such offer or sale or at such time as the Holder no longer intends to make
offers or sales under the Registration Statement;
(c) furnish to the Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, as many copies
of each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as the Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents to the use of the Prospectus,
including each preliminary Prospectus, by the Holder of Registrable Securities
in connection with the offering and sale of the Registrable Securities covered
by the Prospectus or the preliminary Prospectus;
(d) use its reasonable efforts to register or qualify the
Registrable Securities by the time the applicable Registration Statement is
declared effective by the SEC under all applicable state securities or "blue
sky" laws of such jurisdictions as the Holder of Registrable Securities covered
by a Registration Statement shall reasonably request in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective or during the period offers or sales
are being made by the Holder that has delivered a Registration Notice to the
Company, whichever is shorter, and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
the Holder; PROVIDED, HOWEVER, that the Company shall not be required to (i)
qualify generally to do business as a foreign corporation in any jurisdiction or
to register as a broker or dealer in such jurisdiction where it would not
otherwise be required to qualify but for this Section 4(d), (ii) subject itself
to taxation in any jurisdiction outside of the United States, or (iii) submit to
the general service of process in any jurisdiction outside of the United States;
(e) promptly notify the Selling Holder(s) of Registrable
Securities and confirm such advice in writing (i) when a Registration Statement
has become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iii) if the Company receives any notification with
7
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation of any proceeding for such purpose,
and (iv) at any time when a Prospectus is required to be delivered under the
Securities Act, that any such Registration Statement contains 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, in light of the
circumstances under which they were made (in the case of the Prospectus), not
misleading;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) furnish to the Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) cooperate with the selling Holder of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend; and enable certificates for such Registrable Securities to be issued
for such numbers of shares and registered in such names as the selling Holder
may reasonably request at least two business days prior to any sale of
Registrable Securities;
(i) subject to the next to last sentence of Section 3(a)
hereof and the last three sentences of Section 4(b) hereof, upon the occurrence
of any event contemplated by Section 4(e) (iv) hereof, use its reasonable
efforts promptly to prepare and file a supplement or prepare, file and obtain
effectiveness of a post- effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities, each such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(j) make available for inspection by representatives of the
Holder of the Registrable Securities and any counsel or accountant retained by
the Holder, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representative, counsel or accountant in connection with a Registration
Statement; PROVIDED, HOWEVER, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies such
representatives,
8
counsel or accountants in writing that such records, documents or information
are confidential shall not be disclosed by the representatives, counsel or
accountants unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a material misstatement or omission in a
Registration Statement, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public;
(k) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus, provide copies of such document (not
including any documents incorporated by reference therein unless requested) to
the Holder of Registrable Securities that have provided a Registration Notice to
the Company;
(l) use its reasonable efforts to cause all Registrable
Securities to be listed on any securities exchange on which similar securities
issued by the Company are then listed;
(m) provide a CUSIP number for all Registrable Securities, not
later than the effective date of a Registration Statement;
(n) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and
(o) use its reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary by virtue
of the business and operations of the Company to enable Holders that have
delivered Registration Notices to the Company to consummate the disposition of
such Registrable Securities.
(p) permit the Holder(s) of Registrable Securities to rely on
any representations and warranties made to any underwriter of the Company or any
opinion of counsel or "cold comfort" letter delivered to any such underwriter,
and indemnify such Holder(s) to the same extent that it indemnifies any such
underwriter; and
(q) in the event of any underwritten public offering,
cooperate with the selling Holder(s), the underwriters participating in the
offering and their counsel in any due diligence investigation reasonably
requested by the selling Holder(s) or the underwriters in connection therewith.
9
The Company may require the Holder of Registrable Securities
to furnish to the Company in writing such information regarding the proposed
distribution by the Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
In connection with and as a condition to the Company's
obligations with respect to the Registration Statement pursuant to Section 3
hereof and this Section 4, the Holder agrees that (i) it will not offer or sell
its Registrable Securities under the Registration Statement until it has
provided a Registration Notice pursuant to Section 4(b) hereof and has received
copies of the supplemental or amended Prospectus contemplated by Section 4(b)
hereof and receives notice that any post-effective amendment has become
effective, (ii) upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4(e)(iv) hereof, the Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until the Holder receives copies of the supplemented or
amended Prospectus contemplated by Section 4(i) hereof and receives notice that
any post-effective amendment has become effective, and, if so directed by the
Company, the Holder will deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in the
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice, and (iii) all offers and sales
under the Registration Statement shall be completed within sixty (60) days after
the first date on which offers or sales can be made pursuant to clause (i)
above, and upon expiration of such sixty (60) day period the Holder will not
offer or sell its Registrable Securities under the Registration Statement until
it has again complied with the provisions of clause (i) above.
5. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Holder and its officers and directors or
trustees and each Person, if any, who controls any Holder within the meaning of
Section 15 of the Securities Act as follows:
(i) against any and all loss, liability, claim,
damage and expense (including reasonable legal and other professional fees)
whatsoever, as incurred, including any of the foregoing incurred in settlement
of any litigation, commenced or threatened, arising out of or based on any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company in connection with any Registration
Statement, if such settlement is effected with the written consent of the
Company which consent shall not be
10
unreasonably withheld, and provided that the Company will not be liable to any
Holder to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with information
furnished to the Company by an instrument duly executed by the Holder and stated
to be specifically for use therein or arising out of any untrue statement or
alleged untrue statement of material fact contained in any Registration
Statement;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the written
consent of the Company which consent shall not be unreasonably withheld; and
(iii) against any and all expense whatsoever, as
incurred (including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under subparagraph
(i) or (ii) above; PROVIDED, HOWEVER, that the indemnity provided pursuant to
this Section 5(a) does not apply to any Holder with respect to any loss,
liability, claim, damage or expense to the extent arising out of (x) any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in a Registration Statement or (y) such Holder's
failure to deliver an amended or supplemented Prospectus if such loss,
liability, claim, damage or expense would not have arisen had such delivery
occurred.
(b) INDEMNIFICATION BY HOLDER. The Holder (if Registrable
Securities held by such Holder are included in the Securities as to which such
registration is being effected) agrees to indemnify and hold harmless the
Company, and its directors and officers (including each director and officer of
the Company who signed the Registration Statement), and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof (except that
any settlement described in Section 5(a)(ii) shall be effected with the written
consent of such Holder, which consent shall not be unreasonably withheld), but
only to the extent that such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or omission, or alleged untrue
statements or omissions, made in a Registration Statement in reliance upon and
in conformity with written information
12
furnished to the Company by the Holder expressly for use in such Registration
Statement.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Each indemnified
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section 5(a) or 5(b) above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the indemnified party
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) shall not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided under Section 5(a) or 5(b) above, if the indemnifying party
so elects within a reasonable time after receipt of such notice, the
indemnifying party may assume the defense of such action or proceeding at such
indemnifying party's own expense with counsel chosen by the indemnifying party
and approved by the indemnified parties defendant in such action or proceeding,
which approval shall not be unreasonably withheld; PROVIDED, HOWEVER, that, if
such indemnified party or parties reasonably determine that a conflict of
interest exists where it is advisable for such indemnified party or parties to
be represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to them which are different from or in addition to
those available to the indemnifying party, then the indemnifying party shall not
be entitled to assume such defense and the indemnified party or parties shall be
entitled to one separate counsel at the indemnifying party's or parties'
expense. If an indemnifying party is not entitled to assume the defense of such
action or proceeding as a result of the proviso to the preceding sentence, such
indemnifying party's counsel shall be entitled to conduct such indemnifying
party's defense and counsel for the indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties, it being
understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible. If an
indemnifying party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the indemnifying party or parties will pay
the reasonable fees and expenses of counsel for the indemnified party or
parties. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party, 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 to such claim or
litigation. No indemnifying party will be liable for any settlement effected
without the written consent of such indemnifying party, which consent shall not
be unreasonably withheld. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, such indemnifying
12
party shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action or
proceeding.
(d) CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 5 is for any reason held to be unenforceable although applicable in
accordance with its terms, the Company, the Holder and/or any other selling
Holder(s) shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, the Holder and/or such other selling Holder(s) in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and the Holder and/or such other selling Holder(s) on the other, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or the indemnified parties, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), the selling
Holder shall not be required to contribute any amount in excess of the amount of
net proceeds from the offering received by the Holder.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5(d), each Person, if
any, who controls the Holder within the meaning of Section 15 of the Securities
Act and directors and officers of the Holder shall have the same rights to
contribution as the Holder, and each director of the Company, each officer of
the Company who signed the Registration Statement and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
6. RULE 144 SALES.
(a) The Company covenants that it will file in a timely manner
all reports and other documents required to be filed by the Company under the
13
Securities Act and the Exchange Act so as to enable the Holder to sell Shares
pursuant to Rule 144 under the Securities Act.
(b) In connection with any sale, transfer or other disposition
by the Holder of any Shares pursuant to Rule 144 under the Securities Act, the
Company shall cooperate with the Holder to facilitate the timely preparation and
delivery of certificates representing Shares to be sold and not bearing any
Securities Act legend, and enable certificates for such Shares to be for such
number of shares and registered in such names as the selling Holder may
reasonably request at least two business days prior to any sale of Shares. For
so long as Holder shall hold any Registrable Securities, the Company shall
furnish to the Holder promptly upon request a written statement as to its
compliance with the reporting requirements of Rule 144, and of the Securities
Act and the Exchange Act.
7. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Holders of
at least a majority of Registrable Securities then outstanding, PROVIDED,
HOWEVER, that no amendment, modification or supplement or waiver or consent to
the departure with respect to the provisions of Sections 2, 3, 5 or 6 hereof
shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder of Registrable Securities, and provided
further that the Company and any Holder may waive or agree to a modification of
this Agreement or any portion hereof to the extent that such waiver or
modification applies only to the Company and such Holder. Notice of any
amendment, modification or supplement to this Agreement adopted in accordance
with this Section 7(a) shall be provided by the Company to the Holders of
Registrable Securities at least thirty (30) days prior to the effective date of
such amendment, modification or supplement.
(b) 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 any courier guaranteeing overnight delivery, to
the parties at their respective addresses set forth opposite their signatures
below or at such other address as a party may indicate by written notice to the
other party or parties.
(c) DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to the Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of the
Holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any
14
other breach or default therefore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of the Holder of any
breach or default under this Agreement or any waiver on the part of the Holder
of any provisions or conditions of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to the
Holder, shall be cumulative and not alternative.
All such notices and communications shall be deemed to have
been duly given upon actual receipt (or refusal of delivery).
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any successor, assignee or transferee
of the Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such Person shall be entitled to receive the benefits
hereof and shall be conclusively deemed to have agreed to be bound by all of the
terms and provisions hereof.
(e) COUNTERPARTS. This Agreement may be executed via facsimile
and 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.
(f) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
(g) HEADING. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
(i) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this
15
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(j) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
(l) TERMINATION. The obligations of the Company to register
the Holder's Registrable Securities pursuant to Section 3 of this Agreement
shall terminate if all of the Holder's Registrable Securities may be sold under
Rule 144 during any 90 day period.
16
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be duly executed on its behalf, as
of the date first written above.
0000 Xxxxxx Xxxxxxxxx THE XXXXX CORPORATION
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxx X. Parent
---------------------------------------
Name: Xxxxxxx X. Parent
Title: Executive Vice President of Finance
and Chief Financial Officer
Ten Piedmont Center KAN AM USA XIII LIMITED PARTNERSHIP
Xxxxx 000
0000 Xxxxxxxx Xxxx By: Kan Am USA Management XIII Limited
Xxxxxxx, XX 00000 Partnership, its general partner
By: Kan Am America, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
17
