EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
AMONG
XXXXXXXX XXXXXXX CORPORATION,
XXXXXXXXXX & PARTNERS, INC. AND
XXXXXXXX XXXXXXXX & CO. INCORPORATED
DATED: SEPTEMBER 11, 1996
TABLE OF CONTENTS
PAGE
----
Section 1. Definitions................................................... 1
Section 2. Registration under the Securities Act......................... 4
Section 3. Rule 144...................................................... 12
Section 4. [Intentionally left blank].................................... 12
Section 5. Amendments and Waivers........................................ 12
Section 6. Entire Agreement.............................................. 12
Section 7. No Third-Party Beneficiary.................................... 13
Section 8. Invalid Provisions............................................ 13
Section 9. Nominees for Beneficial Owners................................ 13
Section 10. Notices....................................................... 13
Section 11. Deemed Acceptance by Investors; Assignment.................... 14
Section 12. Descriptive Headings; Section References...................... 14
Section 13. Specific Performance.......................................... 14
Section 14. Governing Law................................................. 14
Section 15. Attorneys' Fees............................................... 15
Section 16. Termination of Certain Rights................................. 15
Section 17. No Inconsistent Agreements.................................... 15
Section 18. Counterparts.................................................. 15
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement") made and entered
into as of September 11, 1996, among Xxxxxxxx Xxxxxxx Corporation (formerly
Washington Construction Group, Inc.), a Delaware corporation (the "Company"),
Xxxxxxxxxx & Partners, Inc. and Xxxxxxxx Xxxxxxxx & Co. Incorporated
(collectively, the "Investors").
WHEREAS, in connection the merger of Xxxxxxxx Xxxxxxx Corporation, a
Delaware corporation ("Old MK") with and into the Company, with the Company
continuing as the surviving corporation, pursuant to a Restructuring and Merger
Agreement between the Company and Old MK dated as of May 28, 1996 (the "Merger
Agreement");
WHEREAS, the Company has engaged the Investors to act as financial advisors
to the Company with respect to the Merger; and
WHEREAS, the Company has agreed to issue Warrants (the "Warrants") pursuant
to the Warrant Agreement (the "Warrant Agreement") dated of even date herewith
by and among the Company and the Investors for the purchase of certain number of
shares of Common Stock of the Company to the Holders as set forth in Schedule A
of the Warrant Agreement as part of the compensation for their services as such
financial advisors.
NOW THEREFORE, in consideration of the foregoing, the parties hereby agree
as follows:
SECTION 1. DEFINITIONS
Except as otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Merger Agreement. The
following terms, as used herein, have the following meanings (all terms defined
herein in the singular to have the correlative meanings when used in the plural
and vice versa):
"AFFILIATE" means (i) when used with reference to any partnership,
any Person that, directly or indirectly through one or more intermediaries,
owns or controls 10% or more of either the capital or profit interests of
such partnership or is a general partner of such partnership or is a Person
in which such partnership has a 10% or greater direct or indirect equity
interest and (ii) when used with reference to any corporation, any Person
that, directly or indirectly owns or controls 10% or more of the outstanding
voting securities of such corporation or is a Person in which such
corporation has a 10% or greater direct or indirect equity interest. In
addition, the term "Affiliate", when used with reference to any Person, also
means any other Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
such Person. As used in the preceding sentence, (A) the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the entity referred to, whether
through ownership of voting securities, by contract or otherwise, and (B) the
terms "controlling" and "controls" shall have meanings correlative to the
foregoing.
1
"AFFILIATE OF THE COMPANY" has the meaning ascribed to the term
"affiliate" in Rule 144(a)(1) promulgated by the SEC pursuant to the Securities
Act.
"AGREEMENT" means this Registration Rights Agreement, as the same may
be amended, modified or supplemented from time to time.
"BUSINESS DAY" means any day other than (a) a Saturday or Sunday, (b)
any day on which banking institutions located in the City of New York, New York
are required or authorized by law or by local proclamation to close or (c) any
day on which the New York Stock Exchange is closed.
"COMMERCIALLY REASONABLE EFFORTS" when used with respect to any
obligation to be performed or term or provision to be observed hereunder, means
such efforts as a prudent Person seeking the benefits of such performance or
action would make, use, apply or exercise to preserve, protect or advance its
rights or interests, PROVIDED, that such efforts do not require such Person to
incur a material financial cost or a substantial risk of material liability
unless such cost or liability (i) would customarily be incurred in the course of
performance or observance of the relevant obligation, term or provision, (ii) is
caused by or results from the wrongful act or negligence of the Person whose
performance or observance is required hereunder or (iii) is not excessive or
unreasonable in view of the rights or interests to be preserved, protected or
advanced. Such efforts may include, without limitation, the expenditure of such
funds and retention by such Person of such accountants, attorneys or other
experts or advisors as may be necessary or appropriate to effect the relevant
action; the undertaking of any special audit or internal investigation that may
be necessary or appropriate to effect the relevant action; and the commencement,
termination or settlement of any action, suit or proceeding involving such
Person to the extent necessary or appropriate to effect the relevant action.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Company.
"EFFECTIVE PERIOD" means the earlier of (x) the two (2) month
anniversary of the date the applicable Registration Statement is declared
effective by the SEC and (y) the date on which all of the Registrable Securities
covered by such Registration Statement have been sold, but in no event prior to
the expiration of the applicable period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor law.
"HOLDERS" means, subject to Section 9 hereof, the holders of record of
Registrable Securities, or, in the case of explicit references to holders of
securities of the Company other than Registrable Securities, the record holders
of such securities.
"INDEMNIFIED PARTY" has the meaning ascribed to such term in Section
2.5(a) hereof.
"LOSS" has the meaning ascribed to such term in Section 2.5(a) hereof.
2
"PARTICIPATING HOLDERS" means, with respect to the registration of
Registrable Securities by the Company pursuant to this Agreement, the Holders
that are entitled to participate in, and are participating in or seeking to
participate in, such registration.
"PERSON" means a natural person, a corporation, a partnership, a
trust, a joint venture, any regulatory authority or any other entity or
organization.
"PIGGYBACK REGISTRATION" means any registration of Registrable
Securities under the Securities Act effected in accordance with Section 2.1
hereof.
"REGISTERED ADDRESS" means for (i) Xxxxxxxxxx & Partners, Inc., 0000
Xx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, Telecopier No.:
(000) 000-0000 and (ii) Xxxxxxxx Wertheim & Co. Incorporated, Equitable Center
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopier No.: (000) 000-0000,
and such other addresses furnished in writing to the Company for purposes of
this Agreement.
"REGISTRABLE SECURITIES" means the Common Stock acquired by the
Investors upon the exercise of the Warrants and any securities issued or
issuable with respect to Registrable Securities, whether by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise
PROVIDED THAT, with respect to any permitted transferee of such securities, only
such securities held by permitted transferees that have complied with the
assignment requirements of Section 11 shall be deemed to be Registrable
Securities. As to any particular Registrable Securities, once issued such
securities will cease to be Registrable Securities when a Registration Statement
with respect to the resale of such securities has become effective under the
Securities Act and such securities shall have been disposed of in accordance
with the plan of distribution set forth in such Registration Statement.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without
limitation, (a) all registration, filing, securities exchange listing, rating
agency and National Association of Securities Dealers, Inc. fees, (b) all
registration, filing, qualification and other fees and expenses of complying
with securities or blue sky laws of all jurisdictions in which the securities
are to be registered and any legal fees and expenses incurred in connection
with the blue sky qualifications of the Registrable Securities and the
determination of their eligibility for investment under the laws of all such
jurisdictions, (c) all word processing, duplicating, printing, messenger and
delivery expenses, (d) the fees and disbursements of counsel for the Company
and of its independent public accountants, including, without limitation, the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (e) the reasonable fees and
disbursements incurred by the Holders of the Registrable Securities being
registered for one counsel or firm of counsel selected by the Investors, (f)
premiums and other costs of policies of insurance against liabilities arising
out of the public offering of the Registrable Securities being registered to
the extent the Company elects to obtain such insurance, (g) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (but excluding underwriting discounts and commissions and transfer
taxes, if any, relating to the Registrable Securities being registered) and
(h) fees and expenses of other Persons retained or employed by the Company.
3
"REGISTRATION STATEMENT" means a registration statement filed under
the Securities Act pursuant to Section 2.1 hereof including but not limited to a
Shelf Registration Statement.
"RULE 144" means Rule 144 promulgated by the SEC under the Securities
Act, and any successor provision thereto.
"SEC" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor law.
"SHELF PERIOD" means the earlier of (x) six (6) months following the
date the applicable Shelf Registration Statement is declared effective by the
SEC and (y) the date on which all of the Registrable Securities covered by such
Shelf Registration Statement have been sold, but in no event prior to the
expiration of the applicable period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder.
"SHELF REGISTRATION STATEMENT" means a Registration Statement filed
under Rule 415 under the Securities Act.
"SUCCESSOR" means, with respect to any Person, a successor to such
Person by merger, consolidation, liquidation or other similar transaction.
"SUSPENSION NOTICE" has the meaning ascribed to such term in Section
2.2(d) hereof.
"SUSPENSION PERIOD" has the meaning ascribed to it such term Section
2.2(d) hereof.
"UNDERWRITER" has the meaning ascribed to such term in Section 2 of
the Securities Act.
SECTION 2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 PIGGYBACK REGISTRATION
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at any
time proposes to register any of its equity securities under the Securities Act
(other than by a registration on Form S-4 or Form S-8 or any successor or
similar form then in effect in a form and in a manner that would permit
registration of the Registrable Securities, whether or not for sale for its own
account, it will give prompt (but in no event less than 30 days prior to the
proposed date of filing the Registration Statement relating to such
registration) notice to the Holders of Registrable Securities of the Company's
intention to do so and of such Holders' rights under this Section 2.1. Upon the
written request of any such Holder made within twenty (20) days after the
receipt by that Holder of the notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method or methods of disposition thereof), the Company shall use
Commercially
4
Reasonable Efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Holders thereof, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof as aforesaid) of the
Registrable Securities so to be registered, PROVIDED that if, at any time after
giving notice of its intention to register any equity securities and prior to
the effective date of the Registration Statement filed in connection with such
registration, the Company determines for any reason not to register or to delay
registration of the equity securities, the Company may, at its election, give
notice of that determination to each such Holder and, thereupon, (i) in the case
of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay all Registration Expenses in connection therewith
as provided in Section 2.2(b) hereof), and (ii) in the case of a determination
to delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other equity
securities.
(b) PRIORITY IN PIGGYBACK REGISTRATIONS. If a registration
pursuant to this Section 2.1 involves an underwritten offering and the
managing underwriter of such underwritten offering advises the Company in
writing (with a copy to each Participating Holder) of its belief that the
amount of securities requested to be included in such registration exceeds
the amount which can be sold in (or during the time of) such offering within
an acceptable price range, then the Company will include in such registration
that amount of securities which the Company is so advised can be sold in (or
during the time of) the offering as follows: FIRST, all securities proposed
by the Company to be sold for its own account; SECOND, Registrable Securities
of any Participating Holder that has properly requested that its Registrable
Securities be included in such registration and that is an "underwriter" or
an "affiliate" of the Company in an amount sufficient to include all the
Registrable Securities offered by such Participating Holder or an amount
sufficient to reduce the amount of such Participating Holder's Registrable
Securities held after the offering to a level that would cause such
Participating Holder to no longer be an "underwriter" or an "affiliate" of
the Company, whichever amount is less; THIRD, such Registrable Securities
requested to be included in such Registration Statement by any other
Participating Holder, PRO RATA on the basis of the amount of such securities
held by such other Participating Holder; and FOURTH, all other securities of
the Company duly requested to be included in such Registration Statement.
2.2 REGISTRATION TERMS AND PROCEDURES
(a) REGISTRATION EXPENSES. Subject to Section 2.2(b) hereof, the
Company will pay all Registration Expenses incurred in connection with a
registration to be effected pursuant to Section 2.1 hereof.
(b) WITHDRAWAL. Any Holder participating in a registration pursuant
to this Agreement shall be permitted to withdraw all or part of its Registrable
Securities from such registration at any time prior to the effective date of the
Registration Statement covering such securities.
(c) REGISTRATION PROCEDURES. In connection with the Company's
obligations to register Registrable Securities pursuant to this Agreement, the
Company will use Commercially Reasonable Efforts to effect such registration so
as to permit the sale, resale or other disposition of any Registrable Securities
included
5
in such registration in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will as expeditiously as
possible:
(i) prepare and (as soon thereafter as practicable) file
with the SEC the requisite Registration Statement containing all information
required thereby to effect such registration and thereafter use Commercially
Reasonable Efforts to cause such Registration Statement to become and remain
effective in accordance with the terms of this Agreement, PROVIDED that as far
in advance as practicable before filing such Registration Statement or any
amendment, supplement or exhibit thereto (but, with respect to the filing of
such Registration Statement, in no event later than seven (7) days prior to such
filing), the Company will furnish to the Participating Holders or their counsel
copies of reasonably complete drafts of all such documents proposed to be filed
(excluding exhibits, which shall be made available upon request by any
Participating Holder), and any such Holder shall have the opportunity to object
to any information contained therein and the Company will make the corrections
reasonably requested by such Holder, in writing, with respect to information
relating to such Holder or the plan of distribution of the Registrable
Securities prior to filing any such Registration Statement, amendment,
supplement or exhibit;
(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith (A) as reasonably requested by any Participating Holder, in writing,
to which such Registration Statement relates (but only to the extent such
request relates to information with respect to such Holder) and (B) as may be
necessary to keep such Registration Statement effective (x) during the Effective
Period in the case of a Registration Statement other than a Shelf Registration
Statement and (y) during the Shelf Period in the case of a Shelf Registration
Statement, and comply with the provisions of the Securities Act with respect to
the sale, resale or other disposition of all securities covered by such
Registration Statement during such period in accordance with the intended method
or methods of disposition by the seller or sellers thereof set forth in such
Registration Statement;
(iii) furnish to each Holder covered by, and each underwriter
or agent participating in the disposition of securities under, such Registration
Statement such number of conformed copies of such Registration Statement and of
each such amendment and supplement thereto (in each case excluding all exhibits
and documents incorporated by reference, which exhibits and documents shall be
furnished to any such Person upon request), such number of copies of the
prospectus contained in such Registration Statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under Rule
424 under the Securities Act relating to such Holder's Registrable Securities,
in conformity with the requirements of the Securities Act, and such other
documents as such Holder, underwriter or agent may reasonably request to
facilitate the disposition of such Registrable Securities;
(iv) use Commercially Reasonable Efforts to register or
qualify all Registrable Securities and other securities covered by such
Registration Statement under all applicable blue sky and other securities laws,
and to keep such registration or qualification in effect for so long as such
Registration Statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition of the securities owned by such Holder, except that the Company
shall not for any such purpose be required to (A) qualify generally to do
business as a foreign corporation in any
6
jurisdiction wherein it would not but for the requirements of this clause (iv)
be obligated to be so qualified, (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any jurisdiction;
(v) use Commercially Reasonable Efforts to cause all
Registrable Securities covered by such Registration Statement to be registered
with or approved by such other governmental agencies or authorities applicable
to the Company as may be reasonably necessary to enable the seller or sellers
thereof (or underwriter or agent, if any) to consummate the disposition of such
Registrable Securities in accordance with the plan of distribution set forth in
such Registration Statement;
(vi) promptly notify each Participating Holder at its
Registered Address and any underwriter or agent participating in the
disposition of Registrable Securities covered by such Registration Statement,
at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the happening of any
event known to the Company as a result of which, the prospectus included 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 light
of the circumstances under which they were made, and promptly prepare and
furnish to such Holder (or underwriter or agent, if any) a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
(vii) otherwise use Commercially 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 (but not more than fifteen
(15) months) after the effective date of the Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder, and furnish to each Holder covered by such
Registration Statement or any participating underwriter or agent a copy of any
amendment or supplement to such Registration Statement or prospectus five (5)
calendar days (or such shorter period as may be practicable under the
circumstances) prior to the filing thereof with the SEC;
(viii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration Statement
from and after a date not later than the effective date of such Registration
Statement;
(ix) use Commercially Reasonable Efforts to, on or prior to
the effective date of such Registration Statement, list the Registrable
Securities covered by such Registration Statement on any securities exchange on
which the Registrable Securities are then listed;
(x) cooperate with each Participating Holder and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc.;
(xi) use Commercially Reasonable Efforts to prevent the
issuance by the SEC or any other governmental agency or court of a stop order,
injunction or other order suspending the effectiveness of such Registration
Statement and, if such an order is issued, use Commercially Reasonable Efforts
to cause such order to be lifted as promptly as practicable; and
(xii) promptly notify each Participating Holder and each
underwriter or agent, if any:
7
(1) when such Registration Statement or any prospectus used
in connection therewith, or any amendment or supplement thereto, has been filed
and, with respect to such Registration Statement or any post-effective amendment
thereto, when the same has become effective;
(2) of any written comments from the SEC with respect to
any filing referred to in clause (A) and of any written request by the SEC for
amendments or supplements to such Registration Statement or prospectus;
(C) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to, or of the issuance by the SEC of,
any stop order suspending the effectiveness of such Registration Statement; and
(D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale, resale or other disposition under the applicable securities or blue sky
laws of any jurisdiction;
(xiii) cooperate with each Participating Holder and each
underwriter or agent participating in the distribution of such Registrable
Securities to facilitate the timely preparation and delivery of certificates
(which shall not bear any restrictive legends, other than as required by
applicable law) representing securities sold under a Registration Statement
hereunder, and enable such securities to be in such denominations and registered
in such names as such seller, underwriter or agent may request and keep
available and make available to the Company's transfer agent, prior to the
effectiveness of such Registration Statement, an adequate supply of such
certificates;
(xiv) not later than the effective date of such registration
statement, provide a CUSIP number for all Registrable Securities covered by a
Registration Statement hereunder;
(xv) incorporate in the Registration Statement or any
amendment, supplement or post-effective amendment thereto such information as
each Participating Holder, each underwriter or agent (if any) or their
respective counsel may reasonably request, in writing, to be included therein
with respect to any Registrable Securities being sold by such Holder to such
underwriter or agent, the purchase price being paid therefor by such underwriter
or agent and any other terms of the offering of such Registrable Securities; and
(xvi) during any period when a prospectus is required to be
delivered under the Securities Act, make timely periodic filings with the SEC
pursuant to and containing the information required by the Exchange Act (whether
or not the Company is required to make such filings pursuant to such Act).
(d) AGREEMENTS OF CERTAIN HOLDERS
(i) Each Participating Holder shall furnish to the Company,
in writing, such information regarding such Holder, the Registrable Securities
held by such Holder and the intended plan of distribution of such securities as
the Company may from time to time reasonably request in writing in connection
with such registration.
(ii) Each Participating Holder agrees, by acquisition of
such Registrable Securities, that upon receipt of any notice (a "Suspension
Notice") from the Company of the happening of any event of the kind described in
clause (vi) of Section 2.2(c) hereof, such Holder will forthwith discontinue
such Holder's disposition of Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause (vi)
8
of Section 2.2(c) hereof or of a notice that such Holder may resume
dispositions of Registrable Securities pursuant to the Registration Statement
(the period from the date on which such Holder receives a Suspension Notice
to the date on which such Holder receives copies of the supplemental or
amended prospectus being herein called the "Suspension Period"). The Company
shall take such actions as are necessary to end the Suspension Period as
promptly as practicable.
2.3 UNDERWRITTEN OFFERINGS IN CONNECTION WITH PIGGYBACK REGISTRATIONS. If
the Company at any time proposes to register any of its equity securities under
the Securities Act as contemplated by Section 2.1 hereof and such securities are
to be distributed by or through one or more underwriters, the Company will, if
requested by any Participating Holder and subject to Section 2.1(b) hereof,
arrange for such underwriters to include Registrable Securities to be offered
and sold by such Holder or Holders among the securities to be distributed by
such underwriters. The Participating Holders shall be parties to the
underwriting agreement between the Company and such underwriters, such agreement
to contain such representations and warranties by the Company and the
Participating Holders and such other terms as are generally prevailing in
agreements of such type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.5 hereof.
2.4 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each Registration Statement under the Securities Act
pursuant to this Agreement, the Company will give Participating Holders, their
underwriters or agents, if any, and their respective counsel and accountants,
reasonable access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of such Holders' and such underwriters' or agents' respective counsel,
to conduct a reasonable investigation within the meaning of the Securities Act.
2.5 INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Participating
Holder, its directors, officers, shareholders, employees, investment advisers,
agents and Affiliates, either direct or indirect (and each such Affiliate's
directors, officers, shareholders, employees, investment advisers and agents),
and each other Person, if any, who controls such Persons within the meaning of
the Securities Act (each such Person, an "Indemnified Party"), from and against
any losses, claims, damages, liabilities or expenses, joint or several (each a
Loss and collectively, "Losses"), to which such Indemnified Party may become
subject under the Securities Act or otherwise, to the extent that such Losses
(or actions or proceedings, whether commenced or threatened, 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
securities were registered under the Securities Act (including all documents
incorporated therein by reference), any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and the Company will reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
against any such Loss, action or proceeding; PROVIDED that in any such case the
Company shall not be liable to any particular Indemnified Party to the extent
that such Loss (or action or proceeding in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Party specifically for inclusion therein; and
PROVIDED, FURTHER, that the Company shall not be liable in any such case to the
extent it is finally determined by a court of competent jurisdiction that any
such Loss (or action or proceeding in respect
9
thereof) arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made
(i) in any such preliminary prospectus, if (A) it was the
responsibility of such Indemnified Party to provide the Person asserting such
Loss with a current copy of the final prospectus or summary prospectus contained
therein and such Indemnified Party failed to deliver or cause to be delivered a
copy of the final prospectus or summary prospectus contained therein to such
Person after the Company had furnished such Indemnified Party with a sufficient
number of copies of the same prior to the sale of Registrable Securities to the
Person asserting such Loss and (B) the final prospectus or summary prospectus
contained therein corrected such untrue statement or omission; or
(ii) in such final prospectus or summary prospectus contained
therein, if such untrue statement or omission is corrected in an amendment or
supplement to such final prospectus or summary prospectus contained therein and
such amendment or supplement has been delivered to the Indemnified Party prior
to the sale of Registrable Securities to the Person asserting such Loss and the
Indemnified Party thereafter fails to deliver the final prospectus or summary
prospectus contained therein as so amended or supplemented prior to or
concurrently with such sale after the Company had furnished such Indemnified
Party (in accordance with the notice provisions contained in Section 10 for
Persons who are parties to this Agreement) with a sufficient number of copies of
the same for delivery to purchasers of securities.
Such indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall survive
the transfer of such securities by such Indemnified Party. The Company shall
also indemnify each other Person who participates (including as an underwriter)
in the offering or sale of Registrable Securities hereunder, their officers and
directors and each other Person, if any, who controls any such participating
Person within the meaning of the Securities Act to the same extent as provided
above with respect to Indemnified Parties.
(b) INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any Registration Statement
filed pursuant to Section 2.1 hereof and as a condition to indemnifying such
sellers pursuant to this Section 2.5, that the Company shall have received an
undertaking reasonably satisfactory to it from each Participating Holder
included in any such offering regarding its agreement to indemnify and hold
harmless and reimburse (in the same manner and to the same extent as set forth
in paragraph (a) of this Section 2.5) the Company, each director, officer,
employee and agent of the Company, and each other Person, if any, who controls
the Company within the meaning of the Securities Act, from and against any
Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement pursuant to
which securities of such Holder are registered under the Securities Act
(including all documents incorporated therein by reference), any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission from such
Registration Statement, preliminary prospectus, final prospectus or summary
prospectus, or any amendment or supplement thereto required to be stated therein
or necessary to make the statements therein not misleading, if (but only if)
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Participating Holder specifically for inclusion
therein; PROVIDED, HOWEVER, that such Participating Holder shall not be
obligated to provide such indemnity to the extent that such Losses result,
directly or indirectly, from the failure of the Company to promptly amend or
take action to correct or supplement or to deliver timely any such Registration
Statement, prospectus, amendment or supplement based on corrected or
supplemental information provided in writing by such Participating Holder to the
Company expressly for such purpose; and PROVIDED FURTHER, that the obligation to
provide indemnification pursuant to this Section 2.5(b) shall be several, and
not joint and several,
10
among such indemnifying parties. Notwithstanding anything in this Section
2.5(b) to the contrary, in no event shall the liability of any Participating
Holder under such indemnity be greater in amount than the amount of the proceeds
received by such Participating Holder upon the sale of its Registrable
Securities in the offering to which the Losses relate. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer, employee, agent or
participating or controlling Person and shall survive the transfer of such
securities by such Participating Holder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action or proceeding involving a
claim referred to in paragraph (a) or (b) of this Section 2.5, such Indemnified
Party will, if a claim in respect thereof is to be made against an indemnifying
party, give prompt written notice to the latter of the commencement of such
action, PROVIDED that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Section 2.5, except to the extent that the indemnifying party is
actually and materially prejudiced by such failure to give notice. In case any
such action is brought against an Indemnified Party, the indemnifying party
shall be entitled to participate in and to assume the defense thereof (such
assumption to constitute its acknowledgement of its agreement to indemnify the
Indemnified Party with respect to such matters), jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the indemnifying party to such Indemnified Party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
Indemnified Party for any legal fees or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED, HOWEVER, that if, in such Indemnified Party's
reasonable judgment, a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, such Indemnified Party
shall be entitled to separate counsel reasonably satisfactory to the
indemnifying party at the expense of the indemnifying party; and PROVIDED,
FURTHER, that, unless there exists a conflict of interest among indemnified
parties, all indemnified parties in respect of such claim shall be entitled to
only one counsel or firm of counsel for all such indemnified parties. In the
event an indemnifying party shall not be entitled, or elects not, to assume the
defense of a claim, such indemnifying party shall not be obligated to pay the
fees and expenses of more than one counsel or firm of counsel for all parties
indemnified by such indemnifying party in respect of such claim, unless in the
reasonable judgment of any such Indemnified Party a conflict of interest exists
between such Indemnified Party and any other of such indemnified parties in
respect of such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of one additional counsel or firm of counsel for
such indemnified parties. No indemnifying party shall, without the consent of
the Indemnified Party, consent to entry of any judgment or enter into any
settlement that (i) does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
Losses in respect of such claim or litigation or (ii) would impose injunctive
relief on such Indemnified Party. No indemnifying party shall be subject to any
Losses for any settlement made without its consent, which consent shall not be
unreasonably withheld.
(d) OTHER INDEMNIFICATION. The provisions of this Section 2.5 shall
be in addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
(e) INDEMNIFICATION PAYMENTS. The indemnification required by this
Section 2.5 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, promptly as and when bills are received
or Losses are incurred.
(f) Contribution. If for any reason the foregoing indemnity and
reimbursement is unavailable or is insufficient to hold harmless an Indemnified
Party under paragraph (a) or (b) of this Section 2.5, then each indemnifying
party shall contribute to the amount paid or payable by such Indemnified Party
as a result
11
of any Loss (or actions or proceedings, whether commenced or threatened, in
respect thereof), including, without limitation, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Loss, action or proceeding, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and the Indemnified
Party on the other. 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 indemnifying party or the Indemnified Party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Notwithstanding anything
in this Section 2.5(f) to the contrary, no indemnifying party (other than the
Company) shall be required pursuant to this Section 2.5(f) to contribute any
amount in excess of the amount by which the net proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the Losses of the indemnified parties relate exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue statement or omission. 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.
SECTION 3. RULE 144
(a) The Company will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
promulgated by the SEC thereunder and will take such further action as any
Holder may reasonably request, to the extent required from time to time to
enable the Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144,
or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, the Company will deliver to that Holder a written
statement as to whether it has complied with such requirements, a copy of the
most recent annual or quarterly report of the Company, and such other reports or
documents so filed as a Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing a Holder to sell any such securities
without registration.
(b) If at any time the Company is not required to file reports in
compliance with either Section 13 or Section 15(d) of the Exchange Act, the
Company at its expense will, forthwith upon the request of any Holder make
available adequate current public information with respect to the Company within
the meaning of paragraph (c)(2) of Rule 144.
SECTION 4. [Intentionally left blank]
SECTION 5. AMENDMENTS AND WAIVERS
This Agreement may be amended, supplemented or modified only by a
writing (which makes reference to this Agreement) executed by the Company and
the Holders. Any term or condition of this Agreement may be waived at any time
by the party that is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly executed by or on
behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same term or condition of this
Agreement on any future occasion.
SECTION 6. ENTIRE AGREEMENT
This Agreement supersedes all prior discussions and agreements between
the parties with respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof.
12
SECTION 7. NO THIRD-PARTY BENEFICIARY
The terms and provisions of this Agreement are intended solely for the
benefit of each party, their respective Successors or permitted assigns and it
is not the intention of the parties to confer third-party beneficiary rights
upon any other Person other than (i) any Affiliate of any Investor, (ii) any
permitted transferee, direct or indirect, of any of the Registrable Securities
held by any Investor or any of their respective Affiliates, or (iii) any other
Person entitled to notice of the registration of Registrable Securities under
Section 2.1(a) hereof or to indemnity under Section 2.5 hereof.
SECTION 8. INVALID PROVISIONS
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
SECTION 9. NOMINEES FOR BENEFICIAL OWNERS
In the event that any Registrable Securities are held by a nominee for
the beneficial owner thereof, the beneficial owner thereof may, at its election,
be treated as the holder of such Registrable Securities for purposes of request
or other action by any Holder or Holders pursuant to this Agreement or any
determination of any amount of shares of Registrable Securities held by any
Holder or Holders of Registrable Securities contemplated by this Agreement. If
the beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities. For purposes of this Agreement,
"beneficial ownership" and "beneficial owner" refer to beneficial ownership as
defined in Rule 13d-3 (without regard to the 60-day provision in paragraph
(d)(1)(i) thereof) under the Exchange Act.
SECTION 10. NOTICES
All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if (a) delivered
personally, (b) by facsimile transmission, (c) by Federal Express or other
nationally recognized courier service or (d) mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
(i) If to the Company, to:
Xxxxxxxx Xxxxxxx Xxxxx
X.X. Xxx 00
000 Xxxx Xxxx.
Xxxxx, Xxxxx 00000
Attention: General Counsel
(ii) If to an Investor, to the Registered Address for that Investor.
13
With respect to any other Holder of Registrable Securities entitled to
receive notice, requests or other communications hereunder, such notices,
requests and other communications shall be sent to the Registered Addresses and
telecopy numbers provided to the Company and the other parties hereto by notice
as herein provided and referencing this Agreement. All such notices, requests
and other communications will (A) if delivered personally to the address as
provided in this Section 10, be deemed given upon delivery, (B) if delivered by
facsimile transmission to the facsimile number as provided in this Section 10,
be deemed given upon receipt, and (C) if delivered by courier service or by mail
in the manner described above to the address as provided in this Section 10, be
deemed given upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy of
such notice is to be delivered pursuant to this Section 10). Any Person from
time to time may change its Registered Address, facsimile number or other
information for the purpose of notices to that Person by giving notice in
accordance with this Section 10 specifying such change to each of the other
parties executing this Agreement.
SECTION 11. DEEMED ACCEPTANCE BY INVESTORS; ASSIGNMENT
Each Investor shall be deemed, by accepting the shares of Common Stock
acquired by such Investor upon the exercise of the Warrants, to agree to the
terms of this Agreement as it may be in effect from time to time, including any
amendments, supplements or waivers duly adopted in accordance with Section 5
hereof.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties and their respective Successors and permitted
assigns of Registrable Securities. Each Investor may assign any of its rights
hereunder (in whole or in part) to one or more permitted transferees of
Registrable Securities; PROVIDED, HOWEVER, that any such permitted transferees
of Registrable Securities agrees in writing, in form and substance satisfactory
to the Company, to be bound by all of the terms and provisions hereof and to
join this Agreement as a party hereto. Without limiting the foregoing, no such
assignment shall be binding upon or obligate the Company to any such assignee
unless and until (a) the Company has received notice of the assignment as herein
provided, which notice (i) references this Agreement and (ii) sets forth the
Registered Address of any assignee for the purpose of any notices hereunder.
SECTION 12. DESCRIPTIVE HEADINGS; SECTION REFERENCES
The descriptive headings of the several sections and paragraphs of
this Agreement are inserted for convenience of reference only and do not define
or limit the provisions hereof or otherwise affect the meaning hereof. All
references in this Agreement to sections are to sections of this agreement
unless otherwise stated.
SECTION 13. SPECIFIC PERFORMANCE
The parties agree that, to the extent permitted by law, (i) the
obligations imposed on them in this Agreement are special, unique and of an
extraordinary character, and that in the event of a breach by any such party
damages would not be an adequate remedy; and (ii) each of the other parties
shall be entitled to specific performance and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled at law or in
equity.
SECTION 14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware without reference to the conflicts of law
principles thereof.
14
SECTION 15. ATTORNEYS' FEES
In any action or proceeding brought to enforce any provision of this
Agreement or where any provision hereof is validly asserted as a defense, the
successful party shall, to the extent permitted by applicable law, be entitled
to recover reasonable attorneys' fees in addition to any other available remedy.
SECTION 16. TERMINATION OF CERTAIN RIGHTS
The rights and obligations hereunder of each Investor will terminate
with respect to such party at such time when neither it nor any of its
respective Affiliates holds Registrable Securities, PROVIDED that the provisions
of Section 2.3 hereof, the rights of any party hereto with respect to the breach
of any provision hereof, and any obligation accrued as of the date of
termination (including any obligation accrued under Section 2.5 hereof) shall
survive termination of this Agreement.
SECTION 17. NO INCONSISTENT AGREEMENTS
The Company will not hereafter enter into, modify, amend or waive any
agreement with respect to its securities if such agreement, modification,
amendment or waiver would conflict with the rights granted pursuant to this
Agreement to the Holders of Registrable Securities.
SECTION 18. COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
XXXXXXXX XXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
XXXXXXXXXX & PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Partner
XXXXXXXX XXXXXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
