REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the
30th day of June, 1998 by and among DELPHI FINANCIAL GROUP, INC., a Delaware
corporation ("Delphi") and the stockholders of Matrix Absence Management, Inc.,
a California corporation ("Matrix"), listed on Schedule A hereto (the
"Holders").
WHEREAS, Delphi and Matrix have entered into that certain Agreement and
Plan of Merger (the "Merger Agreement"), pursuant to which Matrix will be merged
(the "Merger") with and into a newly-formed, wholly-owned subsidiary of Delphi
("Merger Subsidiary") and the Holders will receive pursuant to the Merger, among
other things, the shares listed in Schedule A hereto (the "Shares") of Delphi
Class A common stock, $.01 par value ("Common Stock"); and
WHEREAS, in connection with the issuance of the Shares in the Merger,
Delphi and the Holders desire to provide for the rights of the Holders with
respect to the registration of the Shares according to the terms of this
agreement.
NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Definitions.
1.1. The term "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2. The term "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.3. The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any permitted assignee thereof in accordance
with Section 8 hereof.
1.4. The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
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1.5. The term "Registrable Securities" means (i) the Shares held by each
Holder and (ii) any shares of Common Stock issued prior to the effective date of
the Registration Statement (as defined below) as a dividend or other
distribution with respect to, in exchange for or in replacement of, the Shares,
excluding in all cases, however, any Registrable Securities sold by a person in
a transaction in which such person's registration rights are not assigned;
provided, however, that any Shares sold pursuant to an effective registration
statement or pursuant to Rule 144 or 145 under the Securities Act shall cease to
be Registrable Securities.
1.6. The term "Securities Act" means the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.7. All other capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Merger Agreement to which this Agreement is
attached as Exhibit E.
2. Registration.
2.1. Delphi shall prepare and, on or prior to the date which is 30 days
after the Effective Date, file with the Commission a registration statement on
Form S-3 for an offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act covering the then outstanding Registrable Securities
then held by each Holder (the "Registration Statement"), and shall use
commercially reasonable efforts to cause the Registration Statement to be
declared effective as soon as reasonably practicable thereafter.
2.2. A Holder may inform Delphi in writing that such Holder wishes to
exclude all or a portion of its Registrable Securities from the Registration
Statement.
2.3. The registration of the Registrable Securities provided for in this
Section 2 shall not be underwritten.
3. Obligations of Delphi. Delphi shall, as expeditiously as reasonably
possible:
3.1. Before filing the Registration Statement or prospectus or any
amendments or supplements thereto, provide copies of such documents to counsel
selected by the Holders.
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3.2. Once declared effective, keep the Registration Statement continuously
effective under the Securities Act until the earlier of the expiration of two
years after the Effective Date or the date on which this Agreement has
terminated with respect to all the Holders of Registrable Securities (such
period is hereinafter referred to as the "Effectiveness Period"). In the event
that, in the reasonable judgment of Delphi, it is advisable to suspend use of
the prospectus relating to the Registration Statement for a discrete period of
time (a "Deferral Period") due to pending material corporate developments or
similar material events that have not yet been publicly disclosed and as to
which Delphi believes public disclosure will be prejudicial to Delphi, Delphi
shall, if the circumstances giving rise to such Deferral Period are within
Delphi's control, at least three trading days prior to the first day of such
Deferral Period, or otherwise, as soon as reasonably practicable, deliver a
notice in writing to each Holder to the effect of the foregoing (but in no event
shall Delphi be obligated to disclose to the Holders the facts and circumstances
giving rise to the foregoing) and, upon receipt of such notice, each Holder
agrees not to dispose of such Holder's Registrable Securities covered by the
Registration Statement (other than in transactions exempt from the registration
requirements under the Securities Act) until the Holders are advised in writing
by Delphi that use of the prospectus may be resumed; provided, however, that the
aggregate number of days in any such Deferral Period or Deferral Periods shall
be no more than 60 in any 12-month period.
3.3. Prepare and file with the Commission such amendments and supplements
to the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement.
3.4. Furnish to the Holders covered by the Registration Statement such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of such
Registrable Securities.
3.5. Use its commercially reasonable efforts to register and qualify the
securities covered by the Registration Statement under such other securities or
Blue Sky laws of such United States jurisdictions as shall be reasonably
requested by the Holders thereof and keep such registrations and qualifica-
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tions in effect during the Effectiveness Period; provided that Delphi shall not
be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
4. Obligations of the Holders; Procedures for Sales of Shares Under the
Registration Statement.
4.1. It shall be a condition precedent to the obligations of Delphi to take
any action pursuant to this Agreement that the selling Holders shall furnish to
Delphi such information regarding themselves, the Registrable Securities held by
them, and the intended method of disposition of such securities as shall be
required to effect the registration of the Registrable Securities.
4.2. For any offer or sale of any of the Registrable Securities under the
Registration Statement by a Holder in a transaction that is not exempt under the
Securities Act, the Holder, in addition to complying with any other federal
securities laws, shall deliver a copy of the final prospectus (together with any
amendment of or supplement to such prospectus) of Delphi covering the
Registrable Securities, in the form furnished to the Holder by Delphi, to the
purchaser of any of the Registrable Securities on or before the settlement date
for the purchase of such Registrable Securities.
4.3. Upon the receipt by a Holder of any notice from Delphi of (1) the
existence of any fact or the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, contains
an untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (2) the issuance by
the Commission of any stop order or injunction suspending or enjoining the use
or the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, or the taking of any similar action by the
securities regulators of any state or other jurisdiction, or (3) the request by
the Commission or any other federal or state governmental agency for amendments
or supplements to the Registration Statement or related prospectus or for
additional information related thereto, such Holder shall forthwith discontinue
disposition of such Holder's Registrable Securities covered by the Registration
Statement or related prospectus (other than in transactions exempt from the
registration requirements under the Securities Act) until such Holder's re-
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ceipt of the supplemented or amended prospectus or until such Holder is advised
in writing by Delphi that the use of the applicable prospectus may be resumed.
In such a case, subject to Section 3.2, Delphi shall as promptly as reasonably
practicable (i) prepare an amendment to correct or update the prospectus, (ii)
use its commercially reasonable efforts to remove the impediments referred to in
subclause (2) above, or (iii) comply with the requests referred to in subclause
(3) above.
5. Expenses. Delphi shall bear and pay all expenses incurred by Delphi in
connection with any registration, filing or qualification of Registrable
Securities with respect to the Registration Statement for each Holder thereof
(which right may be assigned as provided in Section 8 hereof), including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees relating or apportionable thereto, fees and disbursements of
counsel for Delphi, blue sky fees and expenses, including fees and disbursements
of counsel related to all blue sky matters, and the expenses of providing
materials pursuant to Section 3.4 hereof, but excluding the fees and
disbursements of counsel for the selling Holders, stock transfer taxes that may
be payable by the selling Holders, and all underwriting discounts and
commissions relating to Registrable Securities, which shall be borne by the
Holders.
6. Delay of Registration. No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying the Registration Statement as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification. In the event any Registrable Securities are included in
the Registration Statement under this Agreement:
7.1. To the extent permitted by law, Delphi will indemnify and hold
harmless each Holder of such Registrable Securities, against any losses, claims,
damages or liabilities (joint or several) to which they may become subject under
the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supple-
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ments thereto, (ii) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by Delphi of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; and Delphi will reimburse each such Holder for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 7.1 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Delphi (which consent
shall not be unreasonably withheld), nor shall Delphi be liable in any such case
for any such loss, claim, damage, liability or action, or any related expense,
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by or on behalf of any such Holder.
7.2. To the extent permitted by law, each selling Holder will indemnify and
hold harmless Delphi, each of its directors, each of its officers who have
signed the Registration Statement, each person, if any, who controls Delphi
within the meaning of the Securities Act, and any other Holder selling
securities in the Registration Statement against any losses, claims, damages or
liabilities (joint or several) to which Delphi or any such director, officer or
controlling person, or other such Holder may become subject, under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by Delphi or any such director, officer,
controlling person, or other Holder in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 7.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the indemnifying Holder,
which consent shall not be unreasonably withheld; provided, that in no event
shall any indemnity under this Section 7.2 exceed the net pro-
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ceeds received by such Holder from the sale of Registrable Securities as
contemplated hereunder.
7.3. Promptly after receipt by a party entitled to indemnification under
this Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonable fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding; it being
understood, however, that the indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for such
indemnified party, which firm shall be designated in writing by a majority in
number of shares of Registrable Securities held by the Holders, if the Holders
are the indemnified parties, or by Delphi, if it is the indemnified party, and
shall be reasonably satisfactory to the indemnifying party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 7.
7.4. The obligations of Delphi and the Holders under this Section 7 shall
survive the completion of any offering of Registrable Securities pursuant to the
Registration Statement under this Agreement, and otherwise.
8. Assignment of Registration Rights. The rights to cause Delphi to
register Registrable Securities pursuant to this Agreement may not be assigned
by any Holder without the prior written consent of Delphi, except in connection
with a Permitted Transfer as contemplated by the Merger Agreement.
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9. Termination of Registration Rights. Delphi's obligations pursuant to
this Agreement (other than those in Section 7) shall terminate as to any Holder
of Registrable Securities on the earlier of (i) when the Holder can sell all of
such Holder's Registrable Securities pursuant to Rule 144 or 145 under the
Securities Act during any 90-day period or (ii) the expiration of the
Effectiveness Period.
10. Miscellaneous.
10.1. Successors and Assigns. Except as otherwise provided herein, the
terms of this Agreement shall inure to the benefit of and be binding upon the
respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
10.2. Notices. Unless otherwise provided, any notice, request, demand or
other communication required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified, or when sent by facsimile transmission (with receipt
confirmed), or overnight courier service, or upon deposit with the United States
Post Office, by registered or certified mail, postage prepaid and addressed as
follows (or at such other address as a party may designate by notice to the
other in accordance with this Section 10.2):
If to Delphi: Delphi Financial Group, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: President
with copies to: Delphi Capital Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: President
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Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
If to the Holders: Xxxx X. Xxxxx
P.O. Box 8895
00000 Xxx Xxxx Xxxx
Xxxxxx Xxxxx Xx, XX 00000
Xxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxx
00000 Xxxxxxxx Xxxx, #00
Xxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0
Xxx Xxxxxxxxx, XX 00000
with a copy to: Xxxxxx & Xxxxx LLP
000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
10.3. Waivers. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party against whom such
waiver is sought to be enforced. No waiver by any party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be
a continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
10.4. Severability. If one or more provisions of this Agreement are held to
be unenforceable, invalid or void by a court of competent jurisdiction, such
provision shall be excluded from this Agreement and the balance of this
Agreement
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shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
10.5. Entire Agreement; Amendments.
(a) Except as otherwise provided herein, this Agreement contains the entire
understanding of the parties with respect to the matters covered herein and
supersedes all prior agreements and understandings, written or oral, between the
parties relating to the subject matter hereof.
(b) Any term of this Agreement may be amended (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of Delphi and the holders of a majority of the Registrable
Securities then outstanding. Any amendment effected in accordance with this
paragraph shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and Delphi.
10.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
10.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8. Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. Any reference in this Agreement to a statutory
provision or rule or regulation promulgated thereunder shall be deemed to
include any similar successor statutory provision or rule or regulation
promulgated thereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DELPHI FINANCIAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
HOLDERS:
/s/ Xxxx X. Xxxxx
---------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
SCHEDULE A
TO REGISTRATION RIGHTS AGREEMENT
Name of Holder Number of Registrable Securities
Xxxx X. Xxxxx 186,253
Xxxxx X. Xxxxx 75,388
Xxxxxx X. Xxxxxx 53,215
Xxxxxx X. Xxxxxx 70,954
