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EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of July
24, 1998, by and between AHL SERVICES, INC., a Georgia corporation (the
"Company"), and Gage Marketing Group, LLC, a Minnesota limited liability company
(the "Holder").
RECITALS:
WHEREAS, pursuant to a Purchase Agreement (the "Purchase Agreement")
dated June 17, 1998, by and among Gage Marketing Group, LLC ("Gage"), Adistra,
LLC ("Adistra"), Xxxxx X. Xxxx and Xxxxxxx X. Xxxx and the Company, the Company
agreed to purchase the membership units of Adistra, following the transfer to
Adistra of certain assets of Gage and all of the equity interests in Gage, Inc.
and Gage Marketing Group De Mexico, S.A. De C.V.; and
WHEREAS, the execution and delivery of this Agreement by the Holder and
the Company is a condition for the consummation of the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
SECTION 1. Definitions.
(a) Defined Terms. For purposes of this Agreement, the
following terms have the meanings set forth below:
"Agreement" means this Registration Rights Agreement as in effect on
the date hereof and as hereafter amended, supplemented, restated or otherwise
modified.
"Business Day" means any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in New
York, New York.
"Common Stock" means shares of common stock of the Company, $.01 par
value per share.
"Company" is defined in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" means the Holders as defined in the Preamble and any
permitted transferee of such Holder that holds Registrable Shares.
"Indemnified Person" is defined in Section 7(a).
"Indemnifying Person" is defined in Section 7(c).
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"Minimum Number of Shares" means 30% of the Registrable Shares
distributed to the Holders pursuant to the Purchase Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, partnership, corporation, limited
liability company, joint venture, trust, cooperative or association.
"Piggyback Registration" is defined in Section 4(a).
"Piggyback Registration Request" is defined in Section 4(a).
"Purchase Agreement" is defined in the Recitals.
"Registrable Shares" means the Common Stock issued to the Holders
pursuant to the Purchase Agreement; provided, however, that any Registrable
Shares shall cease to be Registrable Shares when (a) a registration statement
under the Securities Act covering such Registrable Shares has been declared
effective and such Registrable Shares have been disposed of pursuant to such
effective registration statement, or (b) such Registrable Shares are sold by a
Holder to a third party in a transaction in which the rights under the
provisions of this Agreement are not assigned.
"Registration Expenses" is defined in Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Expenses" is defined in Section 6.
"Shelf Prospectus" means the prospectus included in a Shelf
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Registrable Shares covered by the Shelf
Registration Statement, and in each case including all material incorporated by
reference therein.
"Shelf Registration" shall mean a registration effected by means of a
Shelf Registration Statement.
"Shelf Registration Statement" shall mean a registration statement of
the Company (and any other entity required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities Act)
that covers all of the Registrable Shares to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, or any similar
rule that may be adopted by the SEC, and all amendments (including
post-effective amendments) to such registration
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statement, and all exhibits thereto and materials incorporated by reference
therein.
"Termination Date" is defined in Section 2(a).
(b) Terms Defined in Purchase Agreement. Unless otherwise
defined herein, capitalized terms used in this Agreement shall have the meanings
ascribed to such terms in the Purchase Agreement.
(c) Cross-References. Unless otherwise specified,
references in this Agreement to any Section, Recital or Preamble are references
to such Section, Recital or Preamble of this Agreement, and unless otherwise
specified, references in any Section or definition to any clause or subsection
are references to such clause or subsection of such Section or definition.
SECTION 2. Registration Under the Securities Act for the Benefit of the
Holders.
(a) Filing of Registration Statement. If on or before
December 31, 1998, the Holders have not sold at least 53% of the Registrable
Shares either in a registered offering or an offering exempt from registration
(other than due to an election by the Holders not to sell shares pursuant to a
registered offering), the Company will file a Shelf Registration Statement no
later than January 31, 1999 with respect to the Registrable Shares then owned by
the Holders. The Company shall only be obligated to file one Shelf Registration
Statement pursuant to this Agreement. The Company agrees to use its reasonable
efforts to keep the Shelf Registration Statement continuously effective for a
period of not less than 180 days (the "Termination Date"), subject to the
suspension of use of the Shelf Registration Statement for such periods as may be
required in connection with the Company's issuance of securities for its own
account or other material developments affecting the Company (in which case the
Company shall cause the Shelf Registration Statement to remain effective for an
additional period of time equal to such suspension).
(b) Inclusion in Registration Statement. Any Holder who
does not provide in writing the information requested by the Company and
required by the rules and regulations of the SEC to be included in a Shelf
Registration Statement as promptly as practicable after such information is
requested by the Company, but in no event later than 10 Business Days
thereafter, shall not be entitled to have its Registrable Shares included in
such Shelf Registration Statement.
(c) Plan of Distribution. Upon the effectiveness of the
Shelf Registration Statement, Registrable Shares may be sold from time to time
to purchasers directly by any Holder, or any such Holder may from time to time
offer the Registrable Shares through underwriters, dealers or agents, who may
receive compensation in the form of discounts or commissions from such Holder
and/or the purchasers of Registrable Shares; provided, however, that Holders
shall only be entitled to sell in the aggregate up to a number of Registrable
Shares equal to 53% of the Registrable Shares distributed to the Holders
pursuant to the Purchase Agreement through the first anniversary of this
Agreement and shall be entitled to sell the remainder of the Registrable Shares
registered under the Shelf Registration Statement from the day following the
first anniversary of this Agreement through the Termination Date.
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(d) Company Delay Rights. Notwithstanding anything to the
contrary contained herein, the Company shall not be required to take any of the
actions described in Section 3(a), Section 3(b), or Section 3(i) with respect to
each Holder who holds Registrable Shares to the extent that the Company is in
possession of material non-public information that it has a bona fide business
purpose for preserving as confidential and that is not then otherwise required
to be disclosed and it delivers written notice to each Holder that it intends to
defer the actions so required, and that such Holder may not make offers or sales
under a Shelf Registration Statement, for a period not to exceed 30 days from
the date of such notice; provided, however, that the Company may deliver only
three such notices within any twelve-month period.
SECTION 3. Registration Procedures.
In connection with the obligations of the Company with respect to a
Shelf Registration Statement contemplated by Section 2 hereof, the Company shall
as expeditiously as possible:
(a) subject to Section 2 hereof, prepare and file with
the SEC a Shelf Registration Statement for the sale of the Registrable Shares,
which Shelf Registration Statement 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, and use its reasonable
best efforts to cause such Shelf Registration Statement to become and remain
effective for the periods contemplated in this Agreement;
(b) subject to Section 2(d) and Section 3(i) hereof, (i)
prepare and file with the SEC such amendments to such Shelf Registration
Statement as may be necessary to keep such Shelf Registration Statement
effective for the applicable period; (ii) cause the Shelf Prospectus to be
amended or supplemented as required and to be filed as required by 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
such Shelf Registration Statement or any amendment thereto; and (iv) comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during the applicable
period in accordance with the requested methods of distribution;
(c) furnish to each Holder, without charge, as many
copies of the Shelf Prospectus forming a part of such Shelf Registration
Statement and any amendment or supplement thereto in order to facilitate the
public sale or other disposition of the Registrable Shares; subject to Section
2(d) hereof, the Company consents to the use of the Shelf Prospectus and any
amendment or supplement thereto by each such Holder of Registrable Shares in
connection with the offering and sale of the Registrable Shares covered by the
Shelf Prospectus or amendment or supplement thereto;
(d) use its reasonable efforts to register or qualify the
Registrable Shares by the time a Shelf Registration Statement is declared
effective by the SEC under all applicable state securities or blue sky laws of
such jurisdictions in the United States and its territories and possessions as
any Holder who holds Registrable Shares covered by such Shelf Registration
Statement shall
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reasonably request in writing, and keep each such registration or qualification
effective during the period such Shelf Registration Statement is required to be
kept effective; provided, however, that in connection therewith, the Company
shall not be required to (i) qualify as a foreign corporation to do business or
to register as a broker or dealer in any such jurisdiction where it would not
otherwise be required to qualify or register but for this Section 3(d), (ii)
subject itself to taxation in any such jurisdiction, or (iii) file a general
consent to service of process in any such jurisdiction;
(e) notify each Holder promptly (i) when the Shelf
Registration Statement and any post-effective amendments thereto have become
effective, (ii) when any amendment or supplement to the Shelf Prospectus forming
a part of a Registration Statement has been filed with the SEC, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Shelf Registration Statement or any part
thereof or the initiation of any proceedings for that purpose, (iv) if the
Company receives any notification with respect to the suspension of the
qualification of the Registrable Shares for offer or sale in any jurisdiction or
the initiation of any proceeding for such purpose, and (v) of the happening of
any event during the period the Shelf Registration Statement is effective as a
result of which (A) such Shelf Registration Statement contains any 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 or (B)
the Shelf Prospectus forming a part of the registration statement as then
amended or supplemented contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Shelf Registration Statement or
any part thereof as promptly as possible;
(g) furnish to each Holder, without charge, at least one
conformed copy of the Shelf Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the selling Holders to facilitate the
timely preparation and delivery of certificates representing Registrable Shares
to be sold and not bearing any Securities Act legend; and enable certificates
for such Registrable Shares to be issued for such numbers of shares and
registered in such names as the selling Holders may reasonably request at least
two Business Days prior to any sale of Registrable Shares;
(i) subject to Section 2(d) hereof, upon the occurrence
of any event contemplated by Section 2(d) or clause (v) of Section 3(e) hereof,
use its reasonable efforts promptly to prepare and file an amendment or a
supplement to the Shelf Prospectus or any document incorporated therein by
reference or prepare, file and obtain effectiveness of a post-effective
amendment to the Shelf Registration Statement, or file any other required
document, in any such case to the extent necessary so that, such Shelf
Prospectus and Shelf Registration Statement as then amended or supplemented will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading;
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(j) make available for inspection by the Holders and any
counsel, accountants, underwriters, dealers or agents or other representatives
retained by such Holders all financial and other records, pertinent corporate
documents and properties of the Company and cause the officers, directors and
employees of the Company to supply all such records, documents or information
reasonably requested by such Holders, counsel, accountants or representatives in
connection with such Shelf Registration Statement;
(k) a reasonable time prior to the filing of the Shelf
Registration Statement or any amendment thereto, or any Shelf Prospectus forming
a part of the registration statement or any amendment or supplement thereto,
provide copies of such document (not including any documents incorporated by
reference therein, unless requested) to the Holders;
(l) use its reasonable efforts to cause all Registrable
Shares to be listed on any securities exchange on which similar securities
issued by the Company are then listed; and
(m) use its reasonable efforts to 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.
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 2 hereof and
this Section 3, each Holder covenants and agrees that upon receipt of any notice
from the Company contemplated by Section 2(d) or Section 3(e) (in respect of the
occurrence of an event contemplated by clause (v) of Section 3(e)), such Holder
shall not offer or sell any Registrable Shares pursuant to the Shelf
Registration Statement until such Holder receives copies of the supplemented or
amended Shelf Prospectus contemplated by Section 3(i) hereof and receives notice
that any post-effective amendment has become effective, and, if so directed by
the Company, such Holder will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Shelf Prospectus as amended or supplemented at
the time of receipt of such notice.
SECTION 4. Right to Piggyback.
(a) Piggyback Registration. If the Company at any time
proposes to register any of its Common Stock or other equity securities under
the Securities Act for sale to the public, whether for its own account or for
the account of other shareholders or both (except with respect to registration
statements on Form X-0, Xxxx X-0 or another form not available for registering
the Registrable Shares for sale to the public) (a "Piggyback Registration"), the
Company will promptly (but in any event within 5 Business Days following the
determination by the Company to register additional shares of Common Stock) give
written notice to all Holders of its intention to effect such registration and
will include in such registration all Registrable Shares with respect to which
the Company has received written requests for inclusion within 5 Business Days
after the giving of the Company's notice (a "Piggyback Registration Request");
provided, however, that the Company shall
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not be required to include Registrable Shares in the securities to be registered
pursuant to a registration statement on any form which limits the amount of
securities which may be registered by the issuer and/or selling security holders
if, and to the extent that, such inclusion would make the use of such form
unavailable, so long as no other shares are to be included in the securities to
be registered pursuant to the registration statement for the account of any
person other than the Company; provided, further, that the Company will only be
obligated to register in the aggregate 53% of the Registrable Shares in a
Piggyback Registration; provided, further, that the Company will not consummate
an offering of equity securities of the Company if the Holders are not permitted
to sell at least the Minimum Number of Shares in such offering. In the event
that any Piggyback Registration shall be, in whole or in part, an underwritten
public offering of Common Stock, any Piggyback Registration Request by a Holder
shall include an agreement of such Holder that such Registrable Shares is to be
included in the underwriting on the same terms and conditions as the shares of
Common Stock otherwise being sold through underwriters under such registration.
The Company shall determine, in its sole discretion, whether or not the proposed
sale price of the shares of Common Stock offered pursuant to such registration
is acceptable.
(b) Priority on Underwritten Offerings. If a Piggyback
Registration is an underwritten registration on behalf of the Company or other
shareholders of the Company, and the managing underwriter advises the Company
that in their opinion the registration of the Registrable Shares is reasonably
likely to adversely affect the distribution of the securities pursuant to such
registration, the Company may limit the number of Registrable Shares included in
such registration, and the shares registered shall be selected in the following
order of priority: (i) first, securities the Company proposes to sell, (ii)
second, Registrable Shares covered by Piggyback Registration Requests of the
Holders, which shall be pro rata among the Holders thereof on the basis of the
number of shares requested to be registered by each such Holder, and (iii)
third, other securities requested to be included in such registration.
SECTION 5. Holdback Agreements. If any registration in which any Holder
is participating shall be in connection with an underwritten public offering,
each such Holder agrees (and shall enter into an agreement which shall so
state), if requested by the managing underwriter, not to effect any public sale
or distribution, including any sale pursuant to Rule 144 under the Securities
Act, of any Registrable Shares (other than as part of such underwritten public
offering) or any securities convertible into or exchangeable for such securities
being registered during the 14 days prior to and during the 90 day period
beginning on the effective date of any underwritten offering of securities by
the Company; provided, however, that the provisions of this Section 5 shall be
applicable to Holders only if each officer and director of the Company, and all
other shareholders of the Company so requested by the managing underwriter,
shall, prior to such effective date, have entered into written agreements with
the Company and/or the managing underwriters imposing on such officer and
director and other shareholders similar restrictions as those set forth in this
Section 5 with respect to the Holders (in no event shall Holders' lock up period
be longer than the lock up period imposed on the Company and its officers and
directors).
SECTION 6. Registration Expenses. Except as otherwise provided herein,
all expenses incident to the Company's performance of or compliance with its
obligations under this Agreement
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will be paid by the Company, regardless of whether Registrable Shares are sold
pursuant to any registration statement, including, without limitation, all
registration, filing and listing fees, fees and expenses of compliance with
securities or blue sky laws, printing, messenger, telephone and delivery
expenses, fees and disbursements of counsel for the Company, fees and
disbursements of all independent certified public accountants of the Company
(including, without limitation, in connection with any special audit or "cold
comfort" letters), fees and disbursements of one counsel for the Holders (which
counsel shall be selected by the Holders of a majority of the Registrable Shares
included in such registration) and fees and expenses associated with any NASD
filing required to be made in connection with the registration statement,
including, if applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained in accordance
with the rules and regulations of the NASD (collectively, the "Registration
Expenses"). Registration Expenses shall not include the fees and disbursements
of any other counsel for any Holder or any fees, discounts or commissions to any
underwriter or any fees or disbursements of counsel for any underwriter in
respect of the Registrable Shares sold by such Holders (collectively, the
"Selling Expenses"). The Company will, in any event, pay its internal expenses,
the expense of any annual audit, and the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange on which securities of the same class are then listed or the
qualification for trading of the securities to be registered in each
inter-dealer quotation system in which securities of the same class are then
traded. The Company will also, at its expense, assist the Holders in selling
Registrable Shares covered by a Shelf Registration Statement by, among other
things, accompanying the Holders to meetings with underwriters or institutional
investors.
SECTION 7. Indemnification.
(a) Indemnification by the Company. In the event of the
registration of any Registrable Shares under the Securities Act pursuant to the
provisions hereof, the Company will indemnify and hold harmless each and every
seller of Registrable Shares, its directors, officers, employees and agents,
each underwriter, broker or dealer and each other Person, if any, who controls
such seller or underwriter, broker or dealer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
Person being hereinafter sometimes referred to as an "Indemnified Person"
provided that for purposes of subsections (b), (c) and (d) of this Section 7
"Indemnified Person" also shall include the Company, its directors, officers,
employees and agents, and each other Person, if any who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) from and against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Indemnified Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained or incorporated by reference in any registration
statement under which Registrable Shares were registered under the Securities
Act or any Shelf Prospectus included therein (in each case, as amended or
supplemented), or any document incorporated by reference therein, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Indemnified Person for any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating
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or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made or incorporated by reference in such registration statement or prospectus
or any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such Indemnified Person stated
to be specifically for use in preparation thereof. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Person and shall survive the transfer of such Registrable
Shares.
(b) Indemnification by Holders of Registrable Shares. In
the event of the registration of any Registrable Shares under the Securities Act
pursuant to the provisions hereof, each Holder on whose behalf such Registrable
Shares shall have been registered will indemnify and hold harmless each and
every Indemnified Person, against any losses, claims, damages or liabilities,
joint or several, to which such Indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained or incorporated by reference in any registration statement under
which Registrable Shares were registered under the Securities Act or any
prospectus or preliminary prospectus included therein (in each case, as amended
or supplemented), or any document incorporated by reference therein, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which untrue statement or alleged untrue statement or
omission or alleged omission has been made or incorporated therein in reliance
upon and in conformity with written information furnished to the Company by such
Holder specifically stating that it is for use in preparation thereof, and will
reimburse each such Indemnified Person for any legal and other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the liability of each Holder hereunder shall be limited to the
proceeds received by such Holder from the sale of Registrable Shares covered by
such registration statement.
(c) Procedure. Promptly after receipt by an Indemnified
Person of notice of the commencement of any action (including any governmental
investigation or inquiry), such Indemnified Person will, if such Indemnified
Person intends to make a claim in respect thereof against the party agreeing to
indemnify such Indemnified Person pursuant to subsections (a) or (b) of this
Section 7 (any such Person being hereinafter referred to as an "Indemnifying
Person"), give written notice to such Indemnifying Person of the commencement
thereof, but the omission so to notify the Indemnifying Person shall not relieve
the Indemnifying Person from any of its obligations pursuant to the provisions
of this Section 7 except under such subsection (a) or (b) to the extent that the
Indemnifying Person is materially prejudiced by such failure to give notice. In
case any such action is brought against any Indemnified Person and it notifies
an Indemnifying Person of the commencement thereof, the Indemnifying Person
shall be entitled to participate in, and to the extent that it may wish, jointly
with any other Indemnifying Person similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Person, and
after notice from the Indemnifying Person to such Indemnified Person, the
Indemnifying Person shall not, except as
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hereinafter provided, be responsible for any legal or other expenses
subsequently incurred by such Indemnified Person in connection with the defense
thereof. No Indemnifying Party, shall without the written consent of the
Indemnified Party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnified Party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any Indemnified
Party. Such Indemnified Person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of such Indemnified Person unless
(i) the Indemnifying Person has agreed to pay such fees and expenses, (ii) the
Indemnifying Person shall have failed to assume the defense of such action or
proceeding or has failed to employ counsel reasonably satisfactory to such
Indemnified Person in any such action or proceeding in a timely manner or (iii)
the named parties to any such action or proceeding (including any impleaded
parties) include both such Indemnified Person and the Indemnifying Person and
such Indemnified Person shall have been advised by counsel that representation
of both parties by the same counsel would be inappropriate due to actual or
potential material differing interests between them (in which case, if such
Indemnified Person notifies the Indemnifying Person in writing that it elects to
employ separate counsel at the expense of the Indemnifying Person, the
Indemnifying Person shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Person). The Indemnifying
Person shall not be liable for any settlement of any such action or proceeding
effected without its written consent, which consent shall not unreasonably be
withheld, delayed or conditioned, but if settled with its written consent, or if
there is a final judgment for the plaintiff in any such action or proceeding,
subject to no further appeal, the Indemnifying Person shall indemnify and hold
harmless such Indemnified Persons from and against any loss or liability by
reason of such settlement or judgment.
(d) Contribution. If the indemnification provided for in
this Section 7 is unavailable to or insufficient to hold harmless an Indemnified
Person under subsection (a) or (b) above in respect to any losses, claims,
damages or liabilities (or action in respect thereof) referred to therein, then
each Indemnifying Person shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Indemnified Person on the other from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the Indemnified Person failed to give the notice
required under subsection (c) above, then each Indemnifying Person shall
contribute to such amount paid or payable by such Indemnified Person in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Indemnified Person on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Holders on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting
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expenses) received by the Company bear to the total net proceeds from the
offering (before deducting expenses) received by the Holders, in each case as
set forth in the table on the cover page of the Prospectus. 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
of a material fact relates to information supplied by the Indemnifying Person or
the Indemnified Person and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7(c), any legal or other fees or
expenses reasonably incurred by such party in connection with the investigation
or defense of any action or claim. The Company and each Holder of Registrable
Shares agree that it would not be just and equitable if contribution pursuant to
this Section 7 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 this Section 7. Notwithstanding the provisions of this Section 7(d), no
Holder of Registrable Shares shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Shares
sold by it exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged 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.
(e) Other Indemnifications. Indemnification or, if
appropriate, contribution, similar to that specified in the preceding provisions
of this Section 7 (with appropriate modifications) shall be given by the Company
and each seller of Registrable Shares with respect to any required registration
or other qualification of such Registrable Shares under any federal or state law
or regulation or governmental authority other than the Securities Act.
SECTION 8. Withdrawals. Any Holder or Holders may at any time withdraw
any request made pursuant to Section 4 hereof for inclusion of its Registrable
Shares in a Piggyback Registration or Section 2 hereof for registration of its
Registrable Shares.
SECTION 9. Exchange Act Registration; Rule 144 Reporting. The Company
covenants and agrees that until such time as the Holders no longer hold any
Registrable Shares (or as otherwise specified below) it will:
(a) if required by law, maintain an effective
registration statement (containing such information and documents as the SEC
shall specify) with respect to the Common Stock of the Company under Section
12(g) of the Exchange Act through the Termination Date;
(b) use its reasonable best efforts to make and keep
public information available, as those terms are understood and defined in Rule
144 under the Securities Act, even if the Company subsequently ceases to be
subject to the reporting requirements of the Securities Act or the Exchange Act;
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(c) use its reasonable best efforts to file with the SEC
in a timely manner all reports and documents required of the Company under the
Securities Act and the Exchange Act; and
(d) furnish to any Holder promptly upon request (i) a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 under the Securities Act and of the Securities Act and
the Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company, and (iii) such other reports and documents of the Company and other
information in the possession of or reasonably attainable by the Company as such
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing such Holder to sell any such Registrable Shares without
registration.
The Company represents and warrants that any registration statement or
any information, document or report filed with the SEC in connection therewith
or any information so made public shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not misleading. The
Company agrees to indemnify and hold harmless (or to the extent the same is not
enforceable, make contribution to) the Holders, their officers, directors,
employees and agents, or any Person controlling (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) such Holder
from and against any and all losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arising out of or resulting from any breach of
the foregoing representation or warranty, all on terms and conditions comparable
to those set forth in Section 7.
SECTION 10. No Prior Registration Rights. The Company represents and
warrants that it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company. The Company agrees
that it will not, during the period Holders own Registrable Shares, grant any
rights which conflict with the rights granted to Holders under this Agreement.
SECTION 11. Sale of Registrable Shares by Holders. The Holders shall
not (i) engage in any hedging transactions with respect to the Registrable
Shares or any other shares of Common Stock or conduct any short sales with
respect to the Registrable Shares or other shares of Common Stock and (ii) sell
more than 53% of the Registrable Shares distributed to the Holders pursuant to
the Purchase Agreement in any manner prior to the first anniversary of the date
hereof.
SECTION 12. Termination. The rights of any Holder under Sections 2, 3
and 4 of this Agreement shall terminate as to any Registrable Shares when such
Registrable Shares have been effectively registered under the Securities Act and
sold pursuant to a registration statement covering such Registrable Shares. The
expense provisions of Section 6 and the indemnification and contribution
provisions of Section 7 shall survive any termination of this Agreement.
SECTION 13. Notices. All notices, consents, approvals, agreements and
other communications provided hereunder shall be in writing and delivered
personally, by mail or by telecopy and shall be sufficiently given to the
Holders and the Company if addressed or delivered to them at the following
addresses:
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If to Company: AHL Services, Inc.
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Holders: c/o Xxxxx X. Xxxx
00000 Xxxxxxx 00
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
or at such other address as any party or any other Holder may designate to any
other party by written notice. All such notices and communications shall be
deemed to have been duly given: (i) at the time delivered by hand, if personally
delivered, (ii) when received, if deposited in the mail, postage prepaid and
(iii) when transmission is verified, if telecopied.
SECTION 14. Successors. All covenants and agreements of this Agreement
by or on behalf of any of the parties hereto shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, including, without limitation, any
Holders from time to time of the Registrable Shares and heirs, personal
representatives, successors and assigns by operation of law, merger or
consolidation. So long as a Holder holds Registrable Shares, such Registrable
Shares can be transferred to any other Person.
SECTION 15. Governing Law. This Agreement shall be governed by laws of
the State of Georgia and for all purposes shall be construed in accordance with
the internal laws of said state.
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SECTION 16. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company and the Holders any
legal or equitable right, remedy or claim under this Agreement.
SECTION 17. Counterparts. This Agreement may be executed in any number
of counterparts and each such counterpart shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute one and the
same instrument.
SECTION 18. Amendments; Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived and the
Company may take any action herein prohibited, or fail to take any action herein
required to be performed by it if, but only if, the Company has obtained the
written consent of the Holders of a majority of the total number of shares of
outstanding Registrable Shares at the time such amendment or waiver becomes
effective and any such waiver or action so given or taken shall be binding on
all Holders. No failure or delay by any party in exercising any right or remedy
hereunder shall operate as a waiver thereof, and a waiver of a particular right
or remedy on one occasion shall not be deemed a waiver of any other right or
remedy or a waiver of the same right or remedy on any subsequent occasion.
SECTION 19. Jurisdiction. Each of the parties hereto hereby agrees
that, unless otherwise specified herein, any legal action or proceeding against
such party with respect to this Agreement shall be resolved in accordance with
Sections 15.7 and 15.12 of the Purchase Agreement.
SECTION 20. Specific Performance. The Company recognizes that the
rights of the Holders under this Agreement are unique and, accordingly, the
Holders shall, in addition to such other remedies as may be available to any of
them at law or in equity, have the right to enforce their rights hereunder by
actions for injunctive relief and specific performance to the extent permitted
by law. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate. This Agreement is
not intended to limit or abridge any rights of the Holders which may exist apart
from this Agreement.
SECTION 21. Entire Agreement. The parties hereto agree that this
Agreement, the Purchase Agreement and the documents contemplated by the Purchase
Agreement constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
between them as to such subject matter; and there are no restrictions,
agreements, arrangements, oral or written, between any or all of the parties
relating to the subject matter hereof which are not fully expressed or referred
to herein or therein.
SECTION 22. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflict
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of any provision with any constitution, statute, rule or public policy, or for
any other reason, such circumstance shall not have the effect of rendering the
provision or provisions in question, invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute, rule or public policy, but
this Agreement shall be reformed and construed in any such jurisdiction or case
as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.
AHL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Chief
Financial Officer
GAGE MARKETING GROUP, LLC
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
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