REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.3
This
Registration Rights Agreement (the “Agreement”) is made and entered into as of
the ___ day of May, 2006, by and among Tandy Leather Factory, Inc., a Delaware
corporation (the “Company”), J. Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxxxx X.
Xxxxxx (collectively, the “Selling Shareholders”) and the Subscribers listed on
Schedule A attached hereto (individually, an “Subscriber” and collectively, the
“Subscribers”).
RECITALS
A. Each
of
the Subscribers, the Company and the Selling Shareholders have entered into
a
Subscription Agreement and Letter of Investment Intent (the “Subscription
Agreements”) pursuant to which the Subscribers are purchasing from the Selling
Shareholders outstanding shares of the Company’s Common Stock (the
“Shares”).
B. It
is a
condition to the transactions contemplated in the Subscription Agreements that
the Company provide the registration rights provided herein and the parties
hereto desire to provide for such rights on the terms and conditions contained
herein.
NOW,
THEREFORE, in consideration of the premises and covenants contained herein,
the
parties hereto agree as follows:
1. Defined
Terms. Unless otherwise noted, all capitalized terms used herein shall have
the
meanings afforded them in the Subscription Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Effectiveness
Deadline"
means
the 90th day
following the date hereof, unless the Registration Statement is reviewed by
the
SEC, in which case it means the 120th
day
following the date hereof.
"Prospectus"
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Shares covered by the Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"Registration
Statement"
means
each registration statement required to be filed hereunder, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
2. Required
Registration.
Subject
to Section 5 below, promptly following the date hereof but no later than the
earlier to occur of (a) 30 days following the date hereof (the “Filing Date”),
the Company shall file a Registration Statement under the Securities Act, as
required by the Securities and Exchange Commission (the “SEC”), covering the
Subscribers’ resale of the Shares. The Registration Statement required hereunder
shall contain (except if otherwise directed by the Subscribers) the “Plan of
Distribution” attached hereto as Annex
A.
Subject
to Section 5 below, the Company will use its best efforts to have such
Registration Statement become effective with the SEC as soon as possible
thereafter.
3. Registration
- General Provisions.
In
connection with the registration of the Shares under the Securities Act, subject
to Section 5 below, the Company will:
(a) prepare
and file with the SEC, on or before the Filing Date, a Registration Statement
covering the Subscribers’ resale of the Shares (in accordance with Section 2
above), and use its best efforts to cause such Registration Statement to become
effective as soon as possible thereafter and keep the prospectus, which is
a
part of such Registration Statement, current until the earlier of the date
on
which: (i) all registered Shares have been sold or otherwise transferred by
the
Subscribers, or (ii) two years after the date of this Agreement;
(b) prepare
and file with the SEC such amendments, including post-effective amendments,
to
such Registration Statement and supplements to the prospectus contained therein
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Shares covered by the Registration Statement
and to keep such Registration Statement effective for the period required by
Section 3(a) above; respond as promptly as reasonably possible, and in any
event
within five business days, to any comments received from the SEC with respect
to
a Registration Statement or any amendment thereto and as promptly as reasonably
possible provide the Subscribers true and complete copies of all correspondence
from and to the SEC; and comply in all material respects with the provisions
of
the Securities Act and the Exchange Act with respect to the disposition of
all
Shares covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Subscribers as set
forth in the Registration Statement as so amended or in such Prospectus as
so
supplemented;
(c) furnish
to each Subscriber copies of all documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will
be subject to the review of such Subscribers, and cause its officers and
directors, counsel and independent certified public accountants to respond
to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to conduct a reasonable investigation within the meaning of the
Securities Act; and provide Subscribers’ counsel with reasonable opportunities
to review and comment on, and otherwise participate in, the preparation of
such
Registration Statement;
(d) furnish
to the Subscribers participating in such registration and to the underwriters
of
the securities being registered, if any, such reasonable number of copies of
the
Registration Statement, preliminary prospectus, final prospectus
and such other documents as the Subscribers and underwriters may reasonably
request in order to facilitate the public offering of the Shares, and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Subscribers in connection with the
offering and sale of the Shares covered by such Prospectus and any amendment
or
supplement thereto;
(e) use
its
diligent, good faith efforts to register or qualify the Shares covered by such
Registration Statement under such state securities or blue sky laws of such
jurisdictions as the Subscribers may reasonably request, and to keep such
registration or qualification in effect for so long as such Registration
Statement remains in effect, except that the Company shall not for any purpose
be required to execute a general consent to service of process (which shall
not
include a “Uniform Consent to Service of Process” or other similar consent to
service of process which relates only to actions or proceedings arising out
of
or in connection with the sale of securities, or out of a violation of the
laws
of the jurisdiction requesting such consent) or to qualify to do business as
a
foreign corporation in any jurisdiction wherein it is not so
qualified;
(f) notify
the Subscribers, promptly after it shall receive notice thereof, of the time
when such Registration Statement has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been filed with
the
SEC;
(g) notify
the Subscribers promptly of any request by the SEC for the amending or
supplementing of such Registration Statement or prospectus or for additional
information;
(h) prepare
and file with the SEC, promptly upon the request of the Subscribers, any
amendments or supplements to such Registration Statement or prospectus which,
in
the opinion of counsel for the Subscribers (and concurred in by counsel for
the
Company), is required under the Securities Act or the rules and regulations
promulgated thereunder in connection with the distribution of the Shares by
the
Subscribers;
(i) prepare
and promptly file with the SEC, and promptly notify the Subscribers of the
filing of, such amendment or supplement to such Registration Statement or
prospectus as may be necessary to correct any statements or omissions if, at
the
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such prospectus then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading;
(j) promptly
notify the Subscribers (i) when the SEC notifies the Company whether there
will
be a “review” of the Registration Statement and whenever the SEC comments in
writing on the Registration Statement (the Company shall upon request provide
true and complete copies thereof and all written responses thereto to each
of
the Subscribers), (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Shares or the initiation
of
any proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose; and (iv) of the
occurrence of any event or passage of time that makes the financial statements
included in the Registration Statement ineligible for inclusion therein or
any
statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of
the circumstances then existing. The Subscribers agree that, upon receipt of
any
notice from the Company of the happening of any event of the kind described
in
this Section 3(j), the Subscribers will immediately discontinue disposition
of
the Shares pursuant to the Registration Statement covering such Shares until
the
Subscribers’ receipt of the copies of the supplemented or amended prospectus or
receipt of notice that no supplement or amendment is required.
(k) use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of
(i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification)
of
any of the Shares for sale in any jurisdiction, at the earliest practicable
moment;
(l) not
file
any amendment or supplement to such Registration Statement or prospectus to
which the Subscribers shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or the rules and regulations promulgated
thereunder, after having been furnished with a copy thereof at least two
business days prior to the filing thereof, unless in the opinion of counsel
for
the Company the filing of such amendment or supplement is reasonably necessary
to protect the Company from any material liabilities under any applicable
federal or state law and such filing will not violate applicable
law;
(m) cooperate
with the selling Subscribers to facilitate the timely preparation and delivery
of certificates representing the Shares to be sold pursuant to the Registration
Statement;
(n) file
reports in compliance with the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”), and use its best efforts to comply with all rules and
regulations of the SEC applicable in connection with use of Rule 144 and take
such other actions and furnish the Subscribers with such other information
as
any such Subscriber may request in order to avail itself of such rule or any
other rule or regulation of the SEC, allowing such Subscriber to sell any Shares
without registration. 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 written request of any
Subscriber, make available adequate current public information with respect
to
the Company within the meaning of paragraph (c)(2) of Rule 144;
(o) Upon
the
earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) Rule 144(k) becoming available the Company shall (A) deliver
to the transfer agent for the Common Stock (the "Transfer Agent") irrevocable
instructions that the Transfer Agent shall reissue a certificate representing
shares of Common Stock without legends upon receipt by such Transfer Agent
of
the legended certificates for such shares, together with either (1) a customary
representation by the Subscriber that Rule 144(k) applies to the shares of
Common Stock represented thereby or (2) a statement by the Subscriber that
such
Subscriber has sold the shares of Common Stock represented thereby in accordance
with the Plan of Distribution contained in the Registration Statement, and
(B)
cause its counsel to deliver to the Transfer Agent one or more blanket opinions
to the effect that the removal of such legends in such circumstances may be
effected under the Securities Act. From and after the earlier of such dates,
upon a Subscriber's written request, the Company shall promptly cause
certificates evidencing the Subscriber's Shares to be replaced with certificates
which do not bear such restrictive legends. When the Company is required to
cause unlegended certificates to replace previously issued legended
certificates, if unlegended certificates are not delivered to a Subscriber
within five (5) Business Days of submission by that Subscriber of legended
certificate(s) to the Transfer Agent as provided above, the Company shall be
liable to the Subscriber for liquidated damages in an amount equal to 1.5%
of
the aggregate purchase price of the Shares evidenced by such certificate(s)
for
each thirty (30) day period (or portion thereof) beyond such five (5) Business
Day that the unlegended certificates have not been so delivered;
and
(p) maintain
the listing of the Shares covered by the Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed.
(q) Not
withstanding anything else herein, the Company will not provide any material
non-public information to any Subscribers as result of a disclosure requirement
in this agreement.
4. Registration
Expense.
The
Selling Shareholders shall pay all Registration Expenses (as defined below)
in
connection with the inclusion of the Shares in any Registration Statement,
or
application to register or qualify such Shares under state securities laws,
filed by the Company hereunder, other than as set forth herein. For purposes
of
this Agreement, the term “Registration Expenses” means the filing fees payable
to the SEC, any state agency and the NASD; the fees and expenses of the
Company’s legal counsel and independent certified public accountants in
connection with the preparation and filing of the Registration Statement (and
all amendments and supplements thereto) with the SEC; fees of transfer agents
and registrars; fees and expenses incurred in connection with the maintaining
the listing of the Shares; and all expenses relating to the printing of the
Registration Statement, prospectuses and various agreements executed in
connection with the Registration Statement.
5. Delays
in Filing; Liquidated Damages.
(a)
Delays in Filing. Notwithstanding Section 2 and 3 above, if at the
time the Registration Statement or an amendment thereto is to be filed, or
at
any time while the Registration Statement remains in effect, the Board of
Directors of the Company determines, in its good faith judgment after
consultation with Company legal counsel, that there are one or more pending
material developments that have not been publicly disclosed but would be
required to be disclosed (either directly or via incorporation by reference)
in
such Registration Statement, and that the disclosure of such development at
such
time would materially and adversely affect the Company (a "Valid Business
Reason"), then (i) the Company shall notify the Subscribers that a Valid
Business Reason exists (without disclosing the specifics thereof), (ii) the
Company may postpone the filing of such registration statement or amendment
thereto (or SEC filing incorporated therein) until such Valid Business Reason
no
longer exists, and (iii) for so long as such Valid Business Reason exists,
the
Subscribers will cease offering or selling shares pursuant to the Registration
Statement; provided that (x) the total number of days during which the
Subscribers are prevented pursuant to this section from offering or selling
shares shall not exceed 60 days during any consective 12 month period, and
(y)
during any such period in which the Subscribers are prevented from selling
shares pursuant to this section, the Company shall prevent its officers and
directors from effecting any market transactions in the Company's stock.
The Subscribers will maintain in strict confidence any information provided
by
the Company pursuant to this Section and not use such information in violation
of applicable securities laws.
(b) Liquidated
Damages.
If: (i)
the Registration Statement is not filed on or prior to the Filing Date; (ii)
the
Company fails to file with the SEC a request for acceleration in accordance
with
Rule 461 promulgated under the Securities Act, within five business days after
the date that the Company is notified (orally or in writing, whichever is
earlier) by the SEC that the Registration Statement will not be “reviewed,” or
is not subject to further review; (iii) prior to its Effectiveness Deadline,
the
Company fails to file a pre-effective amendment and otherwise respond in writing
to comments made by the SEC in respect of the Registration Statement within
five
business days after the receipt of comments by or notice from the SEC that
such
amendment is required in order for the Registration Statement to be declared
effective; (iv) the Registration Statement is not declared effective by the
SEC
by the Effectiveness Deadline; or (v) after the Registration Statement is filed
with and declared effective by the SEC, the Registration Statement ceases to
be
effective (by suspension or otherwise) for a period of time in excess of 20
days
in the aggregate per year or 10 consecutive calendar days, (any such failure
or
breach being referred to as an "Event"), then the Selling Shareholders,
severally and not jointly, shall pay to each Subscriber an amount in cash,
as
liquidated damages and not as a penalty, equal to 1.5% of the purchase price
for
the Shares, plus, if such Event continues for longer than an initial 30 days,
an
additional 1.5% of the purchase price for the Shares for each additional 30-day
period (prorated on a daily basis for partial periods) that such Event continues
beyond such initial 30-day period. Notwithstanding the foregoing, (x) no
liquidated damages shall be paid pursuant to this Section if such Event is
due
to acts or omissions of an Subscriber, and (y) if an Event occurs or continues
at the same time under more than one of clauses (i) through (iv) above, then
for
purposes of this subsection (b), only one Event shall be deemed to have
occurred. While such Event continues, such liquidated damages shall be paid
not
less often than each 30 days. Any unpaid liquidated damages as of the date
when
an Event has been cured by the Company shall be paid within three days following
the date on which such Event has been cured by the Company. If
a
Selling Shareholder fails to pay any liquidated damages pursuant to this Section
in full within seven days after the date payable, such Selling Shareholder
will
pay interest thereon at a rate of 18% per annum (or such lesser maximum amount
that is permitted to be paid by applicable law) to the Subscriber, accruing
daily from the date such liquidated damages are due until such amounts, plus
all
such interest thereon, are paid in full. Notwithsatnding the foregoing, in
no
event shall liquidated damages under this Section 5 exceed the gross proceeds
received by the applicable Selling Shareholder under the Subscription
Agreements.
6. Indemnification.
With
respect to the registration of the resale of the Shares:
(a) to
the
fullest extent permitted by law and notwithstanding any termination of this
Agreement, the Selling Shareholders, severally and not jointly, will indemnify,
defend and hold harmless each Subscriber, the trustees, partners, officers,
members, directors and agents of each Subscriber, any underwriter (as defined
in
the Securities Act) for such Subscriber and each person, if any, who controls
such Subscriber or underwriter within the meaning of the Securities Act or
the
Exchange Act, 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”) by the Company: (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 supplements 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 the Company 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 in connection with the offering
covered by the Registration Statement; and the Selling Shareholders, severally
and not jointly, will reimburse each such Subscriber, trustee, partner, officer,
member, director, agent, underwriter or controlling person 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 6 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 Selling Shareholders
(which consent shall not be unreasonably withheld, conditioned or delayed),
nor
shall the Selling Shareholders be liable in any such case for any such loss,
claim, damage, liability or action 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 to it expressly for use in connection with such
registration by an Subscriber, trustee, partner, officer, member, director,
agent, underwriter or controlling person of an Subscriber; provided further
that
in no event shall indemnification under this Section 6 exceed the gross proceeds
received by the applicable Selling Shareholder under the Subscription
Agreements.
(b) to
the
extent permitted by law, each Subscriber, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning
of
the Securities Act and any underwriter against any losses, claims, damages
or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person or underwriter 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 Subscriber and stated to be specifically
for use in connection with such registration; and each such Subscriber will
reimburse any legal or other expenses reasonably incurred by the Company or
any
such director, officer, controlling person or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action
if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 6 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 Subscriber, which
consent shall not be unreasonably withheld, conditioned or delayed; provided
further, that in no event shall any indemnity under this Section 6(b) exceed
the
net proceeds received by such Subscriber from sales of such Subscriber’s Shares
unless the Violation is the result of fraud on the part of such
Subscriber.
(c) promptly
after receipt by an indemnified party under this Section of notice of the
commencement of any action (including any governmental action), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section, 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 fees and expenses to be paid by the indemnifying party; and
provided further, that if there is more than one indemnified party, the
indemnifying party shall pay for the fees and expenses of one counsel for any
and all indemnified parties to be mutually agreed upon by such indemnified
parties, unless representation of an indemnified party by the counsel retained
by the other indemnified parties would be inappropriate due to actual or
potential differing interests between such indemnified parties. 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, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that
it
may have to any indemnified party otherwise than under this
Section.
(d) if
the
indemnification provided for in this Section is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any
losses, claims, damages or liabilities referred to herein, the indemnifying
party, in lieu of indemnifying such indemnified party thereunder, shall to
the
extent permitted by applicable law, contribute to the amount paid or payable
by
such indemnified party as a result of such loss, claim, damage or liability
in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
in
connection with the Violation(s) that resulted in such loss, claim, damage
or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party 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
by
the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
No
Subscriber will not be required to contribute any amount in excess of the amount
of the proceeds actually received by such Subscriber from the sale of its
Shares. No person or entity guilty of fraudulent misrepresentation (within
the
meaning of Section 11 of the Securities Act) shall be entitled to contribution
from any person or entity who shall not have been guilty of such fraudulent
misrepresentation.
(e) the
obligation of the Company and the Subscribers under this Section shall survive
the completion of any offering for resale of Shares in the Registration
Statement, and otherwise.
7. Miscellaneous.
(a) The
Company shall not hereafter enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Subscribers
in
this Agreement.
(b) Except
as
otherwise provided herein, the provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given or made, unless in writing signed by the
Selling Shareholders, the Company and Subscribers holding at least 75% of the
Shares sold pursuant to the Subscription Agreements.
(c) All
notices and other communications provided for or permitted hereunder shall
be
made by hand delivery, telex, facsimile, overnight courier or registered
first-class mail:
|
(i)
|
if
to an Subscriber, at the address set forth on Schedule A attached
hereto;
|
|
(ii)
|
if
to the Company, at the address set forth in the Subscription Agreement;
and
|
|
(iii)
|
if
to the Selling Shareholders, at the address set forth in the Subscription
Agreement.
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All
such
notices and communications shall be deemed to have been duly given: when
delivered, if by hand, overnight courier or mail; when the appropriate answer
back is received, if by telex; when transmission is confirmed by the sending
unit, if by facsimile.
(d) This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one an the
same agreement.
(e) The
headings to this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(f) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware without giving effect to the principles of choice or conflict
of law thereof. Each of the Company, the Selling Shareholders and the
Subscribers irrevocably consent to the exclusive jurisdiction of the United
States Federal courts and state courts, located in Tarrant County, Texas, in
any
suit or proceeding relating to, based on or arising under this Agreement and
irrevocably agree that all claims in respect of such suit or proceeding may
be
determined in such courts. Nothing herein shall affect the right of any
Subscriber to serve process in any manner permitted by law.
(g) In
the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the Subscribers, the Selling
Shareholders and the Company shall be enforceable to the fullest extent
permitted by law.
(h) The
remedies provided for in this Agreement shall be cumulative and in addition
to
all other remedies available, at law or in equity, and nothing herein shall
limit an Subscriber’s right to pursue actual damages for any failure by the
Company to comply with the terms of this Agreement.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
Company:
TANDY
LEATHER FACTORY, INC.
By:
Name:
Title:
Selling
Shareholders:
J.
Xxxx
Xxxxxxxx
Xxxxx
Xxxxxxxx
Xxxxxx
X.
Xxxxxx
[SIGNATURE
PAGE OF SUBSCRIBER TO FOLLOW]
[SIGNATURE
PAGE OF SUBSCRIBER]
Entity
Subscriber:
By:
Name:
Title:
SCHEDULE
A
|
Subscriber
Name and Address
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Annex
A
Plan
of Distribution
The
selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which
the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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| · |
block
trades in which the broker-dealer will attempt to sell the shares as
agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
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| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
settlement
of short sales;
|
| · |
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per share;
|
| · |
a
combination of any such methods of sale;
and
|
| · |
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus. Broker-dealers engaged
by
the selling stockholders may arrange for other brokers-dealers to participate
in
sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The selling
stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.
The
selling stockholder may from time to time pledge or grant a security interest
in
some or all of the Shares or common stock owned by them and, if they default
in
the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list
of
selling stockholders to include the pledgee, transferee or other successors
in
interest as selling stockholders under this prospectus.
The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of
the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The selling stockholders have informed
the
Company that none of them have any agreement or understanding, directly or
indirectly, with any person to distribute the common stock.
The
former affiliates of the Company from whom the selling shareholders acquired
the
Shares are required to reimburse the Company for all fees and expenses incurred
by the Company incident to the registration of the shares. The Company has
agreed to indemnify the selling stockholders against certain losses, claims,
damages and liabilities, including liabilities under the Securities
Act.
