Appendix M
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
April 22, 1996, by and between American Industrial Loan Association (the
"Company"), and Xxxxxxx X. Xxxxxxxxxxx ("Xxxxxxxxxxx").
PRELIMINARY STATEMENTS
The Company has agreed to sell and Witherspoon has agreed to purchase
22,000 shares of the Common Stock, par value $.01 per share, of the Company (the
"Common Stock"), pursuant to the terms of a Stock Purchase Agreement (the "AILA
Purchase Agreement") dated as of even date herewith between the Company and
Witherspoon.
Certain shareholders of the Company have agreed to sell and Witherspoon has
agreed to purchase 4,000 shares of the Common Stock pursuant to the terms of a
Stock Purchase Agreement (the "Shareholder Purchase Agreement") dated as of even
date herewith between Xxxxx X. Xxxxx, Xxxx Xxxxxx and Lizstan, Ltd. and
Witherspoon.
Pursuant to the terms and conditions of this Agreement, the Company has
agreed to provide certain registration rights to Witherspoon regarding his stock
in the Company.
AGREEMENT
In consideration of the foregoing, the mutual covenants and conditions set
forth in this Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to
become legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as in effect from time to time.
"Holder" or "Holders" shall mean (a) Witherspoon, to the extent that he
holds Registrable Securities, and (b) any person holding Registrable Securities
as a transferee of Witherspoon (directly or indirectly, including subsequent
transfers).
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission a registration
statement covering Registrable Securities in compliance with the Securities Act
that is declared or ordered effective by the Commission.
"Registrable Securities" shall mean the Shares; provided, however, that
such securities shall cease to be Registrable Securities when (a) a registration
statement with respect to such securities shall have been declared effective
under the Securities Act and such securities shall have been disposed of
pursuant to the registration statement, (b) such securities are distributed to
the public pursuant to Rule 144(k) (or any successor provisions) promulgated
under the Securities Act or (c) such securities shall have ceased to be
outstanding.
"Registration Expenses" shall mean all expenses incurred in order to comply
with Article II hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one (1) counsel for the Holders,
Blue Sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding the compensation of regular
employees of the Company (which shall be paid in any event by the Company) and
excluding Selling Expenses.
"Restricted Securities" shall mean Registrable Securities that are
"restricted securities" as defined in Rule 144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as in effect from time to time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions incurred in connection with the sale of securities pursuant to a
registration effected hereunder.
2
"Shares" shall mean the 22,000 shares of Common Stock initially purchased
by Witherspoon under the AILA Purchase Agreement and the 4,000 shares of Common
Stock initially purchased by Witherspoon under the Shareholder Purchase
Agreement. This Agreement shall continue to apply to such Shares notwithstanding
any recapitalization, exchange or other change in form of the Shares (whether as
a result of a merger or recapitalization of the Company or otherwise).
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Company Registration.
(a) If, within three (3) years from the date of this Agreement, the
Company shall determine to register any of its Common Stock (or other
security into which the Common Stock has in any way been recapitalized or
for which the Common Stock has been exchanged), for its own account or for
the account of others (other than (i) a registration relating solely to
employee benefit plans, (ii) a registration relating solely to a
transaction pursuant to Rule 145 under the Securities Act or (iii) a
registration statement on Form S-4 (or any successor form)), the Company
will:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which the Company intends
to attempt to qualify such securities under the applicable Blue Sky or
other state securities laws); and
(ii) include in such registration (and any related qualification
under Blue Sky or other state securities laws or other compliance),
and in any underwriting involved therein, all of the Registrable
Securities specified in written requests by any Holders, provided such
written requests are received by the Company within 20 days following
receipt by such Holders of notice of the proposed registration from
the Company.
(b) If, at any time after giving written notice of its intentions to
register any of its securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to
the Holders and thereupon shall be relieved of its
3
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith as provided in Section 2.2).
(c) If the Company intends to distribute the securities subject to the
registration referenced above by means of an underwriting, the Company
shall so advise the Holders as a part of such written notice. In such
event, the rights of the Holders to registration pursuant to this Section
2.1 shall be conditioned upon such Holders' participation in such
underwriting and the inclusion of such Holders' Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with
the Company and any other holders distributing their securities through
such underwriting) enter into an underwriting agreement in customary form
with the underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2.1, if the Company
and the underwriter determine that marketing factors (taking into account
the proposed price range or price per share) require limitation of the
number of shares to be underwritten, the underwriter may exclude from such
underwriting all or some of the shares proposed for registration on the
following basis:
(i) shares held by any person who does not have contractual
rights to cause the Company to register such shares and who is not
included in clause (ii) below shall first be excluded;
(ii) shares held by an officer or director or the Holders will
next be excluded, such reductions to be allocated as nearly as
practicable among each in the proportion that the number of shares of
Common Stock held by each such individual for which registration is
sought bears to the total number of shares of Common Stock held by all
such individuals for which registration is sought; and
(iii) if further reductions are required, such reductions shall
be allocated to the Company.
Except as provided in the last sentence of this paragraph, no shares excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If any Holders disapprove of the terms of any
such underwriting, such persons may elect to withdraw therefrom by written
notice to the Company and the underwriter. The Registrable Securities and/or
other securities so withdrawn from such
4
underwriting shall also be withdrawn from such registration; provided, however,
that if, by the withdrawal of such shares, a greater number of shares may be
included in such registration (up to a maximum of any marketing limitation
imposed by the underwriter), then the Company shall offer to all Holders and
other holders who have included shares in the registration the right to include
additional shares in the same proportion used above in determining the
underwriter's marketing limitation.
Section 2.2 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification, or compliance pursuant to
Section 2.1 shall be borne by the Company; and all Selling Expenses in
connection with such registration, qualification or compliance shall be borne by
the holders of the securities so registered pro rata on the basis of the number
of shares so registered.
Section 2.3 Registration Procedures. In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Article
II, the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense, the Company will:
(a) Keep such registration, qualification or compliance effective for
a period of 180 days or until the Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such 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 such registration statement;
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirement of
the Securities Act, and such other documents as they may reasonably request
(including a conformed copy of the Registration Statement filed with the
Commission and any amendments thereto and an original executed underwriting
agreement entered into in connection with such registration) in order to
facilitate the disposition of Registrable Securities owned by them;
(d) Use reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of one
5
(1) jurisdiction (in addition to those jurisdictions in which the Company
has otherwise agreed to so register and qualify such securities) as shall
be reasonably requested by the Holders, provided that the Company 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;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement with the managing
underwriter(s) of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such
underwriting agreement;
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Article II, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with registration pursuant to this Article II, if such
securities are being sold through underwriters, or on the date that the
registration statement with respect to such securities becomes effective,
if such securities are not being sold through underwriters, (i) a copy of
any opinion, dated such date, of the counsel representing the Company for
the purposes of such registration, addressed to the underwriters of the
Company, and (ii) a copy of any letter, dated such date, from the
independent accountants of the Company, addressed to the underwriters of
the Company.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (f) of this Section 2.3, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of a supplemented or amended prospectus and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense), all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities that was in effect prior to such
6
amendment or supplement. In the event the Company shall give any such notice,
the period set forth in clause (a) of this Section 2.3 shall be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to clause (f) of this Section 2.3 to and including the date
when each seller of Registrable Securities covered by such registration
statement shall have received the copies of a supplemented or amended
prospectus.
Section 2.4 Indemnification.
(a) The Company will indemnify each Holder, each Holder's officers,
directors and partners, and each person controlling such Holder
(collectively, "Holder's Parties"), participating in any registration,
qualification, or compliance effected pursuant to this Article II with
respect to Registrable Securities held by such Holder and each
underwriter, if any, and each person who controls any underwriter, against
all claims, losses, damages, and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, to which they may become subject under
the Securities Act, the Exchange Act, or other federal or state law,
arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other similar document (including any related registration
statement, notification, or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (ii) any violation by the
Company of any federal, state, or common law rule or regulation applicable
to the Company in connection with any such registration, qualification, or
compliance, and will reimburse each such Holder's Parties each such
underwriter, and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or
action, as incurred, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission, made
in reliance on and in conformity with written information furnished to the
Company by such Holder's Parties or underwriter or person controlling such
underwriter specifically for use in the preparation thereof.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration,
qualification, or compliance is being effected, severally and not jointly,
indemnify the Company,
7
each of its directors and officers, each underwriter, if any, of the
Company securities covered by such a registration statement, and each
person who controls the Company or such underwriter within the meaning of
the Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on (i) any untrue
statement (or alleged untrue statement) of a material fact contained in any
such registration statement, prospectus, offering circular, or other
similar document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such
directors, officers, persons, underwriters, or control persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or
action, as incurred, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular, or other document in reliance upon and in conformity
with the written information furnished to the Company by such Holder
specifically for use in the preparation thereof, or (ii) any violation by
any such Holder of any federal, state, or common law rule or regulation
applicable to such Holder in connection with the distribution of securities
pursuant to a registration statement, and will reimburse the Company, such
Holders, such directors, officers, persons, underwriters, or control
persons for any legal any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability, or
action, as incurred; provided, however, that the obligations of each such
Holder hereunder shall be limited to an amount equal to the aggregate
proceeds received by such Holder in such offering.
(c) Each party entitled to indemnification under this Section 2.4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has received written notice of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld). The Indemnified Party may participate
in such defense at such party's expense; provided, however, that the
Indemnifying Party shall bear the expense of such defense of one counsel
representing the Indemnified Party if representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest. The failure of any Indemnified Party to give notice as
8
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2.4, except to the extent such failure to give notice
shall materially and adversely prejudice the Indemnifying Party in the
defense of any such claim or any such litigation. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) (i) If the indemnification provided for in this Section 2.4 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
herein, then the Indemnifying Party hereunder shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and
the Indemnified Party on the other hand in connection with the statements
or omissions which resulted in such loss, liability, claim, damage, or
expense 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 to state a
material fact relates to information supplied by the Indemnifying Party or
by the Indemnified Party and the parties' relevant intent, knowledge,
access to information and opportunities to correct or prevent such
statement or omission.
(ii) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 2.4 were determined by pro rata
allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above. The amount
paid or payable by an Indemnified Party as a result of the claims,
losses, damages, and liabilities referred to above shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
(iii) No Holder that is a seller of Registrable Stock covered by
such registration statement or person controlling such seller other
than the
9
Company shall be obligated to make contribution hereunder that in the
aggregate exceeds the total public offering price of the Registrable
Stock sold by such Holder, less the aggregate amount of any damages
that such Holder and its controlling persons have otherwise been
required to pay pursuant to this Section 2.4. The obligations of such
Holders to contribute are several in proportion to their respective
ownership of the securities covered by such registration statement and
not joint.
(iv) The indemnity and contribution provided herein shall be in
addition to, and not in lieu of, any other liability that one party
may have to another.
Section 2.5 Information by Holder. Each Holder of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Article II.
Section 2.6 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission that may at any time
permit the sale of the Restricted Securities to the public without registration,
the Company agrees to:
(a) Use its best efforts to facilitate the sale of the Restricted
Securities to the public without registration under the Securities Act,
pursuant to Rule 144 under the Securities Act.
(b) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public.
(c) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting
requirements);
(d) So long as a Holder owns any Restricted Securities to furnish to
the Holder forthwith upon request a written statement by the Company as to
its compliance with the public information requirements of said Rule 144,
and the reporting requirements of the Securities Act and the Exchange Act,
a copy of the
10
most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission
allowing a Holder to sell any such securities without registration.
Section 2.7 Transfer of Registration Rights. The rights granted under this
Article II may be assigned or otherwise conveyed by any Holder of Registrable
Securities to any transferee, subject to compliance with all applicable
securities laws and regulations.
Section 2.8 Certain Limitations in Connection with Future Grants of
Registration Rights.
From and after the date of this Agreement, the Company shall not enter into
any agreement with any holder or prospective holder of any securities of the
Company providing for the granting to such holder of registration rights unless
such agreement contains provisions consistent with those contained in Section
2.1(c) with respect to the allocation of Registrable Securities to be included
in an underwritten public offering if marketing factors require a limitation on
the number of such securities to be included; provided that, from and after the
date of this Agreement, without the prior written consent of the Holders of a
majority of the Registrable Securities, the Company shall not enter into any
agreement with any person or persons providing for the granting to such holder
of registration rights which would be superior to those granted to Holders
pursuant to Section 2.1.
Section 2.9 Restrictions on Market Manipulation. In the event any shares of
Common Stock are offered or sold by any Holder in a registration, each such
Holder will:
(a) advise the Company in writing of any offer, sale or other
disposition by it of any Common Stock in any manner other than as set forth
in the registration statement or any prospectus included therein on or for
the 30 day period prior to the filing of such registration statement until
the distribution under the registration statement has been completed;
(b) not effect any stabilization activity in connection with the
Company's Common Stock;
11
(c) not bid or purchase, for any account in which it has a beneficial
interest, any Common Stock except as may be permitted pursuant to Rule
l0b-6 under the Exchange Act (if applicable);
(d) not until it has sold all of such shares of Common Stock, attempt
to induce any person to purchase any Common Stock except as may be
permitted pursuant to Rule 10b-6; and
(e) not until it has sold all such shares of Common Stock, pay any
compensation for soliciting another to purchase any securities of the
Company, except as may be permitted pursuant to Rule 10b-6.
ARTICLE III
MISCELLANEOUS
Section 3.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA WITHOUT TAKING
INTO ACCOUNT THE PRINCIPLES THEREOF GOVERNING CONFLICTS OF LAWS.
Section 3.2 Successors and Assignees. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assignees, heirs, executors, and administrators (as the case may be)
of the parties hereto.
Section 3.3 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
Section 3.4 Notices, etc, All notices and other communications required or
permitted hereunder shall be in writing and shall be effective four days after
mailed by first-class mail, postage prepaid, or otherwise delivered by hand or
by messenger, addressed (a) if to Witherspoon, at 0000 Xxxxxxxx Xxxxxxxxx, 00xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or (b) if to any other Holder of
Registrable Securities, at such address as such Holder shall have furnished the
Company in writing, or, until any such Holder so furnishes an address to the
Company, then to and at the address of the last Holder of such Registrable
Securities who has so furnished an address to the Company, or (c) if to the
Company, at X.X. Xxx 0000, Xxxxxxxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxx.
12
Section 3.5 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any Holder of any Registrable Securities,
upon any breach or default of the Company under this Agreement, shall impair any
such right, power or remedy of such Holder nor shall it be construed to be a
waiver of any such breach or default or an acquiescence therein or of or in any
similar breach or default thereunder occurring nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement or any waiver on the part of any holder of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder shall be cumulative
and not alternative.
Section 3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts and all of which together shall constitute one
instrument.
Section 3.7 Severability. In the event any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 3.8 Amendments. The provisions of this Agreement may be amended at
any time and from time to time, and particular provisions of this Agreement may
be waived, with and only with, an agreement or consent in writing signed by the
Company and by the Holders of a majority of the Registrable Securities voting as
a single class.
[SIGNATURES FOLLOW]
13
The parties have executed this Registration Rights Agreement as of the date
first written above.
AMERICAN INDUSTRIAL LOAN ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxxxx
Signature Page
