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EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of April 9, 1999, by and among Team, Inc., a Texas corporation (the "Company"),
and the holders of certain Common Stock (as defined herein) whose names appear
on the signature pages of this Agreement under the caption "HOLDERS" (the
"Holders").
INTRODUCTION
Concurrently with the execution and delivery of this Agreement, the
Company is issuing shares of its common stock, par value $0.30 per share (the
"Common Stock"), to the Holders as partial consideration paid to the Holders for
the Company's acquisition from the Holders of the issued and outstanding capital
stock of X-Ray Inspection, Inc., a Louisiana corporation ("X Ray"), pursuant to
that certain Stock Purchase Agreement dated as of even date herewith, executed
among the Company and the Holders ("Stock Purchase Agreement"). In order to
induce the Holders to complete the transactions contemplated by the Stock
Purchase Agreement, the Company has agreed to enter into this Registration
Rights Agreement.
In consideration of the mutual promises and covenants hereinafter set
forth, the parties hereby agree as follows:
I. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"best lawful efforts" shall mean the efforts that a
prudent business person desirous of achieving a result would use under
similar circumstances to ensure that such result is achieved as
expeditiously as possible.
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
"Common Stock" means the Common Stock, par value
$0.30 per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar federal statute and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Registrable Stock" means any Common Stock held by a
Holder that was issued to such Holder pursuant to the Stock Purchase
Agreement and any stock split, stock dividend, recapitalization, or
similar event applicable to such stock; provided however, that such
shares of Common Stock shall no longer be
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Registrable Stock when they can be sold in accordance with Rule 144
under the Securities Act (at which time the registration rights
hereunder shall terminate pursuant to Section 3.1).
The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses,
other than Selling Expenses (as defined below), incurred by the Company
in complying with Section 2.1 hereof, including, without limitation,
all registration, qualification and filing fees, exchange listing fees,
printing expenses, escrow fees, fees and disbursements of counsel for
the Company, 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).
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to
the securities registered by the Holders and all fees and disbursements
of counsel for any Holder.
I. Registration Rights.
A. Company Registration.
a) Notice of Registration. If at any time or from time to time the Company shall
determine to file a registration statement with the Securities and Exchange
Commission for the sale of Company Common Stock in an underwritten public
offering for cash, either for its own account or the account of one or more
stockholders, other than a registration (i) on Form S-4 or S-8 or any successor
or similar form, (ii) relating to any capital stock of the Company under
options, warrants or other rights to acquire any such capital stock issued or to
be issued primarily to directors, officers or employees of the Company, or any
of its subsidiaries or affiliates, (iii) filed pursuant to Rule 145 under the
Securities Act or any successor or similar provision, or (iv) relating to any
employee benefit plan or interests therein the Company will:
(a) promptly give to each Holder written notice thereof, and
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(a) use its best lawful efforts to include in such registration (and
any related qualification under blue sky laws or other compliance), all
the Registrable Stock specified in a written request or requests, made
within fifteen (15) days after receipt of such written notice from the
Company, by any Holder.
b) Underwriting Agreement. All Holders who have requested the inclusion
of Registrable Stock in such registration shall (together with the
Company and other holders whose securities are included in such
registration) enter into an underwriting agreement in customary form
with the managing underwriter selected for such underwriting by the
Company.
Notwithstanding anything herein to the contrary, if the
Company's managing underwriter determines that marketing factors require a
limitation of the number of shares to be offered and sold in such offering,
there shall be included in the offering only that number of Registrable Stock,
if any, that the Company's managing underwriter or financial advisor, as the
case may be, reasonably and in good faith believes will not jeopardize the
success of the offering; provided, however, that any reduction imposed upon
Holders of Registrable Stock shall not be greater, on a percentage basis with
respect to the Registrable Stock requested to be included, than the reduction
imposed on any other persons seeking to exercise piggy-back registration rights
in connection with such offering.
If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw such Holder's Registrable Stock
from the registration statement covering such offering, by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of such registration statement. Any Registrable Stock so
withdrawn from such underwriting shall be withdrawn from such registration, and
shall not be sold in the public market for a period of one hundred twenty (120)
days after the effective date of the registration statement relating thereto, or
such shorter period of time as may be acceptable to the underwriters.
a) Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 2.1
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
A. Expenses of Registration. All Registration Expenses shall be borne by the
Company. Unless otherwise agreed by the Company, all Selling Expenses relating
to securities registered on behalf of the Holders shall be borne by the Holders
pro rata on the basis of the number of shares so registered.
A. Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Agreement the Company will
keep each Holder advised in writing as to the initiation of each registration,
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qualification and compliance and as to the completion thereof. At its expense,
the Company will:
a) Subject to Section 2.1(c), prepare and file with the Commission a
registration statement with respect to such securities and use its best lawful
efforts to cause such registration statement to become and remain effective for
at least ninety (90) days or until the distribution described in the
Registration Statement has been completed;
a) Furnish to each underwriter such number of copies of a prospectus, and a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such underwriter may reasonably request in
order to facilitate the public sale of the shares by such underwriter, and
promptly furnish to each underwriter and Holder notice of any stop-order or
similar notice issued by the Commission or any state agency charged with the
regulation of securities; and
a) Use its best lawful efforts to cause all Registrable Stock included in such
registration to be listed or authorized for inclusion on each securities
exchange or similar trading system on which similar securities issued by the
Company are then listed or authorized for trading.
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A. Indemnification.
a) To the extent permitted by law, the Company will indemnify each Holder
participating in a registration pursuant to this Agreement, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter of the Company's
securities covered by such a registration and each person who controls such
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, to the extent such expenses, claims,
losses, damages or liabilities arise out of or are based on any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
statement, prospectus, or any amendment or supplement thereto, 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, in the light of the circumstances
in which they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company or any applicable state securities laws or regulations
in connection with any such registration, qualification or compliance, and the
Company will reimburse each such Holder, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action; provided, however, that the indemnity contained herein shall not apply
to amounts paid in settlement of any claim, loss, damage, liability or expense
if settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); and provided further, 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 or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
controlling person or underwriter specifically for use therein. Notwithstanding
the foregoing, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in a preliminary prospectus but eliminated or remedied in an amended prospectus
on file with the Commission at the time the registration statement becomes
effective or in the final prospectus filed with the Commission pursuant to Rule
424 of the Commission, the indemnity agreement herein shall not inure to the
benefit of any underwriter if a copy of the final prospectus filed pursuant to
Rule 424 was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
a) To the extent permitted by law, each Holder will, if Registrable Stock owned
by such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
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its directors and officers, each underwriter of the Company's securities covered
by such a registration, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other Holder,
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all expenses, 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 the extent such
expenses, claims, losses, damages or liabilities arise out of or are based on
any untrue statement (or alleged untrue statement) by such Holder of a material
fact contained in any such registration statement, prospectus, or any amendment
or supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission by such Holder (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by such Holder of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to such Holder or any applicable state securities laws or regulations
and relating to action or inaction required of such Holder in connection with
any such registration, qualification or compliance, and such Holder will
reimburse the Company, such other Holders, such directors, officers,
underwriters or control persons for any legal or other expenses reasonably
incurred in connection with defending any such claim, loss, damage, liability or
action, 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, in reliance upon and in
conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss, damage,
liability or expense if settlement is effected without the consent of the Holder
from whom such payment is sought (which consent shall not be unreasonably
withheld). Notwithstanding the foregoing, the liability of each Holder under
this subsection (b) shall be limited to an amount equal to the net proceeds from
the sale of the shares sold by such Holder, unless such liability arises out of
or is based on intentional misstatements or omissions by such Holder. In
addition, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in a preliminary prospectus but eliminated or remedied in an amended prospectus
on file with the Commission at the time the registration statement becomes
effective or in the final prospectus filed pursuant to Rule 424 of the
Commission, the indemnity agreement herein shall not inure to the benefit of the
Company or any underwriter if a copy of the final prospectus filed pursuant to
Rule 424 was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
a) 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 actual knowledge 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
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unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate or different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to the entry of any judgment or enter into any settlement which
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. No Indemnified Party shall consent to entry of any
judgment or enter into any settlement without the consent of each Indemnifying
Party.
a) If the indemnification provided for in this Section 2.4 is unavailable to an
Indemnified Party in respect of any losses, claims, damages or liabilities
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and all shareholders offering securities in the
offering (the "Selling Shareholders") on the other from the offering of the
Company securities, or (ii) if the allocation provided by the clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Selling Shareholders
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Selling Shareholders on the other shall be the net proceeds
from the offering (before deducting expenses) received by the Company on the one
hand and the Selling Shareholders on the other. The relative fault of the
Company on the one hand and the Selling Shareholders on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Selling
Shareholders and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Selling Shareholders agree that it would not be just and equitable if
contribution pursuant to this Section 2.5(d) were based solely upon the number
of entities from whom contribution was requested or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 2.4(d). The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to
above in this Section 2.4(d) shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
defending any such action or claim, subject to the provisions of Section 2.4(c)
hereof. Notwithstanding the provisions of this Section 2.4(d) or any other
provision of this Article 2, no Holder shall be required to contribute any
amount or make any other
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payments under this Agreement which in the aggregate exceed the net proceeds
received in the offering by such Holder, unless the subject losses, claims,
damages and liabilities arise out of or are based on intentional misstatements
or omissions by such Holder. No person guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
a) Notwithstanding the foregoing provisions of this Section 2.4, if pursuant to
an underwritten public offering of capital stock of the Company, the Company,
the Selling Shareholders and the underwriters enter into an underwriting or
purchase agreement relating to such offering which contains provisions covering
indemnification among the parties thereto in connection with such offering, the
indemnification provisions of this Section 2.4, to the extent they are in
conflict therewith, shall be deemed inoperative for the purpose of such
offering, except as to any parties to this Agreement who are not parties to such
subsequent underwriting or purchase agreement.
A. Certain Information.
a) As a condition to exercising the registration rights provided for herein,
each Holder, with respect to any Registrable Stock included in any registration,
shall furnish the Company such information regarding such Holder and the
Registrable Stock as the Company may request in writing and as shall be required
in connection with any registration, qualification or compliance referred to in
Section 2.
a) The failure of any Holder to furnish the information requested pursuant to
Section 2.5(a) shall not affect the obligation of the Company under Section 2 to
the remaining Holders who furnish such information unless, in the reasonable
opinion of counsel to the Company or the underwriters, such failure impairs or
may impair the legality of the Registration Statement or the underlying
offering.
a) Each Holder, with respect to any Registrable Stock included in any
registration, shall cooperate in good faith with the Company and its
underwriters, in connection with such registration, including placing such
shares in escrow or custody to facilitate the sale and distribution thereof.
a) Each Holder, with respect to any Registrable Stock included in any
registration, shall make no further sales or other dispositions, or offers
therefor, of such shares under such registration statement if, during the
effectiveness of such registration statement, such Holder is informed that an
intervening event has occurred which, in the opinion of counsel to the Company,
makes the prospectus included in such registration statement no longer comply
with the Securities Act until such time as such Holder has received from the
Company copies of a new, amended or supplemented prospectus complying with the
Securities Act; provided, however, that the 90-day period referenced in Section
2.3(a) shall be extended by the number of days from the date on
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which the Holder is so informed up to and including the date on which the Holder
receives new amended or supplemental prospectuses.
A. Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of
the Common Stock acquired by Holders under the Stock Purchase Agreement to the
public without registration, the Company agrees to use its best lawful efforts
to:
a) Make and keep public information available, as those terms are defined in
Rule 144 under the Securities Act, at all times that the Company is subject to
the reporting requirements of the Securities Act or the Exchange Act;
a) 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; and
a) So long as a Holder owns any Common Stock that such Holder acquired under the
Stock Purchase Agreement, to furnish to such Holder forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of such Rule 144, and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as a Holder may reasonably
request in order to comply with any rule or regulation of the Commission
allowing such Holder to sell any such securities without registration.
A. Transfer of Registration Rights. The rights granted to a Holder hereunder may
not be assigned or transferred by such Holder, except (i) to the former spouse
of a Holder pursuant to a final decree of divorce or (ii) to the estate of a
holder and the beneficiaries of such estate, upon the death of a Holder.
A. Standstill Agreement. Subject to the provisions of Section 2.1 hereof, each
Holder agrees upon request of the underwriter(s) managing any underwritten
public offering of the Company's securities, not to sell, make any short sale
of, loan, grant any option for the purchase of or otherwise dispose of any
equity securities of the Company (other than those included in the registration)
without the prior written consent of such underwriter(s), for such period of
time (not to exceed 120 days) following the effective date of the registration
statement relating to each such underwritten public offering as may be requested
by the underwriter(s).
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I. Miscellaneous.
A. Term. The registration rights granted pursuant to this Agreement shall begin
on the date of this Agreement and shall terminate, as to any individual Holder,
at such time as all Common Stock acquired by such Holder under the Stock
Purchase Agreement can be sold in accordance with Rule 144 under the Securities
Act.
A. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS
OF THE STATE OF TEXAS WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
A. Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
A. Entire Agreement: Amendment. This Agreement shall constitute the full and
entire understanding and agreement between the parties with regard to the
subject hereof. Except as expressly provided herein, this Agreement, or any
provision hereof may be amended, waived, discharged or terminated upon the
written consent of the Company and the Holders holding at least a majority of
the then outstanding Registrable Stock.
A. Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Holders: Copy to:
X. Xxxxxxx Xxxxxx Xxxxxx & Xxxxx
0000 Xxx 000 Xxxx 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
X.X. Xxx 00000
X. Xxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
000 Xxxxxxx Xxx, Xxx 000 Attn: Xx. Xxxxx X. Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000 Facsimile: (000) 000-0000
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If to the Company: Copy to:
Team, Inc. Chamberlain, Hrdlicka, White,
000 Xxxxxxx Xxxxx Xxxxxxxx & Xxxxxx
Xxxxx, Xxxxx 00000 0000 Xxxxx Xxxxxx, Xxxxx 0000
P.O. Box 123 Houston, Texas 77002-4310
Xxxxx, Xxxxx 00000-0000 Attn: Xx. Xxxxxx X. Xxxxxxxx
Attn: Xxxxxx X. Xxxx, Facsimile: (000) 000-0000
Chairman and CEO
Facsimile: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
A. Delays or Omissions. Except as expressly provided herein, no delay or
omission to exercise any right, power, or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party 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 thereafter 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 party of any
breach or default under this Agreement, or any waiver on the part of any party
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
party to this Agreement, shall be cumulative and not alternative.
A. 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.
A. Validity. In the event that any provisions hereof are held to be invalid,
illegal or against public policy, the remaining provisions hereof shall not be
affected thereby. In such event, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible with respect to those provisions which were held
to be invalid, illegal or against public policy.
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A. Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have executed this Agreement effective as
of the date first set forth above.
"COMPANY"
TEAM, INC.
By:
Xxxxxx X. Xxxx, Chairman and CEO
"HOLDERS"
X. Xxxxxxx Xxxxxx
X. Xxx Xxxxxx
