REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION
RIGHTS
AGREEMENT
(this
“Agreement”) is made as of December 8, 2006, among Argan,
Inc.,
a
Delaware corporation (the “Company”), and the parties identified on Schedule A
attached hereto (each a “Stockholder” or “Holder”).
RECITAL:
The
Company and Stockholders are parties to that certain Stock Purchase Agreement
of
even date herewith (the “Purchase Agreement”), whereby Stockholders purchased
1,000,000 shares of the common stock of the Company, par value $0.15 per share
(the “Common Stock”). Capitalized terms used but not defined in this Agreement
have the meanings assigned to such terms in the Purchase Agreement. As
an
inducement to Stockholders to enter into the Purchase Agreement, the Company
agrees with Stockholders as follows:
AGREEMENT:
NOW, THEREFORE, the
parties hereby agree as follows:
1. CERTAIN
DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following respective
meanings:
1.1 Affiliates.
“Affiliate”
shall mean any person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
any party specified in this Agreement.
1.2 Commission.
“Commission”
shall mean the United States Securities Exchange Commission or any other federal
agency at the time administering the Securities Act.
1.3 Common
Shares. “Common
Shares” shall mean the shares of Common Stock issued at any time to the
Stockholders pursuant to the Purchase Agreement.
1.4 Exchange
Act. “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 from time to time.
1.5 Person.
“Person”
shall mean any individual, partnership, limited liability company, corporation,
trust or other entity.
1.6 Register;
Registered; Registration. “Register,”
“registered” and “registration” shall 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 by the Commission.
1.7 Registrable
Shares. “Registrable
Shares” shall mean (i) the Common Shares and (ii) all shares of the Company’s
Common Stock issued as a dividend on, or other distribution with respect to,
or
in exchange or in replacement of, the Common Shares, until, in the case of
any
such security, the earliest of (i) its effective registration under the
Securities Act and resale in accordance with the registration statement covering
it, (ii) the earliest date all of such shares may be sold pursuant to Rule
144(k) under the Securities Act, (iii) its sale pursuant to Rule 144 or
otherwise, except in sales referenced in the proviso to Section
5.1.
1.9 Registration
Expenses. “Registration
Expenses” shall mean all expenses incurred by the Company in complying with
Section
3,
including all registration and filing fees, exchange listing fees, printing
expenses, fees and disbursements of counsel for the Company, state securities’
law fees and expenses, and the expense of any special consents and advice or
similar audit services of independent auditors incident to or required by any
such registration.
1.10 Securities
Act. “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 from time to time.
1.11 Selling
Expenses. “Selling
Expenses” shall mean any underwriting discounts and selling commissions
associated with the sale of Registrable Securities by a Holder hereunder.
Selling Expenses are and shall be the responsibility of the
Holders.
2.
RESTRICTIONS
ON
TRANSFER.
2.1 Notice
of Proposed Transfers.
Unless
there is an effective registration statement under the Securities Act covering
a
proposed transfer, Stockholder shall notify the Company of its intention to
affect a transfer of any of its Common Shares. Such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied (except that the requirements set forth in the balance
of
this sentence need not be complied with where the proposed transaction complies
with Rule 144 as long as the Company is furnished with evidence of compliance
with such rule) by:
(a) an
unqualified written opinion of legal counsel which is reasonably satisfactory
to
the Company addressed to the Company’s counsel, to the effect that the proposed
transfer of the Common Shares may be effected without registration of the
Securities Act; or
(b) a
“no
action” letter from the Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the
staff
of the Commission that action be taken with respect thereto;
provided,
that
this Section 2.1 shall not require a legal opinion or “no action letter” in
connection with any transfer described in the proviso to Section 5.1 of this
Agreement.
2.2 Compliance. Each
certificate evidencing the Common Shares transferred as above provided shall
bear the appropriate restrictive legend set forth in the Purchase Agreement,
except that such certificate shall not bear such restrictive legend if in the
opinion of counsel for the Company such legend is not required in order to
establish compliance with any provisions of the Securities Act or applicable
state securities laws.
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3.
REGISTRATION
RIGHTS
3.1 Shelf
Registration.
(a)
The
Company shall prepare and file with the Commission as soon as practicable but
in
no event later than 120 days after the closing of the transaction contemplated
by the Purchase Agreement, a registration statement (the “Initial Shelf
Registration Statement,” and together with any Subsequent Shelf Registration
Statement (as defined below), including,
in each case, the prospectus, amendments and supplements to such registration
statements, including post-effective amendments, all exhibits, and all materials
incorporated by reference or deemed to be incorporated by reference in such
registration statements, are herein collectively referred to as the “Shelf
Registration Statement”)
for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 of
the
Securities Act of 1933, as amended (the “Securities Act”) (the “Shelf
Registration”), registering the resale from time to time by Stockholders of all
of the Registrable Securities. The Initial Shelf Registration Statement shall
be
on an appropriate form under the Securities Act permitting registration of
such
Registrable Securities for resale by Stockholders from time to time as set
forth
in the Initial Shelf Registration Statement. The
Company shall use its best efforts to cause the Initial Shelf Registration
Statement to be declared effective under the Securities Act as promptly as
is
practicable and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act to
permit
the prospectus included therein to be lawfully delivered by the Stockholders,
for a period that will terminate when (i) all the Registrable Securities covered
by the Shelf Registration Statement have been sold pursuant thereto or (except
in sales described in the proviso to Section 5.1) otherwise or (ii) such
Registrable Securities may be sold pursuant to the provisions of Rule 144 under
the Securities Act (such period, the “Effectiveness Period”).
(b)
If
the
Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement ceases to be effective for any reason at any time during the
Effectiveness Period (other than because all Registrable Securities registered
thereunder have been resold pursuant thereto or have otherwise ceased to be
Registrable Securities), the Company shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in
any
event shall within thirty (30) days of such cessation of effectiveness amend
such Shelf Registration Statement in a manner reasonably expected to obtain
the
withdrawal of the order suspending the effectiveness thereof, or file an
additional Shelf Registration Statement covering all of the securities that
as
of the date of such filing are Registrable Securities (a “Subsequent Shelf
Registration Statement”). If a Subsequent Shelf Registration Statement is filed,
the Company shall use its best efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as is practicable after
such filing and to keep such Subsequent Shelf Registration Statement
continuously effective until the end of the Effectiveness Period.
(c)
The
Company shall supplement and amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if required by the
Securities Act.
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(d)
Notwithstanding any other provisions of this Agreement to the contrary, the
Company shall cause the Shelf Registration Statement and the related prospectus
and any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
3.2 Registration
Procedures. In
connection with the Shelf Registration contemplated by Section 3.1 hereof,
the following provisions shall apply:
(a)
The
Company shall (i) furnish to each Stockholder, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement and each
amendment thereof and each supplement, if any, to the prospectus included
therein and the Company shall use its best efforts to reflect in the Shelf
Registration Statement, when so filed with the Commission, such comments as
a
Stockholder may reasonably and timely propose.
(b)
The
Company shall give written notice to each Stockholder (which notice pursuant
to
clauses (ii) through (v) hereof shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been
made):
(i)
when
the Shelf Registration Statement or any amendment thereto has been filed with
the Commission and when the Shelf Registration Statement or any post-effective
amendment thereto has become effective;
(ii)
of
any request by the Commission for amendments or supplements to the Shelf
Registration Statement or the prospectus included therein or for additional
information;
(iii)
of
the issuance by the Commission of any stop order suspending the effectiveness
of
the Shelf Registration Statement or the initiation of any proceedings for that
purpose;
(iv)
of
the receipt by the Company or its legal counsel of any notification with respect
to the suspension of the qualification of the Registrable Securities for sale
in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v)
of
the happening of any event that requires the Company to make changes in the
Shelf Registration Statement or the prospectus in order that the Shelf
Registration Statement or the prospectus do not contain an untrue statement
of a
material fact nor omit to state a material fact required to be stated therein
or
necessary to make the statements therein (in the case of the prospectus, in
light of the circumstances under which they were made) not
misleading.
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(c)
The
Company shall make every reasonable effort to obtain the withdrawal at the
earliest possible time, of any order suspending the effectiveness of the Shelf
Registration Statement or the lifting of any suspension of the qualification
(or
exemption from qualification) of any of the Registrable Securities for sale
in
any jurisdiction in which they have been qualified for sale.
(d)
The
Company shall furnish to each Stockholder, without charge, at least one copy
of
the Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if such Stockholder so
requests, all exhibits thereto (including those, if any, incorporated by
reference).
(e)
The
Company shall, during the Effectiveness Period, deliver to each Stockholder,
without charge, except for normal copying and actual delivery costs, as many
copies of the prospectus (including each preliminary prospectus, if any)
included in the Shelf Registration Statement and any amendment or supplement
thereto as such Stockholder may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus or
any
amendment or supplement thereto by Stockholders in connection with the offering
and sale of the Registrable Securities covered by the prospectus, or any
amendment or supplement thereto, included in the Shelf Registration
Statement.
(f)
Prior
to any public offering of the Registrable Securities pursuant to any Shelf
Registration Statement the Company shall register or qualify or cooperate with
the Stockholders and their counsel in connection with the registration or
qualification of the Registrable Securities for offer and sale under the
securities or “blue sky” laws of such states of the United States as any
Stockholder reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Registrable Securities covered by such Shelf Registration Statement,
provided, however, that in no event shall the Company be required to qualify
to
do business as a foreign corporation in any jurisdiction where it would not,
but
for the requirements of this paragraph (f), be required to be so qualified,
to
subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction.
(g)
The
Company shall cooperate with Stockholders to facilitate the timely preparation
and delivery of certificates representing the Registrable Securities to be
sold
pursuant to any Shelf Registration Statement free of any restrictive legends
and
in such denominations and registered in such names as the Holders may request
a
reasonable period of time prior to sales of the Registrable Securities pursuant
to such Shelf Registration Statement. Stockholders shall provide such
representations as may be reasonably requested by the Company’s transfer agent
in this regard.
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(h)
Upon
the occurrence of any event contemplated by paragraphs (ii) through (v) of
Section 3.2(b) above during the period for which the Company is required to
maintain an effective Shelf Registration Statement, the Company shall promptly
prepare and file a post-effective amendment to the Shelf Registration Statement
or a supplement to the related prospectus and any other required document so
that, as thereafter delivered to Stockholders, the prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not misleading. If the
Company notifies the Stockholders in accordance with paragraphs
(ii) through (v) of Section 3.2(b) above to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then
each Stockholder shall suspend use of such prospectus and, if so directed by
the
Company, destroy or deliver to the Company all copies then in Stockholder’s
possession of the prospectus covering such Registrable Securities that was
in
effect at the time of such notice (such period during which the availability
of
the Shelf Registration Statement and any related prospectus is suspended being
a
“Deferral Period”). The period of effectiveness of the Shelf Registration
Statement provided for in Section 3.1(a) above shall be extended by the
number of days from and including the date of the giving of such notice to
and including the date when the Holders of Registrable Securities shall have
received such amended or supplemented prospectus pursuant to this
Section 3.2(h). The Company will use its best efforts to ensure that the
use of the prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3.2(h) to suspend
the
availability of the Shelf Registration Statement or any prospectus for one
or
more periods not to exceed 30 days in any 3 month period and not to exceed,
in
the aggregate, 90 days in any 12 month period.
(i)
The
Company shall prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement continuously effective
for
the applicable period specified in Section 3.1(a) and shall cause the related
prospectus to be supplemented by any required prospectus supplement to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act. The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and the Company will make generally available to its
securityholders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act, no later than 45 days after the
end of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company’s first fiscal quarter commencing
after the effective date of the Shelf Registration Statement, which statement
shall cover such 12-month period.
(j)
The
Company may require Stockholders to furnish to the Company such information
regarding the Stockholders and the distribution of the Registrable Securities
as
the Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement.
(k)
The
Company shall (i) make reasonably available for inspection by Stockholders,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained
by
Stockholders or any such underwriter, all relevant financial and other records,
pertinent corporate documents and properties of the Company and (ii) cause
the Company’s officers, directors, employees, accountants and auditors to supply
all relevant information reasonably requested by Stockholders or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as shall be reasonably necessary to enable
such persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act.
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(l)
The
Company shall use its best efforts to take all other steps necessary to effect
the registration of the Registrable Securities covered by a Shelf Registration
Statement contemplated hereby.
(m)
The
Company shall as
promptly as practicable (if reasonably requested by Stockholders),
incorporate in a prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as any Stockholder
or
shall, on the basis of an opinion of nationally recognized counsel experienced
in such matters, determine to be required to be included therein and make any
required filings of such prospectus supplement or such post-effective amendment;
provided
that the
Company shall not be required to take any actions under this Section 3.2(m)
that
are not, in the reasonable opinion of counsel for the Company, in compliance
with applicable law.
3.3 Expenses
of Registration.
The
Company shall pay all Registration Expenses incurred in connection with the
performance of the Company’s obligations under this Agreement.
4.
INDEMNIFICATION
4.1 Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless each Stockholder and its
Affiliates, against all claims, losses, damages and liabilities, joint or
several (or actions in respect thereof, and including, but not limited to,
any
claims, losses, damages, liabilities or actions relating to purchases and sales
of the Registrable Securities), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, to which any of them
may
become subject under the Securities Act, the Exchange Act or other federal
or
state law, arising out of or based on the following:
(a) any
untrue statement or alleged untrue statement of a material fact contained in
any
such registration statement, preliminary prospectus, prospectus, offering
circular or other similar document (including any related registration
statement, notification or the like, and including any amendment or supplement
thereto) incident to any such registration, 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;
(b) 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
(c) any
legal
and any other expenses reasonably incurred in connection with investigating
or
defending any such claim, loss, damage, liability or action, as incurred related
to the foregoing.
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4.2 Indemnification
by Stockholders.
If
Registrable Securities held by Stockholders are included in the securities
as to
which such registration is being effected, each Stockholder shall, severally
and
not jointly, indemnify the Company, each of its officers and directors, each
underwriter and each person who controls any underwriter, and each person,
if
any, who controls the Company or any such underwriter within the meaning of
Section 15 of the Securities Act, and each person affiliated with or retained
by
the Company and who may be subject to liability under any applicable securities
laws, 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 or other federal or state law, arising out of or based
on:
(a) 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 in the light of the circumstances under which they were made, 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 written information furnished to the
Company by an instrument duly executed by such Stockholder and stated to be
specifically for use therein; and
(b) any
legal
and other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, as
incurred.
4.3 Limitation
on the Indemnification Obligation.
(a) No
party
required to provide indemnification under this Section
4
(the
“Indemnifying Party”) shall be liable, and shall have any indemnification
obligation hereunder, for any amounts paid in settlement by any party entitled
to indemnification hereunder (the “Indemnified Party”) of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Indemnifying Party (which consent shall not be unreasonably withheld).
(b) The
Company shall not be liable under Section 4.1 hereof for any such claim, loss,
damage, liability or expense to the extent it 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 an instrument duly executed by any
Stockholder, underwriter or controlling person and stated to be specifically
for
use therein.
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4.4 Indemnification
Procedure.
Each
Indemnified Party” shall give notice to 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 the Indemnifying Party acknowledges its obligations to indemnify the
Indemnified Party with respect to the claim and provided further 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), 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 Section
4
except
to the extent that 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 and different defenses but shall
bear the expense of such defense nevertheless. 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
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. If the Indemnifying Party does not
assume the defense of any claim or proceeding resulting therefrom, the
Indemnified Party may defend against such claim or proceeding as the Indemnified
Part may deem appropriate and may
settle such claim or proceeding
in such
manner as the Indemnified Party may deem appropriate, all
without prejudice to its right to indemnification
hereunder.
4.5 Contribution,
Allocation, etc.
If the
indemnification provided for in this Section
4
is
unavailable or insufficient to hold harmless an Indemnified Party under such
paragraphs in respect of any losses, claims, damages or liabilities or actions
in respect thereof referred to therein, then each Indemnifying Party shall
in
lieu of indemnifying such Indemnified Party contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or actions in such proportion as appropriate to reflect the relative
fault of the Company, on the one hand, and the underwriters and Stockholders,
on
the other, in connection with the statements or omissions which resulted in
such
losses, claims, damages, liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any notice under
Section
4.4.
The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact relates to information
supplied by the Company, on the one hand, or the underwriters or Stockholders,
on the other, and to the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and Stockholders agree that it would not be just and equitable
if
contributions pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph, no Stockholder
shall
be required to contribute any amount in excess of the lesser of (i) the
proportion that the public offering price of shares sold by such Stockholders
under such registration statement bears to the total public offering price
of
all securities sold thereunder, but not to exceed the proceeds received by
such
Stockholder for the sale of Registrable Shares covered by such registration
statement and (ii) the amount of any damages which it would have otherwise
been
required to pay by reason of such untrue or alleged untrue statement or
omission. No person guilty of fraudulent misrepresentations (within the meaning
of Section 11(f) of the Securities Act), shall be entitled to contribution
from
any person who is not guilty of such fraudulent misrepresentation.
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4.6 Conflicts
with Underwriting Agreement.
Notwithstanding anything in this Section
4
to the
contrary, to the extent that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions,
the
provisions in the underwriting agreement shall control.
5.
MISCELLANEOUS
PROVISIONS.
5.1 No
Transfer of Registration Rights.
The
registration rights granted under this Agreement may not be assigned or
otherwise conveyed by Stockholders without the consent of the Company, which
consent shall not be unreasonably withheld; provided,
that
registration rights may be assigned by a Stockholder in connection with a sale
or other transfer to an immediate family member or to an entity controlled
by or
under common control with Stockholders.
5.2 Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without giving effect to conflict of laws
or
any other rules or principles which may require the application of the laws
of
any other jurisdiction.
5.3 Delays
or Omissions.
No delay
or omission to exercise any right, power or remedy accruing to Stockholders,
upon any breach or default by the Company under this Agreement, shall impair
any
such right, power or remedy of Stockholders 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 Stockholder or any breach or default
under this Agreement, or any waiver on the part of any Stockholder 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
Stockholders, shall be cumulative and not alternative.
5.4 Rule
144. The
Company shall
use
its best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at any time,
the
Company is not required to file such reports, it will, upon the request of
any
Stockholder, make publicly available other information so long as necessary
to
permit sales of their securities pursuant to Rule 144 under the Securities
Act.
The Company covenants that it will take such further action as any Stockholder
may reasonably request, all to the extent required from time to time to enable
Stockholders to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
Upon the request of Stockholders, the Company shall deliver to such Stockholder
a written statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 5.4
shall be
deemed to require the Company to register any of its securities pursuant to
the
Exchange Act if not otherwise registered.
5.5 Remedies. Each
of
the parties hereto acknowledges and agrees that any failure by a party to
perform its obligations hereunder or otherwise breach this Agreement,
irreparable injury may occur for which there is no adequate remedy at law,
that
it will not be possible to measure damages for such injuries precisely and
that,
in the event of any such failure, a party may obtain such relief as may be
required to specifically enforce the other party’s obligations hereunder.
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5.6 No
Inconsistent Agreements.
The
Company will not on or after the date of this Agreement enter into any agreement
with respect to its securities that is inconsistent with the rights granted
to
Stockholders in this Agreement or otherwise conflicts with the provisions
hereof. The Company represents and warrants that the rights granted to
Stockholders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of securities of the Company under any
agreement in effect on the date hereof.
5.7 Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements, correspondence, arrangements and understandings relating to the
subject matter hereof.
5.8 Binding
Effect.
All of
the terms, provisions and conditions hereof shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto, and their
respective heirs, personal representatives, successors and assigns.
5.9 Headings;
Construction.
The
headings contained herein are for the purposes of convenience only, and will
not
be deemed to constitute a part of this Agreement or to affect the meaning or
interpretation of this Agreement in any way. Unless the context clearly states
otherwise, the use of the singular or plural in this Agreement shall include
the
other and the use of any gender shall include all others. The parties have
participated jointly in the negotiation and drafting of this Agreement. If
any
ambiguity or question of intent or interpretation arises, no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of
the
authorship of any of the provisions of this Agreement. All references herein
to
Sections shall refer to this Agreement unless the context clearly otherwise
requires.
5.10 Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter’s confirmation of receipt of a facsimile
transmission, (b) confirmed delivery by a standard overnight carrier or when
delivered by hand or (c) the expiration of five (5) business days (or seven
(7)
business days where the addressee is not in the United States) after the day
when mailed by certified or registered mail, postage prepaid, to the addresses
set forth on the signature pages hereto, or to such other address as any party
may, from time to time, designate in a written notice given in a like
manner.
5.11 Severability
of Provisions.
If
a
court
in any proceeding holds any provision of this Agreement or its application
to
any person or circumstance invalid, illegal or unenforceable, the remainder
of
this Agreement, or the application of such provision to persons or circumstances
other than those to which it was held to be invalid, illegal or unenforceable,
shall not be affected, and shall be valid, legal and enforceable to the fullest
extent permitted by law, but only if and to the extent such enforcement would
not materially and adversely frustrate the parties’ essential objectives as
expressed in this Agreement. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties intend
that
the court add to this Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be valid and enforceable, so as to effect
the
original intent of the parties to the greatest extent possible.
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5.12 No
Third Party Beneficiaries.
This
Agreement does not create, and will not be construed as creating, any rights
enforceable by any person not a party to this Agreement.
5.13 Waiver
of Jury Trial.
TO THE
EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND
ALL
RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE
PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS
TO
DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT NOT LIMITED TO,
THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN, COMMON LAW OR ANY
APPLICABLE STATUTE OR REGULATIONS. EACH PARTY HERETO ACKNOWLEDGES THAT IT IS
KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY
JURY.
5.14 Amendment.
This
Agreement may be amended, modified, superseded, or canceled only by a written
instrument signed by all of the parties hereto and any of the terms, provisions
and conditions hereof may be waived, only by a written instrument signed by
the
waiving party.
5.15 Counterparts.
This
Agreement may be executed in any number of counterparts and each such
counterpart shall for al purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Signature
Pages Follow
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IN
WITNESS
WHEREOF, the
parties have entered into this Agreement as of the date first written
above.
| THE COMPANY: | |||
| ARGAN, INC. | |||
|
|
|||
| /s/ Xxxxxx Xxxxxxxxxx | |||
|
By:
Xxxxxx Xxxxxxxxxx
Its:
President
|
| BUYERS: | |||
| ARGAN INVESTMENTS LLC | |||
|
|
|||
| /s/ Xxxxxx Xxxxxxx | |||
|
By:
Xxxxxx Xxxxxxx
Its:
Member
|
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