EXHIBIT 10.18
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 20, 2000 (as the
same may be amended, modified, supplemented or restated from time to time, this
"Agreement"), between Citadel Holding Corporation, a Nevada corporation
("Citadel"), and Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx (individually, an
"Original Holder" and, collectively, the "Original Holders").
RECITALS
WHEREAS, pursuant an Agreement and Plan of Merger, dated as of July 28,
2000 (as the same may be amended, modified, supplemented or restated from time
to time, the "Merger Agreement"), among Citadel, Off Broadway Investments, Inc.,
a California corporation wholly owned by the Original Holders ("OBI"), Citadel
Off Broadway Theatres, Inc. a Nevada corporation and an affiliate of Citadel
("Merger Sub"), and the Original Holders, OBI is merging with and into Merger
Sub on the date hereof (the "Closing Date");
WHEREAS, pursuant to the Merger Agreement, Citadel is issuing to the
Original Holders _____ duly authorized, validly issued, fully paid and non-
assessable shares (the "Shares") of Citadel's Class A Non-Voting Common Stock,
par value $.01 per share (the "Class A Common Stock"), and Citadel's Class B
Voting Common Stock, par value $.01 per share (the "Class B Common Stock"; the
Class A Common Stock and Class B Common Stock are together referred to as the
"Common Stock"); and
WHEREAS, the Company wishes to afford the Holders unlimited "piggyback"
registration rights and each Original Holder one demand registration right each
in respect of the Shares;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and understandings contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement intending to be legally bound hereby
agree as follows:
Definitions. For purposes of this Agreement, the following terms shall have
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the following meanings:
The term "Act" refers to the Securities Act of 1933, as amended, and the rules
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and regulations promulgated thereunder.
The term "Xxxxxx Holder" means a Holder which is Xxxxx X. Xxxxxx or an
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assignee of a Xxxxxx Holder.
The term "Exchange Act" refers to the Securities Exchange Act of 1934, as
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amended, and the rules and regulations promulgated thereunder.
The term "Xxxxxx Holder" means a Holder which is Xxxxxxx X. Xxxxxx or an
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assignee of a Xxxxxx Holder.
The term "Holder" means a holder of record of Registrable Securities on the
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books and records of Citadel which is either an Original Holder or an assignee
of an Original Holder who succeeds to the rights as a Holder in accordance with
Section 1.9 hereof.
The term "Original Holder" means Xxxxxxx X. Xxxxxx or Xxxxx X. Xxxxxx.
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The terms "register," "registered," and "registration" refer to a
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registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement by the SEC.
The term "Registrable Securities" of any Holder refers to the Shares owned
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by such Holder, except that the Shares owned by a Holder shall cease to be
Registrable Securities at the earliest date when (i) a registration statement
with respect to the sale of such Shares has become effective under the Act and
the Shares have been disposed of in accordance with such registration statement;
(ii) all such Shares may be sold to the public pursuant to paragraph (k) of Rule
144 under the Act ("Rule 144") or any successor provision; (iii) such Shares
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shall have been transferred (under Rule 144 or otherwise), new certificates for
the Shares not bearing a legend restricting further transfer (other than as
provided in Citadel's Articles of Incorporation) shall have been delivered by
Citadel and subsequent disposition of the shares does not require registration
or qualification under the Act or state law then in force in the opinion of
legal counsel for Citadel; or (iv) such Shares cease to be outstanding.
The number of shares of "Registrable Securities then outstanding" means the
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number of Shares which are Registrable Securities.
The term "SEC" means the Securities and Exchange Commission.
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1.1 Demand Registration.
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(a) Subject to Sections 1.2(b) and 1.2(c), if Citadel shall receive a
written request (specifying that it is being made pursuant to this Section 1.2)
from a Holder or Holders that Citadel file a registration statement under the
Act, or a similar document pursuant to any other statute then in effect
corresponding to the Act, covering the registration of Shares owned by such
Holder or Holders which represent at least twenty-five percent of the
Registrable Securities originally issued pursuant to the Merger Agreement, then
Citadel shall, within ten (10) business days of the receipt thereof, give
written notice of such request to the other Holders at their respective
addresses and shall file as soon as practicable, and in any event within sixty
(60) days of the receipt of such request, a registration statement under the Act
covering all Registrable Securities which the Holders request to be registered
within 30 days of the mailing of such notice to all Holders.
(b) Notwithstanding the foregoing, (i) Citadel shall not be obligated to
effect a registration pursuant to this Section 1.2 during the period starting
with the date 60 days prior to Citadel's estimated date of filing of, and ending
on a date six months following the effective date
of, a registration statement pertaining to an underwritten public offering of
securities for the account of Citadel, provided that Citadel is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective and that Citadel's estimate of the date of filing
such registration statement is made in good faith; (ii) if Citadel shall furnish
to the Holders initiating the registration request hereunder (the "Initiating
Holders") a certificate signed by the President of Citadel stating that in the
good faith judgment of the Board of Directors it would be seriously detrimental
to Citadel or its shareholders for a registration statement to be filed in the
near future, then Citadel's obligation to file a registration statement shall be
deferred for a period not to exceed six months, provided, however, that Citadel
may furnish such a certificate to the Initiating Holders only once in any one-
year time period, and (iii) if the managing underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders which would otherwise be underwritten pursuant hereto, and the number of
shares of Registrable Securities that may be included in the underwriting shall
be allocated among all Holders thereof in proportion to the amount of
Registrable Securities owned by each Holder; provided, however, that the number
of shares of Registrable Securities to be included in such underwriting shall
not be reduced unless all other securities are first entirely excluded from the
underwriting.
(c) Citadel shall be obligated to effect only one demand registration
pursuant Xxxxxx Holders, collectively, provided, however, that if the Holders
who demand registration under this Section 1.2 are unable to register at least
ninety percent (90%) of their Registrable Securities requested to be included in
such registration, then the number of registrations which Citadel shall be
obligated to effect under this Section 1.2 shall be increased by one.
1.2 "Piggyback" Registration.
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(d) Subject to Section 1.3(b), if at any time Citadel determines to
register (including for this purpose a registration effected by Citadel for
stockholders other than the Holders) any shares of Common Stock under the Act in
connection with the public offering of such securities solely for cash on an SEC
Form that would also permit the registration of the Registrable Securities
(other than Forms S-4 and S-8, or successor forms with similar applicability),
Citadel shall, each such time while Registrable Securities are outstanding,
promptly give each Holder written notice of such determination. Upon the written
request of any Holder given within 20 days after mailing of any such notice by
Citadel, Citadel shall, subject to the provisions of Section 1.7, cause to be
registered under the Act all of the Registrable Securities that such Holder has
requested be registered; provided, however, that Citadel shall not be required
to proceed with such registration if the offering is abandoned in its entirety
and no other securities are offered for sale.
(e) Citadel shall not be required under this Section 1.3 to include any
Registrable Securities in such underwriting unless the Holders accept reasonable
and customary terms of the underwriting as agreed upon between Citadel and the
underwriters selected by it.
1.3 Obligations of Citadel. Notwithstanding any other provision hereof,
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whenever required under this Article One to effect the registration of any
Registrable Securities, Citadel shall, as expeditiously as reasonably possible:
(f) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its commercially reasonable efforts to cause
such registration statement to become effective, and, upon the request of any
Holder, to keep such registration statement effective for up to 90 days.
Prepare and file with the SEC 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
Act with respect to the disposition of all securities covered by such
registration statement.
Furnish to the Holders such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
Use its commercially reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be necessary for the Holders to dispose of
the Registrable Securities, provided that Citadel 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 or subject itself to taxation in
any such states or jurisdictions.
Enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter, if any, of such
offering. Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement.
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 Act or 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 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.
Furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Article One, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Article One, (i) an opinion, dated such date, of
the counsel representing Citadel for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters and to the Holders requesting
registration of Registrable Securities and (ii) a letter, dated such date, from
the independent certified public accountants of Citadel, in form and substance
as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters and to the Holders requesting registration of Registrable
Securities.
Make generally available to its stockholders an earnings statement satisfying
the provisions of Section 11(a) of the Act (including by means of satisfying the
provisions of Rule 158 under the Act) as soon as reasonably practical covering
the 12-month period beginning with the first month of Citadel's first fiscal
quarter commencing after the effective date of the registration statement.
Whenever any notice is required to be given under this Article One, such
notice may be given personally or by mail. Any notice given to a Holder shall
be sufficient if given to the Holder at the last address set forth for such
Holder on the stock transfer records of Citadel. Any notice given by mail shall
be deemed to have been given when deposited in the United States mail with
postage thereon prepaid.
1.4 Furnish Information. The selling Holders shall furnish to Citadel
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such information regarding themselves, the Registrable Securities held by them,
and the intended method of disposition of such securities as shall be required
to effect the registration of the Registrable Securities.
1.5 Expenses of Registration. All expenses other than underwriting
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discounts and commissions incurred in connection with any registration, filing
or qualification pursuant to Sections 1.2 and 1.3, including, without
limitation, all registration, filing and qualification fees, printers and
accounting fees, fees and disbursements of counsel for Citadel, and the
reasonable fees and disbursements of a single counsel for the selling Holders
selected by the Holders of a majority of the Registrable Securities which are
included in such registration statement shall be borne by Citadel; provided,
however, that Citadel shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 1.2 if the registration
request is subsequently withdrawn at the request of the selling Holders (in
which case such selling Holders shall bear such expenses), unless, at the time
of such withdrawal, the selling Holders have learned of a material adverse
change in the condition, business or prospects of Citadel from that known to the
selling Holders at the time of its request, in which case the selling Holders
shall not be required to pay any such expenses and shall retain all rights
pursuant to Section 1.2.
1.6 Underwriting Requirements. In connection with any offering involving
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an underwriting of shares being issued by Citadel, Citadel shall not be required
under Section 1.3 to include any of the Holders' securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between Citadel
and the underwriters selected by it, and then only in such quantity as will not,
in the reasonable opinion of the underwriters, jeopardize the success of the
offering by Citadel. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities to be sold other than by Citadel that the underwriters
reasonably believe compatible with the success of the offering, then Citadel
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters believe
will not jeopardize the success of the offering (the securities so included to
be apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by
such selling stockholders); provided, however, that in no event shall any
securities of selling Holders be excluded until all securities of selling
employees of, or consultants and advisors to, Citadel are excluded.
1.7 Indemnification and Contribution. In the event any Registrable
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Securities are included in a registration statement under this Article One:
(g) To the extent permitted by law, Citadel will indemnify and hold
harmless each Holder, the officers and directors of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Act or the Exchange Act,
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (i) any untrue statement
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or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by Citadel of the Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Act, the Exchange
Act or any state securities law; and Citadel will reimburse each such Holder,
officer or director, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that Citadel shall not be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
(x) a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, officer, director or controlling person of such Holder or
underwriter or (y) any untrue statement or alleged untrue statement made in, or
omission or alleged omission from, any preliminary prospectus or final
prospectus, if the final prospectus or the final prospectus as amended or
supplemented, respectively, which shall have been furnished to the underwriter
or Holders claiming indemnification, prior to the time such underwriter sent
written confirmation of or the Holders made such sale to the person alleging
such statement, alleged statement, omission or alleged omission, does not
contain such statement, alleged statement, omission or alleged omission and a
copy of such final prospectus or such prospectus as amended or supplemented,
respectively, shall not have been sent or given to such person; and provided,
further, that in no case shall Citadel be liable for amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the written consent of Citadel, which consent shall not be
unreasonably withheld.
To the extent permitted by law, each selling Holder will indemnify and hold
harmless Citadel, each of its directors, each of its officers who have signed
the registration statement and any underwriters, against any losses, claims,
damages or liabilities (joint or several) to which Citadel or any such director,
officer, controlling person or underwriter may become subject, under the Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by or on behalf of such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by Citadel or any such director,
officer, controlling person or underwriter in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 1.8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of each Holder, which consent
shall not be unreasonably withheld; provided further that, in no event shall any
indemnity under this Section 1.8(b) exceed the net proceeds from the offering
received by such Holder.
Promptly after receipt by an indemnified party under this Section 1.8 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.8, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually reasonably satisfactory to the
parties; provided, however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.
In order to provide for just and equitable contribution under the Act in any
case in which (i) any indemnified party makes claim for indemnification pursuant
to this Section 1.8, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact the
express provisions of this Section 1.8 provide for indemnification, or (ii)
contribution under the Act may be required on the part of any indemnified party,
then the indemnifying party in lieu of indemnifying such indemnified party
hereunder shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
parties on the one hand and of the indemnified parties 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 fault of the indemnifying parties and of the
indemnified parties 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' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties further agree that it would not be just and equitable if
contribution pursuant to this Section 1.8(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities or actions in respect thereof referred to in the
immediately preceding paragraph 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. Notwithstanding the
provisions of this Section 1.8(d), in no event shall any contribution under this
Section 1.8(d) exceed the net proceeds from the offering received by such
Holder. No person guilty of fraudulent misrepresentations (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
The obligations of Citadel and the Holders under this Section 1.8 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Article One.
1.8 Assignment of Registration Rights. The rights to cause Citadel to
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register Registrable Securities pursuant to this Article One may be assigned by
a Holder to any transferee or assignee of any amount of such securities or
pursuant to the laws of descent and distribution; provided, in each case that
(i) Citadel is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(ii) such assignment shall be effective only if, immediately following such
transfer, the further disposition of such securities by the transferee or
assignee is restricted under the Act; and (iii) the transferee or assignee
agrees in writing to assume all the obligations of the transferor under this
Article One with respect to the Shares so transferred.
1.9 Limitations on Subsequent Registration Rights. From and after the
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date of this Agreement, Citadel shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of Citadel
which would allow such holder or prospective holder to include such securities
in any registration, filed under Section 1.2 hereof, unless, under the terms of
such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of its securities
will not reduce the amount of the Registrable Securities of the Holders which is
included.
1.10 Amendment of Registration Rights. Any provision of this Article One
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may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of Citadel and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 1.11 shall be binding upon each Holder of Registrable Securities,
each future holder of all such securities and Citadel.
GENERAL PROVISIONS
1.11 General Provisions.
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(h) Subject to Section 1.4(i), all notices, requests, demands or other
communications required or authorized or contemplated to be given by this
Agreement shall be in writing and shall be deemed to have been duly given, made
and received when delivered against receipt, upon receipt of a facsimile
transmission, when deposited in the United States mails (first class postage
prepaid) or when deposited with Federal Express, and addressed as provided in
subsection 11.3 of the Merger Agreement or to such other address and fax number
as any of the parties hereto may from time to time designate in writing, prior
to the giving of such notice.
(i) Except as set forth in Article One, no amendment or waiver of any
provision this Agreement shall in any event be effective, unless the same shall
be in writing signed by the parties hereto, and then such amendment, waiver or
consent shall be effective only in a specific instance and for the specific
purpose for which given.
(j) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.
(k) Except as set forth in Article One, this Agreement shall not be
assigned by any party without the prior written consent of the other party
hereto.
(l) This Agreement and the documents and agreements referred to herein
contain the entire understanding among the parties with respect to the
transactions contemplated hereby and supersede all prior and contemporaneous
agreements and understandings whether oral or written, relating to the subject
matter hereof.
(m) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, notwithstanding any New York or other
conflict of law provisions to the contrary.
(n) Each party hereto shall execute and deliver such further agreements
and instruments, and take such further actions, as the other party may
reasonably request in order to carry out the purpose and intent of this
Agreement.
(o) Other than as specifically provided herein, each party shall bear its
own costs and expenses (including fees and disbursements of legal counsel)
incurred in connection with the consummation of the transactions provided for
herein.
(p) No party, nor its respective counsel, shall be deemed the drafter of
this Agreement for purposes of construing the provisions of this Agreement, and
all language in all parts of this Agreement shall be construed in accordance
with its fair meaning, and not strictly for or against any party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.
CITADEL HOLDING CORPORATION
By: /s/ Xxxxx Xxxxxxxx
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Name: S. Xxxxx Xxxxxxxx
Title: Vice-Chairman
/s/ Xxxxxxx X. Xxxxxx
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/s/ Xxxxx X. Xxxxxx
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