Exhibit 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of May 3,
1999, is made between Hilb, Xxxxx and Xxxxxxxx Company, a Virginia corporation
(the "Company"), PM Holdings, Inc., a Connecticut corporation ("Holdings"), and
Phoenix Home Life Mutual Insurance Company, a New York life insurance company
("PHL").
W I T N E S S E T H:
WHEREAS, the Company, Holdings, PHL and Xxxxxx X. Xxxxxxx, III entered into
a Stock Purchase Agreement dated March 29, 1999 (the "Stock Purchase
Agreement"), under which the Company agreed to acquire from Holdings and Xxxxxx
X. Xxxxxxx, III all of the issued and outstanding shares of the capital stock of
American Phoenix Corporation, a Connecticut corporation ("APC"); and
WHEREAS, pursuant to the Stock Purchase Agreement, (i) Holdings acquired
865,042 shares of the Company's Common Stock (as hereinafter defined) and
$22,000,000 principal amount of the Company's Subordinated Debentures (as
hereinafter defined), and (ii) PHL acquired $10,000,000 principal amount of the
Company's Subordinated Debentures; and
WHEREAS, the Subordinated Debentures acquired by Holdings and PHL pursuant
to the Stock Purchase Agreement are convertible into shares of Common Stock
pursuant to the terms of the Subordinated Debentures; and
WHEREAS, the Company has agreed to enter into this Agreement to provide
certain registration rights to Holdings in order to facilitate the distribution
of the shares of Common Stock acquired by Holdings pursuant to the Stock
Purchase Agreement and any shares of Common Stock that may be acquired by
Holdings, PHL or their Affiliates upon conversion of the Subordinated
Debentures.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Stock Purchase Agreement, the Company, Holdings and PHL
hereby agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise specified herein, capitalized terms used in this
Agreement shall have the respective meanings assigned to such terms in the Stock
Purchase Agreement. For purposes of this Agreement, the following terms have the
following meanings:
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(a) "Affiliate" shall mean, as to any specified Person, each other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with that specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, or by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, the following shall not be deemed to
be an Affiliate of Holdings or PHL for purposes of this Agreement: (i) Phoenix
Investment Partners, Ltd., a Delaware corporation, and its subsidiaries (or any
successor thereof), and (ii) any Person registered as an investment company
under the Investment Company Act of 1940, as amended.
(b) "Blue Sky Filing" shall mean a filing made in connection with the
registration or qualification of the Registrable Shares under a particular
state's securities or blue sky laws.
(c) "Common Shares" shall mean the 865,042 shares of Common Stock that
Holdings acquired from the Company pursuant to the Stock Purchase Agreement and
such additional shares of Common Stock that the Company may issue with respect
to such shares pursuant to any stock splits, stock dividends, recapitalizations,
restructurings, reclassifications or similar transactions.
(d) "Common Stock" shall mean the Common Stock, without par value, of the
Company.
(e) "Effective Period," with respect to the Registrable Shares, shall mean
the period from the date of effectiveness of the Registration Statement relating
to the Registrable Shares under Section 2.3 below to the date that is two years
from the date of such effectiveness; PROVIDED, that, for each Holdback Period
required by the Company under Article III of this Agreement and for each
Discontinuance Period (as defined in Section 2.5(k) below), the Effective Period
shall be extended by the number of days during which the applicable Holdback
Period or Discontinuance Period was in effect.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "NYSE" shall mean the New York Stock Exchange.
(h) "Person" shall have the meaning set forth in Section 3(a)(9) of the
Exchange Act as in effect on the date of this Agreement, and shall include,
without limitation, corporations, partnerships, limited liability companies and
trusts.
(i) "Prospectus" shall mean the prospectus included in a Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and
all other amendments and supplements to such prospectus, including
post-effective amendments,
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and all material incorporated by reference or deemed to be incorporated by
reference in any such prospectus.
(j) "Registrable Shares" shall mean collectively (i) the Common Shares and
(ii) the aggregate number of shares of Common Stock into which the Subordinated
Debentures are convertible pursuant to the terms of the Subordinated Debentures
and such additional shares of Common Stock that the Company may issue with
respect to such shares pursuant to any stock splits, stock dividends,
recapitalizations, restructurings, reclassifications or similar transactions.
(k) "Registration Statement" shall mean a registration statement of the
Company under the Securities Act that covers the resale of the Registrable
Shares pursuant to the terms of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
(l) "SEC" shall mean the Securities and Exchange Commission.
(m) "Securities Act" shall mean the Securities Act of 1933, as amended.
(n) "Subordinated Debentures" shall mean the Company's 5.25% Convertible
Subordinated Debentures (Due 2014), in the aggregate principal amount of
$32,000,000.
(o) "Voting and Standstill Agreement" shall mean the Voting and Standstill
Agreement, dated May 3, 1999, executed by the Company, Holdings and PHL in
connection with the Stock Purchase Agreement.
ARTICLE II
REGISTRATION OF SECURITIES
SECTION 2.1. SECURITIES SUBJECT TO THIS AGREEMENT. The securities entitled
to the benefits of this Agreement are the Registrable Shares. For the purposes
of this Agreement, one or more of the Registrable Shares will no longer be
subject to this Agreement when and to the extent that (i) a Registration
Statement covering such Registrable Shares has been declared effective under the
Securities Act and such Registrable Shares have been sold pursuant to such
effective Registration Statement, (ii) such Registrable Shares are distributed
to the public pursuant to Rule 144 under the Securities Act, (iii) such
Registrable Shares shall have been otherwise transferred or disposed of, new
certificates therefor not bearing a legend restricting further transfer or
disposition shall have been delivered by the Company and, at such time,
subsequent transfer or disposition of such securities shall not require
registration or qualification of such Registrable Shares under the Securities
Act or any similar state law then in force, or (iv) such Registrable Shares have
ceased to be outstanding.
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SECTION 2.2. REGISTRATION RIGHTS. Holdings may exercise the demand and
piggy-back registration rights to which it is entitled under this Agreement only
at a time at which the Holdings Ownership Percentage (as such term is defined in
the Voting and Standstill Agreement) exceeds 10% or Holdings is otherwise deemed
by the Company to be an Affiliate of the Company. Holdings may not exercise any
such rights after May 3, 2014.
SECTION 2.3. DEMAND REGISTRATION.
(a) Holdings shall have the right, subject to Section 2.2 above, to make
one written request to the Company for the registration of all of the
Registrable Shares subject to this Agreement that are beneficially owned by
Holdings, PHL and their Affiliates at the time of the request. The Company shall
not be obligated to register any of the Registrable Shares held by an Affiliate
of Holdings or PHL unless and until such Affiliate shall have agreed in writing
to indemnify the Company pursuant to Section 4.2 of this Agreement.
(b) Upon the receipt of the request described in Section 2.3(a) above, the
Company shall (i) within 45 days of such request, file a Registration Statement
with the SEC under the Securities Act to register the resale of the Registrable
Shares as set forth in such request and (ii) use its best efforts to cause such
Registration Statement to become effective as soon as practicable after the
filing thereof with the SEC. On or before the Closing Date, the Company shall
have listed on the NYSE, on a when issued basis, the Registrable Shares.
(c) The Company shall use its best efforts to maintain the effectiveness of
the Registration Statement relating to the Registrable Shares, and maintain the
listing of such shares, as applicable, on the NYSE or any exchange or automated
interdealer quotation system on which the Common Stock is then listed or quoted,
during the Effective Period.
(d) If the Company is required to effect a Registration Statement pursuant
to this Section 2.3, the Company may, in its discretion, include securities,
other than Registrable Shares, among the securities covered by such
registration.
(e) The Company shall not be required to effect more than one registration
under this Section 2.3.
SECTION 2.4 PIGGY-BACK REGISTRATION.
(a) In the event that the Company shall propose to file a registration
statement under the Securities Act relating to a public offering by or through
one or more underwriters of shares of Common Stock for the Company's own account
or for the account of any holder of shares of Common Stock other than Holdings,
PHL or any of their Affiliates (a "Selling Shareholder") and on a form and in a
manner that would permit the registration of any of the Registrable Shares for
sale to the public under the Securities Act, the Company shall (i) give written
notice to Holdings of its intention to do so and of the right of Holdings,
subject to Section 2.2 above, to have any or all of the Registrable Shares
subject to this Agreement that are beneficially owned by Holdings, PHL and their
Affiliates at the time of such notice included among the securities to be
covered by
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such registration statement and (ii) at the written request of Holdings given to
the Company within 20 days after the Company provides such notice, use its best
efforts to include among the securities covered by such registration statement
the number of such Registrable Shares that Holdings shall have requested be so
included (subject, however, to reduction in accordance with Section 2.4(b)
below). None of Holdings, PHL and their Affiliates, however, shall be entitled
to participate in any offering pursuant to this Section 2.4(a) unless and until
Holdings, PHL, if participating, and any participating Affiliate have entered
into an underwriting or other agreement with such underwriter or underwriters
for such offering in such customary form as such underwriter or underwriters
shall reasonably determine.
(b) Holdings may include Registrable Shares in any registration statement
relating to any offering pursuant to Section 2.4(a) above to the extent that the
inclusion of such shares shall not reduce the number of shares of Common Stock
to be offered and sold by the Company or the Selling Shareholder, as the case
may be. If the lead managing underwriter selected by the Company for any such
offering determines that marketing factors require a limitation on the number of
Registrable Shares to be offered and sold by Holdings, PHL and their Affiliates
in such offering, there shall be included in such offering only that number of
Registrable Shares, if any, that such lead managing underwriter reasonably and
in good faith believes will not jeopardize the success of the offering of all
shares of Common Stock that the Company or the Selling Shareholder, as the case
may be, desires to sell for its own account. In such event and provided that the
lead managing underwriter has so notified the Company in writing, the shares of
Common Stock to be included in such offering shall consist of (i) the securities
that the Company or the Selling Shareholder, as the case may be, proposes to
sell, and (ii) the number, if any, of Registrable Shares requested to be
included in such registration that, in the opinion of such lead managing
underwriter, can be sold without jeopardizing the success of the offering of the
shares of Common Stock that the Company or the Selling Shareholder, as the case
may be, desires to sell for its own account.
(c) Nothing in this Section 2.4 shall create any liability on the part of
the Company to Holdings, PHL or any of their Affiliates if the Company for any
reason should decide not to file a registration statement proposed to be filed
under Section 2.4(a) above or to withdraw such registration statement subsequent
to its filing, regardless of any action whatsoever that Holdings may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
SECTION 2.5. REGISTRATION PROCEDURES. In order to comply with the
requirements of Sections 2.3 and 2.4 above, the Company will:
(a) prepare and file with the SEC a Registration Statement covering the
Registrable Shares on any form or forms for which the Company then qualifies and
that counsel for the Company shall deem appropriate, and which form shall be
available for the sale of the Registrable Shares
(i) in connection with the registration of the Registrable Shares
pursuant to Section 2.3 above, on a delayed or continuous basis in
accordance with Rule 415 under the Securities Act (or any successor rule);
PROVIDED, however, that the methods of distribution permitted by such
Registration Statement shall not include underwritten offerings; or
(ii) in connection with a registration that includes any Registrable
Shares pursuant to Section 2.4 above, in accordance with the intended
methods of distribution thereof.
(b) prepare and file with the SEC pre- and post-effective amendments to the
Registration Statement and such amendments and supplements to the Prospectus
used in connection therewith as may be required by the rules, regulations or
instructions applicable to the registration form utilized by the Company, or by
the Securities Act or the rules and regulations thereunder, and cause the
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and otherwise comply with the provisions of the Securities Act
with respect to the disposition of the Registrable Shares;
(c) furnish to Holdings such number of copies of the Registration Statement
and each pre- and post-effective amendment thereto, any Prospectus or Prospectus
supplement and each amendment thereto and such other documents as Holdings may
reasonably request in order to facilitate the transfer or disposition of the
Registrable Shares by Holdings;
(d) make such Blue Sky Filings, if necessary, to register or qualify the
Registrable Shares under such state securities or blue sky laws of such
jurisdictions as Holdings may reasonably request, and do any and all other acts
that may be reasonably necessary or advisable to enable Holdings to consummate
the transfer or disposition in such jurisdictions of the Registrable Shares,
except that the Company shall not for any such purpose be required (i) to
qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this Section 2.5(d), it would not be
obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction, or (iii) to consent to general service of process in any such
jurisdiction;
(e) notify Holdings, at any time when a Prospectus is required to be
delivered under the Securities Act with respect to one or more of the
Registrable Shares, of the Company's becoming aware that a Prospectus included
in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and prepare and furnish to Holdings a reasonable number of
copies of an amendment to such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(f) notify Holdings
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(1) when any Prospectus or Prospectus supplement or pre- or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when such Registration Statement or
post-effective amendment has become effective;
(2) of any request by the SEC or any other applicable regulatory
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information;
(3) of the issuance by the SEC or any other applicable regulatory
authority of any stop order of which the Company or its counsel is aware
suspending the effectiveness of the Registration Statement or any order
preventing the use of a related Prospectus, or the initiation or any threats of
any proceedings for such purpose; and
(4) of the receipt by the Company of any written notification of the
suspension of the registration or qualification of any of the Registrable Shares
for sale in any jurisdiction, or the initiation or any threats of any proceeding
for such purpose;
(g) make generally available to the Company's shareholders, as soon as
reasonably practicable, an earnings statement that shall satisfy the provisions
of Section 11(a) of the Securities Act, provided that the Company shall be
deemed to have complied with this Section 2.5(g) if it has complied with Rule
158 under the Securities Act;
(h) use its best efforts to provide a transfer agent and registrar for the
Registrable Shares covered by the Registration Statement no later than the
effective date of such Registration Statement;
(i) cooperate with Holdings to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing the
securities to be sold under the Registration Statement, and enable such
securities to be in such denominations and registered in such names as Holdings
may reasonably request;
(j) provide Holdings and any attorney, accountant or other agent retained
by Holdings (collectively, the "Inspectors") with reasonable access during
normal business hours to appropriate officers of the Company and its
subsidiaries to ask questions and to obtain information that any such Inspector
may reasonably request and make available for inspection all financial and other
records, pertinent corporate documents and properties of any of the Company and
its subsidiaries (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility; PROVIDED,
however, that the Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors in writing are confidential
shall not be disclosed to any Inspector unless such Inspector signs or is
otherwise bound by a confidentiality agreement reasonably satisfactory to the
Company; and
(k) in the event of the issuance of any stop order of which the Company or
its counsel is aware suspending the effectiveness of the Registration Statement
or any order suspending or
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preventing the use of any related Prospectus or suspending the registration or
qualification of any Registrable Shares for sale in any jurisdiction, the
Company promptly will use its best efforts to obtain its withdrawal.
Holdings shall furnish to the Company in writing such information regarding
Holdings, PHL and their Affiliates as is required to be disclosed pursuant to
the Securities Act. Holdings agrees to notify the Company promptly of any
inaccuracy or change in information previously furnished by Holdings to the
Company or of the happening of any event in either case as a result of which the
Registration Statement, a Prospectus, or any amendment or supplement thereto
contains an untrue statement of a material fact regarding Holdings, PHL or any
of their Affiliates or omits to state a material fact regarding Holdings, PHL or
any of their Affiliates required to be stated therein or necessary to make the
statements therein not misleading and to furnish promptly to the Company any
additional information required to correct and update any previously furnished
information or required so that such Registration Statement, Prospectus, or
amendment or supplement, shall not contain, with respect to Holdings, PHL or any
of their Affiliates, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Holdings agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Sections 2.5(e) or (k) above,
Holdings will forthwith discontinue (and cause any Affiliate, and PHL and any of
its Affiliates, to discontinue) the transfer or disposition of any Registrable
Shares pursuant to the Prospectus relating to the Registration Statement
covering such Registrable Shares until Holdings' receipt of the copies of the
amended or supplemented Prospectus contemplated by Section 2.5(e) or the
withdrawal of any order contemplated by Section 2.5(k), and, if so directed by
the Company, Holdings will deliver to the Company all copies, other than
permanent file copies then in Holdings' possession, of the Prospectus covering
such Registrable Shares at the time of receipt of such notice. The period during
which any discontinuance under this paragraph is in effect is referred to herein
as a "Discontinuance Period."
SECTION 2.6. REGISTRATION EXPENSES.
(a) In connection with the registration of the Registrable Shares pursuant
to Section 2.3 above, the Company will pay any and all out-of-pocket expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, (i) all registration and filing fees with the SEC
relating to the shares of Common Stock into which the Subordinated Debentures
are convertible pursuant to the terms of the Subordinated Debentures, (ii) all
fees and expenses of complying with state securities or blue sky laws, (iii) all
printing and delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of the Registrable Shares on the NYSE, or any other
exchange or automated interdealer quotation system as then applicable, (v) the
fees and disbursements of the Company's counsel and of its independent public
accountants, and (vi) the fees and expenses of any special experts retained by
the Company in connection with the requested registration, and Holdings shall
pay any and all out-of-pocket expenses incurred by Holdings, including, without
limitation, (x) all registration and filing fees with the SEC relating to the
Common Shares, (y) all fees or disbursements of
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counsel to Holdings and (z) all brokerage commissions, fees and expenses and all
transfer taxes and documentary stamp taxes, if any, relating to the sale or
disposition of the Registrable Shares.
(b) In connection with a registration that includes any Registrable Shares
pursuant to Section 2.4 above, Holdings will pay any and all out-of-pocket
expenses attributable to such Registrable Shares, including, without limitation,
(i) all registration and filing fees with the SEC and the National Association
of Securities Dealers, Inc., (ii) all fees and expenses associated with
qualifying the Registrable Shares with state securities or blue sky laws, (iii)
any fees or disbursements of counsel to Holdings, and (iv) any brokerage
commissions and fees, underwriting discounts and commissions, transfer taxes and
documentary stamp taxes, if any, relating to the sale or disposition of the
Registrable Shares.
ARTICLE III
HOLDBACK PERIOD
If one or more underwritten public offerings of shares of Common Stock
(other than the Registrable Shares) by the Company occur during the Effective
Period, then, in connection with each such public offering, the Company may
require Holdings, PHL and their Affiliates to refrain from, and Holdings, PHL
and their Affiliates will refrain from, selling any of the Registrable Shares
for a period determined by the Company but not to exceed 120 days (or such
lesser period as the Company may require its officers and directors or other
holders of shares of Common Stock to so refrain) (each such period referred to
as a "Holdback Period") so long as the Company delivers written notice to
Holdings of the Company's requirement of a Holdback Period and the length of
such Holdback Period prior to commencement of the Holdback Period.
ARTICLE IV
INDEMNIFICATION; CONTRIBUTION
SECTION 4.1. INDEMNIFICATION BY THE COMPANY. The Company will, and hereby
agrees to, indemnify and hold harmless, to the fullest extent permitted by law,
and, subject to Section 4.3 below, defend Holdings, PHL, each of their
Affiliates (i) to whom Holdings or PHL transferred Registrable Shares in a
manner permitted by the Voting and Standstill Agreement and (ii) who is listed
as a selling shareholder in the Prospectus, and their respective officers,
directors, employees, agents, representatives and each other Person, if any, who
controls Holdings within the meaning of the Securities Act (each, a "Company
Indemnitee"), against any and all losses, claims, damages, liabilities and
expenses, joint or several, to which they or any of them may become subject
under the Securities Act or any other statute or common law, including any
amount paid in settlement of any action or proceeding, commenced or threatened,
and to reimburse them for any reasonable legal or other expenses incurred by
them in connection with investigating any claims and defending any actions
(collectively, "Losses"), with respect to sales of Registrable Shares under the
Registration Statement, insofar as any Losses arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any pre- or post-effective amendment thereto or in
any Blue Sky
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Filing, or 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 (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, however,
that the indemnification agreement contained herein shall not (i) apply to
Losses arising out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Company Indemnitee from time to time
specifically for use in the Registration Statement, the Prospectus or any such
amendment or supplement thereto or any Blue Sky Filing or (ii) inure to the
benefit of any Person, to the extent that any such Loss arises out of such
Person's failure to send or give a copy of the Prospectus, as the same may be
then supplemented or amended, to the Person asserting an untrue statement or
alleged untrue statement, or omission or alleged omission, at or prior to the
written confirmation of the sale of the Registrable Shares to such Person if
such statement or omission was corrected in the Prospectus or any amendment or
supplement thereto prior to the written confirmation of the sale. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Company Indemnitee or any other Person and shall survive the
transfer of such securities by such Company Indemnitee.
SECTION 4.2. INDEMNIFICATION BY HOLDINGS. Holdings and PHL will, and hereby
agree to, indemnify and hold harmless and, subject to Section 4.3 below, defend
(in the same manner and to the same extent as set forth in Section 4.1 above),
and cause each of their Affiliates who is listed as a selling shareholder in the
Prospectus to so indemnify, hold harmless and defend, the Company and the
Company's officers, directors, employees, agents, representatives and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any such untrue statement or alleged untrue statement in,
or any such omission or alleged omission from, the Registration Statement, any
Prospectus, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by Holdings, PHL or any of their Affiliates from time
to time specifically for use in the Registration Statement, the Prospectus, and
any such amendment or supplement thereto. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or any other Person and shall survive the
transfer of such securities by Holdings and PHL. The liability of an
indemnifying party under this Section 4.2 shall be limited to the amount of the
net proceeds received by such indemnifying party upon the resale of any
Registrable Shares pursuant to the Registration Statement creating such
liability.
SECTION 4.3. NOTICES OF CLAIMS. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 4.1 and 4.2 above, such indemnified party will
give, if a claim in respect thereof is to be made against an indemnifying party,
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Article IV, except
to the extent
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that the indemnifying party is actually prejudiced in any material respect by
such failure to give notice. In case any such action is brought against an
indemnified party, the indemnifying party shall be entitled to participate in
and, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
reasonable investigation. If the indemnifying party advises an indemnified party
that it will contest a claim for indemnification hereunder, or fails, within 30
days of receipt of any indemnification notice to notify, in writing, such Person
of its election to defend, settle or compromise, at its sole cost and expense,
any action, proceeding or claim (or discontinues its defense at any time after
it commences such defense), then the indemnified party may, at its option,
defend, settle or otherwise compromise or pay such action or claim in each case
at the indemnifying party's expense. In any event, unless and until the
indemnifying party elects in writing to assume and does so assume the defense of
any such claim, proceeding or action, the indemnified party's reasonable costs
and expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party that relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
informed at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense, except that the indemnifying party shall be liable for such reasonable
costs and expenses if, in such indemnified party's reasonable judgment, a
conflict of interest between such indemnified and indemnifying parties may exist
as described above. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party informed at all times as to
the status of the defense; PROVIDED, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; PROVIDED, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the written consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
general written release from all liability with respect to such claim or
litigation.
SECTION 4.4. INDEMNIFICATION PAYMENTS. The indemnification required by this
Article IV shall be made by periodic payments of the amount thereof during the
course of the investigation or defense as and when bills are received or Losses
are incurred, subject to the receipt of such documentary support therefor as the
indemnifying party may reasonably request.
(Page 52 of 58 pages)
SECTION 4.5. CONTRIBUTION. If the indemnification provided for in this
Article IV is unavailable to or insufficient to hold harmless a party otherwise
entitled to be indemnified thereunder in respect to any Losses referred to
therein, then the parties required to provide indemnification under this Article
IV shall contribute to the amount paid or payable by such party as a result of
Losses in such proportion as is appropriate to reflect the relative fault of
each such indemnifying party in connection with the statements or omissions that
resulted in such Losses. The relative fault of each indemnifying party shall be
determined by reference to whether the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, Holdings and PHL
agree that it would not be just and equitable if contributions pursuant to this
Section 4.5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this Section 4.5. No person guilty of fraudulent misrepresentation
(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.
SECTION 4.6. OTHER RIGHTS AND LIABILITIES. The indemnity and contribution
agreements contained herein shall be in addition to (i) any cause of action or
similar right of the indemnified party against the indemnifying party or others
and (ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
ARTICLE V
RULE 144 REPRESENTATIONS
The Company covenants that, for the time that the Holdings Ownership
Percentage (as such term is defined in the Voting and Standstill Agreement)
exceeds 10% or Holdings is otherwise deemed by the Company to be an Affiliate of
the Company, it will use its best efforts to:
(i) file with the SEC all reports and other documents required to be
filed by the Company under the Exchange Act and the rules and regulations
promulgated thereunder;
(ii) if not required to file such reports and documents referred to in
subsection (i) above, keep publicly available certain information regarding
the Company, as contemplated by Rule 144(c)(2) under the Securities Act;
and
(iii) take all other actions reasonably necessary to enable Holdings,
PHL and their Affiliates to sell the Registrable Shares without
registration under the Securities Act within the limitation of the
exemption provided by Rule 144 under the Securities Act.
(Page 53 of 58 pages)
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to the Company, Hilb, Xxxxx and Xxxxxxxx Company
to it at: 0000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx., Esquire
If to Holdings PM Holdings, Inc.
or PHL, to them at: Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esquire
Phoenix Home Life Mutual Insurance Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Executive Vice President and
Chief Financial Officer
With a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esquire
(Page 54 of 58 pages)
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three Business
Days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
SECTION 6.2. AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Holdings and by the Company following approval
thereof by a majority of the Continuing Directors (as such term is defined in
the Voting and Standstill Agreement).
SECTION 6.3. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; PROVIDED that no party may assign
this Agreement without the other party's prior written consent, which consent
will not be required in the event of the transfer of all of the Registrable
Shares beneficially owned by Holdings in accordance with Sections 4.1(g) or
4.1(h) of the Voting and Standstill Agreement.
SECTION 6.4. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement and the Stock Purchase Agreement.
SECTION 6.5. SPECIFIC PERFORMANCE. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
SECTION 6.6. REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
SECTION 6.7. NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and
(Page 55 of 58 pages)
any custom or practice of the parties at variance with the terms hereof, shall
not constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
SECTION 6.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Article IV
above, this Agreement is not intended to be for the benefit of and shall not be
enforceable by any Person who or which is not a party hereto.
SECTION 6.9. CONSENT TO JURISDICTION. Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits, and agrees to cause each of
its Affiliates to submit, to the jurisdiction of the federal courts located
either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and in the event that such federal courts shall not have subject
matter jurisdiction over the relevant proceeding, then of the state courts
located either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, for the purpose of any Action (as such term is defined in the Stock
Purchase Agreement) arising out of or based upon this Agreement or relating to
the subject matter hereof or the transactions contemplated hereby, (ii) hereby
waives, and agrees to cause each of its Affiliates to waive, to the extent not
prohibited by applicable law, and agrees not to assert, and agrees not to allow
any of its Affiliates to assert, by way of motion, as a defense or otherwise, in
any such Action, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution, that any such proceeding brought in one of the above-named courts
is improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (iii) hereby agrees not to commence or to
permit any of its Affiliates to commence any Action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before one of
the above-named courts nor to make any motion or take any other action seeking
or intending to cause the transfer or removal of any such Action to any court
other than one of the above-named courts whether on the grounds of inconvenient
forum or otherwise. Each party hereby consents to service of process in any such
proceeding in any manner permitted by Virginia or Connecticut law, as the case
may be, and agrees that service of process by registered or certified mail,
return receipt requested, at its address specified pursuant to Section 6.1 above
is reasonably calculated to give actual notice. Notwithstanding anything
contained in this Section 6.9 to the contrary with respect to the parties' forum
selection, if an Action is filed against a party to this Agreement, including
its Affiliates, by a person who or which is not a party to this Agreement, an
Affiliate of a party to this Agreement, or an assignee thereof (a "Third Party
Action"), in a forum other than the federal district court or a state court
located in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and such Third Party Action is based upon, arises from, or
implicates rights, obligations or liabilities existing under this Agreement or
acts or omissions pursuant to this Agreement, then the party to this Agreement,
including its Affiliates, joined as a defendant in such Third Party Action shall
have the right to file cross-claims or third-party claims in the Third Party
Action against the other party to this Agreement, including its Affiliates, and
even if not a defendant therein, to intervene in such Third Party Action with or
without also filing cross-claims or third-party claims against the other party
to this Agreement, including its Affiliates.
(Page 56 of 58 pages)
SECTION 6.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
SECTION 6.11. NAME, CAPTIONS. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
SECTION 6.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
SECTION 6.13. EXPENSES. Each of the parties hereto shall bear their own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
SECTION 6.14. SEVERABILITY. In the event that any provision of this
Agreement would, under applicable law, be invalid or unenforceable in any
respect, such provision shall (to the extent permitted under applicable law) be
construed by modifying or limiting it so as to be valid and enforceable to the
maximum extent compatible with, and possible under, applicable law. The
provisions of this Agreement are severable, and in the event that any provision
hereof should be held invalid or unenforceable in any respect, it shall not
invalidate, render unenforceable or otherwise affect any other provision hereof.
[SIGNATURES ON NEXT PAGE]
(Page 57 of 58 pages)
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Registration Rights Agreement to be executed, as of the
date first above written by their respective officers thereunto duly authorized.
HILB, XXXXX AND XXXXXXXX COMPANY
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
PM HOLDINGS, INC.
By: /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Vice President/Chief Financial Officer
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: /S/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
(Page 58 of 58 pages)
