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EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of _________, 1999, by and between The Source
Information Management Company, a Missouri corporation (the "Company"), and
Xxxxxxxx X. Xxxxxxx ("Ledecky"), Xxxxx X. Xxxxxx and Xxxxx Xxxxxx (Messrs.
Ledecky, Gillis and Weiner hereinafter collectively referred to as the
"Shareholders").
Recitals
WHEREAS, the Company and the Shareholders have entered into that
certain agreement and plan of merger by and among the Company, the Shareholders,
U.S. Marketing Services, Inc. ("Target") and Source U.S. Marketing Co.("S-US")
dated January 7, 1999 (the "Merger Agreement") pursuant to which Target will be
merged with and into S-US and the Shareholders will receive an aggregate of
1,926,719 shares of the Company's common stock, $.01 par value per share (the
"Common Stock") and 1,473,281 shares of the Company's Series A Convertible
Preferred Stock, $.01 par value per shares (the "Preferred Stock").
The Company has agreed to extend, and the Shareholders desire to
accept, registration rights with respect to the shares of the Company's Common
Stock issued to the Shareholders pursuant to the Merger Agreement and the shares
of Common Stock that may be issued to the Shareholders upon conversion of the
Preferred Stock.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Shareholders agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(b) :Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(c) "Register," "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement with
the Commission in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement, and compliance
with applicable state securities laws of such states in which the Shareholders
notify the Company of his intention to offer Registrable Securities.
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(d) "Registrable Securities" shall mean all of the (i) shares
of the Company's Common Stock issued to the Shareholders pursuant to the Merger
Agreement, or (ii) shares of the Company's Common Stock issued to the
Shareholders upon conversion of his shares of the Company's Preferred Stock, or
(iii) stock issued in respect of stock referred to in (i) and (ii) above in any
reorganization or (iv) stock issued in respect of the stock referred to in (i),
(ii) or (iii) as a result of a stock split, stock dividend, recapitalization or
combination.
(e) "Rule 144" shall mean Rule 144 under the Securities Act or
any successor or similar rule as may be enacted by the Commission from time to
time, but shall not include Rule 144A.
(f) "Rule 144A" shall mean Rule 144A under the Securities Act
or any successor or similar rule as may be enacted by the Commission from time
to time, but shall not include Rule 144.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations
thereunder, all as the same shall be in effect at the time.
Section 2. Restrictions on Transferability.
(a) The Registrable Securities shall not be sold, assigned,
transferred or pledged except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. The Shareholders will cause any proposed purchaser, assignee,
transferee, or pledgee of the Registrable Securities held by them to agree to
take and hold such securities subject to the provisions and upon the conditions
specified in this Agreement.
(b) Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of Section 2(c) below) be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws or
otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENTS
COVERING THE PURCHASE OF THESE SHARES AND RIGHTS TO REGISTER
THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS
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CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
The Shareholders consent to the Company making a notation on its records and
giving instructions to any transfer agent of the Registrable Securities in order
to implement the restrictions on transfer established in this Agreement.
(c) Each Shareholder agrees not to make any disposition of all
or any portion of any Registrable Securities unless and until:
(i) There is in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) The Shareholder shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, which
proposed disposition may not be made prior to the first anniversary of this
Agreement and, if reasonably requested by the Company, the Shareholder shall
furnish the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition shall not require registration of such shares
under the Securities Act. It is agreed, however, that no such opinion will be
required for Rule 144 or Rule 144A transactions.
(iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall
be necessary for (A) a transfer by a Shareholder to a member of his immediate
family, to trusts for the benefit of members of his immediate family, (B) the
pledge or hypothecation of the Registrable Securities as security for
obligations, and (C) with the Company's prior consent, which shall not be
unreasonably withheld, a transfer by Ledecky to Ironbound Partners or another
investment partnership controlled by him; provided, that such transferee or
pledgee agrees in writing to be subject to all of the terms hereof and that any
such transferee or pledgee of Ledecky agrees in writing to be subject to all of
the terms of the Voting Agreement of even date herewith between Ledecky and S.
Xxxxxx Xxxxxx III to the same extent as if he, she or it were Ledecky.
Section 3. Piggyback Registration.
(a) If, at any time or from time to time, the Company shall
determine to register any of its equity securities, for its own account or the
account of any of its shareholders, other than a registration on Form S-4 or
Form S-8, or any successor form thereto, the Company will:
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(i) give to the Shareholders written notice thereof
as soon as practicable prior to filing the registration statement; and
(ii) include in such registration, and in any
underwriting involved therein, all of the Registrable Securities specified in a
written request by the Shareholders, made within fifteen (15) days after receipt
of such written notice from the Company, except as set forth in subsection (b)
below.
(b) Notwithstanding any other provision of this Section 3, if
the managing underwriter determines that marketing factors require a limitation
of the number of shares to be underwritten, the managing underwriter may limit
the number of Registrable Securities to be included in the registration and
underwriting (provided that no shares held by persons with piggyback
registration rights granted after the date of this Agreement are included in the
registration and underwriting). The Company shall so advise the Shareholders,
and the number of shares of Registrable Securities and other securities that may
be included in the registration and underwriting shall be allocated among all
holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by the Shareholders and other securities held by
other holders at the time of filing the registration statement. If any
Shareholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.
Section 4. Demand Registration. The Shareholders shall have the right
at any time or from time to time but not more than three times collectively and
only after the second anniversary of this Agreement to request registrations of
the Registrable Securities on Form S-3, or any successor form thereto. All
requests for registration shall be in writing and shall state the number of
shares of Registrable Securities to be disposed of and the intended method of
disposition. The Company shall, if it is then eligible to register its
securities on such form, file a registration statement on Form S-3 covering the
Registrable Securities so requested to be registered as soon as practical, but
in any event within sixty (60) days after receipt of the request from the
Shareholders, and shall use its reasonable best efforts to have such
registration statement promptly declared effective by the Commission subject to
the following:
(a) The Company shall not be required to effect registration
under this Section 4 on any form other than Form S-3, or any successor forms
thereto, during the term of this Agreement.
(b) The Company shall not be required to file a registration
statement pursuant to this Section 4 within ninety (90) days of the effective
date of any registration referred to in Section 3 above.
(c) The Company shall not be required to file a registration
statement pursuant to this Section 4 unless the Shareholder proposes to dispose
of shares of Registrable Securities
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having an aggregate disposition price (before deduction of underwriting
discounts and expenses of sale) of at least $1,000,000.
(d) The Company shall not be required to file more than two
registration statements pursuant to this Section 4 within any twelve-month
period.
Section 5. Expenses of Registration. In addition to the fees and
expenses contemplated by Section 6 hereof, all expenses incurred in connection
with the registrations pursuant to Sections 3 and 4 hereof, including without
limitation all registration, filing and qualification fees, printing expenses,
and fees and disbursements of counsel for the Company, shall be borne by the
Company, except that the Company shall not be required to pay underwriters'
fees, discounts or commissions relating to the sale of Registrable Securities.
Section 6. Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep the
Shareholders advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to Sections 3 and 4
continuously effective for a period of one hundred eighty (180) days, or, in
each case, such reasonable period necessary to permit the Shareholders to
complete the distribution described in the registration statement relating
thereto, which ever is less;
(b) promptly prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act, and to keep such registration statement effective for
that period of time specified in Section 6(a) above;
(c) furnish such number of prospectuses and other documents
incident thereto as the Shareholders from time to time may reasonably request;
(d) use reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of any such registration statement, or
the lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;
(e) cause all Registrable Securities covered by such
registrations to be listed on each securities exchange, including NASDAQ, on
which similar securities issued by the Company are then listed;
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(f) make available for inspection by the Shareholders, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by the
Shareholders or any underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by the Shareholders, or any such underwriter,
attorney, accountant or agent in connection with such registration statement;
(g) notify the Shareholders, at any time a prospectus covered
by such registration statement is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and
(h) take such other actions as shall be reasonably requested
by the Shareholders.
Section 7. Indemnification.
(a) In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Sections 3 or 4, the Company
will indemnify and hold harmless the Shareholders, each underwriter of such
Registrable Securities thereunder and each other person, if any, who controls
such underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, to which the Shareholders, underwriter or
control person may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement (or alleged untrue
statement) of any material fact contained in any registration statement under
which such Registrable Securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon 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 any violation by
the Company of any rule or regulation promulgated under the Securities Act or
any state securities law applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, and
will reimburse the Shareholders, and each such underwriter and each person who
controls each underwriter, for any reasonable legal and any other expenses
incurred in connection with investigating, defending or settling any such claim,
loss, damage, liability or action, provided that the Company will not be liable
in any such case to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by the
Shareholders or underwriter specifically for use therein.
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(b) In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Sections 3 or 4, the
Shareholders will, severally but not jointly, indemnify and hold harmless the
Company, against any losses, claims, damages or liabilities to which the Company
may become subject under the Securities Act or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement (or alleged untrue statement) of any
material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, and will reimburse the Company for any
reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) was
made in reliance upon and in conformity with written information furnished to
the Company by the Shareholders specifically for use therein; provided, however,
that the total amount for which any Shareholder shall be liable under this
Section 6(b) shall not in any event exceed the aggregate proceeds received by
such Shareholder from the sale of Registrable Securities in such registration.
(c) Each party entitled to indemnification under this Section
7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party, 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 hereunder, except to the extent that such
failure resulted in actual detriment to the Indemnifying Party. 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 of such claim or litigation.
(d) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other
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relevant equitable considerations. The relevant fault of the Indemnifying Party
and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount any Shareholder
shall be obligated to contribute pursuant to this Section 7(d) shall be limited
to an amount equal to the proceeds to such Shareholder pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which such Shareholder has otherwise been
required to pay in respect of such loss, claim, damage, liability or action or
any substantially similar loss, claim, damage, liability or action arising from
the sale of such Registrable Securities).
(e) The indemnification provided by this Section 7 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
Section 8. Lockup Agreement.
(a) Each Shareholder agrees that in the event Registrable
Securities are included in any underwritten registration of the Company's
securities, if the Company or the managing underwriters so request in connection
with such registration, the Shareholders will not, without the prior written
consent of the Company or such underwriters, effect any public sale or other
distribution of any equity securities of the Company, including any sale
pursuant to Rule 144, during the seven (7) days prior to, and during the ninety
(90) day period subsequent to, the effective date of such underwritten
registration, except in connection with such underwritten registration; provided
that each officer and director of the Company and each other person who is also
an affiliate of the Company shall enter into similar agreements.
(b) The Company agrees not to effect any public sale or other
distributions of equity securities, or any securities convertible into or
exchangeable for such equity securities, during the seven (7) days prior to, and
during the ninety (90) day period subsequent to, the effective date of any
underwritten piggyback registration, except in connection with any such
underwritten registration.
Section 9. Rule 144 and 144A Reporting. With a view to making available
to the Shareholders the benefits of certain rules and regulations of the
Commission which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees at all times to:
(a) make and keep public information available, as those terms
are understood in Rule 144 and Rule 144A; and
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(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.
Section 10. Termination of Rights. All rights with respect to any given
Shareholder under this Agreement shall terminate upon the later to occur of: (i)
the date which is five (5) years after the closing date of the transactions
covered by the Merger Agreement or (ii) the date on which such Shareholder is no
longer deemed to be an "affiliate" of the Company, as defined in Rule 144.
Section 11. Representations and Warranties of the Company. The
Company represents and warrants to the Shareholders as follows:
(a) This Agreement has been duly executed and delivered by the
Company, has been effectively authorized by all necessary action (corporate or
otherwise), and constitutes the legal, valid and binding obligation of the
Company.
(b) Neither the execution or delivery of this Agreement by the
Company, nor the consummation by the Company of the transactions contemplated
hereby, will conflict with or result in a breach or violation of, or default
under any of the terms, conditions or provisions of (i) any material note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which the Company is a party or by which the Company or any of its assets or
properties are bound, (ii) the Company's charter documents or bylaws or (iii)
any judgment, order, injunction, decree, statute, rule or regulation applicable
to the Company or any of its properties or assets.
Section 12. Miscellaneous.
(a) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by certified or registered mail, postage prepaid, return receipt
requested, addressed as follows:
If to Ledecky: Building One Services Corporation
000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxxx X. Xxxxxxx
With copies to: Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn: X. Xxxxx Xxxx, Esq.
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If to Xxxxxx: 00-00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With copies to: Xxxxxxxx & O'Neil, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
If to Weiner: 000 Xxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
With copies to: Xxxxxxxx & X'Xxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
If to the Company: The Source Information Management Company
00000 Xxxxxxx Xxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: S. Xxxxxx Xxxxxx, CEO & Chairman
With a copy to: Armstrong, Teasdale, Schlafly & Xxxxx
Xxx Xxxxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxx, Xx., Esq.
(b) Except as provided in Section 2 hereof, this Agreement
shall not be assignable by any of the parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and permitted assigns.
(c) This Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws, but not the laws pertaining to
choice or conflicts of laws, of the State of Missouri.
(d) This Agreement may be executed in one or more counterparts
(including by facsimile), each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(e) This Agreement and the other agreements entered into by
the parties on this date contain the entire agreement between the parties hereto
with respect to the transactions contemplated herein and supersedes all previous
oral and written and all contemporaneous oral negotiations, commitments,
writings and understandings.
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(f) This Agreement may be amended only by a writing signed by
the Shareholder and the Company.
(g) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(h) Any provision to this Agreement which is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdictions or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction, so long as the
remaining provisions are sufficient to carry out the overall intentions of the
parties as evidenced hereby.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed and delivered as of the date first above written.
THE SOURCE INFORMATION MANAGEMENT
COMPANY:
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ S. Xxxxxx Xxxxxx
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XXXXXXXX X. XXXXXXX S. Xxxxxx Xxxxxx
CEO & Chairman
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
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