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EXHIBIT 4.01
REGISTRATION RIGHTS AGREEMENT
BETWEEN
XXXXXX X. XXXXXX TESTAMENTARY TRUST
AND
ST. XXX CORPORATION
Dated as of December 16, 1997
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REGISTRATION RIGHTS AGREEMENT, dated as of December 16, 1997, between
the Xxxxxx X. xxXxxx Testamentary Trust (the "Trust") and St. Xxx Corporation,
a Florida corporation (the "Company").
1. Introduction; Term of Agreement. The Trust Beneficially Owns approximately
69% of the issued and outstanding common stock of the Company (the "Common
Stock"). The Trust has determined that it is in the best interests of the Trust
to dispose of certain shares of the Common Stock of the Company Beneficially
Owned by the Trust primarily to diversify the Trust's assets and to reinvest
the proceeds from such sale in assets which produce higher current income. The
Company has proposed to the Trust that it accomplish this objective through one
or more secondary offerings of the shares it Beneficially Owns. The Company has
determined that it is in the best interests of the Company and its stockholders
that the proposed disposition of shares be effected in one or more public
offerings that will provide for broad distribution of the shares, thereby
enhancing the overall trading market for all of the issued and outstanding
shares of the Company's Common Stock. The Trust intends, subject to market
conditions and other factors, and upon consummation of a 3-for-1 split of the
Company's Common Stock to which the Trust hereby agrees, to sell not less than
3,000,000 shares (the "Shares") of the Common Stock (including any
overallotment option granted to underwriters) on a pre-stock split basis in a
public offering to be consummated as soon as practicable in 1998 (the "Initial
Sale". The Trust and the Company have agreed that it is in their mutual best
interests to enter into this Agreement to govern, among other things, certain
terms and conditions of the Initial Sale and any subsequent registered public
sales that may be considered by the Trust and/or its affiliate, The Nemours
Foundation. In connection with the Initial Sale, the Company has commenced
preparation of an appropriate registration statement covering the Shares and
has agreed to use its best efforts to file such registration statement with the
Commission under the Securities Act as soon as practicable in December 1997.
This agreement shall terminate and be of no further force and effect at such
time as either the Trust owns less than 1% of the outstanding shares of Common
Stock or the last Demand Request (as hereinafter defined) permitted by this
Agreement is effected pursuant hereto. Certain capitalized terms used in this
Agreement are defined in Section 4 hereof; references to sections shall be to
sections of this Agreement.
2. Registration under Securities Act, etc.
2.1 Registration on Request.
(a) Demand Request. Upon the written request of the Trust that the
Company effect the registration under the Securities Act of all or part of the
Registrable Securities
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Beneficially Owned by the Trust and specifying the intended method or methods
of disposition thereof and the minimum price for such Registrable Securities
acceptable to the Trust (a "Demand Request"), the Company will, subject to the
terms of this Agreement, use its best efforts to effect the registration under
the Securities Act of:
(i) the Registrable Securities which the Company has
been so requested to register by the Trust for disposition in accordance with
the intended method or methods of disposition stated in such request;
(ii) all shares of Common Stock which the Company may
elect to register in connection with the offering of Registrable Securities
pursuant to this Section 2.1, it being understood that the Company shall have
no right to elect to include shares of the Common Stock in the registration
relating to the Initial Sale; and
(iii) all shares of Common Stock which the Company may be
required to register in connection with "piggyback" or incidental registration
rights granted to any other Person, it being understood that no other Person
has any such registration rights in connection with the Initial Sale;
all to the extent requisite to permit the disposition (in accordance with the
intended method or methods of distribution specified in the Demand Request) of
the Registrable Securities and the additional shares of Common Stock, if any,
so to be registered, provided, however, that each such Demand Request shall be
for a number of shares of Common Stock which represent at least 10% of the then
outstanding shares of Common Stock, unless the Demand Request is the last
Demand Request available hereunder, in which event the Demand Request may cover
the remainder of the Registrable Securities even if such amount of Registrable
Securities is less than 10% of such then outstanding shares. Subject to the
provisions of Section 2.1(d), the Trust will have the right pursuant to this
Section 2.1(a) to make an aggregate of five Demand Requests, including the
deemed Demand Request relating to the Initial Sale referred to below in this
Section 2.1(a).
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to take any action to effect any registration requested by the Trust
pursuant to this Section 2.1(a) for a period of six months after the Company
has effected one such registration pursuant to this Section 2.1 and such
registration has been declared or ordered effective, such six month period to
commence on the date the registration statement was declared or ordered
effective. In addition, no Demand Request other than with respect to the
Initial Sale may be
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delivered prior to the expiration of the Trust's "lockup" period set forth in
the underwriting agreement for the Initial Sale.
Without limiting the generality of the foregoing, the Trust and the
Company agree that the commencement of preparation by the Company of a
registration statement under the Securities Act in connection with the Initial
Sale shall automatically constitute a Demand Request entitling the Trust to all
of the benefits of this Agreement with respect to the Initial Sale, without the
Trust being required to comply with the written notice requirements of this
Section 2.1(a) or take any further action under this Agreement with respect
thereto.
(b) Registration Statement Form. Registrations under this Section
2.1 (including any registration with respect to the Initial Sale) shall be on
such appropriate registration form of the Commission (i) as shall be selected
by the Company and as shall be acceptable to the Trust and (ii) as shall permit
the disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in the request for such registration
(it being understood that the intended method of disposition with respect to
the Initial Sale shall be a firm commitment underwritten public offering);
provided, however, that the Company shall not be required by the Trust to file
with the Commission a shelf registration under Rule 415 under the Securities
Act.
(c) Expenses. The Company will pay all Registration Expenses in
connection with any registration requested pursuant to this Section 2.1
(including any registration with respect to the Initial Sale and any
registration deemed not to be "effected" under Section 2.1), except that the
Trust shall pay only the underwriting discounts and commissions attributable to
the Registrable Securities Beneficially Owned by the Trust, the fees and
expenses of the Trust's legal counsel and financial advisors, transfer taxes,
if any, attributable to the Registrable Securities Beneficially Owned by the
Trust and with respect to any offering pursuant to this Section 2.1(a) any
"road show" expenses of the underwriters not paid by the underwriters pursuant
to the related underwriting agreement (such "road show" expenses payable by
the Trust not to exceed $200,000).
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 (including a registration statement relating to
the Initial Sale) shall not be deemed to have been effected (and therefore not
requested for purposes of the limitations in Section 2.1(a) on the number of
requests for registration that can be made pursuant to Section 2.1(a)) (i)
unless a registration statement with respect thereto has become effective,
provided that a registration which does not become effective after the Company
has filed a registration statement with respect thereto solely by reason of the
refusal to proceed
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by the Trust (other than a refusal to proceed based upon the advice of counsel
relating to a material adverse change in, or other material development
relating to, the business, properties, financial condition or results of
operations of the Company) shall be deemed to have been effected by the Company
at the request of the Trust unless the Trust shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if, after it
has become effective, such registration becomes subject to any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, or (iii) if the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than solely
by reason of some act or omission by the Trust.
(e) Selection of Underwriters. If a requested registration pursuant
to this Section 2.1 (including a registration with respect to the Initial Sale)
involves an underwritten offering, the underwriter or underwriters thereof
shall be selected by the Trust from a list of underwriters to be agreed upon by
the Trust and the Company.
(f) Priority in Requested Registrations. If a requested registration
pursuant to this Section 2.1 involves an underwritten offering, and the
managing underwriter shall advise the Company in writing (with a copy to the
Trust) that, in its opinion, the number of securities requested to be included
in such registration (including securities of the Company which are not
Registrable Securities) exceeds the number which can be sold in such offering
within the price range acceptable to the Trust as set forth in the Demand
Request, the Company will include in such registration the number of shares
which the Company is so advised can be sold, in the following order of priority
(i) first, Registrable Securities requested to be included in such registration
by the Trust, and (ii) second, subject to Section 2.1(a) hereof, securities the
Company proposes to sell and other securities of the Company included in such
registration by other holders who may have "piggyback" or incidental
registration rights, it being understood that with respect to the Initial Sale,
the Company shall have no right to sell shares of its Common Stock and there
are no shares subject to "piggyback" or incidental registration rights.
(g) Delay Periods. Notwithstanding anything herein to the contrary,
except with respect to the Initial Sale, the Company shall be entitled to
postpone the filing of any registration statement otherwise required to be
prepared and filed by the Company pursuant to this Section 2.1, or suspend the
use of any effective registration statement and related prospectus under this
Section 2.1, for a reasonable period of time, but not in excess of 60 days (a
"Delay Period"), if any
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executive officer of the Company determines that in such executive officer's
reasonable good faith judgment the registration and/or distribution of the
Registrable Securities covered or to be covered by such registration statement
and related prospectus would materially interfere with any pending material
financing, acquisition or corporate reorganization or other material corporate
development involving the Company or any of its subsidiaries or would require
premature disclosure thereof and promptly gives the Trust written notice of
such determination and an approximation of the period of the anticipated delay;
provided, however, that (i) during the first year after the consummation of the
Initial Sale, the Company may invoke only one Delay Period and (ii) thereafter
the aggregate number of days included in all Delay Periods during any
consecutive 12 months shall not exceed the aggregate of 120 days. Immediately
upon receipt of a written notice of suspension, the Trust shall cease all
disposition efforts with respect to Registrable Securities held by the Trust.
If the Company shall so postpone the filing of a registration statement, the
Trust shall have the right to withdraw the request for registration by giving
written notice within 45 days after receipt of the notice of postponement or,
if earlier, the termination of such Delay Period (and, in the event of such
withdrawal, such request shall not be counted for purposes of determining the
number of Demand Requests for registration of Registrable Securities to which
the Trust is entitled pursuant to this Section 2). The time period for which the
Company is required to maintain the effectiveness of any registration statement
shall be extended by the aggregate number of days of all Delay Periods during
such registration. The Company shall not be entitled to initiate a Delay Period
unless it shall (A) to the extent permitted by agreements with other security
holders of the Company, concurrently prohibit sales by such other security
holders under registration statements covering securities held by such other
security holders and (B) in the case of a delay relating to premature
disclosure, in accordance with the Company's policies from time to time in
effect, forbid purchases and sales in the open market by executive officers and
directors of the Company.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at any
time proposes to register any of its shares of Common Stock (other than in
connection with a registration of securities which are convertible or
exchangeable into Common Stock) under the Securities Act (other than by a
registration on Form S-4 or S-8 or any successor or similar forms and other
than pursuant to Section 2.1), whether or not for sale for its own account, it
will each such time give prompt written notice to the Trust of its intention to
do so and of the Trust's rights under this Section 2.2. Upon the written request
of the Trust made within 15 days after the receipt of any such notice (which
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request shall specify the Registrable Securities Beneficially Owned by the
Trust intended to be disposed of and the intended method or methods of
disposition thereof), the Company will, subject to the terms of this Agreement,
use its best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Trust, to the extent requisite to permit the disposition (in accordance
with the intended method or methods of distribution thereof specified in the
requests of the Trust) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register; provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any
reason either not to register or to delay registration of such securities, the
Company shall give prompt written notice of such determination to the Trust
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
the Trust to request that such registration be effected as a registration under
Section 2.1, and ((ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities, for the
same period as the delay in registering such other securities. No registration
effected under this Section 2.2 shall relieve the Company of its obligation to
effect any registration upon request under Section 2.1, nor shall any such
registration hereunder be deemed to have been effected pursuant to Section 2.1.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2,
and the Trust will pay only any underwriting discounts and commissions with
respect to the Registrable Securities Beneficially Owned by the Trust and the
fees and expenses of the Trust's legal counsel and financial advisors in
connection therewith.
(b) Priority in Incidental Registrations. If (i) a registration
pursuant to this Section 2.2 involves an underwritten offering of the
securities so being registered, whether or not for sale for the account of the
Company, to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing under underwriting terms appropriate
for such a transaction and (ii) the managing underwriter of such underwritten
offering shall inform the Company and the Trust by letter of its belief that
the number of securities requested to be included in such registration exceeds
the number which can be sold in (or during the time of) such offering, then the
Company will include in such registration:
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(i) first, all the securities the Company proposes to
sell for its own account, and
(ii) second, all Registrable Securities as to which the
Trust has made a demand for registration.
2.3 Registration Procedures. Subject to Section 2.1(a), if and whenever
the Company is required to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the Commission the requisite registration
statement to effect such registration (including such audited financial
statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter cause such registration
statement to become and remain effective for a period of at least 120 days,
provided however that the Company may discontinue any registration of its
securities which are not Registrable Securities (and, under the circumstances
specified in Section 2.2(a), its securities which are Registrable Securities)
at any time prior to the effective date of the registration statement relating
thereto;
(b) 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 keep such registration statement
effective for a period of at least 120 days and to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended method or
methods of disposition by the Trust set forth in such registration statement or
such other time as is required by the Securities Act;
(c) furnish to the Trust and its underwriter or underwriters, if
any, of the securities being sold by the Trust such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed pursuant
to Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as the Trust and its underwriter
or underwriters, if any, may reasonably request;
(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other state securities laws or
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blue sky laws of such jurisdictions as the Trust and its underwriter or
underwriters, if any, of the securities being sold by the Trust shall
reasonably request, to keep such registrations or qualifications in effect for
so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable the Trust and
its underwriter or underwriters to consummate the disposition in such
jurisdictions of the securities owned by the Trust, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subsection (d) be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(e) furnish to the Trust a signed counterpart, addressed to the
Trust and its underwriter or underwriters, if any, of:
(i) an opinion of counsel for the Company (which shall be
outside counsel if outside counsel is rendering such opinion in
the transaction and otherwise may be the Company's inside
counsel), dated the effective date of such registration
statement (or, if such registration includes an underwritten
public offering, an opinion dated the date of the closing under
the underwriting agreement), customary for a transaction of such
type, and
(ii) a "comfort" letter (or, in the case of any such Person
which does not satisfy the conditions for receipt of a
"comfort" letter specified in Statement on Auditing Standards
No. 72, an "agreed upon procedures" letter), dated the effective
date of such registration statement (or, if such registration
includes an underwritten public offering, a letter of like kind
dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified
the Company's financial statements included in such registration
statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered
to the underwriters in underwritten public offerings of securities
(with, in the case of an "agreed upon procedure" letter, such
modifications or deletions as may be required under Statement on
Auditing Standards No. 35) and, in the case of
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the accountants' letter, such other financial matters customarily
covered in a transaction of such type;
(f) notify the Trust and the managing underwriter or underwriters,
if any, promptly:
(i) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed, and,
with respect to the registration statement or any
post-effective amendment thereto, when the same has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or
for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or
the initiation of any proceedings by any Person for that purpose;
(iv) if at any time the representations and warranties of the
Company made as contemplated by Section 2.4 cease to be true and
correct; and
(v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue
sky laws of any jurisdiction or the initiation or threat of any
proceeding for such purpose;
(g) notify the Trust at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon the Company's
discovery that, or upon 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 a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and at
the request of the Trust promptly prepare and furnish to the Trust and each
underwriter or underwriters, if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such securities, such prospectus
shall not include 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
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therein not misleading in the light of the circumstances under which they were
made;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement as promptly as
practicable;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and, if required, make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first day of the Company's first full calendar
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder, and will use its best efforts to furnish to the Trust
and any underwriter or underwriters at least one business day prior to the
filing thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any amendment or supplement to
which the Trust shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations thereunder;
(j) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(k) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any of the
securities of the same class as the Registrable Securities are then listed.
The Company will not file any registration statement or amendment thereto
or any prospectus or any supplement thereto to which the Trust or its
underwriter or underwriters, if any, shall reasonably object.
The Company may require the Trust to furnish the Company such information
not inconsistent with the terms of this Agreement regarding the Trust and the
distribution of Registrable Securities as the Company may from time to time
reasonably request in writing in connection with the preparation of any
registration statement pursuant to this Agreement.
The Trust agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in paragraph (g) of this
Section 2.3, the Trust will forthwith discontinue the disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable
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Securities until the Trust's receipt of the copies of the supplemented or
amended prospectus contemplated by paragraph (g) of this Section 2.3 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in the Trust's possession of
the prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the period mentioned in paragraph (b) of this Section 2.3 shall be extended by
the length of the period from and including the date when the Trust shall have
received such notice to the date on which the Trust has received the copies of
the supplemented or amended prospectus contemplated by paragraph (g) of this
Section 2.3.
If any such registration statement refers to the Trust by name or
otherwise as the holder of any securities of the Company, then the Trust shall
have the right to require (i) the insertion therein of language, in form and
substance satisfactory to the Trust, to the effect that the holding by the
Trust of such securities does not necessarily make the Trust a "controlling
person" of the Company within the meaning of the Securities Act (if appropriate
based on the advice of the Trust's counsel and concurrence therewith by counsel
to the Company), such holding is not to be construed as a recommendation by the
Trust of the investment quality of the Company's securities covered thereby and
that such holding does not imply that the Trust will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to the Trust by name or otherwise is not required by the Securities
Act or rules and regulations promulgated thereunder and concurrence with such
position by counsel to the Company, the deletion of the reference to the Trust.
2.4 Underwritten Offerings:
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Trust pursuant to a
registration requested under Section 2.1 (including a registration statement
with respect to the Initial Sale), the Company will enter into an underwriting
or similar agreement with such underwriters for such offering, such agreement
to be satisfactory in substance and form to the Company, the Trust and the
underwriters, and to contain such representations and warranties by the Company
and the Trust and such other terms as are generally prevailing in agreements of
this type. The Trust will cooperate with the Company in the negotiation of the
underwriting or similar agreement and will give consideration to the reasonable
suggestions of the Company regarding the form thereof, provided that nothing
herein contained shall diminish the foregoing obligations of the Company.
Subject to the terms hereof, the Trust shall be a party to such underwriting
agreement. The Company hereby agrees that the Trust and The
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Nemours Foundation shall automatically have the benefit of all of the
representations and warranties by, and the other agreements on the part of, the
Company made to and for the benefit of such underwriters in connection with the
underwriting agreement. The Company shall not require the Trust to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties or agreements regarding
the Trust, the Registrable Securities Beneficially Owned by the Trust,
transactions between the Trust and its affiliates and the Trust's intended
method or methods of distribution (including lock-ups) and any other
representation required by law. In addition, the Trust shall cooperate with the
Company in an effort to provide that any such agreement will contain a
provision modifying the indemnification of the underwriter to the effect that
the Company will not be liable to any Person who participates as an underwriter
in the offering or sale of Registrable Securities with respect to any
preliminary prospectus, to the extent that any such loss, claim, damage or
liability of such underwriter results from such underwriter having sold
Registrable Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus,
if the Company has previously furnished copies thereof to such underwriter and
such final prospectus as then amended or supplemented, has corrected any such
misstatement or omission.
(b) Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its shares of Common Stock under the Securities Act
as contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by the Trust
as provided in Section 2.2 and subject to the provisions of Sections 2.2(a) and
(b), use its best efforts to arrange for such underwriters to include all the
Registrable Securities to be offered and sold by the Trust among the securities
to be distributed by such underwriters. Subject to the terms hereof, the Trust
shall be a party to the underwriting agreement between the Company and such
underwriters. The Company hereby agrees that the Trust and The Nemours
Foundation shall automatically have the benefit of all of the representations
and warranties by, and the other agreements on the part of, the Company made to
and for the benefit of such underwriters in connection with the underwriting
agreement. The Company shall not require the Trust to make any representations
or warranties to or agreements with the Company of the underwriters other than
representations, warranties of agreements regarding the Trust, the Registrable
Securities Beneficially Owned, transactions between the Trust and it affiliates
and the Trust's intended method of distribution (including lock-ups) and any
other representation required by law. In addition, the Trust shall cooperate
with the Company in an effort to provide that any such agreement will contain a
provision modifying the indemnification of the underwriter to the
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effect that the Company will not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities with respect to
any preliminary prospectus, to the extent that any such loss, claim, damage or
liability of such underwriter results from such underwriter having sold
Registrable Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus,
if the Company has previously furnished copies thereof to such underwriter and
such final prospectus as then amended or supplemented, has corrected any such
misstatement or omission.
(c) Holdback Agreements.
(i) The Trust agrees, if and to the extent so required by the
managing underwriter, not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any securities of the Company, during the seven days prior
to and the 90 days after any underwritten registration pursuant to Section 2.1
or 2.2 has become effective, except as part of such underwritten registration,
whether or not the Trust participates in such registration.
(ii) The Company agrees (X) if so required by the managing
underwriter, not to sell, make any short sale of, loan, grant any option for
the purchase of, effect any public sale or distribution of or otherwise dispose
of its Common Stock or securities convertible into or exchangeable or
exercisable for any of such Common Stock during the seven days prior to and the
90 days after any underwritten registration pursuant to Section 2.1 or 2.2 has
become effective, except as part of such underwritten registration and except
pursuant to registrations on Form X-0, X-0, or any successor or similar forms
thereto, and (Y) to cause each holder of its Common Stock purchased from the
Company at any time after the date of this Agreement (other than in a public
offering) to agree not to sell, make any short sale of, loan, grant any option
for the purchase of, effect any public sale or distribution of or otherwise
dispose of such securities during such periods.
(d) Participation in Underwritten Offerings. No Person may
participate in any underwritten offering hereunder unless such Person (i)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved, subject to the terms and conditions hereof,
by the Company and the Trust and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or
other agreement in connection with such offering) shall require the Trust (i)
to make any
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representations or warranties to or agreements with the Company other than
representations and warranties regarding the Trust, the Registrable Securities
Beneficially Owned by the Trust, transactions between the Trust and its
affiliates and the Trust's intended method or methods of distribution and any
other representation required by law or (ii) to make any agreements with the
Company with respect to indemnification of any Person or the contribution
obligations of any Person that would impose any obligation which is broader
than the indemnity furnished by the Trust pursuant to the provisions of Section
2.7.
2.5 Preparation: Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Trust, its underwriter or
underwriters, if any, and their respective counsel, financial advisors and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give
each of them such reasonable access during normal business hours to its books
and records and such opportunities to discuss the business of the Company with
its officers, legal counsel and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of the
Trust's and its underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6 Rights of the Trust. The Company will not file any registration
statement relating to Common Stock under the Securities Act (other than by a
registration on Form S-4 or Form S-8 or in connection with a registration of
securities which are convertible into or exchangeable for Common Stock), unless
it shall first have given to the Trust at least 15 days prior written notice
thereof. Upon making a request within 15 days after such notice, the Trust
shall have the rights provided in Sections 2 2, 2.3, 2.5 and 2.7.
2.7 Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act, the Company will,
and hereby does, indemnity and hold harmless in the case of any registration
statement filed pursuant to Section 2.1 or 2.2, the Trust, its trustees, its
agents, legal counsel and financial advisors, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls the Trust or any such underwriter
within the meaning of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which the Trust, any of its trustees or
any of its agents, legal counsel or financial
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advisors or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, 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 securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Trust, its trustees, its agents, legal counsel or financial
advisors, underwriters and controlling persons for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding, provided, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by the
Trust or its agents or representatives, as the case may be, specifically
stating that it is for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Trust, or any such trustee, agent, legal counsel, financial
advisor, underwriter or controlling person and shall survive the transfer of
such securities by the Trust. The indemnity agreement contained in this Section
2.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, action or proceeding if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld).
(b) Indemnification by the Trust. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.3, that the Company shall have received an
undertaking reasonably satisfactory to it from the Trust to indemnify severally
and hold harmless (in the same manner and to the same extent as set forth in
subsection (a) of this Section 2.7) the Company, each director of the Company,
each officer of the Company or its agents or representatives and each other
person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such
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statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by the Trust or its agents or
representatives specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any 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 controlling person and shall survive
the transfer of such securities by the Trust. The indemnity agreement provided
for in this Section 2.7(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, action or proceeding if such settlement is
effected without the consent of the Trust (which consent shall not be
unreasonably withheld). The parties hereto hereby acknowledge and agree that,
unless otherwise expressly agreed to in writing by the Trust to the contrary,
for all purposes of this Agreement the only information furnished or to be
furnished to the Company for use in any registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto are statements specifically relating to (i)
transactions between the Trust and its affiliates, on the one hand, and the
Company, on the other hand, (ii) the Beneficial Ownership of shares of Common
Stock by the Trust, (iii) the name and address of the Trust, (iv) solely in
offerings that are underwritten offerings, the method or methods of
distribution of the Registrable Securities of the Trust, (v) the identity of
the Trust's trustees, and (vi) a description of the Trust and the reasons for
selling Registrable Securities. The indemnity provided for under this Section
2.7(b) shall be limited in amount to the net amount of proceeds actually
received by the Trust from the sale of Registrable Securities pursuant to such
registration statement.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this Section 2.7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give 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 the preceding subsections of this Section 2.7, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, 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, the
indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying
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party similarly notified, to the extent that the indemnifying party may wish,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
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 investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement of any such action 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, or a covenant not to xxx, in respect of such claim
or litigation. No indemnified party shall consent to entry of any judgment or
enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying
party.
(d) Indemnification Payments. The indemnification required by this
Section 2.7 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
expense, loss, damage or liability is incurred.
(e) Contribution. If the indemnification provided for in the
preceding subsections of this Section 2.7 is unavailable to an indemnified
party or is otherwise insufficient in respect of any expense, loss, claim,
damage or liability referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such expense, loss, claim,
damage or liability in such proportion as is appropriate to reflect the
relative benefits and the relative fault of the Company on the one hand and the
Trust or its underwriter or underwriters, as the case may be, on the other in
connection with the distribution of the Registrable Securities and the
statements or omissions which result in any expense, loss, damage or liability,
as well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and of the Trust or its underwriter or
underwriters, as the case may be, on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the Company, by the Trust, by the underwriter or underwriters and
the parties, relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Trust agree that it would not be just and equitable if
contribution pursuant to this subsection (e) were determined by pro rata
allocation (even if the Trust and any
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underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of 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 referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth in the preceding sentence and
subsection (c) of this Section 2.7, 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 subsection (e), neither the Trust
nor any underwriter or underwriters shall be required to contribute any amount
in excess of the amount by which (i) in the case of the Trust, the net proceeds
received by the Trust from the sale of Registrable Securities or (ii) in the
case of an underwriter, the total price at which the Registrable Securities
purchased by it and distributed to the public were offered to the public
exceeds, in any such case, the amount of any damages that the Trust or its
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. 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 was not guilty of such
fraudulent misrepresentation. No party shall be liable for contribution under
this Section 2.7 except to the extent and under such circumstances as such
party would have been liable to indemnify under this Section 2.7 if such
indemnification were enforceable under applicable law.
3. Anti-Dilution, Representation on Board of Directors.
(a) The Company agrees that as long as the Trust Beneficially Owns
at least 51% of the Company's issued and outstanding Common Stock calculated on
a Fully Diluted Basis, the Company will not, without the prior written consent
of the Trust, issue any common stock, convertible preferred stock, stock
subject to options, warrants or other rights, convertible or exchangeable debt
or equity securities or any other securities which would cause the Beneficial
Ownership interest of the Trust in the Company's Common Stock to fall below 51%
on a Fully Diluted Basis, provided, however, that the agreement contained in
this Section 3(a) shall terminate automatically on the date that is one year
after the consummation of the Initial Sale.
(b) For so long as the Trust Beneficially Owns at least 20% of the
issued and outstanding shares of the Company's Common Stock, the Trust shall
be entitled to nominate, and the Company and the Board of Directors of the
Company shall support the election by the Company's stockholders of, two
individuals designated by the Trust to be members of the Company's Board of
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Directors. For so long as the Trust Beneficially Owns at least 5% and less
than 20% of the issued and outstanding shares of the Company's Common Stock,
the Trust shall be entitled to nominate, and the Company and the Board of
directors of the Company shall support the election by the Company's
stockholders of, one individual designated by the Trust to be a member of the
Company's Board of Directors. It is understood and agreed that if the size of
the Company's Board of Directors is increased, the number of individuals that
can be designated by the Trust pursuant to this Section 3(b) shall be
appropriately and proportionately increased. It is understood and agreed that
nothing contained in the Section 3(b) shall limit the ability of the Trust to
vote or cause to be voted shares of Common Stock Beneficially Owned by it in
any manner it sees fit in connection with the election of directors or
otherwise.
4. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings.
Beneficially Own or Beneficial Ownership: With respect to any
securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing. Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a
person shall include securities Beneficially Owned by all affiliates
of such Person and all other Persons with whom such person would
constitute a "group" within the meaning of Section 13 (d) of the
Exchange Act and the rules promulgated thereunder (including, in the
case of the Trust, shares of the Common Stock owned by The Nemours
Foundation).
Commission: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
Common Stock: As defined in Section 1.
Company: As defined in the introductory paragraph of this Agreement.
Delay Period: As defined in Section 2.1(g).
Demand Request: As defined in Section 2.1(a).
Exchange Act: The Securities Exchange Act of 1934, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934 shall
include a
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reference to the comparable section, if any, of any such similar
federal statute.
Fully Diluted Basis: On any date of determination, the amount of
issued and outstanding shares of the Company's Common Stock adjusted
to give effect to the issuance of all shares of Common Stock issuable
under outstanding stock options, warrants, rights to subscribe for or
purchase shares of Common Stock or similar rights or agreements and
under all outstanding securities (whether equity, debt or otherwise)
of the Company convertible into or exchangeable for Common Stock of
the Company.
Initial Sale: As defined in Section 1.
Person: A corporation, association, partnership, organization,
business, individual, trust, Federal, state or local government or
governmental or political subdivision thereof or governmental agency.
Registrable Securities: The Common Stock and any securities issued or
issuable with respect to any Common Stock by way of stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidations or other reorganization or
otherwise Beneficially Owned by the Trust and its affiliate, The
Nemours Foundation. As to any particular Registrable Securities, once
issued, such securities shall cease to be Registrable Securities when
(a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and
such securities have been disposed of in accordance with such
registration statement, (b) they shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) under the
Securities Act, (c) a disposition of all of them by the holder thereof
shall not require registration or qualification of them under the
Securities Act or shall be eligible for disposition under Rule 144, or
(d) they shall have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2, including, without
limitation, all registration, filing and NASD fees, all stock exchange
listing fees, all fees and expenses of complying with securities or
blue sky laws, all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, and any fees and
disbursements of underwriters customarily paid by issuers or sellers
of
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securities, but excluding underwriting discounts and commissions
attributable to the Registrable Securities Beneficially Owned by the
Trust, the fees and expenses of the Trust's legal counsel and
financial advisors, transfer taxes, if any, attributable to the
Registrable Securities Beneficially Owned by the Trust, and with
respect to any offering pursuant to Section 2.1, the "road show"
expenses of the underwriters agreed to be paid by the Trust pursuant
to Section 2.1(c) hereof.
Securities Act: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder,
all as of the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a
reference to the comparable section, if any, of any such similar
Federal statute.
Shares: As defined in Section 1.
Trust. As defined in Section 1.
5. Rule 144. The Company shall timely file the reports required to
be filed by it under the Securities Act and the Exchange Act (including but not
limited to the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder and will take such further action as the Trust may reasonably
request, all to the extent required from time to time to enable the Trust to
sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as it may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commissions. Upon the request of the
Trust, the Company will (a) deliver to the Trust a written statement as to
whether it has complied with the requirements of this Section 5 or (b) take
such action as is necessary to allow transfer of such Registrable Securities in
accordance with the provisions of Rule 144(k) (or any successor provision)
under the Securities Act, if applicable, including without limitation, if
necessary, the issuance of new certificates for such Registrable Securities
bearing a legend restricting further transfer.
6. Amendments and Waivers The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, without the mutual written
agreement or consent of the parties hereto.
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7. Notices. Except as otherwise provided in this Agreement, all notices,
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to such Person (a) in the case of the Trust, by
mail or courier addressed to the Xxxxxx X. xxXxxx Testamentary Trust, 0000
Xxxxxxxxxx Xxxxx, Xxxxx 000 xxXxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, to the
attention of Xxxxxxx X. Xxxxxxxx, Chairman, or at such other address as it
shall have furnished to the Company in writing, or by facsimile transmission to
the Trust at (000) 000-0000, to the attention of Xxxxxxx X. Xxxxxxxx, Chairman,
or (b) in the case of the Company, by mail or courier addressed to St. Xxx
Corporation, 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 duPont Center, Xxxxxxxxxxxx,
Xxxxxxx 00000, to the attention of its General Counsel, or by facsimile
transmission to the Company at (000) 000-0000, to the attention of its General
Counsel, or at such other address, or to the attention of such other officer,
as the Company shall have furnished to the Trust. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after
such communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including without
limitation, by air courier), when delivered at the address specified above,
provided that any such notice, request or Communication to the Trust shall not
be effective until received.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS
OF THE STATE OF FLORIDA WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
11. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
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13. Severability. If any provision of this Agreement, or the application
of such provisions to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provisions to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
XXXXXX X. XXXXXX TESTAMENTARY TRUST
By: /s/ X. X. Xxxxxxxx
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ST. XXX CORPORATION
By: /s/
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