REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated April 22, 1999, by
and among Xxxxxxx-Xxxxx Group, Inc., a Delaware corporation (the "Company"), 399
Venture Partners, Inc., a Delaware corporation ("399 Venture"), the individuals,
including Xxxxxxx X. Xxxxxxx, Xx. ("Xxxxxxx"), set forth on the signature page
to this Agreement and those persons, who hereafter join in the Stockholders'
Agreement and this Agreement as Management Investors (collectively, the
"Management Investors") and other Persons who may from time to time become
parties to this Agreement.
Background
The Company, 399 Venture, and the Management Investors are parties to, and
this Agreement is made pursuant to, the Stockholders' Agreement. In order to
induce the Investors to enter into the Stockholders' Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement.
Terms
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties hereto agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the Rules
promulgated under the Exchange Act.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Class A Common Stock, no par value, of the
Company, and the Class B Common Stock, no par value, of the Company and any
capital stock of the Company issued or issuable with respect to such common
stock by way of or in connection with any stock dividend or distribution payable
thereon or stock split, reverse stock split, recapitalization, reclassification,
reorganization, exchange, subdivision or combination thereof.
"Damages" has the meaning set forth in Section 6(a) of this Agreement.
"Demand Registration" and "Demand Registration Requests" have the meanings
set forth in Section 3(a) of this Agreement.
"Demand Securities" has the meaning set forth in Section 3(c) of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Incidental Registration" has the meaning set forth in Section 2(a) of this
Agreement.
"Inspector" and "Inspectors" have the meanings set forth in Section 4(i) of
this Agreement.
"Investor" means each Person which is or becomes a party to this Agreement
and the Permitted Transferee of such Person.
"Xxxxxxx Registrable Securities" means (i) any shares of Common Stock
issued or issuable to or otherwise acquired by Xxxxxxx on or after the date
hereof and (ii) any shares of capital stock of the Company issued or issuable
with respect to the securities referred to in clause (i) above by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes of
this Agreement, a Person will be deemed to be a holder of Xxxxxxx Registrable
Securities whenever such Person has the right to acquire, directly or
indirectly, such Xxxxxxx Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected, provided, however, that each such
share of Common Stock shall cease to be a Xxxxxxx Registrable Security when (i)
it has been effectively registered under the Securities Act and disposed of in
accordance with the Registration Statement covering it; (ii) it is distributed
to the public pursuant to Rule 144 (or any similar provisions then in force)
under the Securities Act; or (iii) it has otherwise been transferred and a new
certificate or other evidence of ownership for it not bearing or requiring a
legend as set forth in Section 4.2 of the Stockholders' Agreement (or other
legend of similar import) and not subject to any stop transfer order has been
delivered by or on behalf of the Company and no other restriction on transfer
exists under the Securities Act.
"Other Registrable Securities" means (i) any shares of Common Stock issued
or issuable to or otherwise acquired by the Management Investors on or after the
date hereof and (ii) any shares of capital stock of the Company issued or
issuable with respect to the securities referred to in clause (i) above by way
of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization,
provided, however, that Incentive Shares (as defined in the Stockholders'
Agreement) of Common Stock issued to Management Investors (and any shares of
capital stock of the Company issued or issuable with respect to such Incentive
Shares by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization) shall be deemed to be Other Registrable Securities only to the
extent that such shares are subject to the Company's Purchase Option (as defined
in the Stockholders' Agreement) at the Adjusted Book Value Price (as defined in
the Stockholders' Agreement). For purposes of this Agreement, a Person will be
deemed to be a holder of Other Registrable Securities whenever such Person has
the right to acquire, directly or indirectly, such Other Registrable Securities
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected, but in
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the case of Registrable Securities subject to vesting, only to the extent that
such Person's right to acquire such Registrable Securities has vested and
provided, further, that each Other Registrable Security shall cease to be an
Other Registrable Security when (i) it has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it; (ii) it is distributed to the public pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act; or (iii) it has
otherwise been transferred and a new certificate or other evidence of ownership
for it not bearing or requiring a legend as set forth in Section 4.2 of the
Stockholders' Agreement (or other legend of similar import) and not subject to
any stop transfer order has been delivered by or on behalf of the Company and no
other restriction on transfer exists under the Securities Act.
"Permitted Transferee" shall mean a Permitted Transferee of a Person as
determined according to the Stockholders' Agreement, provided that such
transferee executes a joinder to this Agreement.
"Person" means an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference in such prospectus.
"Public Offering" means a successfully completed firm-commitment
underwritten public offering (other than a Unit Offering) pursuant to an
effective registration statement under the Securities Act in respect of the
offer and sale of shares of Common Stock for the account of the Company and any
stockholder selling shares of Common Stock resulting in aggregate net proceeds
to the Company in such offering of not less than $20 million.
"Records" has the meaning set forth in Section 4(i) of this Agreement.
"Registrable Securities" means the 399 Venture Registrable Securities, the
Xxxxxxx Registrable Securities, and the Other Registrable Securities.
"Registration Expenses" means the costs and expenses of all registrations
and qualifications under the Securities Act, and of all other actions the
Company is required to take in order to effect the registration of Registrable
Securities under the Securities Act pursuant to this Agreement (including all
federal and state registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, the fees and expenses of the Company's
independent public accountants (including the expenses of any special audit and
"cold comfort" letters required by or incident to such registration)) other than
the costs and expenses of any Investors whose Registrable Securities are to be
registered pursuant to this Agreement comprising underwriters' commissions,
brokerage fees, transfer taxes or the fees and expenses of any accountants or
other representatives retained by any Investor; provided, however, that the
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Company shall pay the reasonable fees and disbursements of one attorney for all
of the Investor or Investors whose Registrable Securities are to be registered.
"Registration Statement" means any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such registration statement.
"Rule 415" has the meaning set forth in Section 3(a) of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Shelf Registration Statement" has the meaning set forth in Section 4(o) of
this Agreement.
"Special Registration Statement" means (i) a registration statement on
Forms S-8 or S-4 or any similar or successor form or any other registration
statement relating to an exchange offer or an offering of securities solely to
the Company's employees or security holders or (ii) a registration statement
registering a Unit Offering.
"Stockholders' Agreement" means the Securities Purchase and Holders
Agreement dated as of the date hereof by and among the Company, 399 Venture,
Xxxxxxx and the Management Investors and other Persons party thereto from time
to time.
"399 Venture Registrable Securities" means (i) any shares of Common Stock
issued or issuable to or otherwise acquired by 399 Venture on or after the date
hereof and (ii) any shares of capital stock of the Company issued or issuable
with respect to the securities referred to in clause (i) above by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes of
this Agreement, a Person will be deemed to be a holder of 399 Venture
Registrable Securities whenever such Person has the right to acquire, directly
or indirectly, such 399 Venture Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected, provided, however,
that each such share of Common Stock shall cease to be a 399 Venture Registrable
Security when (i) it has been effectively registered under the Securities Act
and disposed of in accordance with the Registration Statement covering it; (ii)
it is distributed to the public pursuant to Rule 144 (or any similar provisions
then in force) under the Securities Act; or (iii) it has otherwise been
transferred and a new certificate or other evidence of ownership for it not
bearing or requiring a legend as set forth in Section 4.2 of the Stockholders'
Agreement (or other legend of similar import) and not subject to any stop
transfer order has been delivered by or on behalf of the Company and no other
restriction on transfer exists under the Securities Act.
"Unit Offering" means an underwritten public offering of a combination of
debt and equity securities of the Company (or warrants or exchange rights to
purchase equity securities) in which not more than 15% of the gross proceeds
received from the sale of such securities is attributed to such equity
securities.
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"underwritten registration" or "underwritten offering" means a registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.
2. Incidental Registration.
(a) Right to Include Common Stock. If the Company at any time proposes
to register any of its Common Stock under the Securities Act (other than on
a Special Registration Statement), whether or not for sale for its own
account, the Company will give written notice at least 30 days prior to the
anticipated effective date of the registration statement filed or to be
filed in connection with such registration to all holders of Registrable
Securities of its intention to register Common Stock under the Securities
Act and of such holders' rights under this Section 2. Upon the written
request of any such holders of Registrable Securities made within 15 days
of the date of the foregoing notice from the Company (which request shall
specify the aggregate number of such holder's Registrable Securities to be
registered and will also specify the intended method of disposition
thereof), the Company will effect the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register by the holders thereof (an "Incidental Registration"), to the
extent required to permit the public disposition (in accordance with such
intended methods thereof) of the Registrable Securities to be so
registered; provided, however, that (i) if, any time after giving written
notice of its intention to register shares of Common Stock and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register
the Common Stock, the Company shall give written notice of such
determination to each holder of Registrable Securities and, thereupon,
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); (ii) if a registration
requested pursuant to this Section 2 shall involve an underwritten public
offering, any holder of Registrable Securities requesting to be included in
such registration may elect, in writing at least 25 days prior to the
effective date of the Registration Statement filed in connection with such
registration, not to register such securities in connection with such
registration; and (iii) if, at any time after the 180-day or shorter period
specified in Section 4(b), the sale of the securities has not been
completed, the Company may withdraw from the registration on a pro rata
basis (based on the number of each holder's Registrable Securities included
in such Registration Statement) the Registrable Securities included in such
Registration Statement and which have not been sold.
(b) Priority in Incidental Registrations. If a registration pursuant
to Section 2(a) involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the total
number of shares of Common Stock to be included in such registration,
including the Registrable Securities requested to be included pursuant to
this Section 2, exceeds the maximum number of shares of Common Stock
specified by the managing underwriter that may be distributed without
adversely affecting the price, timing or distribution of such shares of
Common Stock, then the Company shall include in such registration only such
maximum number of shares of Common Stock which, in the reasonable opinion
of such underwriter or underwriters, can be sold, in the following order of
priority: (i) first, all of the shares of Common Stock that the Company
proposes to sell for its own account, if any, unless such registration is
commenced pursuant to exercise of a valid demand registration then all of
the shares of Common Stock being registered by such holder shall be first
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and the Common Stock being registered by the Company for its own account
shall be second, (ii) next, all of the shares of Common Stock being
registered pursuant to a Demand Registration (as hereinafter defined) or
any other demand registration rights exercised after registration is
commenced, (iii) next, the shares of Common Stock being registered by
holders with registration rights requested to be included in such
Incidental Registration (allocated among such holders on a pro rata basis
based upon their respective percentage of ownership of the total number of
shares of Common Stock then outstanding), and (iv) next, the shares of
Common Stock being registered by holders without registration rights that
are permitted to participate in such Incidental Registration (allocated
among such holders on a pro rata basis based upon their respective
percentage of ownership of the total number of shares of Common Stock then
outstanding). Notwithstanding the foregoing, if an Incidental Registration
is an underwritten offering, the managing underwriter or underwriters may
select shares for inclusion, or exclude shares completely, in such
Incidental Registration on a basis other than a pro rata basis if, in the
reasonable opinion of such underwriter or underwriters, selection on such
other basis, or inclusion of such shares, would be material to the success
of the offering.
(c) Selection of Underwriters. If any Incidental Registration is an
underwritten offering, the investment banker(s) and manager(s) for the
offering will be selected by the Company.
(d) Expenses. The Company will pay all Registration Expenses in
connection with any registration of Registrable Securities requested
pursuant to this Section 2.
(e) Liability for Delay. The Company shall not be held responsible for
any delay in the filing or processing of a Registration Statement which
includes any Registrable Securities due to requests by holders of
Registrable Securities pursuant to this Section 2 nor for any delay in
requesting the effectiveness of such Registration Statement.
(f) Participation in Underwritten Registrations. No holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such holder (i) agrees to sell such holder's Registrable
Securities on the basis provided in any underwriting arrangements approved
by the persons who have selected the underwriter and (ii) accurately
completes in a timely manner and executes all questionnaires, escrow
agreements, powers of attorney, indemnification agreements, underwriting
agreements and other documents customarily required under the terms of such
underwriting arrangements.
3. Demand Registration
(a) Right to Demand Registration. At any time after the date 6 months
after the effective date of the first registration statement under the
Securities Act for a Public Offering and subject to Section 3(c) below, (i)
the holders of a majority of 399 Venture Registrable Securities shall be
entitled to make two written requests (each, a "Demand Registration
Request") and (ii) Xxxxxxx, so long as he holds at least five percent of
the then outstanding Common Stock, shall be entitled to make one Demand
Registration Request to the Company for registration (a "Demand
Registration") with the Commission under and in accordance with the
provisions of the Securities Act (including, but not limited to,
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registrations under Rule 415 promulgated under the Securities Act ("Rule
415")) of all or part of the 399 Venture Registrable Securities or Xxxxxxx
Registrable Securities, as the case may be, owned by any such Investor
(which Demand Registration Request shall specify the intended number of 399
Venture or Xxxxxxx Registrable Securities to be disposed of by such
holders, the anticipated price range for such offering and the intended
method of disposition thereof); provided, however, that (i) the Company
may, if the Board of Directors so determines in the exercise of its
reasonable judgment, that it would be inadvisable to effect such Demand
Registration at such time, defer such Demand Registration for a single
period not to exceed 180 days. Within 10 days after receipt of the Demand
Registration Request, the Company will serve written notice of such Demand
Registration Request to all holders of Registrable Securities and, subject
to paragraph (c) below, the Company will include in such registration all
Registrable Securities of such holders with respect to which the Company
has received written requests for inclusion therein from such holders
within 15 business days after duly given to the applicable holder of the
notice from the Company. All requests made pursuant to this Section 3(a)
will specify the aggregate number of such holder's Registrable Securities
to be registered and will also specify the intended methods of disposition
thereof.
(b) In addition to the registration rights provided in Section 3(a),
upon the written request of the holders of a majority of the 399 Venture
Registrable Securities, at any time and from time to time, the Company
shall be obliged to register under the Securities Act on Form S-3 (if the
Company is then eligible to use such registration form) (each, a "Short
Form Registration"), or any similar or successor short-form registration
adopted by the Commission for which the Company may then be eligible, of
such 399 Venture Registrable Shares, each in accordance with the provisions
of this Agreement. Xxxxxxx shall have the right, so long as he holds at
least five per cent of the then outstanding Common Stock, to request two
Short Form Registrations of the Xxxxxxx Registrable Shares, each in
accordance with the provisions of this Agreement.
(c) Priority in Demand Registrations. The Company will not include in
any Demand Registration any securities (including securities to be sold for
the account of the Company) which are not Registrable Securities without
the prior written consent of holders of at least a majority of the 399
Venture Registrable Securities and Xxxxxxx Registrable Securities
(collectively, the "Demand Securities") included in such registration. If
any of the Registrable Securities proposed to be registered pursuant to a
Demand Registration are to be sold in a firm commitment underwritten
offering and the managing underwriter or underwriters of a Demand
Registration advise the Company and the holders of such Registrable
Securities in writing that in its or their reasonable opinion the number of
shares of Common Stock proposed to be sold in such Demand Registration
exceeds the maximum number of shares specified by the managing underwriter
that may be distributed without adversely affecting the price, timing or
distribution of the Common Stock, the Company shall include in such
registration only such maximum number of securities which, in the
reasonable opinion of such underwriter or underwriters can be sold in the
following order of priority: (i) first, the number of Demand Securities
requested to be included in such registration, (allocated among such
holders on a pro rata basis based upon their respective percentage of
ownership of the total number of shares of Common Stock then outstanding);
(ii) next, the securities the Company has requested to be included in such
registration, if any; (iii) next, the shares of Common Stock being
registered by holders with incidental or "piggyback" registration rights
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requested to be included in such Demand Registration (allocated among such
holders on a pro rata basis based upon their respective percentage of
ownership of the total number of shares of Common Stock then outstanding),
and (iv) next, the shares of Common Stock being registered by holders
without registration rights that are permitted to participate in such
Demand Registration (allocated among such holders on a pro rata basis based
upon their respective percentage of ownership of the total number of shares
of Common Stock then outstanding).
(d) Selection of Underwriters. In the case of a Demand Registration
for an underwritten offering, the holders of a majority of the Demand
Securities to be included in such Demand Registration will have the right
to select the investment banker(s) and manager(s) to administer the
offering, which investment banker(s) and manager(s) will be nationally
recognized, subject to the Company's approval, which will not be
unreasonably withheld.
(e) Expenses. The Company will pay all Registration Expenses in
connection with any registration of Registrable Securities requested
pursuant to this Section 3.
4. Registration Procedures. If and whenever the Company is required to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously
as possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities, and use its best efforts to cause
such Registration Statement to become effective, provided, however, that
before filing any Registration Statement the Company will furnish to the
counsel selected by the holders of a majority of the Registrable Securities
covered by such Registration Statement copies of all such documents
proposed to be filed;
(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 not less than 180 days or such shorter
period which will terminate when all Registrable Securities covered by such
Registration Statement have been sold (but not before the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and
Rule 174 promulgated thereunder, if applicable, and other than as may be
required pursuant to Section 4(o) below) and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance
with the intended methods of disposition by the seller or sellers thereof
set forth in such Registration Statement;
(c) furnish to each seller of such Registrable Securities such number
of copies of such Registration Statement and of each such amendment and
supplement thereof (in each case including all exhibits), such number of
copies of the Prospectus included in such Registration Statement (including
each preliminary Prospectus and supplemental Prospectus), in conformity
with the requirements of the Securities Act, and such other documents as
such seller may reasonably request in order to facilitate the disposition
of the Registrable Securities by such seller;
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(d) use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as each seller shall
request, and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject itself to general
taxation in any jurisdiction where it is not then so subject;
(e) immediately notify each seller of any Registrable Securities
covered by such Registration Statement, of the Company becoming aware that
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 (at any time when a Prospectus relating thereto is required to
be delivered under the Securities Act within the appropriate period
mentioned in clause (b) of this Section 4) within ten days of such notice
prepare and furnish to all sellers a reasonable number of copies of an
amended or supplemental Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable 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 therein not misleading in the light of the circumstances
then existing;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the Nasdaq National
Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), and arrange for at
least two market makers to register as such with respect to the Registrable
Securities with the National Association of Securities Dealers, Inc.
(g) provide an independent transfer agent and registrar for such
Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement;
(h) furnish to each seller of Registrable Securities covered by such
Registration Statement an original, manually signed copy, addressed to such
seller (and the underwriters, if any) of:
(i) an opinion of counsel for the Company, dated the effective
date of such Registration Statement (or, if such registration involves
an underwritten offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and substance
to the sellers of not less than 50% of the Registrable Securities
included in such Registration Statement (and the managing underwriter,
if any); and
(ii) a "comfort letter," dated the effective date of such
Registration Statement (or, if such registration involves an
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underwritten offering, 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 such matters with respect to such
Registration Statement as are customarily covered in accountants'
letters delivered to the underwriters in underwritten offerings of
securities as may reasonably be requested by the sellers of not less
than 50% of the Registrable Securities included in such Registration
Statement (and the managing underwriter, if any);
(i) make available for inspection by any seller of such Registrable
Securities covered by such Registration Statement, by any underwriter
participating in any disposition to be effected pursuant to such
Registration Statement and by any attorney, accountant or other agent
retained by any such seller or any such underwriter (any of the foregoing
persons, including such seller, individually an "Inspector" and
collectively the "Inspectors"), all pertinent financial and other records,
pertinent corporate documents and properties of the Company as shall be
reasonably requested by an Inspector (collectively, the "Records"), and
cause all of the Company's officers, directors and employees to supply all
information reasonably requested by any Inspector in connection with such
Registration Statement; provided, however, that any Records that are
designated by the Company in writing as confidential shall be kept
confidential by the Inspectors unless (A) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such
Registration Statement or (B) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or by any regulatory authority having jurisdiction. Each
Investor agrees that non-public information obtained by it as a result of
such Inspections shall be deemed confidential and acknowledges its
obligations under the federal securities laws not to trade any securities
of the Company on the basis of material non-public information;
(j) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities (including, without
limitation, effecting a stock split or combination of shares);
(k) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earning statement covering
the period of at least 12 months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
Registration Statement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(l) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;
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(m) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending of
preventing the use of any related Prospectus or suspending the
qualification of any Common Stock included in such Registration Statement
for sale in any jurisdiction, the Company will use its reasonable best
efforts promptly to obtain the withdrawal of such order;
(n) use its best efforts to cause such Registrable Securities covered
by such Registration Statement to be registered or approved by such other
governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable
Securities; and
(o) keep effective any Registration Statement effected pursuant to
Rule 415 (a "Shelf Registration Statement") until the earlier of (i) such
date as of which all the Registrable Securities under the Shelf
Registration Statement have been disposed of in the manner described in
such Registration Statement and (ii) two years after the date on which such
Shelf Registration Statement is declared effective.
The Company may require each seller of Registrable Securities as to which
any registration is being effected promptly to furnish to the Company such
information regarding the distribution of such Registrable Securities as may be
legally required. Such information shall be furnished in writing and shall state
that it is being furnished for use in the Registration Statement.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in clause (e) of this Section 4,
such holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by clause (e) of this Section 4, and, if so directed by
the Company, such holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of the Company's notice. In the event the Company shall give any such
notice, the period mentioned in clause (b) of this Section 4 shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to clause (e) of this Section 4 up to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by clause (e) of this Section 4.
If any Registration Statement or comparable statement contemplated by this
Agreement refers to any holder by name or otherwise as the holder of any
securities of the Company and if, in its sole and exclusive judgment, such
holder is or might be deemed to be a controlling person of the Company, such
holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to such holder and presented to the Company in
writing, to the effect that the holding by such holder of such securities is not
to be construed as a recommendation by such holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such holder by name or
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otherwise is not required by the Securities Act or any similar federal statute
then in force, the deletion of the reference to such holder, provided, however,
that with respect to this clause (ii) such holder shall furnish to the Company
an opinion of counsel to such effect which opinion and counsel shall be
reasonably satisfactory to the Company.
5. Lapse of Registration Rights. Notwithstanding any other provision of
this Agreement, the rights set forth in Sections 2 and 3 hereof shall not be
available to any Investor owning less than five percent (5%) of the then
outstanding Common Stock.
6. Indemnification.
(a) Indemnification by the Company. The Company hereby agrees to
indemnify and hold harmless each holder of Registrable Securities which
shall have been registered under the Securities Act, and such holder's
officers, directors and agents and each other Person, if any, who controls
such holder within the meaning of the Securities Act and each other Person
(including underwriters) who or which participates in the offering of such
Registrable Securities against any losses, claims, damages, liabilities,
reasonable attorneys' fees, costs or expenses (collectively, the
"Damages"), joint or several, to which such holder or controlling Person or
participating Person may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact made by the Company or its agents contained
in any Registration Statement under which such Registrable Securities are
registered under the Securities Act, in any preliminary Prospectus or final
Prospectus contained therein, or in 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, and will reimburse such holder of
Registrable Securities or such controlling Person or participating Person
in connection with investigating or defending any such Damages or
proceeding; provided, however, that the Company will not be liable in any
such case to the extent that any such Damages arise out of or are based
upon (i) an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, said preliminary or
final Prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such holder
or such controlling or participating Person, as the case may be,
specifically for use in the preparation thereof; or (ii) an untrue
statement or alleged untrue statement, omission or alleged omission in a
Prospectus if such untrue statement or alleged untrue statement, omission
or alleged omission is corrected in an amendment or supplement to the
Prospectus which amendment or supplement is delivered to such holder in a
timely manner and such holder thereafter fails to deliver such Prospectus
as so amended or supplemented prior to or concurrently with the sale of
such Registrable Securities to the Person asserting such Damages.
(b) Indemnification by the Holders of Registrable Securities Which Are
Registered. It shall be a condition of the Company's obligations under this
Agreement to effect any registration under the Securities Act that there
shall have been delivered to the Company an agreement or agreements duly
executed by each holder of Registrable Securities to be so registered,
whereby such holder agrees to indemnify and hold harmless the Company, its
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directors, officers and agents and each other Person, if any, which
controls the Company within the meaning of the Securities Act against any
Damages, joint or several, to which the Company, or such other Person or
such Person controlling the Company may become subject under the Securities
Act or otherwise, but only to the extent that such Damages (or proceedings
in respect thereof) arise out of or are based upon any untrue statements or
alleged untrue statement of any material fact contained, on the effective
date thereof, in any Registration Statement under which such Registrable
Securities are registered under the Securities Act, in any preliminary
Prospectus or final Prospectus contained therein or in any amendment or
supplement thereto, 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, which,
in each such case, has been made in or omitted from such Registration
Statement, said preliminary or final Prospectus or said amendment or
supplement in reliance upon, and in conformity with, written information
furnished to the Company by such holder of Registrable Securities
specifically for use in the preparation thereof. The Company shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to
information furnished in writing by such Persons specifically for inclusion
in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section
6; and (ii) unless the indemnified party has been advised by its counsel
that a conflict of interest exists between such indemnified and
indemnifying parties under applicable standards of professional
responsibility, with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party. Whether or not such defense is assumed by the
indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent
will not be unreasonably withheld). No indemnifying party will consent to
the entry of any judgment or enter into any settlement (i) that 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 and (ii) except for judgments or
settlements calling for the payment of money only, without the consent of
the indemnified party (which consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of the claim, will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification provided for
in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified
party in respect of any Damages referred to therein, the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as
a result of such Damages in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnified party and the
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indemnifying party, but also the relative fault of the indemnified party
and the indemnifying party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action; provided, however, that in no event shall
the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the difference between the dollar amount of the
proceeds received by such holder upon the sale of the Registrable
Securities giving rise to such contribution obligation and all amounts
previously contributed by such holder with respect to such Damages. 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 fraudulent misrepresentation.
(e) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on
behalf of any indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of
securities. The Company also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such
party in the event the Company's indemnification is unavailable for any
reason.
7. Hold-Back Agreements
(a) Restrictions on Public Sale by Holder of Registrable Securities.
Each holder of Registrable Securities whose Registrable Securities are
eligible for inclusion in a Registration Statement filed pursuant to
Sections 2 or 3 agrees, if requested by the managing underwriter or
underwriters in an underwritten offering of any Registrable Securities, not
to effect any public sale or distribution of Registrable Securities,
including a sale pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act (except as part of such underwritten
registration), during the 20-day period prior to, and during the 180-day
period (or such shorter period as may be agreed to by such parties)
beginning on the effective date of such Registration Statement, to the
extent timely notified in writing by the Company or the managing
underwriter or underwriters, provided, however, that this provision shall
not apply to employees of 399 Venture.
The foregoing provisions shall not apply to any holder of Registrable
Securities if such holder is prevented by applicable statute or regulation from
entering into any such agreement; provided, however, that any such holder shall
undertake, in its request to participate in any such underwritten offering, not
to effect any public sale or distribution of Registrable Securities (except as
part of such underwritten registration) during such period unless it has
provided 45 days prior written notice of such sale or distribution to the
managing underwriter or underwriter.
(b) No Inconsistent Agreements. The Company will not enter into any
Agreement which is inconsistent with or violate the rights granted to
holders of Registrable Securities in this Agreement.
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(c) Restrictions on Public Sale by the Company and Others. The Company
shall (i) not effect any public sale or distribution of any of its Common
Stock for its own account during the 20-day period prior to, and during the
180-day period beginning on, the effective date of a Registration Statement
filed pursuant to Sections 2 or 3 (except as part of a Special Registration
Statement), and (ii) use reasonable efforts to cause each holder of Common
Stock purchased from the Company at any time after the date of this
Agreement (other than purchasers in an underwritten offering) to agree not
to effect any public sale or distribution of any such securities during
such period, including a sale pursuant to Rule 144 under the Securities Act
(except as part of such underwritten registration, if permitted).
8. Miscellaneous
(a) Amendment and Modification. This Agreement may be amended or
modified, or any provision hereof may be waived, provided, however, that
such amendment or waiver is set forth in a writing executed by (i) the
Company, (ii) 399 Venture (so long as 399 Venture and its Affiliates own in
the aggregate at least 5% of the outstanding Common Stock on a fully
diluted basis), (iii) Xxxxxxx (so long as he owns at least 5% of the
outstanding Common Stock on a fully diluted basis), (iv) the holders of a
majority of the outstanding Common Stock on a fully diluted basis
(including Shares owned by 399 Venture and its Affiliates) held by the
Investors, and (v) in the case of any amendment which materially and
adversely affects any Investor, such Investor. No course of dealing between
or among any persons having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any person under or by reason of this Agreement.
(b) Survival of Representations and Warranties. All representations,
warranties, covenants and agreements set forth in this Agreement will
survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, regardless of any investigation
made by an Investor or on its behalf.
(c) Successors and Assigns; Entire Agreement. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
and executors, administrators and heirs. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which
are for the benefit of purchasers or holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities. This Agreement sets forth the entire agreement and
understandings among the parties as to the subject matter hereof and merges
and supersedes all prior discussions and understandings of any and every
nature among them.
(d) Separability. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid
or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent
necessary to delete such illegal, invalid or unenforceable provision unless
that provision held invalid shall substantially impair the benefits of the
remaining portions of this Agreement.
(e) Notices. All notices provided for or permitted hereunder shall be
made in writing by hand delivery, registered or certified first-class mail,
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telecopier or air courier guaranteeing overnight delivery to the other
party at the following addresses (or at such other address as shall be
given in writing by any party to the others):
If to the Company to:
Xxxxxxx-Xxxxx Group, Inc.
00 Xxxxxxxxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxxxxx X. Xxxxx
If to 399 Venture to:
399 Venture Partners, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy number: 000-000-0000
Attention: Xxxxxx X. XxXxxxxxxx
with a required copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy number: 000 000-0000
Attention: Xxxxx X. Xxxxxxxx
If to the Management Investors or any of them, to their addresses as listed
in the books of the Company.
All such notices shall be deemed to have been duly given: when delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(f) Governing Law. The validity, performance, construction and effect
of this Agreement shall be governed by and construed in accordance with the
internal law of Delaware, without giving effect to principles of conflicts
of law.
(g) Waiver of Jury Trial. Each of the parties to this Agreement
waives, to the fullest extent permitted by law, any right to trial by jury
of any claim, demand, action or cause of action (i) arising under this
Agreement or (ii) in any way connected with or related or incidental to the
dealings of the parties hereto in respect of this Agreement or any of the
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transactions related hereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise. Each of the
parties to this Agreement agrees and consents that any such claim, demand,
action or cause of action shall be decided by court trial without a jury
and that the parties to this Agreement may file an original counterpart of
a copy of this Agreement with any court as written evidence of the consent
of the parties hereto to the waiver of the right to trial by jury.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.
(i) Counterparts. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which
taken together shall constitute one and the same instrument.
(j) Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
(k) Termination. This Agreement and the rights and obligations of the
parties hereunder shall terminate upon the later of (i) the date which is
five years following a Public Offering and (ii) April 22, 2009, provided,
however, that the indemnification rights and obligations set forth in
Section 6 hereof shall survive the termination of this Agreement.
(l) Remedies. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement, it
being agreed by the parties that the remedy at law, including monetary
damages, for breach of such provision will be inadequate compensation for
any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived.
(m) Party No Longer Owning Registrable Securities. If a party hereto
ceases to own any Registrable Securities, such party will no longer be
deemed to be an Investor for purposes of this Agreement; provided, however,
that the indemnification rights and obligations set forth in Section 6
hereof shall survive any such cessation of ownership.
(n) Pronouns. Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine
or feminine forms.
(o) No Effect on Employment. Nothing herein contained shall confer on
any Investor the right to remain in the employ of the Company or any of its
subsidiaries or Affiliates.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the day and year first above written.
XXXXXXX-XXXXX GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chief Executive Officer
399 VENTURE PARTNERS, INC.
By: /s/ Xxxxxx X. XxXxxxxxxx
---------------------------------------
Name: Xxxxxx X. XxXxxxxxxx
Title: Vice President
MANAGEMENT INVESTORS:
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
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