Exhibit 10.2
XXXXX, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
entered into as of November 1, 2004, by and among Xxxxx, Inc., a
Texas corporation (the "Company"), and Xxx X. Xxxxxxxxxx and
Xxxxxx X. Xxxxxxxxxx, individuals who are husband and wife and
each a resident of Texas (each, a "Stockholder" and,
collectively, the "Stockholders").
RECITALS
A. The Company, the Stockholders, and Royal Business
Forms, Inc., a Texas corporation ("Royal"), have entered into a
Stock Purchase Agreement dated as of November 1, 2004 (the "Stock
Purchase Agreement"), pursuant to which the Company will purchase
all the outstanding capital stock of Royal from the Stockholders
in exchange for Common Stock (the "Stock Purchase").
B. It is a condition to the Stockholders obligation to
consummate the Stock Purchase Agreement that the Company enter
into this Agreement.
C. The Company, Centrum Acquisition, Inc., a Delaware
corporation ("Centrum"), and Midlothian Holdings LLC, a Delaware
limited liability company ("Sub"), have entered into an Agreement
and Plan of Merger (the "Merger Agreement"), dated June 25, 2004,
pursuant to which Centrum will be merged (the "Merger") with and
into Sub and the shares of capital stock of Centrum held by the
Centrum's stockholders will be converted into Common Stock.
D. This Registration Agreement is intended to include the
Stockholders' Registrable Securities in the registration
contemplated by the Merger Agreement, but in any case, to
register the Stockholders' Registrable Securities no later than
sixty days after the date this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, covenants
and conditions set forth in this Agreement, the parties mutually
agree as follows:
SECTION 1. GENERAL
1.1 Definitions. As used in this Agreement the following
terms shall have the following respective meanings:
"Common Stock" means the common stock, $2.50 par value,
of the Company.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Form S-3" means such form under the Securities Act as
in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted
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by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents
filed by the Company with the SEC.
"Holder" means any Person owning of record Registrable
Securities that have not been sold to the public or any
assignee of record of such Registrable Securities in
accordance with Section 2.8 hereof, including without
limitation the Stockholders and their respective permitted
successors and assigns.
"Person" means any individual, trust, corporation,
partnership, limited partnership, limited liability company
or other business association or entity, court, governmental
body or governmental agency.
"Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means Common Stock issued to
the Stockholders in connection with the Stock Purchase.
"Registration Expenses" shall mean all expenses
incurred by the Company in complying with Sections 2.1, 2.2
and 2.3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, Blue Sky fees and
expenses, the expense of any auditor letter and any special
audits incident to or required by any such registration, but
shall specifically exclude Selling Expenses.
"Rule 144" means Rule 144 promulgated under the
Securities Act as in effect on the date hereof or any
successor rule or regulation under the Securities Act
subsequently adopted by the SEC.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to any sale
hereunder and all fees and expenses of legal counsel to the
Holders.
SECTION 2. REGISTRATION
2.1 Required Registration.
(a) Registration Statement. The Company will include
the Registrable Securities of the Holders in its filing of the
registration statement under the Securities Act pursuant to the
Merger Agreement. The Company shall use its commercially
reasonable efforts to prepare and file as promptly as practicable
after the consummation of the Merger, but in no event later than
sixty days from the date of this Agreement (even if no
registration statement is filed pursuant to the Merger
Agreement), and to effect all such registrations, qualifications
and compliances
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(including, without limitation, obtaining appropriate
qualifications or exemptions under applicable state securities or
"blue sky" laws and compliance with any other applicable
governmental or securities law requirements or regulations) as
any Holder may reasonably request and that would permit or
facilitate the sale of Registrable Securities in the open market
(provided, however, that the Company shall not be required in
connection therewith to qualify to do business or to file a
general consent to service of process in any such state or
jurisdiction). Notwithstanding the foregoing, the Company shall
not be obligated to effect an underwritten registration
statement.
(b) Effectiveness; Suspension Right; Lock-Up.
(i) The Company will use its commercially
reasonable efforts to maintain the effectiveness of the
Registration Statement and other applicable registrations,
qualifications and compliances until the registration rights
granted under this Section 2 terminate in accordance with Section
2.5 (the "Registration Effective Period"), and from time to time
will amend or supplement the Registration Statement and the
prospectus contained therein as and to the extent necessary to
comply with the Securities Act, the Exchange Act and any
applicable state securities statute or regulation, subject to the
following limitations and qualifications.
(ii) Following the date on which the Registration
Statement is declared effective, the Holders will be permitted
(subject in all cases to Section 2.2 below) to offer and sell
Registrable Securities during the Registration Effective Period
in the manner described in the Registration Statement, provided
that the Registration Statement remains effective and has not
been suspended.
(iii) Notwithstanding any other provision of this
Section 2.1, but subject to Section 2.2, the Company shall have
the right at any time (but no more than three times in any twelve-
month period) to require that all Holders suspend further open
market offers and sales of Registrable Securities whenever, and
only if, in the reasonable good faith judgment of the Company
after receipt of advice from outside counsel there is or there is
reasonably likely to be in existence material undisclosed
information or events with respect to the Company (the
"Suspension Right"). In the event the Company exercises the
Suspension Right, such suspension will continue only for the
period of time reasonably necessary for disclosure to occur at a
time that is not detrimental to the Company or its stockholders
or until such time as the information or event is no longer
material (but in no event more than 30 days), each as determined
in good faith by the Company after receipt of advice from outside
counsel. The Company will promptly give the Holders notice of
any such suspension and will use all commercially reasonable
efforts to minimize the length of the suspension.
(iv) Each Holder agrees, if requested by the
Company and an underwriter of a public offering of securities of
the Company, not to sell, assign, donate, pledge, encumber,
hypothecate, grant an option to or otherwise transfer or dispose
of, whether in privately negotiated or open market transactions,
any Common Stock or other securities of the Company held by it
during a period not to exceed one hundred twenty (120) days
following the effective date of the registration statement
relating to such underwritten public offering, provided that all
executive officers and directors of the Company are subject to
substantially identical restrictions. Upon request of the
Company, each Holder will execute an agreement agreeing to the
foregoing
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and containing other customary terms and conditions, and the
Company may impose stop-transfer instructions with respect to the
shares subject to the foregoing restrictions until the end of
such period.
2.2 Procedure for Sale of Shares under Registration
Statement.
(a) Delivery of Prospectus. For any offer or sale of
any of the Registrable Securities by a Holder in a transaction
that is not exempt under the Securities Act, the Holder, in
addition to complying with any other federal securities laws,
shall deliver a copy of the final prospectus (or amendment of or
supplement to such prospectus) of the Company covering the
Registrable Securities in the form furnished to the Holder by the
Company to the purchaser of any of the Registrable Securities on
or before the settlement date for the purchase of such
Registrable Securities.
(b) Copies of Prospectuses. The Company shall furnish
to each Holder a reasonable number of copies of the final
prospectus (or amendment of or supplement to such prospectus) of
the Company covering the Registrable Securities as may be
necessary so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not as of the
date of delivery to the Holder 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 or incomplete in the light of the circumstances then
existing, in each case exclusive of information supplied by such
Holder expressly for inclusion in the Registration Statement.
2.3 Termination of Registration. The Company shall have
the right to terminate or withdraw any registration initiated by
it under Section 2.1 prior to the effectiveness of such
registration whether or not any Holder has elected to include
Registrable Securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.4 hereof.
2.4 Expenses of Registration. Except as provided herein,
all Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 2.1
or Section 2.3 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder
shall be borne by the holders of the securities so registered pro
rata on the basis of the number of shares so registered.
2.5 Termination of Registration Rights. All registration
rights granted under this Section 2 shall terminate and be of no
further force and effect as to any Holder at such time as such
Holder is free to sell all Registrable Securities held by such
Holder pursuant to paragraph (k) of Rule 144 under the Securities
Act or a comparable exemption from registration that enables the
Holder to sell all Registrable Securities held by such Holder
without registration and without restriction as to the manner of
sale or otherwise.
2.6 Delay of Registration; Furnishing Information. It
shall be a condition precedent to the obligations of the Company
to take any action pursuant to Section 2.1 that the selling
Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the
intended method of disposition of such securities as reasonably
shall be required to effect the registration of their Registrable
Securities.
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2.7 Indemnification. In the event any Registrable
Securities are included in a registration statement under Section
2.1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder against any losses,
claims, damages, or liabilities (joint or several) to which they
may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions
or violations (collectively a "Violation") by the Company: (i)
any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration
statement; and the Company will promptly reimburse to each such
Holder for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the
Company shall not be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon
and in conformity with information furnished expressly for use in
connection with such registration or for incorporation by
reference in such registration statement by the Stockholders or
such Holder in writing.
(b) To the extent permitted by law, each Stockholder
severally and jointly will, if Registrable Securities held by any
Holder are included in the securities as to which such
registration is being effected, indemnify and hold harmless the
Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling
securities under such registration statement, against any losses,
claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person,
underwriter or such other Holder may become subject under the
Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity
with information furnished the Stockholders or any Holder in
writing to the Company expressly for use in connection with such
registration or for incorporation by reference in such
registration statement; and each Stockholder severally and
jointly will promptly reimburse to the Company or any such
director, officer, controlling person, underwriter or other
Holder any legal or other expenses reasonably incurred by such
party in connection with investigating or defending any such
loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation.
(c) If the indemnification provided for in this
Section 2.7 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any losses,
claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or
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liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying parry on the one hand and of
the indemnified party on the other in connection with the
Violations) that resulted in such loss, claim, damage or
liability, as welt as any other relevant equitable
considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(d) The obligations of the Company and Stockholders
under this Section 2.7 shall survive completion of any offering
of Registrable Securities in a registration statement and the
termination of this Agreement.
(e) Promptly after receipt by an Indemnified Party of
notice of the commencement or of any action or proceeding
involving a claim referred to in the preceding subdivisions of
this Section 2.7, such indemnified party shall, if a claim in
respect thereof is to be made against a party required to provide
indemnification, give written notice to the latter of the
commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligation under the
preceding subdivisions 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, the indemnifying party shall be
entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election 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. In
any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel
would be, in the reasonable judgment of the indemnified party,
inappropriate due to actual differing interests between them. It
is understood that the indemnifying party shall not, in respect
of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate
firm for the Company, its directors, its officers who sign the
Registration Statement and each Person, if any, who controls the
Company within the meaning of either such Section and (ii) the
fees and expenses of more than one separate firm for any
Stockholders, Holders and all Persons, if any, who control any
Holder within the meaning of either such Section. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, which consent
will not be unreasonably withheld, but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the consent of
the indemnified party, effect the settlement or
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compromise of, or consent to entry of any judgment or enter into
any settlement with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such
settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out
of such action or claim and (B) does not include a statement as
to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
2.8 Assignment of Registration Rights. The rights to
cause the Company to register Registrable Securities pursuant to
this Section 2 may be assigned by a Stockholder to a transferee
of Registrable Securities that is: (a) the estate of such
Stockholder, or the spouse, siblings or lineal descendants of
such Stockholder, or such Stockholder's spouse's siblings or
lineal descendants or trusts for the benefit of any of the
foregoing; (b) a trust or individual who or which, directly or
indirectly through one or more intermediaries, is controlled by
or under common control with such Stockholder or which controls,
directly or indirectly through one or more intermediaries, such
Stockholder; (c) a trust for the benefit of any of the foregoing;
or (d) any other lawful transferee of all, but not less than all,
of such Stockholder's Registrable Securities; provided, however,
(i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and
address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned and
(ii) such transferee shall agree to become a party to and be
subject to all restrictions set forth in this Agreement. For
purposes of this Section 2.8, the terms "control", "controlled"
and "common control with" mean the ability, whether by the direct
or indirect ownership of voting securities or other equity
interest, by contract or otherwise, to elect a majority of the
directors of a corporation, to select the managing or general
partner of a partnership or limited partnership, respectively, or
otherwise to select a majority of those persons exercising
governing authority over an entity.
2.9 Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the
Registrable Securities to the public without registration, at all
times the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144 under the
Securities Act;
(b) use its best efforts to file with the Commission
in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and
(c) furnish to each Holder promptly upon request a
written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act
and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and
documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Registrable
Securities without registration.
2.10 Representation and Warranties of the Company. The
Company represents and warrants as follows:
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(a) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by; all
requisite corporate action and will not violate any provision of
law, any order of any court or other agency of government,
Certificate of Incorporation of the Company or By-laws of the
Company or any provision of any indenture, agreement or other
instrument to which it or any of its properties or assets is
bound, conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the
Company.
(b) This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable in accordance with
its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and except as the provisions of Section 2.7 may be deemed to
conflict with public policy.
SECTION 3. MISCELLANEOUS
3.1 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Texas as applied to
agreements among Texas residents entered into and to be performed
entirely within Texas.
3.2 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs,
executors, and administrators of the parties hereto; provided,
however, that prior to the receipt by the Company of written
notice of the transfer of any Registrable Securities specifying
the full name and address of the transferee, the Company may deem
and treat the person listed as the holder of such shares in its
records as the absolute owner and holder of such shares for all
purposes, including the payment of dividends or any redemption
price.
3.3 Entire Agreement. This Agreement constitutes the full
and entire understanding and agreement between the parties with
regard to the subject matter hereof and no party shall be liable
or bound to any other in any manner with regard to the subject
matter hereof by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
3.4 Severability. In case any provision of the Agreement
shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
3.5 Amendment and Waiver.
(a) This Agreement may be amended or modified only
upon the written consent of the Company and the Stockholders.
(b) The obligations of the Company and the rights of
the Holders under this Agreement may be waived only with the
written consent of the Stockholders.
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3.6 Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any
Holder, upon any breach, default or noncompliance of the Company
under this Agreement shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or
of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character on any Holder's part of any
breach, default or noncompliance under the Agreement or any
waiver on such Holder's part of any provisions or conditions of
this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies,
either under this Agreement, by law, or otherwise afforded to
Holders, shall be cumulative and not alternative.
3.7 Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a)
upon personal delivery to the party to be notified, (b) when sent
by confirmed facsimile if sent during normal business hours of
the recipient, but if not, then on the next business day, (c)
five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1)
day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be
notified at the address or facsimile number as set forth below or
at such other address or facsimile number as such party may
designate by ten (10) days advance written notice to the other
parties hereto:
if to Company: with copies to:
--------------- ---------------
Xxxxx, Inc. Xxxxxx & Xxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxxxx 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
if to Stockholders: with copies to:
------------------ ---------------
Alf R. and Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxxxxxxx 0000 Xxxxxxx Xx., Xxxxx 000
401 Royal Colonnade Dallas, TX 75205
Xxxxxxxxx, XX 00000 Telecopy: (000) 000-0000
3.8 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
3.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
3.10 Aggregation of Stock. All of the Registrable
Securities held or acquired by affiliated entities or persons
shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
REGISTRATION RIGHTS AGREEMENT as of the date set forth in the
first paragraph hereof.
XXXXX, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------
By: Xxxxx X. Xxxxxxx
Title: Chairman, CEO, and President
STOCKHOLDERS:
/s/ Xxx X. Xxxxxxxxxx
------------------------
Xxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
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