EXHIBIT 10.9
Execution Copy
REGISTRATION RIGHTS AND REPURCHASE AGREEMENT
Registration Rights and Repurchase Agreement ("Agreement") dated as of
August 24, 1992 among Xxxxxxx'x Management Corporation, Inc., a Texas
corporation ("Xxxxxxx'x"), The Xxxxxx Xxxxxxx Leveraged Equity Fund II, L.P., a
Delaware limited partnership ("MSLEF II"), and the other persons listed on the
signature pages hereto (the "Other Selling Shareholders" and together with MSLEF
II, the "Selling Shareholders").
WHEREAS, Xxxxxxx'x and the Selling Shareholders are parties to that
certain Acquisition Agreement ("Acquisition Agreement") dated as of August 11,
1992 pursuant to which, among other things, Xxxxxxx'x is purchasing (the
"Purchase") the shares of common stock, par value $1.00 per share, of Xxxxxx
Companies, Inc. owned by the Selling Shareholders;
WHEREAS, as consideration for the Purchase, among other things, Xxxxxxx'x
is issuing to, and may issue in the future to, the Selling Shareholders shares
of Xxxxxxx'x 8% convertible preferred stock, par value $10 per share (the
"Convertible Preferred Stock"), and shares of Xxxxxxx'x common stock, par value
$0.25 per share;
WHEREAS, as an inducement to enter into the Acquisition Agreement,
Xxxxxxx'x and the Selling Shareholders agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Securities Subject.
(a) Definitions. As used herein, the following terms have the indicated
meanings, unless the context otherwise requires:
"Closing Date" has the meaning set forth in the Acquisition Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.25 per share, of
Xxxxxxx'x.
"Converted Common Stock" means the shares of Common Stock issued pursuant
to the conversion of the Convertible Preferred Stock.
"Disposition" means any inter vivos sale, transfer, pledge, assignment,
hypothecation, mortgage or other encumbrance, or any other disposition of
Xxxxxxx'x Securities whatsoever, whether voluntary or involuntary.
"Fair Market Value" means for any date the per share value of the Common
Stock as most recently determined on behalf of the trustee of Xxxxxxx'x employee
stock ownership plan (established for the benefit of its salaried employees) or,
if such plan is no longer in existence, the value thereof as determined in good
faith by the Board of Directors of Xxxxxxx'x based on an opinion of an
independent investment banking firm or any other qualified independent
appraiser.
"Holder" means a Selling Shareholder or any transferee thereof permitted
hereby if such transferee has executed a counterpart hereof at the time of the
transfer to such transferee, unless the Common Stock held by such person is
acquired in (i) a public distribution pursuant to a registration statement under
the Securities Act or (ii) transactions exempt from registration under the
Securities Act where securities sold in such transaction may be resold without
subsequent registration under the Securities Act.
"IPO" means an offering of Common Stock that was registered under the
Securities Act pursuant to an effective registration statement in which the
total gross proceeds to Xxxxxxx'x and any selling shareholders (together with
the total gross proceeds to Xxxxxxx'x and any selling shareholders from any
previous offering of Common Stock that was registered under the Securities Act
pursuant to an effective registration statement) were at least $30 million.
"Original Common Stock" means the shares of Common Stock issued by
Xxxxxxx'x to the Selling Shareholders on the Closing Date as part of the
Purchase Consideration (as defined in the Acquisition Agreement).
"Payment Amount" means for any date (i) in the case of Original Common
Stock, the product of the Fair Market Value multiplied by the number of shares
of Original Common Stock to be sold or transferred pursuant to this Agreement,
(ii) in the case of Converted Common Stock, the product of 150% of the Fair
Market Value multiplied by the number of shares of Converted Common Stock to be
sold or transferred pursuant to this Agreement, and (iii) in the case of
Convertible Preferred Stock, the product of $100 (plus any accrued and unpaid
dividends per share of Convertible Preferred Stock) multiplied by the number of
shares of Convertible Preferred Stock to be sold or transferred pursuant to this
Agreement.
"Payment Date" means (i) in the case of Original Common Stock, October 15,
1997 and each subsequent October 15 to and including October 15, 2001 and (ii)
in the case of Converted Common Stock, October 15, 1999 and each subsequent
October 15 to and including October 15, 2008.
"Put Option" means the option of a Holder of Original Common Stock or
Converted Common Stock pursuant to Section 8(a) or 8(b) hereof, respectively, to
sell shares of such Original Common Stock or Converted Common Stock to
Xxxxxxx'x.
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"Registrable Securities" means the shares of Original Common Stock and any
shares of Converted Common Stock.
"Xxxxxxx'x Securities" means the Original Common Stock, the Converted
Common Stock and the Convertible Preferred Stock.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement.
(b) Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (i) a registration statement covering such Registrable
Security has been declared effective by the Commission and such Registrable
Security has been disposed of pursuant to such effective registration statement,
(ii) such Registrable Security is distributed to the public pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, (iii) such
Registrable Security has been otherwise transferred and it may be resold without
subsequent registration under the Securities Act or (iv) such Registrable
Security is no longer held by a Holder.
2. Piggy-Back Registration.
(a) If at any time Xxxxxxx'x proposes to file a registration statement
under the Securities Act with respect to an offering of Common Stock whether or
not for sale for Xxxxxxx'x account (other than a registration statement on Form
S-4 or S-8 (or any substitute form for comparable purposes that may be adopted
by the Commission) or a registration statement filed in connection with an
exchange offer or an offering of securities solely to Xxxxxxx'x existing
security holders), then Xxxxxxx'x shall in each such case give written notice of
such proposed filing to the Holders as soon as practicable (but in no event less
than 20 days before the anticipated filing date), and such notice shall offer
such Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request.
(b) Xxxxxxx'x shall use its reasonable efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in the registration statement
for such offering to be included on the same terms and conditions as any similar
securities of Xxxxxxx'x included therein. Notwithstanding the foregoing, if the
managing underwriter or underwriters of such offering shall inform Xxxxxxx'x
that because of the size of the offering which the Holders, Xxxxxxx'x and such
other persons intend to make, the success of the offering would be materially
and adversely affected by inclusion of the Registrable Securities requested to
be included, then the amount of securities to be offered for the accounts of
Holders shall be reduced pro rata to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount such managing
underwriter or underwriters have advised Xxxxxxx'x can be sold in such offering;
provided that if Common Stock is being offered for the account of other persons
or entities as well as Xxxxxxx'x, then the proportion
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by which the amount of Registrable Securities intended to be offered by Holders
is reduced shall not exceed the proportion by which the amount of Common Stock
intended to be offered by such other persons or entities is reduced. Xxxxxxx'x
will bear all Registration Expenses in connection with a piggy-back
registration.
(c) The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the agreements (other than those
regarding indemnification) on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such holders of
Registrable Securities. Any such Selling Holder of Registrable Securities shall
not be required to make any representations or warranties to or agreements with
the Company other than representations, warranties or agreements regarding such
Selling Holder, such Selling Holder's Registrable Securities and such Selling
Holder's intended method of distribution or as otherwise required by law.
3. Restrictions on Public Sale by Holder of Registrable Securities.
To the extent not inconsistent with applicable law, each Holder whose
securities are included in a registration statement agrees not to effect any
public sale or distribution of the securities being registered or a similar
security of Xxxxxxx'x, or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under the
Securities Act, during the fourteen days prior to, and during the 90-day period
beginning on, the effective date of such registration statement (except pursuant
to such registration), if and to the extent requested by Xxxxxxx'x in the case
of a non-underwritten public offering or if and to the extent requested by the
managing underwriter or underwriters in the case of an underwritten public
offering.
4. Registration Procedures.
Whenever the Holders have requested that any Registrable Securities be
included in a registration statement pursuant to Section 2 hereof, Xxxxxxx'x
will use its reasonable best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as practicable, and in connection with any such
request, Xxxxxxx'x will:
(a) (i) prior to filing a registration statement or prospectus or any
amendments or supplements thereto, furnish to the Selling Holders and one
counsel selected by the Holders of a majority in aggregate number of shares of
the Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed, (ii) furnish to each Selling Holder such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto), the prospectus included
in such registration statement (including each preliminary prospectus) and such
other documents as such Selling Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Selling
Holder, and (iii) after the filing of the registration statement, promptly
notify each Selling Holder of any stop
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order issued or threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered;
(b) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any Selling Holder reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Selling Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Selling Holder; provided that Xxxxxxx'x
will not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph (b),
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(c) use its reasonable best efforts to cause such Registrable Securities
to be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
Xxxxxxx'x to enable the Selling Holder or Selling Holders thereof to consummate
the disposition of such Registrable Securities;
(d) immediately notify each Selling Holder, at any time when a
prospectus relating to the Registrable Securities is required to be delivered
under the Securities Act, of the occurrence of an event known to Xxxxxxx'x
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and promptly make available to each
Selling Holder any such supplement or amendment;
(e) enter into or arrange for the furnishing of customary agreements and
documents (including an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(f) make available for inspection by any Selling Holder, and any
attorney, accountant or other professional retained by any such Selling Holder
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of Xxxxxxx'x or its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause Xxxxxxx'x and its
subsidiaries' officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such registration
statement. Each Inspector that actually reviews Records supplied by Xxxxxxx'x or
its subsidiaries that actually include information that Xxxxxxx'x determines to
be confidential ("Confidential Information") shall be required, prior to any
such review, to execute an agreement with Xxxxxxx'x providing that such
Inspector shall not disclose any Confidential Information unless such disclosure
is required by applicable law or legal process. Each Selling Holder agrees that
it will not make any market transaction in securities of Xxxxxxx'x based on such
Confidential Information in violation of applicable securities laws. Each
Selling Holder further agrees
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that it will, upon learning that disclosure of Confidential Information is
sought in a court of competent jurisdiction, give notice to Xxxxxxx'x and allow
Xxxxxxx'x, at its expense, to undertake appropriate action to prevent disclosure
of the Confidential Information. Each Selling Holder also agrees that the due
diligence investigation made by the Inspectors shall be conducted in a manner
which shall not unreasonably disrupt the operations of Xxxxxxx'x or of the work
performed by Xxxxxxx'x officers and employees;
(g) use its reasonable best efforts to obtain (i) an opinion or opinions
of counsel to Xxxxxxx'x and (ii) a comfort letter or comfort letters from
Xxxxxxx'x independent public accountants each in customary form and covering
such matters of the type customarily covered by such opinion and comfort letters
as the managing underwriter (or, if there is no underwriter, a majority in
interest of all Selling Holders) reasonably requests;
(h) otherwise use its reasonable 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 a period of twelve months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act; and
(i) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which the Common Stock is
then listed.
Xxxxxxx'x may require each Selling Holder as to which any registration is
being effected to furnish to Xxxxxxx'x such information regarding the
distribution of such Registrable Securities as Xxxxxxx'x may from time to time
reasonably request in writing and such other information as may be legally
required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from Xxxxxxx'x
of the happening of any event of the kind described in Section 4(d) hereof, such
Selling Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Selling Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4(d) hereof, and, if so directed by
Xxxxxxx'x, such Selling Holder will deliver to Xxxxxxx'x (at Xxxxxxx'x' expense)
all copies, other than permanent file copies then in such Selling Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice. Each Selling Holder also agrees to notify
Xxxxxxx'x if any event relating to such Selling Holder occurs which would
require the preparation of a supplement or amendment to the prospectus so that
such prospectus will not contain 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.
5. Registration Expenses.
All expenses incident to Xxxxxxx'x performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), rating
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agency fees, printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the fees and
expenses incurred by it in connection with the listing of the securities to be
registered on each securities exchange on which the Common Stock is then listed,
and fees and disbursements of counsel for Xxxxxxx'x and its independent
certified public accountants, securities acts liability insurance (if Xxxxxxx'x
elects to obtain such insurance), the reasonable fees and expenses of any
special experts retained by Xxxxxxx'x in connection with such registration, fees
and expenses of other persons retained by Xxxxxxx'x, incurred in connection with
each registration hereunder (but not including any underwriting discounts or
commissions attributable to the sale of Registrable Securities), will be borne
by Xxxxxxx'x. Any expenses of counsel for any Selling Holders will be borne by
the Selling Holder or Selling Holders retaining such counsel.
6. Indemnification; Contribution.
(a) Indemnification by Xxxxxxx'x. Xxxxxxx'x agrees to indemnify and hold
harmless each Selling Holder of Registrable Securities, its officers, directors,
partners and agents and each person, if any, who controls such Selling Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages, liabilities and expenses (including
any reasonable legal or other costs of investigation) whatsoever arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus relating to the
Registrable Securities or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon 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, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to Xxxxxxx'x by such Selling Holder or on such
Selling Holder's behalf expressly for use therein and provided further, that the
indemnity with respect to any preliminary prospectus shall not apply to the
extent that any such loss, claim, damage, liability or expense results from the
fact that a current copy of the prospectus was not sent or given to the person
asserting any such losses, claims, damages, liabilities or expenses at or prior
to the written confirmation of the sale of the Registrable Securities concerned
to such person if it is determined that (i) it was the responsibility of such
Selling Holder, or any underwriter or dealer selected by such Selling Holder, to
provide such person with a current copy of the prospectus and (ii) such current
copy of the prospectus would have cured the defect giving rise to such loss,
claim, damage, liability or expense. Xxxxxxx'x also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Selling Holders provided in this Section 6(a)
(as if clause (i) were not contained herein) or such other indemnification
customarily obtained by underwriters at the time of offering.
(b) Conduct of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
any Selling Holder (or its officers, directors, partners or agents) or any
person controlling any such
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Selling Holder in respect of which indemnity may be sought from Xxxxxxx'x,
Xxxxxxx'x shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Selling Holder, and shall assume the payment of
all fees and expenses. Such Selling Holder or any controlling person of such
Selling Holder shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Selling Holder or such controlling
person unless (i) Xxxxxxx'x has agreed to pay such fees and expenses or (ii) the
named parties to any such action or proceeding (including any impleaded parties)
include both such Selling Holder or such controlling person and Xxxxxxx'x, and
such Selling Holder or such controlling person shall have been advised by
counsel that there may be one or more legal defenses available to such Selling
Holder or such controlling person which are different from or additional to
those available to Xxxxxxx'x, in which case, if such Selling Holder or such
controlling person notifies Xxxxxxx'x in writing that it elects to employ
separate counsel at the expense of Xxxxxxx'x, Xxxxxxx'x shall not have the right
to assume the defense of such action or proceeding on behalf of such Selling
Holder or such controlling person; it being understood, however, that Xxxxxxx'x
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for such Selling Holder and such
controlling persons, which firm shall be designated in writing by such Selling
Holder, and that all such fees and expenses shall be reimbursed as they are
incurred. Xxxxxxx'x shall not be liable for any settlement of any such action or
proceeding effected without Xxxxxxx'x written consent, but if settled with its
written consent, or if there be a final judgment for the plaintiff in any such
action or proceeding, Xxxxxxx'x agrees to indemnify and hold harmless such
Selling Holder and such controlling person from and against any loss or
liability (to the extent stated above) by reason of such settlement or judgment
Xxxxxxx'x shall not, without the prior written consent of a Selling Holder,
effect any settlement of any pending or threatened proceeding in respect of
which any Selling Holder is or could have been a party and indemnity could have
been sought hereunder by such Selling Holder, unless such settlement includes an
unconditional release of such Selling Holder from all liability on claims that
are the subject matter of such proceeding.
(c) Indemnification by Holders of Registrable Securities. Each Selling
Holder agrees, severally but not jointly, to indemnify and hold harmless
Xxxxxxx'x, its directors and officers who sign the registration statement and
each person, if any, who controls Xxxxxxx'x within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from Xxxxxxx'x to such Selling Holder, but only with
respect to information concerning such Selling Holder furnished in writing by
such Selling Holder or on such Selling Holder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus; provided
that the indemnity with respect to any preliminary prospectus shall not apply to
the extent that such loss, claim, damage, liability or expense results from the
fact that a current copy of the prospectus was not sent or given to the person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
person if it is determined that (i) it was the responsibility of Xxxxxxx'x, or
any underwriter
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or dealer selected by Xxxxxxx'x, to provide such person with a current copy of
the prospectus and (ii) such current copy of the prospectus would have cured the
defect giving rise to such loss, claim, damage, liability or expense. In case
any action or proceeding shall be brought against Xxxxxxx'x or its directors or
officers, or any such controlling person, in respect of which indemnity may be
sought against such Selling Holder, such Selling Holder shall have the rights
and duties given to Xxxxxxx'x, and Xxxxxxx'x or its directors or officers or
such controlling person shall have the rights and duties given to such Selling
Holder, by the preceding paragraph. Each Selling Holder also agrees to indemnify
and hold harmless underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of Xxxxxxx'x provided in this Section
6(c) (as if clause (i) were not contained herein).
(d) Contribution. If the indemnification provided for in this Section 6
is unavailable to Xxxxxxx'x, the Selling Holders or the underwriters in respect
of any losses, claims, damages, liabilities or judgments referred to herein,
then each such 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 losses, claims, damages, liabilities and judgments (i) as
between Xxxxxxx'x and the Selling Holders on the one hand and the underwriters
on the other, in such proportion as is appropriate to reflect the relative
benefits received by Xxxxxxx'x and the Selling Holders on the one hand and the
underwriters on the other from the offering of the Registrable Securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of Xxxxxxx'x and the Selling Holders on the one hand and of the
underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations and (ii) as between Xxxxxxx'x, on
the one hand, and each Selling Holder on the other, in such proportion as is
appropriate to reflect the relative fault of Xxxxxxx'x and of each Selling
Holder in connection with such statements or omissions, as well as any other
relevant equitable considerations. The relative benefits received by Xxxxxxx'x
and the Selling Holders on the one hand and the underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by Xxxxxxx'x and the Selling Holders bear to the total underwriting
discounts and commissions received by the underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
Xxxxxxx'x and the Selling Holders on the one hand and of the underwriters on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by Xxxxxxx'x
and the Selling Holders or by the underwriters. The relative fault of Xxxxxxx'x
on the one hand and of each Selling Holder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Xxxxxxx'x and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even
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if the underwriters were treated as one entity for such purpose) or by any other
method of allocation which 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, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 Section 6(d), no underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the public were
offered to the pubic exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Selling Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Selling Holder were offered to
the public exceeds the amount of any damages which such Selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged 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. Each Selling Holder's obligation to contribute
pursuant to this Section 6(d) is several in the proportion that the proceeds of
the offering received by such Selling Holder bears to the total proceeds of the
offering, and not joint.
(e) Indemnification similar to that specified herein (with appropriate
modifications) shall be given by Xxxxxxx'x and each Selling Holder with respect
to any required registration or other qualification of securities under any
federal or state law or regulation or governmental authority other than the
Securities Act.
7. Participation in Underwritten Registrations.
No person may participate in any underwritten registration hereunder
unless such person (a) agrees to sell such person's securities on the basis
provided in any underwriting arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement.
8. Put Option.
(a) Original Common Stock. If Required Notice (as defined below) has
been given to Xxxxxxx'x prior to a Payment Date, a Holder of Original Common
Stock shall have the right to elect to sell to Xxxxxxx'x as of such Payment
Date, and Xxxxxxx'x shall be obligated to purchase from such Holder, at a
purchase price equal to the applicable Payment Amount, the number of such
Holder's shares of Original Common Stock specified in the Required Notice.
(b) Converted Common Stock. If Required Notice has been given to
Xxxxxxx'x prior to a Payment Date, a Holder of Converted Common Stock shall have
the non-cumulative right to elect to sell to Xxxxxxx'x as of such Payment Date,
and Xxxxxxx'x
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shall be obligated to purchase from such Holder, at a purchase price equal to
the applicable Payment Amount, up to 10% of all shares of Converted Common Stock
issued to the Holder thereof, provided, that on the final Payment Date, a Holder
of Converted Common Stock shall have the right to sell to Xxxxxxx'x upon such
terms all of such Holder's shares of Converted Common Stock.
(c) Required Notice. Notice of any exercise of the right to elect to
sell to Xxxxxxx'x any Original Common Stock or Converted Common Stock by a
Holder thereof pursuant to Section 8(a) or 8(b) hereof shall be given to
Xxxxxxx'x in accordance with Section 14.01 of the Acquisition Agreement at least
10 but not more than 60 days prior to the applicable Payment Date, and such
notice shall state (i) the name of the Holder of original Common Stock or
Converted Common Stock, as the case may be, (ii) the number of shares of
Original Common Stock or Converted Common Stock, as the case may be, that the
Holder is electing to sell to Xxxxxxx'x and (iii) the address to which a check
for payment shall be sent (such notice being the "Required Notice").
(d) Delivery of Shares and Payment. In order to receive payment for
shares of Original Common Stock or Converted Common Stock, as the case may be,
upon exercise of a Put Option, the Holder thereof shall surrender to Xxxxxxx'x,
at its address set forth pursuant to Section 14.01 of the Acquisition Agreement,
a certificate or certificates representing the applicable shares of Common Stock
to be purchased by Xxxxxxx'x, duly endorsed for transfer to Xxxxxxx'x. On the
applicable Payment Date, or thereafter when Xxxxxxx'x receives the certificates
representing the shares of Common Stock for which the Put Option is being
exercised, as described in the preceding sentence, Xxxxxxx'x shall pay, by
cashiers or certified check, to a Holder who has exercised a Put Option an
amount equal to the Payment Amount; provided that if such payment is in excess
of $1,000,000, at the request of such Holder such payment shall be made by wire
transfer payable in federal or other immediately available funds. Notice of an
intent to exercise a Put Option shall be irrevocable, and, on the next
subsequent Payment Date, the shares of Original Common Stock or Converted Common
Stock, as the case may be, referenced in such notice shall be converted into the
right to receive the applicable Payment Amount.
(e) Determination of Fair Market Value. The Fair Market Value of the
Common Stock as of the end of the immediately preceding fiscal year and the
Payment Amount applicable with respect to any Payment Date shall be determined
no later than the 20th day preceding such Payment Date. Immediately following
such determination, Xxxxxxx'x shall notify each Holder, in accordance with
Section 14.01 of the Acquisition Agreement, of the Payment Amount applicable
with respect to such Payment Date.
(f) Termination of Put Option. The right of a Holder of shares of
Original Common Stock or Converted Common Stock to sell such shares to Xxxxxxx'x
pursuant to this Section 8 shall terminate upon consummation of an IPO.
9. Restrictions on Transfer; Right of First Refusal; Repurchase Option.
(a) General Restrictions. Each Holder agrees that it will not, directly
or indirectly, effect a Disposition of any Xxxxxxx'x Securities (or solicit any
offers to effect a
-11-
Disposition of any Xxxxxxx'x Securities), except (i) in compliance with the
Securities Act and (ii) prior to the consummation of an IPO, either (x) with the
written consent of Xxxxxxx'x or (y) in compliance with the following provisions;
provided that from and after October 15, 1997, the provisions of this Section
9(a)(ii) shall not apply to any Disposition of Xxxxxxx'x Securities by MSLEF II
to any partner or affiliate of MSLEF II if Xxxxxxx'x shall, if it so requests,
have received (1) an opinion of counsel to MSLEF II to the effect that such
Disposition does not violate the Securities Act and (2) a counterpart hereof
executed by such transferee in which such transferee agrees to be bound by all
the terms hereof (including this Section 9):
(A) Any Holder desiring to make a Disposition of any Xxxxxxx'x
Securities shall first make an offer (the "Offer") to sell such Xxxxxxx'x
Securities to Xxxxxxx'x.
(B) The Offer shall be sent by certified or registered mail,
return receipt requested, to Xxxxxxx'x and shall state the number of
shares involved. The date of the Offer shall be the date on which a notice
containing the Offer has been received by Xxxxxxx'x.
(C) Xxxxxxx'x shall have the option for 20 days following the date
of the Offer to purchase not less than all the Xxxxxxx'x Securities
offered. The Holder may withdraw the offer as to the Xxxxxxx'x Securities
at any time prior to the acceptance thereof by Xxxxxxx'x.
(D) The price per share to be paid upon the purchase of the
Xxxxxxx'x Securities under this Section 9(a) shall be the applicable
Payment Amount.
(E) The closing of the transaction pursuant to this Section 9(a)
shall be 30 days from the date of the Offer. The purchase price of the
Xxxxxxx'x Securities being acquired shall be paid by certified or
cashier's check upon the closing; provided that if such payment is in
excess of $1,000,000, at the request of such Holder such payment shall be
made by wire transfer payable in federal or other immediately available
funds.
(F) In order to exercise its option to purchase the Xxxxxxx'x
Securities hereunder, Xxxxxxx'x shall deliver to the Holder a written
notice of intent to purchase such Xxxxxxx'x Securities or send such notice
by certified or registered mail, return receipt requested, properly
stamped and addressed to the address of the Holder.
(G) If Xxxxxxx'x does not (i) exercise its option pursuant to
subparagraph (C) to purchase any Xxxxxxx'x Securities offered for sale by
a Holder in accordance with this Section 9 or (ii) effect a purchase of
any such Xxxxxxx'x Securities in accordance with subparagraph (E), the
Holder shall thereafter be entitled to freely solicit offers to effect a
Disposition or effect a Disposition with respect to such Xxxxxxx'x
Securities until the expiration of 120 days after the date (x) such option
lapses or (y) Xxxxxxx'x fails to effect such purchase, as the case may be.
-12-
(b) Sale Upon Death of a Holder. Upon the death of a Holder, Xxxxxxx'x
shall have the option to purchase all of the decedent's Xxxxxxx'x Securities,
and such deceased Holder's spouse, heirs, legal representative, executor or
administrator shall be obligated to sell such Xxxxxxx'x Securities to Xxxxxxx'x,
at a purchase price equal to the applicable Payment Amount. Such sale shall be
consummated within six months after the date of death of the deceased Holder.
(c) Disposition Upon Termination of Marital Relationship. If the marital
relationship of a Holder is terminated by death or divorce and such Holder does
not succeed to his spouse's community interest in the Xxxxxxx'x Securities, the
Holder shall be required to purchase all of the spouse's interest in the
Xxxxxxx'x Securities, and the spouse or the executor or administrator of the
decedent's estate shall be obligated to sell such Xxxxxxx'x Securities, at a
purchase price equal to the applicable Payment Amount. Such purchase shall be
consummated within 90 days after such death or divorce. Should such Holder fail
to consummate the purchase within such 90 day period, such failure shall
constitute an Offer and the provisions of Section 9(a) hereof shall apply. The
date of the Offer shall be the 91st day after such death or divorce.
(d) Involuntary Disposition. Prior to any involuntary disposition of
Xxxxxxx'x Securities, the Holder who owns such Xxxxxxx'x Securities or their
representative shall send written notice thereof by certified or registered
mail, return receipt requested, disclosing in full to Xxxxxxx'x the nature and
details of such involuntary disposition and Xxxxxxx'x shall have the option to
purchase any such Xxxxxxx'x Securities for 90 days after the receipt of such
written notice, at a purchase price equal to the applicable Payment Amount.
10. Miscellaneous.
(a) Purchase by Designee. If Xxxxxxx'x is required or permitted under
the terms of Section 8 or Section 9 hereof to purchase any shares of Original
Common Stock, Converted Common Stock or Convertible Preferred Stock, Xxxxxxx'x
may, at its option, in lieu of such purchase, arrange for one or more designees
of Xxxxxxx'x to purchase such shares for a purchase price equal to the
applicable Payment Amount, and upon such purchase, any Xxxxxxx'x obligation to
purchase such shares shall be discharged and any Xxxxxxx'x option to purchase
such shares shall be exercised.
(b) Binding Effect. Unless otherwise provided herein, the provisions of
this Agreement shall be binding upon and accrue to the benefit of the parties
hereto and their respective heirs, legal representatives, transferees,
successors and assigns.
(c) Amendment. This Agreement may be amended or terminated only by a
written instrument signed by Xxxxxxx'x and the Holders of a majority of the
shares of Registrable Securities.
(d) Applicable Law. The internal laws of the State of Texas (without
regard to choice of law provisions thereof) shall govern the interpretation,
validity and performance of the terms of this Agreement.
-13-
(e) Notices. All notices provided for herein shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
registered or certified mail, postage prepaid.
(f) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect.
(g) Spouses. The spouses of the Selling Shareholders are fully aware of,
understand, and fully consent and agree to the provisions of this Agreement and
its binding effect upon any community property interests they may now or
hereafter own, and agree that the termination of their marital relationship with
any Selling Shareholder for any reason shall not have the effect of removing any
Xxxxxxx'x Securities otherwise subject to this Agreement from the coverage
hereof and that their awareness, understanding, consent and agreements are
evidenced by their signing this Agreement. Any Selling Shareholder who marries
or remarries shall be obligated to have his spouse sign this Agreement or an
identical agreement.
(h) Remedies. The parties to this Agreement hereby declare that the
Xxxxxxx'x Securities are unique chattels and each party to this Agreement shall
have all the available remedies for the violation of this Agreement, including,
but not limited to, the equitable remedy of specific performance.
-14-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXXXX'X MANAGEMENT
CORPORATION, INC.
By: /s/ Xxx Xxxxxx
-----------------------------------
Title: Executive Vice President
THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: Xxxxxx Xxxxxxx Leveraged Equity
Fund II, Inc., a general partner
By:
-----------------------------------
Title:
--------------------------------
OTHER SELLING SHAREHOLDERS
--------------------------------------
Xxxx X. Xxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Spouse:
--------------------------------------
Xxxx X. Xxxxx, Xx.
-15-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXXXX'X MANAGEMENT
CORPORATION, INC.
By:
-----------------------------------
Title:
--------------------------------
THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: Xxxxxx Xxxxxxx Leveraged Equity
Fund II, Inc., a general partner
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Director
OTHER SELLING SHAREHOLDERS
--------------------------------------
Xxxx X. Xxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Spouse:
--------------------------------------
Xxxx X. Xxxxx, Xx.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXXXX'X MANAGEMENT
CORPORATION, INC.
By:
-----------------------------------
Title:
--------------------------------
THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: , a general partner
----------------
By:
-----------------------------------
Title:
--------------------------------
OTHER SELLING SHAREHOLDERS
/s/ Xxxx X. Xxxxx
--------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Spouse:
--------------------------------------
Xxxx X. Xxxxx, Xx.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXXXX'X MANAGEMENT
CORPORATION, INC.
By:
-----------------------------------
Title:
--------------------------------
THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: , a general partner
----------------
By:
-----------------------------------
Title:
--------------------------------
OTHER SELLING SHAREHOLDERS
--------------------------------------
Xxxx X. Xxxxx
--------------------------------------
Spouse:
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxx X. Xxxxx, Xx.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
XXXXXXX'X MANAGEMENT
CORPORATION, INC.
By:
-----------------------------------
Title:
--------------------------------
THE XXXXXX XXXXXXX LEVERAGED
EQUITY FUND II, L.P.
By: , a general partner
----------------
By:
-----------------------------------
Title:
--------------------------------
OTHER SELLING SHAREHOLDERS
--------------------------------------
Xxxx X. Xxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Spouse:
/s/ Xxxx X. Xxxxx, Xx.
--------------------------------------
Xxxx X. Xxxxx, Xx.
/s/ Xxxx Xxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Houston X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxx. Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Spouse:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx Xxx Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Houston X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxx. Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Spouse:
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
Spouse:
/s/ Houston X. Xxxxxx, Xx.
--------------------------------------
Houston X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxx. Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Spouse:
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Houston X. Xxxxxx
--------------------------------------
Spouse:
/s/ Xxx. Xxxxxx X. Xxxxxx
--------------------------------------
Xxx. Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Spouse:
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Houston X. Xxxxxx
--------------------------------------
Spouse:
--------------------------------------
Xxx. Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Spouse:
