1
EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
FOR CERTAIN XXXXXXX STOCKHOLDERS
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of August 18,
1999, by and among Xxxxxxx American Corporation, a Delaware corporation (the
"Company"), and each of the holders named on the signature pages hereto
(collectively, the "Holders" and each individually, a "Holder"). This Agreement
supersedes and replaces in its entirety the Registration Rights Agreement dated
as of May 18, 1998 by and among the Company, Xxxxxx X. Xxxxxxx, Xxxxxx &
Company, LLC, JLM Management, LLC, Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxxx X.
Xxxxx, III, Xxxxx Xxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxx X. Xxxxxxxxx and Xx-Xxxx
Xxxxxxx (the "1998 Registration Rights Agreement").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"Business Day" means any day other than a day on which banks are
authorized or required to be closed in the State of New York.
"Commission" means the Securities and Exchange Commission.
"Common Shares" means the 1,602,263 shares of Common Stock held by the
Holders as of the date of this Agreement, together with any shares of Common
Stock or any other class of capital stock of the Company received in respect of
such shares, by stock split, stock dividend, exchange, recapitalization,
reclassification or otherwise, together with any other shares of Common Stock
held by the holders during the term of this Agreement.
"Common Stock" means the common stock, par value $.01 per share, of the
Company and the restricted common stock, par value $.01 per share, of the
Company.
"Company" has the meaning set forth in the preamble and shall include
the Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 8(a).
"Damages" has the meaning set forth in Section 8(a).
"Demand Registration Statement" has the meaning set forth in Section
2(a).
1
2
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"Holder" has the meaning set forth in the preamble and shall include
any assignee, successor or transferee in accordance with the provisions of
Section 11(c) hereof.
"Initiating Holders" shall have the meaning set forth in Section 2(a).
"Xxxxxxx Agreement" means the Registration Rights Agreement dated as of
December 18, 1998 by and among the Company and the former stockholders of
Xxxxxxx Enterprises, Inc., a Massachusetts corporation.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, and by
all other amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Common Shares except for (i) Common
Shares the sale of which is covered by a Registration Statement that has been
declared effective under the Securities Act and (ii) Common Shares which cease
to be outstanding.
"Registration Expenses" has the meaning set forth in Section 6.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Requesting Holder" means any Holder requesting registration of
Registrable Securities pursuant to Section 2 or Section 3 hereof.
"Richmont Agreement" means the Registration Rights Agreement dated as
of the date of this Agreement by and among the Company and the former
stockholders of Richmont Marketing Specialists Inc., a Delaware corporation.
2
3
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Selling Stockholders" has the meaning set forth in Section 2(a).
"Suspension Notice" has the meaning set forth in Section 5.
"Suspension Period" has the meaning set forth in Section 5.
SECTION 2. DEMAND REGISTRATIONS.
(a) On any two (2) occasions after the date of this Agreement, subject
to the conditions set forth in this Agreement, including without limitation the
conditions set forth in Section 2(b) below, one or more Holders holding at least
forty percent (40%) of the Registrable Securities then held by all Holders may
request (the "Initiating Holders") that the Company cause to be filed with the
Commission and cause to become effective a registration statement (a "Demand
Registration Statement") under the Securities Act relating to the sale by such
Holders of their Registrable Securities in accordance with the terms hereof.
Upon receipt of any such request, the Company shall give written notice of such
proposed registration to all Holders of Registrable Securities. Such Holders
shall have the right, by giving written notice to the Company within fifteen
(15) business days after such notice referred to in the preceding sentence has
been given by the Company, to elect to have included in the Demand Registration
Statement such of their Registrable Securities as each Holder may request in
such notice of election. Thereupon, the Company shall as soon as practicable
thereafter cause such Demand Registration Statement to be filed and declared
effective by the Commission for all Registrable Securities which the Company has
been requested to register. The Company shall in no event be obligated to effect
under this Section 2 more than two (2) demand registrations. If the managing
underwriter of an underwritten offering with respect to which registration has
been requested by any Holder pursuant to this Section 2 has advised the Company
that, in such underwriter's good faith judgment, the number of securities to be
sold in such offering by the Company and persons other than the Company
(collectively, "Selling Stockholders") is greater than the number which can be
offered without adversely affecting such offering, then the Company may reduce
the number of securities to be included in such offering to a number deemed
satisfactory by the managing underwriter, provided, however, that the securities
to be excluded shall be determined in the following order of priority: first,
securities held by any Selling Stockholder not having contractual, incidental
registration rights; second, securities held by any Selling Stockholder (not
including the Holders) participating in such offering pursuant to the exercise
of contractual piggyback registration rights (other than pursuant to the Xxxxxxx
Agreement or the Richmont Agreement), as determined on a pro rata basis (based
upon the aggregate number of securities held by such Selling Stockholders);
third, securities the Company proposes to sell and other securities of the
Company included in such registration; fourth, securities held by (i) any
Selling Stockholder participating in such offering
3
4
pursuant to the exercise of piggyback registration rights under the Xxxxxxx
Agreement or the Richmont Agreement and (ii) any Holder participating in such
registration pursuant to the exercise of the demand registration rights set
forth in this Section 2, as determined on a pro rata basis (based upon the
aggregate number of securities held by such Selling Stockholders and such
Holders).
(b) If a requested registration pursuant to this Section 2 involves an
underwritten offering, the underwriter or underwriters thereof shall be selected
by the Holders of at least a majority (by number of shares) of the Registrable
Securities as to which registration has been requested.
SECTION 3. PIGGY-BACK REGISTRATIONS.
(a) If at any time or times after the date hereof the Company shall
determine to register under the Securities Act any shares of Common Stock (other
than in connection with a registration on Form S-4 or S-8 (or then equivalent
forms) or a registration statement filed in connection with an exchange offer or
offering of securities solely to the Company's existing securityholders), then
the Company shall promptly give written notice of such proposed registration to
the Holders (but in no event less than thirty (30) days prior to the anticipated
effective date of the registration statement). If within twenty (20) days after
the receipt of such notice the Company receives a written request from any
Holder for the inclusion in such registration of some or all of the Registrable
Securities held by such Holder (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof), the Company shall use all commercially
reasonable efforts to cause such Registrable Securities to be included in such
registration on the same terms and conditions as any similar securities of the
Company or any other securityholder included therein and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. The Company may withdraw a registration under
this Section 3 at any time prior to the time it becomes effective, provided that
the Company shall give prompt notice of such withdrawal to the Holders which
requested to be included in such registration.
(b) Notwithstanding the foregoing, if counsel to the Company determines
that the form of Registration Statement for any such registration by the Company
does not permit the registration of Registrable Securities, such counsel shall
deliver to the Holders an opinion stating (i) that such form does not permit the
registration of Registrable Securities and (ii) that the use of a form
permitting the registration of Registrable Securities would not be commercially
feasible. Such opinion shall be delivered to the Holders no less than thirty
(30) days prior to the anticipated effective date of the Registration Statement
and the Company shall not be obligated to register Registrable Securities of any
Holder in such Registration Statement pursuant to this Section 3.
(c) In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include a Holder's
Registrable Securities in the
4
5
underwritten offering unless such Holder accepts the terms of the underwriting
as agreed upon between the Company and the underwriters selected by the Company.
If the managing underwriter of an underwritten offering with respect to which
registration has been requested by any Holder pursuant to this Section 3 has
advised the Company in writing that, in such underwriter's good faith judgment,
the number of securities to be sold in such offering by Selling Stockholders is
greater than the number which can be offered without adversely affecting such
offering, then the Company may reduce the number of securities to be included in
such offering for the accounts of Selling Stockholders (including the Holders)
to a number deemed satisfactory by the managing underwriter, provided, however,
that the securities to be excluded shall be determined in the following order of
priority: first, securities held by any Selling Stockholder not having
contractual, incidental registration rights; and second, securities held by any
Selling Stockholder (including the Holders) participating in such offering
pursuant to the exercise of contractual piggyback registration rights and in the
case of the Richmont Agreement, pursuant to the exercise of demand registration
rights, as determined on a pro rata basis (based upon the aggregate number of
securities held by such Selling Stockholders).
(d) Each Holder hereby agrees that such Holder may not participate in
any underwritten offering hereunder unless such Holder (i) agrees to sell such
Holder's Registrable Securities on the basis provided in the underwriting
arrangements for such offering, and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of the underwriting
arrangements.
SECTION 4. REGISTRATION PROCEDURES.
In connection with the obligations of the Company to register
Registrable Securities pursuant to the terms and conditions of this Agreement:
(a) The Company shall, as expeditiously as possible, prepare
and file with the Commission a Registration Statement on the
appropriate form under the Securities Act, which form shall comply as
to form in all materials respects with the requirements of the
applicable form and include all financial statements required by the
Commission to be filed therewith; provided, however, that in the case
of a Registration Statement filed pursuant to Section 2 hereof, that
the form of such Registration Statement shall be reasonably acceptable
to the Holders of more than 50% of the Registrable Securities to be so
registered;
(b) The Company shall (i) prepare and file with the Commission
such amendments and post-effective amendments to any Registration
Statement as may be necessary to keep such Registration Statement
effective until the earlier of (A) one hundred eighty (180) days
following the effectiveness of such Registration Statement; provided,
however, that such 180-day period shall be extended by the number of
days for which any Suspension Period is in effect during the
effectiveness of such
5
6
Registration Statement, or (B) the completion of the proposed offering
of Registrable Securities pursuant to such Registration Statement, (ii)
cause the prospectus included in such Registration Statement to be
supplemented by any required prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act
and (iii) comply with the provisions of the Securities Act applicable
to it with respect to the disposition of all Registrable Securities
covered by such Registration Statement. A registration requested
pursuant to Section 2 shall not be deemed to have been effected (and
therefore not requested for purposes of Section 2) (i) unless a
Registration Statement with respect thereto has become effective,
provided that a registration which does not become effective after the
Company has filed a Registration Statement with respect thereto solely
by reason of the refusal to proceed of the Initiating Holders (other
than a refusal to proceed based upon the advice of counsel relating to
a matter with respect to the Company) shall be deemed to have been
effected by the Company at the request of such Initiating Holders
unless the Initiating Holders shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if,
after it has become effective, such registration becomes subject to any
stop order, injunction or other order or requirement of the Commission
or other governmental agency or court for any reason, or (iii) the
conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such
registration are not satisfied, other than by reason of some act or
omission by such Initiating Holders;
(c) The Company shall furnish to any Holder, without charge,
such number of conformed copies of any Registration Statement and any
post-effective amendment thereto and such number of copies of the
Prospectus (including each preliminary Prospectus) and any amendments
or supplements thereto, as such Holder may reasonably request in order
to facilitate the sale of such Holder's Registrable Securities;
(d) The Company shall use its best reasonable efforts to
register or qualify the Registrable Securities covered by any
Registration Statement under such other securities or "blue sky" laws
of such states of the United States as any Holder or underwriter
reasonably requests; provided, however, that the Company shall not be
required (i) to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 4(d), (ii) to file any general consent to service of process,
or (iii) to subject itself to taxation in any jurisdiction where it
would not otherwise be subject to taxation;
(e) The Company shall promptly notify each Holder of the
happening of any event which makes any statement made in any
Registration Statement or related Prospectus untrue or which requires
the making of any changes in such Registration Statement or Prospectus
so that it will not contain any 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, in light of the circumstances
under which they were made, not misleading, and promptly following
expiration of any Suspension Period, the Company shall prepare and file
with the Commission and furnish a supplement or amendment to such
Prospectus so that, as thereafter deliverable to the purchasers of
Registrable
6
7
Securities, such Prospectus will not contain any 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, in light of the
circumstances under which they were made, not misleading;
(f) The Company shall use its best reasonable efforts to
prevent the issuance of any order suspending the effectiveness of any
Registration Statement, and, if one is issued, the Company shall use
its best reasonable efforts to obtain the withdrawal of such order as
promptly as practicable;
(g) the Company shall use its best efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities;
(h) the Company shall furnish to each seller of Registrable
Securities and each Requesting Holder a signed counterpart, addressed
to such seller, such Requesting Holder and the underwriters, if any,
of:
(X) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if such
registration includes an underwritten public offering, an
opinion dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to
such seller, and
(Y) a "comfort" letter (or, in the case of any such
Person which does not satisfy the conditions for receipt of a
"comfort" letter specified in Statement on Auditing Standards
No. 72, an "agreed upon procedures" letter), dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, a
letter of like kind dated the date of the closing under the
underwriting agreement), signed by the independent public
accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of securities (with,
in the case of an "agreed upon procedure" letter, such modifications or
deletions as may be required under Statement on Auditing Standards No.
35) and, in the case of the accountants' letter, such other financial
matters, and, in the case of the legal opinion, such other legal
matters, as such seller or such Requesting Holder (or the underwriters,
if any) may reasonably request;
7
8
(i) the Company shall notify the Holders of Registrable
Securities and the managing underwriter or underwriters, if any,
promptly and confirm such advice in writing promptly thereafter:
(V) when the registration statement, the prospectus
or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed, and,
with respect to the registration statement or any
post-effective amendment thereto, when the same has become
effective;
(W) of any request by the Commission for amendments
or supplements to the registration statement or the prospectus
or for additional information;
(X) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration
statement or the initiation of any proceedings by any Person
for that purpose;
(Y) if at any time the representations and warranties
of the Company made as contemplated by this Agreement cease to
be true and correct; and
(Z) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue
sky laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose;
(j) the Company shall 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 earnings statement covering the period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with the
first day of the Company's first full calendar quarter after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, and will furnish to each such seller and each
Requesting Holder at least five (5) business days prior to the filing
thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any thereof to which any
such seller or any Requesting Holder shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or of the
rules or regulations thereunder;
(k) the Company shall provide and cause to be maintained a
transfer agent and registrar for all Registrable Securities covered by
such registration statement from and after a date not later than the
effective date of such registration statement;
(l) the Company shall enter into such agreements and take such
other actions as sellers of such Registrable Securities holding more
than 50% of the shares so to be sold
8
9
shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(m) the Company shall use its best efforts to list all
Registrable Securities covered by such registration statement on any
securities exchange on which any of the securities of the same class as
the Registrable Securities are then listed; and
(n) the Company shall use its best efforts to provide a CUSIP
number for the Registrable Securities, not later than the effective
date of the registration statement.
The Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which the Holders of at least a majority of the
Registrable Securities covered by such registration statement or the underwriter
or underwriters, if any, shall reasonably object, provided that the Company may
file such document in a form required by law or upon the advice of its counsel.
SECTION 5. SUSPENSION PERIOD.
Each Holder, upon receipt of any notice (a "Suspension Notice") from
the Company of the happening of any event of the kind described in Section 4(e)
or of any event which, in the Company's reasonable business judgment and good
faith judgment, could become such an event, shall immediately discontinue
disposition of the Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder has received copies of
the supplemented or amended Prospectus contemplated by Section 4(e) (the period
from the date on which such Holder receives a Suspension Notice to the date on
which such Holder receives copies of the supplemented or amended Prospectus is
referred to herein as the "Suspension Period"). If so directed by the Company,
each Holder will deliver to the Company all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities that is current at the time of receipt of such notice. In
the event that the Company shall give any Suspension Notice, the Company shall
use commercially reasonable efforts and take such actions as are reasonably
necessary to end the Suspension Period as promptly as practicable.
SECTION 6. REGISTRATION EXPENSES.
Subject to the proviso below, any and all expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation Commission and securities exchange registration and filing fees,
reasonable fees and expenses of one legal counsel for the Holders, fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws, printing expenses, fees and expenses incurred in connection with the
listing of the Registrable Securities and fees and disbursements of counsel for
the Company and of the independent certified public accountants of the Company
(all such expenses being herein called "Registration Expenses"), will be borne
by the Company; provided, however,
9
10
that Registration Expenses shall not include (a) underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities or (b) any fees or expenses of any counsel, accountants
or other persons retained or employed by the Holders (other than the fees and
expenses of one legal counsel as provided above).
SECTION 7. UNDERWRITTEN OFFERINGS
(a) Requested Underwritten Offerings. If requested by the underwriters
for any underwritten offering by Holders of Registrable Securities pursuant to a
registration requested under Section 2, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the Company, each such
Holder and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
this type, including, without limitation, indemnities. The Holders of the
Registrable Securities will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the reasonable suggestions
of the Company regarding the form thereof, provided that nothing herein
contained shall diminish the foregoing obligations of the Company. The Holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the other agreements 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 and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holders of Registrable Securities. Any such Holder of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations and warranties contained in writing furnished by such Holder
expressly for use in such registration statement or agreements regarding such
Holder, such Holder's Registrable Securities and such Holder's intended method
of distribution and any other representation required by law or to make any
agreements with the Company or the underwriters with respect to indemnification
of any Person or the contribution obligations of any Person that would impose
any obligation beyond or inconsistent with the provisions of this Agreement.
(b) Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by Section 3 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any Holder
of Registrable Securities as provided in Section 3, use its best efforts to
arrange for such underwriters to include all the Registrable Securities to be
offered and sold by such Holder among the securities to be distributed by such
underwriters. 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 other agreements 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 and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities. Any such Holder of Registrable
10
11
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of distribution and any other
representation required by law or to make any agreements with the Company or the
underwriters with respect to indemnification of any Person or the contribution
obligations of any Person that would impose any obligation beyond or
inconsistent with the terms of this Agreement.
(c) Holdback Agreements.
(i) Each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities, if and to the extent so
required by the managing underwriter, not to sell, make any short sale
of, loan, grant any option for the purchase of, effect any public sale
or distribution of or otherwise dispose of any securities of the
Company, during the 7 days prior to and the 90 days after any
underwritten registration pursuant to Section 2 or 3 has become
effective, except as part of such underwritten registration, whether or
not such Holder participates in such registration, provided that the
foregoing restrictions shall not apply with regard to any entity
controlled by Xxxxx X. Xxxxxx in a distribution of Registrable
Securities to its partners or members or to the transfer to any
affiliate of such entity or to any other transferee in a private
transaction not requiring registration under the Securities Act, or to
any bona fide pledge of such Registrable Securities, provided that such
affiliate or other transferee and/or lender or creditor acknowledges in
writing that it is bound by the provisions of this Section 7(c). Each
Holder of Registrable Securities agrees that the Company may instruct
its transfer agent to place stop transfer notations in its records to
enforce this Section 7(c).
(ii) The Company agrees (X) if so required by the managing
underwriter not to sell, make any short sale of, loan, grant any option
for the purchase of, effect any public sale or distribution of or
otherwise dispose of its equity securities or securities convertible
into or exchangeable or exercisable for any of such securities during
the seven days prior to and the 90 days after any underwritten
registration pursuant to Section 2 or 3 has become effective, except as
part of such underwritten registration and except pursuant to
registrations on Form X-0, X-0, or any successor or similar forms
thereto, and (Y) to cause each holder of its securities purchased from
the Company at any time after the date of this Agreement (other than in
a public offering) to agree not to sell, make any short sale of, loan,
grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of such securities during such
period.
(d) Participation in Underwritten Offerings. No Person may participate
in any underwritten offering hereunder unless such person (i) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved, subject to the terms and conditions hereof, by the Company and the
Holders of a majority of Registrable Securities to be included in such
underwritten offering and (ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) required under the terms of such underwriting arrangements.
Notwithstanding the foregoing, no
11
12
underwriting agreement (or other agreement in connection with such offering)
shall require any Holder of Registrable Securities to make any representations
or warranties to or agreements with the Company or the underwriters other than
representations and warranties contained in a writing furnished by such Holder
expressly for use in the related registration statement or agreements regarding
such Holder, such Holder's registrable Securities and such Holder's intended
method of distribution and any other representation required by law or to make
any agreements with the Company or the underwriters with respect to
indemnification of any Person or the contribution obligations of any Person that
would impose any obligation beyond or inconsistent with the provisions of this
Agreement.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, each Holder, its officers,
directors, trustees, employees, agents, successors and assigns and each Person,
if any, which controls such Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, (collectively,
"Controlling Persons"), from and against all losses, claims, damages,
liabilities and expenses (including without limitation any legal or other fees
and expenses reasonably incurred by any Holder or any such Controlling Person in
connection with defending or investigating any action or claim in respect
thereof) (collectively, "Damages") to which any of them may become subject under
the Securities Act or otherwise, insofar as such Damages arise out of or are
based upon (i) any untrue or alleged untrue statement of material fact contained
in any Registration Statement (including any related preliminary or final
Prospectus) pursuant to which Registrable Securities were registered under the
Securities Act, or (ii) any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
Damages arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company by such Holder expressly for use therein.
(b) Indemnification by the Holders. Each Holder agrees to indemnify and
hold harmless, to the full extent permitted by law, the Company, its directors,
officers, employees and agents and each Controlling Person of the Company, from
and against any and all Damages to which any of them may become subject under
the Securities Act or otherwise to the same extent as the foregoing indemnity
from the Company to such Holder, but only to the extent such Damages arise out
or are based upon any untrue statement or omission or alleged untrue statement
or omission based upon information furnished to the Company in writing by such
Holder expressly for use in any Registration Statement. In no event shall the
liability of any Holder for indemnification under this Section 8(b) in its
capacity as such (and not in such Holder's capacity as an officer or director of
the Company) exceed the proceeds received by such Holder from the sale of
Registrable Securities under such Registration Statement.
(c) Indemnification Procedures. In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in respect
of which
12
13
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
Person (the "indemnified party") shall promptly notify the Person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceedings and shall pay the fees and
disbursements of such counsel relating to such proceeding. The failure or delay
of an indemnified party to notify the indemnifying party with respect to a
particular proceeding shall not relieve the indemnifying party from any
obligation or liability which it may have pursuant to this Agreement if the
indemnifying party is not prejudiced by such failure or delay. 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. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent. No
indemnifying party shall, without the prior written consent of any indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which such indemnified
party is a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on all claims that are the subject
matter of such proceeding.
(d) Contribution. To the extent that the indemnification provided for
in paragraph (a) or (b) of this Section 8 is held by a court of competent
jurisdiction to be unavailable to an indemnified party in respect of any
Damages, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such Damages (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand, and each Holder on the other, from the offering of
the Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Holders, on the
other, in connection with the statements or omissions which resulted in such
Damages, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Holders on the other hand 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 the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
If indemnification is available under paragraph (a) or (b) of this
Section 8, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in such paragraphs without regard to the relative
benefits to or relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 8(d).
The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any
13
14
other method of allocation that does not take account of the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the Damages referred to in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred (and not otherwise
reimbursed) by such indemnified party in connection with investigating or
defending any such action or claim. In no event shall any Holder be required to
contribute an amount under this Section 8(d) in excess of the proceeds received
by such Holder from the sale of Registrable Securities under the relevant
Registration Statement. 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.
SECTION 9. INFORMATION FURNISHED BY HOLDERS.
Each Holder shall furnish to the Company such information regarding
such Holder and such Holder's intended method of distribution of the Registrable
Securities as the Company may from time to time reasonably request in writing in
order to comply with the Securities Act and the provisions of this Agreement.
Each Holder agrees (a) to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by the Holder to the
Company or of the occurrence of any event, in either case as a result of which
any Prospectus contains or would contain an untrue statement of a material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities or omits or would omit to state any material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and (b) to promptly furnish to the Company any additional information required
to correct and update any previously furnished information or required so that
the Prospectus shall not contain, with respect to the Holder or the Holder's
intended method of distribution of the Registrable Securities, 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
light of the circumstances then existing.
SECTION 10. "MOST FAVORED NATIONS" ELECTION.
In the event that after the date of this Agreement, but prior to its
termination, the Company enters into an agreement with any Holder of shares of
its Common Stock whereby such Holder is granted registration rights with respect
to such shares (a "Subsequent Agreement"), then the Company shall
(a) provide each Holder of Registrable Securities a copy of such
agreement promptly after its execution, and
(b) offer each such Holder of Registrable Securities an opportunity to
elect to enter into an agreement with the Company whereby such Holder of
Registrable Securities, in lieu of its
14
15
rights hereunder, shall be entitled to the registration rights equivalent to
those described in the Subsequent Agreement.
A Holder of Registrable Securities shall have 20 days after the date on
which notice of such event is deemed to have been given by the Company pursuant
to the provisions of Section 11(b) of this Agreement, to notify the Company in
writing of its election to terminate its rights under this Agreement and, in
lieu thereof, to enter into a new agreement containing registration rights
equivalent to those contained in the Subsequent Agreement. Such new agreement
shall be executed promptly after receipt of such notice by the Company.
SECTION 11. MISCELLANEOUS.
(a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Holders of a
majority in interest of the Registrable Securities then outstanding.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by registered or certified mail (return
receipt requested), postage prepaid or courier to the parties at their
respective addresses set forth on the signature pages hereof (or at such other
address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been received: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; and on the next
Business Day if timely delivered to a courier guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such person shall be entitled to
received the benefits hereof.
(d) Counterparts. This Agreement may be executed in any number of
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 agreement.
15
16
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of law.
(g) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(h) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(i) 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.
(j) Rule 144. The Company shall timely file any reports required to be
filed by it under the Securities Act and the Exchange Act to the extent required
from time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act pursuant to the exemption provided by Rule
144 under the Securities Act. Upon request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(k) Termination of 1998 Registration Rights Agreement. The Company,
Monroe & Company II, LLC and Xxxxxx X. Xxxxxxx hereby terminate the 1998
Registration Rights Agreement and agree that none of such parties shall have any
further rights or obligations thereunder.
[End of text]
16
17
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.
XXXXXXX AMERICAN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
/s/ Xxxxx X. Xxxxxx
Monroe & Company, LLC
Manager
Existing Securities:
Class:
Number of Shares:
Address:
18
/s/ Xxxxx X. Xxxxxx
JLM Management, LLC
Title:
Existing Securities:
Class:
Number of Shares:
Address:
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
0 Xxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
19
/s/ Xxxxxx X. Xxxxx, III
Xxxxxx X. Xxxxx, III
Title:
Existing Securities:
Class:
Number of Shares:
Address:
/s/ Xxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxxxxxx
Title:
Existing Securities:
Class: Common
Number of Shares: 27,409
Class: Restricted Common
Number of Shares: 6,994
Address:
00 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
20
/s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
/s/ Xx-Xxxx Xxxxxxx
Xx-Xxxx Xxxxxxx
Title:
Existing Securities:
Class:
Number of Shares:
Address:
0 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
