EXHIBIT 99.1
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") is made and entered into
by and among ebank Financial Services, Inc., a corporation organized and
existing under the laws of the State of Georgia, (the "Company"); Xxxxxx X.
Xxxxx and Xxxx X. Xxxxxxxxxx, as individuals (the "Individuals"), Xxxxx Xxxxx,
LP, a limited partnership organized and existing under the laws of the State of
Georgia (the "Partnership"), Xxxxx Xxxxx Management Company, LLC, a limited
liability company organized and existing under the laws of the State of Georgia
and the sole general partner of Xxxxx Xxxxx LP (the "LLC"), Sunshine Mortgage
Corporation, ("Sunshine") and Madison Mortgage Company ("Madison"). The
Partnership, the LLC, Sunshine and Madison are executing this Agreement in part
to assure the Company that they are validly and effectively transferring all
rights of record ownership and Beneficial Ownership in Company Common Stock and
Company Voting Securities that they currently hold to the Individuals
immediately upon receipt of all necessary Regulatory Approvals, and assure that
no Company Common Stock or Company Voting Securities will be acquired or held in
any manner by a "company," as defined in HOLA and the Office of Thrift
Supervision regulations thereunder. The Individuals, the Partnership, the LLC,
Sunshine and Madison are referred to, collectively, as the "Holders."
In consideration of the mutual warranties, representations, covenants
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties, intending to be
legally bound, agree as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement and any amendments hereto, the following
terms shall have the following meanings respectively:
"Affiliate" shall have the meaning set forth in SEC Rule 405 under the
Securities Act.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
"Associate" shall have the meaning set forth in SEC Rule 405 under the
Securities Act.
"Beneficial Owner", "Beneficially Owned" and similar terms shall have
the meaning set forth in SEC Regulation 13d-3 under the Securities Exchange Act
of 1934, as amended; provided that for purposes of this Agreement, any option,
warrant, conversion or exchange privilege, right or arrangement to purchase,
acquire or vote Company Voting Securities regardless of the time period during
or at which it may be exercised and regardless of the consideration paid shall
be deemed to give the holder thereof beneficial ownership of the Company Voting
Securities to which it relates.
"Company Common Stock" shall mean the $0.01 par value per share common
stock of the Company and any security or rights which are exercisable or
exchangeable for, or convertible into, such common stock.
"Company Voting Securities" shall mean all classes of capital stock of
the Company which are then entitled to vote generally in the election of
directors and any securities exchanged for such classes of capital stock and any
securities convertible into or exchangeable or exercisable for, such classes of
capital stock, or for which the Company has offered to exchange for or convert
into Company Common Stock or other voting shares of Company capital stock. For
purposes of determining the amount or percentage of outstanding Company Voting
Securities beneficially owned by a Person, and for purposes of calculating the
aggregate voting power relating to such Company Voting Securities: (i) all
Company Voting Securities Beneficially Owned by Affiliates or Associates of such
Person shall be deemed to be Beneficially Owned by such Person and (ii) all
Company Voting Securities Beneficially Owned by that Person shall be included in
the amount Beneficially Owned and in the number of shares of Company Voting
Securities deemed outstanding, but any securities convertible into or
exchangeable or exercisable for Company capital stock entitled to vote in the
election of directors of the Company which are held by Persons other than such
Person shall be excluded from the number of shares of Company Voting Securities
deemed outstanding.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding, or undertaking of any kind or
character, whether or not legally binding, or any other document to which any
Person is a party or that is binding on or seeks to bind any Person or its
capital stock, Assets or business.
"Default" shall mean (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, (ii)
any occurrence of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"ebank" shall mean ebank, a federal savings bank wholly-owned by the
Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"Extraordinary Transaction" shall mean any announcement of any tender
offer, exchange offer or other offer to purchase Company Voting Securities or
any proposal for a merger, consolidation, acquisition of all or 10% or more of
the stock or assets of, or other business combination involving the Company, or
any Contract by the Company to enter into or effect any of same.
"Governmental Authority" shall mean any federal, state, local, foreign,
or other court, board, body, commission, agency, authority or instrumentality,
arbitral authority, self-regulatory authority, mediator, tribunal, including
Regulatory Authorities and taxing authorities.
"Group" shall mean two or more Persons acting in concert for the
purpose of acquiring, holding or disposing of securities of an issuer.
"HOLA" shall mean the Home Owners Loan Act of 1933, as amended (12
U.S.C. 1461, et seq.).
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) and when the Person is an entity
shall mean those facts that are known or should reasonably have been known after
due inquiry by the chairman, president, chief financial officer, chief
accounting officer, chief operating officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior, executive or
other vice president of such Person and the knowledge of any such Persons
obtained or which would have been obtained from a reasonable investigation,
including a review of public filings or records.
"Law" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable to a
Person or its or business, including those promulgated, interpreted, or enforced
by any Regulatory Authority.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular, periodic
examinations of ebank, the Company and their Affiliates by Regulatory
Authorities.
Material Adverse Effect" shall mean an event, change, or occurrence
which, individually or together with any other event, change, or occurrence, has
a material adverse effect on (i) the financial position, business, or results of
operations of a Party, or (ii) the ability of a Party to perform its obligations
under this Agreement, provided that a "Material Adverse Effect" shall not be
deemed to include the effect of (a) changes in banking or similar Laws of
general applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles generally
applicable to banks and their holding companies, (c) changes in economic
conditions or interest rates generally affecting financial institutions, (d) the
direct effects of
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compliance with this Agreement on the operating performance of the Company, (e)
effects demonstrably shown to have been proximately caused by the public
announcement of, and the response or reaction of customers, vendors, licensors,
investors or employees of the Company to this Agreement, (f) failure of the
Company to meet the revenue or earnings predictions of equity analysts, or any
other published revenue or earnings predictions or expectations, for any period
ending on or after the date of this Agreement, or (g) changes in the market
price or trading volume of Company Common Stock.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any Governmental Authority.
"Party" shall mean either the Company, on the one hand, or the Holders
(individually or collectively), on the other hand, and "Parties" shall mean the
Company and Holders.
"Permit" shall mean any federal, state, local or foreign Governmental
Authority approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets or business.
"Person" shall mean a natural person or any legal, commercial or
Governmental Authority, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company or
partnership, trust, business association, group acting in concert, or any person
acting in a representative capacity.
"Regulatory Authorities" shall mean, collectively, the SEC, Nasdaq and
other securities markets or exchanges where the Company's securities are listed
or traded, the Federal Reserve, the Office of Thrift Supervision, the FDIC, the
Georgia Department of Banking and Finance and all other Governmental Authorities
having jurisdiction over a Party and its respective Subsidiaries.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Laws" shall mean the Securities Act, the Exchange Act, the
Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
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ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF
EBANK FINANCIAL SERVICES, INC.
ebank Financial Services, Inc. hereby represents and warrants to the
Holders as follows:
2.1 Organization, Standing, and Power. ebank Financial Services,
Inc. is a corporation duly organized, validly existing, and in good standing
under the Laws of the State of Georgia, and has the corporate power and
authority to carry on its business as now conducted and to own, lease, and
operate its Assets. The Company is duly qualified or licensed to transact
business as a foreign corporation in good standing in the states of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.
2.2 Authority; No Breach by Agreement. ebank Financial Services,
Inc. has the corporate power and authority necessary to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
has been duly and validly authorized by all necessary corporate action,
including approval of this Agreement by the Company's duly constituted Board of
Directors, and such resolutions and this Agreement will be maintained
continuously in the Company's records. Assuming due authorization, execution and
delivery of this Agreement by the Holders, this Agreement represents a legal,
valid, and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
2.3 Compliance. The Company is duly registered with the Office of
Thrift Supervision ("OTS") as a thrift holding company under the BHC Act. The
Company has in effect all Permits necessary for it to own, lease or operate its
material Assets and to carry on its business as now conducted, except for those
Permits the absence of which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect, and there has occurred no Default
under any such Permit, other than Defaults which are not reasonably anticipated
to have, individually or in the aggregate, a Material Adverse Effect. Neither
the Company nor ebank:
(a) is in Default under its articles of incorporation or bylaws
(or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable to
its business except for Defaults which are not reasonably anticipated to have,
individually or in the aggregate, a Material Adverse Effect; or
(c) has received any notification or communication from any
Governmental Authority or the staff thereof (i) asserting that any the Company
is not, or may not be, in compliance with any Laws or Orders, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect,
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(ii) threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect, or
(iii) requiring the Company to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any board resolution or similar undertaking, which
restricts materially the conduct of its business, or in any manner relates to
its employment decisions, its employment or safety policies or practices, its
capital adequacy, its credit or reserve policies, its management, or the payment
of dividends.
2.4 Statements True and Correct. No statement, certificate,
instrument, or other writing furnished or to be furnished by the Company or any
Affiliate thereof to any Holder pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
2.5 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of the Company, threatened (or unasserted but
considered probable of assertion and which if asserted is reasonably like to
have an unfavorable outcome) against the Company, or against any director,
officer or employee (in their capacity as such), or against any Asset, interest,
or right of any of them, that is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect, nor are there any Orders outstanding
against the Company that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF HOLDERS
The Holders hereby represent and warrant to the Company as follows:
3.1 Organization, Standing, and Power. Each of Xxxxx Xxxxx, LP,
Xxxxx Xxxxx Management Company, LLC, Sunshine Mortgage Corporation, Madison
Mortgage Company, as well as any Affiliates or Associates of each, are duly
organized, validly existing, and in good standing under the laws of the state of
each entity's jurisdiction, and each has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Assets. Each entity is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.
3.2 Authority; No Breach by Agreement. Each of Xxxxx Xxxxx, LP,
Xxxxx Xxxxx Management Company, LLC, Sunshine Mortgage Corporation, Madison
Mortgage Company, as well as any Affiliates or Associates of each, has the
corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and
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performance of this Agreement has been duly and validly authorized by all
necessary corporate action, including approval of this Agreement by each
entity's duly constituted Board of Directors or authorized manager. Assuming due
authorization, execution and delivery of this Agreement by the Company, this
Agreement represents a legal, valid, and binding obligation of the Holders,
enforceable against each of the Holders in accordance with its terms. Each of
the Holders has the power, capacity and authority necessary to execute, deliver,
and perform its obligations under this Agreement. The execution, delivery, and
performance of this Agreement has been duly and validly authorized by all
necessary action in respect thereof on the part of Xxxxxx X. Xxxxx and Xxxx X.
Xxxxxxxxxx, individually, and in their capacity as representatives of the other
Holders.
3.3 Compliance with Laws. Each of Xxxxx Xxxxx, LP, Xxxxx Xxxxx
Management Company, LLC, Sunshine Mortgage Corporation, Madison Mortgage
Company, as well as all Affiliates and Associates of each of them, has in effect
all Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably anticipated to have,
individually or in the aggregate, a Material Adverse Effect. None of the
Individuals, Xxxxx Xxxxx, LP, Xxxxx Xxxxx Management Company, LLC, Sunshine
Mortgage Corporation, Madison Mortgage Company, or any Affiliates or Associates
of each of them:
(a) is in Default under its articles of incorporation or
bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits
applicable to its business or employees conducting its business, except for
Defaults which are not reasonably anticipated to have, individually or in the
aggregate, a Material Adverse Effect; or
(c) has received any notification or communication from
any Governmental Authority or the staff thereof (i) asserting that any of the
Holders is not, or may not be, in compliance with any Laws or Orders, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, (ii) threatening to revoke any Permits, the revocation
of which is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on any Holder of Company securities or any of their
respective Affiliates or Associates, or (iii) requiring the Holders to enter
into or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to adopt any board
resolution or similar undertaking, which restricts materially the conduct of its
business or that of the Company, ebank or any of their Affiliates or Associates,
or in any manner relates to its employment decisions, its employment or safety
policies or practices, its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends of the Holders or that of the Company,
ebank or any of their Affiliates or Associates.
3.4 Statements True and Correct. No statements, certificate,
instrument, or other writing furnished or to be furnished by the Holders or any
Affiliate or Associate thereof to the Company pursuant to this Agreement, or to
any Regulatory Authority,
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including all regulatory applications and notices or any other document,
agreement, or instrument referred to herein or made in connection with the
acquisition, ownership or disposition of Company Common Stock or Company Voting
Securities contains or will contain any untrue statement of material fact or
will omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
3.5 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of the Holders, threatened (or unasserted but
considered probable of assertion and which if asserted is reasonably like to
have an unfavorable outcome) against any of the Holders, or against any
director, officer or employee (in their capacity as such), or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such Holders, the
Company, ebank or any of their Affiliates or Associates, nor are there any
Orders outstanding against any Holder that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such Holders, the
Company, ebank or any of their Affiliates or Associates.
3.6 Financial Capacity. The Holders have, and will have at the
Effective Time, cash, and other liquid assets, and funding sources, sufficient
in amount to fulfill any obligations under the terms of this Agreement.
3.7 Ownership of Company Securities. The Holders affirm that their
current ownership of the Company's common stock, whether directly held or
beneficially owned, is completely and accurately set forth on Schedule A hereto
as of the date of this Agreement. The Holders will promptly deliver an amended
Schedule A any time any transfer of Company Common Stock or Company Voting
Securities is being made.
3.8 Rebuttal of Control. Each holder on behalf of themselves and
their affiliates and associates agree that they will comply with all statements,
conditions and commitments made in or in connection with the rebuttal of control
presently in effect prior to the receipt of intent not to disapprove a notice of
change in control.
3.9 Compliance with Banking and Securities Laws. Each of the
holders on behalf of themselves and their affiliates and associates agrees to
comply at all times during the term of this Agreement, with all federal and
state banking and securities laws applicable to them as a result of their
acquisition, ownership or disposition of company common stock or company voting
securities, and to timely make all necessary filings including all filings
required under Section 16 of the Exchange Act, Sections 13 and 15 of the
Exchange Act, all OTS rules and regulations and as requested or required in the
reasonable judgment of the company.
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ARTICLE FOUR
COVENANTS AND AGREEMENTS OF HOLDERS
Each Holder hereby jointly and severally covenants and agrees with the
Company as follows:
4.1 General Restrictions. From the date of this Agreement, no
Holder nor any Affiliate or Associate of a Holder shall, individually, or as
part of a group, directly or indirectly: (i) make or participate in the making
of any public announcement with respect to, or submit or participate in a
proposal for, or offer of, any Extraordinary Transaction or any acquisition of
Company Voting Securities or 10% or more of the assets of the Company or any of
its Affiliates; (ii) initiate the solicitation of or solicit proxies or consents
or become a "participant" in a "solicitation" (as such terms are defined in the
SEC Regulation 14A under the Exchange Act) with respect to any Company Voting
Securities in opposition to the recommendation of the Board of Directors or
management of the Company with respect to any matter; (iii) initiate or
institute, or participate in the initiation or institution of, any solicitation
of shareholder proxies or written consents (whether pursuant to Rule 14a-8 of
the Exchange Act or otherwise) with respect to any matter which is not required
by the Company's Articles of Incorporation or Bylaws, the rules of any
securities exchange or market, if any, on which Company Voting Securities are
then traded, or by any similar laws or rules to be submitted to the Company's
shareholders; (iv) initiate or institute, or participate in the initiation or
institution of, any solicitation of shareholder proxies or written consents
(whether pursuant to Rule 14a-8 of the Exchange Act or otherwise) to nominate or
to withhold votes for any nominee for any director or directors; (v) initiate or
institute, or participate in the initiation or institution of, any legal,
regulatory or administrative action or proceeding in any court of competent
jurisdiction or appropriate regulatory or administrative body or agency with
respect to the Company or any of its Affiliates, Associates, employees,
accountants, legal counsel or other representatives, which action or proceeding
in any way contests, seeks to void or questions, the validity or the
enforceability of any provision of this Agreement or seeks to enjoin or restrain
the Company from taking any action or seeking any remedy authorized or
contemplated herein; or (vi) join or become a part of any Group, or otherwise
act in concert with any other Person, for the purpose of acquiring, holding,
voting, or disposing of Company Voting Securities, or otherwise become a
"person" within the meaning of Section 13(d)(3) of the Exchange Act with respect
to Company Voting Securities, except as a member of a Group consisting solely of
Holders who are parties to this Agreement with respect to actions specifically
required or permitted by this Article Four.
4.2 Acquisition of Company Voting Securities.
(a) From the date of this Agreement, neither a Holder nor
any of its Affiliates or Associates shall, directly or indirectly, acquire or
have Beneficial Ownership of, any Company Voting Securities in excess of 33% of
the total number of issued and outstanding Company Voting Securities, except (i)
pursuant to dividends or distributions of Company Voting Securities made on or
to Company Common Stock beneficially owned by such Person and other similarly
situated shareholders or (ii) pursuant to a merger, consolidation or share
exchange with, or acquisition of stock or substantially all of the assets of, an
Affiliate of a Holder or a business division of a Holder or an Affiliate
thereof,
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which is approved unanimously by the entire Board of Directors of the Company
not including the Holders or their Affiliates or Associates or any of their
representatives on the Company's Board of Directors. In the event that a Holder
or any of its Affiliates or Associates sells, transfers or otherwise disposes
(with or without consideration) of any Company Voting Securities (other than to
a Holder or a wholly owned subsidiary of a Holder or by will or the laws of
descent and distribution, or by gift to a lineal descendant) (provided in each
case the recipient must execute a counterpart of this Agreement before the
Company will be obligated to effect any such transfer of Company Voting
Securities), such Holder and its Affiliates and Associates may not thereafter
reacquire such shares.
(b) In no event shall any holder transfer Beneficial
Ownership of any company voting securities to any entity which is an affiliate
or associate of such holder or of any other holder where such transfer would
cause the transferee to become a savings and loan holding company for purposes
of HOLA.
(c) For purposes of calculating the limit on beneficial
ownership provided in Section 4.2(a), the number of shares which a holder has
beneficial ownership, including all shares which he has the right to acquire
upon exercise of any warrants, options, or conversion or exchange rights with
respect to any company or other securities or instruments, shall be included in
both the numerator and the denominator of company voting securities owned and
company voting securities issued and outstanding.
4.3 Disposition of Company Voting Securities. From the date of
this Agreement, neither a Holder nor any of its Affiliates or Associates shall,
directly or indirectly, offer, sell or otherwise transfer (in any single
transaction or series of transactions over any rolling three month period)
Company Voting Securities to any Person (together with any Affiliate or
Associate thereof) representing beneficial ownership of more than one percent
(1.0%) of the then-outstanding Company Voting Securities except pursuant to SEC
Rule 144; provided that each Holder shall provide notice of any such proposed
sale at least one trading day prior to any sale, together with a copy of any
Form 144s when filed.
4.4 Registration Rights. Holders shall have registration rights
with respect to Company Common Stock subject to this agreement, upon the terms
and conditions hereof and the Registration Agreement attached as Exhibit 1 and
incorporated herein by reference.
4.5 Compliance with Company Xxxxxxx Xxxxxxx Policies. From the
date of this Agreement, each of the Holders, together with any of its Affiliates
or Associates, acknowledges receipt of and agrees to abide by the xxxxxxx
xxxxxxx policy ("Xxxxxxx Xxxxxxx Policy") of the Company, and will timely make
all filings with and give all notices to, all applicable Regulatory Authorities
required as a result of any acquisition, holding or disposition of Company
Voting Securities, including all required under the Securities Act, the Exchange
Act (including Sections 13, 15 and 16) and HOLA and OTS regulations.
4.6 Confidentiality Agreement. The Holders agree to keep and hold
all information in accordance with the provisions of the confidentiality
agreement entered into between the Company and the Holders prior to the date of
this Agreement (the "Confidentiality Agreement"). In addition to the Parties'
respective obligations under the
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Confidentiality Agreement, which are hereby reaffirmed and adopted, and
incorporated by reference herein, the Holders shall, and shall cause their
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the Company concerning its and its Affiliates'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated, the Holders
shall promptly return or certify the destruction of all documents and copies
thereof, and all work papers containing confidential information received from
the Company.
4.7 Termination of Standstill. Notwithstanding anything contained
in this Agreement to the contrary, the provisions of this Article Four shall
terminate, and be of no further force and effect, upon the occurrence of any
Extraordinary Transaction approved and recommended by a majority of the Entire
Board of Directors of the Company in which the Beneficial Owners of Company
Voting Securities immediately prior to the Extraordinary Transaction do not
constitute the holders of a majority of the voting securities of the resulting
entity.
ARTICLE FIVE
ADDITIONAL AGREEMENTS
5.1 Notices of Transfer Restrictions. The Company shall notify its
registrar and transfer agent of the restrictions contained in this Agreement,
and the following legend shall be placed upon all certificates representing
Company Voting Securities held by Holders and their Affiliates and Associates,
which legend will remain thereon as long as such Company Voting Securities are
subject to the restrictions contained in this Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A STANDSTILL AGREEMENT, DATED AS OF MAY 16, 2005,
2005, AS AMENDED, AMONG THE ISSUER AND THE HOLDERS NAMED THEREIN AND
ANY OF THEIR SUCCESSORS AND ASSIGNS. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE OFFICE OF THE SECRETARY OF EBANK FINANCIAL SERVICES, INC.
EBANK FINANCIAL SERVICES, INC. WILL FURNISH TO ANY SHAREHOLDER, UPON
REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE RIGHTS, TERMS AND
CONDITIONS OF SUCH AGREEMENT."
Certificates representing Company Voting Securities acquired prior or subsequent
to the date of this Agreement by Holders or any of their Affiliates or
Associates shall be promptly surrendered to the Company for placement thereon of
the foregoing legend. The Company may enter a stop transfer order with the
registrar and transfer agent or agents of Company Voting Securities against the
transfer of Company Voting Securities except in compliance with the requirements
of this Agreement.
5.2 Director Voting. At the first annual meeting of shareholders
following the date that the Holders have received approval from the OTS of their
Change in Control application and the Holders beneficially own 25% or more of
the total outstanding
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Company Voting Securities, the Company shall use its best efforts to have
elected to the Company Board of Directors at all times, subject to compliance
with all applicable requirements of the Company's governing documents, the laws
of the State of Georgia, the Exchange Act, and the rules of any stock exchange,
the SEC or any other Regulatory Authority, One Holder, who shall initially be
Xxxx Xxxxxxxxxx and who shall thereafter be an individual reasonably acceptable
to the Company; provided, however, that if at any time the Holders shall no
longer beneficially own at least 25% of the total outstanding Company Voting
Securities, the Holders' right to designate an individual to serve as a director
as set forth in this Section 3.2(a) shall immediately cease and shall not be
reinstated. This Section 5.2 applies only to the initial Holders, and not to
their successors, assigns, estates or personal or legal representatives;
5.3 Business Relationships. Neither this Agreement nor the rights
and duties hereunder shall require the Company or any Holder to conduct business
with each other or with any Affiliate or Associate of each other. Any business
that the Company and any Holder or any Affiliate or Associate thereof may
conduct, shall be pursuant to written agreements in form and substance mutually
satisfactory to each party thereto, and which comply with applicable law,
including, Federal Reserve Acts Sections 23A and 23B, Federal Reserve Regulation
W thereunder and other applicable Laws.
5.4 Further Assurances. From time to time after the execution of
this Agreement, as and when requested by the Company and Holders and to the
extent permitted by Georgia law, the Parties shall take or cause to be taken
such further or other action as shall be necessary to carry out the purposes of
this Agreement.
ARTICLE SIX
TERM OF AGREEMENT
6.1 Term of Agreement. Except as otherwise expressly provided in
this Agreement, the respective rights and obligations of the Parties under this
Agreement shall continue in full force and effect through the 5th anniversary of
the date of this Agreement (the "Initial Term"), and thereupon, provided neither
party has given written notice of termination, shall automatically renew for an
additional one-year term 90 days prior to the 5th anniversary and each
subsequent anniversary.
6.2 Termination. This Agreement may be terminated at any time upon
the mutual written agreement of the parties.
6.3 Remedies. The Holders agree that the provisions of this
Agreement are fair, reasonable and necessary to protect the legitimate interests
of the Company and its shareholders generally and further agree that the Company
and its other shareholders would suffer irreparable injury if any of the Holders
were to violate any provision of this Agreement. The Parties recognize and
hereby acknowledge that it may be difficult to measure accurately the amount of
damages that would result to a Party by reason of a failure of the other Party
to perform any of the obligations imposed on it by this Agreement. The Parties
accordingly agree that each such Party shall be entitled to an injunction or
temporary restraining order to prevent breaches of this Agreement and to
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enforce specifically the terms and provisions hereof in addition to any other
remedies, including damages, to which such Party may be entitled at law or in
equity in accordance with this Agreement. The Holders agree to hereby waive and
not to seek the posting of a bond or any security in connection with the Company
seeking or obtaining such relief, and agree not to challenge the jurisdiction or
venue where any such Litigation may be brought. In the event of any
investigation or other proceedings relating to this Agreement, if a court
determines that any Holder has breached this Agreement, then the Holders shall
be jointly and severally liable and pay to the Company, as incurred, the
reasonable legal fees and charges incurred by the Company in connection with
such Litigation, including any appeal therefrom.
ARTICLE SEVEN
MISCELLANEOUS
7.1 Notices. Any notice or other communication required or permitted
under this Agreement shall be effective only if it is in writing and delivered
personally, by facsimile transmission, or by registered or certified mail,
postage pre-paid, addressed as follows:
The Company: ebank Financial Services, Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx Box
Copy to Counsel: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. XxxXxxxxx, III
Holders: Xxxxxx X. Xxxxx
c/o Sunshine Mortgage Company
0000 Xxxx Xxxx Xxxxx Xxxxx 000
Xxxxxx, XX 00000
Xxxx X. Xxxxxxxxxx
c/o Sunshine Mortgage Company
0000 Xxxx Xxxx Xxxxx Xxxxx 000
Xxxxxx, XX 00000
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Sunshine Mortgage Company and
Madison Mortgage Company
0000 Xxxx Xxxx Xxxxx Xxxxx 000
Xxxxxx, XX 00000
Xxxxx Xxxxx L.P. and
Xxxxx Xxxxx Management Company, LLC
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Copy to Counsel: ______________________________________
______________________________________
______________________________________
Attention: ___________________________
or such other address as shall be furnished in writing by any of the Parties.
Any such notice or communication shall be deemed to have been given as of the
date so personally delivered or mailed.
7.2 Amendments. This Agreement may be amended by a subsequent
writing signed by both Parties upon the approval of each of the Parties.
7.3 Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by each Party and
delivered to the other Party. A facsimile signature shall constitute and have
the same force and effect as an original signature for all purposes under this
Agreement.
7.4 Headings. The headings in this Agreement are for convenience
only and shall not affect the construction or interpretation of this Agreement.
7.5 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Company, ebank and the
Holders and their respective successors and assigns, transferees and legal and
personal representatives as provided herein.
7.6 Severability. If any provision of this Agreement shall be held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
7.7 Waiver. No failure or delay by the Company in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or future exercise
thereof or the exercise of any other right, power or privilege hereunder.
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7.8 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between and among the Parties with respect to the
subject matter hereof and supersedes any prior agreements and understandings
among the Parties with respect to such subject matter.
7.9 Governing Law. This Agreement is governed by and shall be
construed in accordance with the laws of the State of Georgia. The federal and
state courts in the Northern District of Georgia shall have exclusive
jurisdiction and venue in the event of any dispute hereunder.
7.10 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting to this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
[Signatures on following page]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed and delivered on May 16, 2005, to be effective upon receipt by the
Parties of notice of approval of the Change in Control Application from the OTS.
eBank Financial Services, Inc.
By: /s/ Xxxxx X. Box
-----------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
XXXXXX X. XXXXX
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
XXXX X. XXXXXXXXXX
By: Xxxx X. Xxxxxxxxxx
----------------------------------------
XXXXX XXXXX, L.P.
By: Xxxxx Xxxxx Management, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Manager
--------------------------------------
XXXXX XXXXX MANAGEMENT COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Manager
--------------------------------------
SUNSHINE MORTGAGE COMPANY
By: Xxxx X. Xxxxxxxxxx
----------------------------------------
Title: President
--------------------------------------
MADISON MORTGAGE COMPANY
By: Xxxx X. Xxxxxxxxxx
----------------------------------------
Title:
--------------------------------------
-16-
SCHEDULE A
LIST OF HOLDERS' OWNERSHIP IN THE COMPANY
AS OF MAY 16, 2005
NAME OF INDIVIDUAL OR ENTITY NUMBER OF SHARES DIRECTLY HELD
---------------------------- ------------------------------
Xxxxxx X. Xxxxx 0000
Xxxxx Xxxxx, LP 854,832
EMT Properties, Inc. Profit Sharing Plan 28,800
Xxxx X. Xxxxxxxxxx 92,792
EXHIBIT 1
REGISTRATION AGREEMENT
The Holders and the Company agree as follows:
1. Piggyback Registrations.
(a) Right to Piggyback. So long as the Holders
beneficially own more than 16.0% of the Company's $0.01 par value
common stock ("Common Stock"), whenever the Company proposes to
register any of its Common Stock in connection with a proposed
underwritten public offering (a "Public Offering")(including any
proposed registration of the Company's Common Stock by any third party
in connection with a Public Offering) under the Securities Act (other
than in connection with registrations on SEC Forms X-0, X-0 or any
successor or similar forms or on SEC Form S-3 in connection with a
business combination or exchange offer, dividend reinvestment and/or
direct investment plan, any employment benefit plan or the exercise or
conversion by employees or lenders of options, warrants or similar
rights) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"),
the Company shall give prompt written notice to all Holders of
Registrable Securities of its intention to effect such a registration.
The Holders shall keep such notice strictly confidential until the
Company has made a public announcement of the proposed Public Offering.
The Company thereafter shall use its commercially reasonable efforts to
include in such registration all Registrable Securities with respect to
which the Company has received written requests from the Holders for
inclusion therein within 20 days after the Holders' receipt of the
Company's notice; provided, however, that at any time after giving such
written notice of its intention to register any Common Stock and prior
to the effective date of the registration statement filed in connection
with such registration, if the Company shall determine, in its sole
discretion, for any reason not to proceed with the registration, the
Company shall give written notice to the Holders and thereupon the
Company shall have no further obligation to register such Registrable
Securities in connection with such proposed Public Offering. Such
termination of a Public Offering shall not relieve the Company from its
obligation to pay the Registration Expenses to the extent incurred in
connection therewith as provided in Section 1(b), or from its
obligations hereunder with respect to any other Public Offering or a
registration of such terminated Public Offering.
(b) Piggyback Expenses. The Company shall pay all
Registration Expenses in connection with Piggyback Registrations,
except that each Holder shall pay the costs described in Section 4(b)
and all costs of providing information to the Company. Each Holder
shall also pay its pro rata share of any underwriting discounts and
underwriter fees and charges (including any fees and charges of
underwriter's counsel) and other costs and expenses of the offering
based on the number of each Holder's securities sold in the offering as
a percentage of the total
securities sold. Any costs incurred shall be paid by the Company and
each Holder as provided herein, regardless of whether the offering is
completed or the size of the offering.
(c) Priority on Primary Registrations. In connection with
any primary Public Offering on behalf of the Company, if the managing
underwriters advise the Company in writing that, in their opinion, the
number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the Company, then the
Company shall include in such registration (i) first, the securities
the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration, pro rata among the
Holders on the basis of the number of Registrable Securities owned by
each such Holder and (iii) third, the other securities requested to be
included in such registration.
(d) Priority on Secondary Registrations. In connection
with any underwritten secondary registration on behalf of holders of
the Company's securities other than the Holders, and the managing
underwriters advise the Company in writing that, in their opinion, the
number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders of a majority
of the securities to be included in such registration, then the Company
shall include in such registration (i) first, the securities requested
to be included therein by the other holders requesting such
registration, (ii) second, the Registrable Securities requested to be
included in such registration, pro rata among the Holders on the basis
of the number of Registrable Securities owned by each such Holder and
(iii) third, the other securities requested to be included in such
registration.
2. Registration Procedures. Whenever the Holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its commercially reasonable efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) notify in writing a representative appointed by the
Holders with authority to act on their behalf (the "Representative") of
the effectiveness of each registration statement filed hereunder and
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for
such period as in the opinion of counsel for the Company a prospectus
is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
-2-
(b) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus), and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(c) use commercially reasonable efforts to register,
qualify, or exempt such Registrable Securities under such other
securities or blue sky laws of such jurisdictions which the
underwriters have determined are appropriate and do any and all other
acts and things which may be reasonably necessary or advisable to
enable such seller of Registrable Securities to consummate the
disposition in such jurisdictions of the Registrable Securities owned
by such seller of Registrable Securities (provided that the Company
shall 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 Section 2(c), (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction), provided the Holders shall pay all fees and
expenses(including reasonable legal fees and expenses) incurred in
connection with any registration and qualification or exemption of the
Registrable Securities in any jurisdiction requested by the Holders;
(d) promptly notify in writing each seller of such
Registrable Securities, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made,
whereupon no selling Holder shall use such prospectus, and, at the
request of the any such Holder, the Company shall promptly prepare and
furnish to each such selling Holder a reasonable number of copies of a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made;
(e) use its commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange or
market, if any, on which similar securities issued by the Company are
then listed or traded; and
(f) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement.
3. Registration Expenses.
(a) Subject to Section 3(b) below, all expenses incident
to the Company's performance of or compliance with this Agreement,
including all
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registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, travel expenses, filing
expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements of counsel for the Company, and
fees and disbursements of all independent certified public accountants,
underwriters including, if necessary, a "qualified independent
underwriter" within the meaning of the rules of the National
Association of Securities Dealers, Inc. (in each case, excluding
discounts and commissions), and other Persons retained by the Company
or by holders of Registrable Securities or their affiliates on behalf
of the Company (all such expenses being herein called "Registration
Expenses"), shall be borne as provided in this Agreement, except that
the Company shall, in any event, pay its internal expenses (including
all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance, and the
expenses and fees for listing the securities to be registered on each
securities exchange or market, if any, on which similar securities
issued by the Company are then listed or traded.
(b) In connection with each Piggyback Registration, the
Holders shall pay the reasonable fees and disbursements of one counsel
chosen by the Holders of a majority of the Registrable Securities
included in such registration.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless, to
the fullest extent permitted by law, each Holder of Registrable
Securities, its officers, directors, agents, and employees, and each
Person who controls such holder (within the meaning of the Securities
Act) against all losses, claims, demands, damages, liabilities, and
expenses (or actions, investigations or proceedings, whether commenced
or threatened, in respect thereof), whether joint and several or
several, together with reasonable costs and expenses (including
reasonable attorneys' fees) to which any such indemnified party may
become subject under the Securities Act or otherwise (collectively,
"Losses") caused by, resulting from, arising out of, based upon, or
relating to any untrue or alleged untrue statement of material fact
contained in (i) (A) any registration statement, prospectus or
preliminary prospectus, or any amendment thereof or supplement thereto
or (B) any application or other document or communication (in this
Section 4, collectively called an "application") executed by or on
behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify
any securities covered by such registration under the "blue sky" or
securities laws thereof or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such
holder and each such director, officer, and controlling Person for any
legal or any other expenses incurred by them in connection with
investigating, defending or settling any such Losses; provided that the
Company shall not be liable in any such case to the extent that any
such Losses result from, arise out of, are based upon, or relate to an
untrue statement or alleged untrue statement, or omission or alleged
-4-
omission, made in such registration statement, any such prospectus, or
preliminary prospectus or any amendment or supplement thereto, or in
any application, in reliance upon, and in conformity with, written
information prepared and furnished in writing to the Company or the
underwriters by or on behalf of such Holder expressly for use therein
or by such Holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after
the Company has furnished such Holder with a sufficient number of
copies of the same. In connection with an underwritten offering, the
Company shall indemnify such underwriters, their officers, employees
and directors, and each Person who controls such underwriters (within
the meaning of the Securities Act or the Securities Exchange Act) to
the same extent as provided above with respect to the indemnification
of the holders of Registrable Securities.
(b) In connection with any Public Offering pursuant to a
registration statement in which a holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for
use in connection with any such registration statement or prospectus
and, to the fullest extent permitted by law, shall indemnify and hold
harmless the other holders of Registrable Securities, the Company and
the Underwriters, and their respective officers, directors, agents, and
employees, and each other Person who controls such other Holders, the
Underwriters and the Company (within the meaning of the Securities Act
or the Securities Exchange Act) against any Losses caused by, resulting
from, arising out of, based upon, or relating to (i) any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus, or any amendment
thereof or supplement thereto or in any application, or (ii) any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is made in
such registration statement, any such prospectus or preliminary
prospectus or any amendment or supplement thereto, or in any
application in reliance upon and in conformity with written information
prepared and furnished to the Company by or on behalf of such Holder
expressly for use therein, and such Holder will reimburse the Company,
the other holders of Registrable Securities and the Underwriters and
each such other indemnified party for any legal or any other expenses
incurred by them in connection with investigating, defending or
settling any such Losses; and the Holders' obligation to indemnify will
be joint and several.
(c) Any Person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification (provided that the
failure to give prompt notice shall not impair any Person's right to
indemnification hereunder to the extent such failure has not prejudiced
the indemnifying party) and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit
-5-
such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, then the indemnifying party will not be subject to
any liability for any settlement made by the indemnified party without
its consent (but such consent will not be unreasonably withheld);
provided, such settlement irrevocably and unconditionally releases the
indemnifying party from all claims and Losses related to, resulting
from or giving rise to such claims or Losses covered by such
settlement. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified
parties with respect to such claim.
(d) The indemnification provided for under this Agreement
shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or
contract, and will remain in full force and effect regardless of any
investigation made or omitted by or on behalf of the indemnified party
or any officer, director, or controlling Person of such indemnified
party and shall survive the transfer of securities.
(e) If the indemnification provided for in this Section 4
is unavailable to or is insufficient to hold harmless an indemnified
party under the provisions above in respect to any Losses referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses
(i) in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the sellers of Registrable
Securities and any other sellers participating in the registration
statement on the other hand or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, then in such
proportion as is appropriate to reflect not only the relative fault
referred to in clause (i) above but also the relative benefit of the
Company on the one hand and to the sellers of Registrable Securities
and any other sellers participating in the registration statement on
the other in connection with the statement or omissions which resulted
in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
sellers of Registrable Securities and any other sellers participating
in the registration statement on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) to the Company bear to the total net proceeds from
the offering (before deducting expenses) to the sellers of Registrable
Securities and any other sellers participating in the registration
statement. The relative fault of the Company on the one hand and of the
sellers of Registrable Securities and any other sellers participating
in the registration statement on the other shall be determined by
reference to, among other things, whether the untrue or alleged
omission to state a material fact relates to information supplied by
the Company or by the sellers of Registrable Securities or other
sellers participating in the registration statement
-6-
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(f) The Company and the sellers of Registrable Securities
agree that it would not be just and equitable if contribution pursuant
to this Section 4 were determined by pro rata allocation (even if the
sellers of Registrable Securities 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 Section 4(e)
above. The amount paid or payable by an indemnified party as a result
of the Losses referred to in Section 4(e) above 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, defending or settling any such action or claim.
Notwithstanding the provisions of this Section 4, no seller of
Registrable Securities shall be required to contribute pursuant to this
Section 4 any amount in excess of the sum of (i) any amounts paid
pursuant to Section 4(b) above and (ii) the net proceeds received by
such seller from the sale of Registrable Securities covered by the
registration statement filed pursuant hereto. 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.
5. Participation in Underwritten Registrations.
(a) No Holder may participate in any Public Offering
hereunder unless such Holder (i) agrees to sell such Holder's
securities on the basis provided in any underwriting arrangements
approved by the Company (including pursuant to the terms of any
over-allotment or "green shoe" option requested by the managing
underwriter(s), provided that no Holder will be required to sell more
than the number of Registrable Securities that such Holder has
requested the Company to include in any registration) and (ii)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting and lock-up agreements, and other documents
reasonably required under the terms of such underwriting arrangements;
provided that each Holder whose Registrable Securities are included in
any underwritten registration shall be required to make all customary
representations and warranties to the Company and the Underwriters, and
to incur such obligations and duties that are customary for Public
Offerings.
(b) Each Holder that is participating in any registration
hereunder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2(d) above,
such Holder will immediately discontinue the disposition of its
Registrable Securities pursuant to the registration statement until
such Person's receipt of the copies of a supplemented or amended
prospectus as contemplated by Section 2(d).
-7-
6. Definitions.
(a) "Registrable Securities" means (i) any Company Common
Stock held by a Holder and subject to the Standstill Agreement to which
this Registration is an Exhibit and wherein this Registration Agreement
is incorporated by reference. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities
when they (i) have been distributed to the public pursuant to an
offering registered under the Securities Act or sold to the public
through a broker, dealer, or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force), (ii) have
been effectively registered under a registration statement including,
without limitation, a registration statement on Form S-3, Form S-4 or
Form S-8 (or any successor or similar form), or (iii) have been
repurchased by the Company.
(b) Any capitalized terms used but not defined in this
Registration Agreement shall have the meanings provided in the
Standstill Agreement, of which this Registration Agreement is a part.
7. Miscellaneous.
(a) Termination. No Holder of Registrable Securities
shall be entitled to exercise any rights provided herein after the
earlier to occur of (i) the date upon which such Holder has registered
or sold all of such Holder's Registrable Securities; (ii) upon the
Holder's breach of the Registration Agreement or the Standstill
Agreement which remains uncured for more than 15 days; (iii) the date
upon which the Standstill Agreement is terminated or is no longer
effective; and (iv) the date upon which the Holders beneficially own
less than 16% of the Company's issued and outstanding Common Stock.
(b) Amendments and Waivers. Except as otherwise provided
herein and notwithstanding any contrary provisions respecting amendment
contained in the Standstill Agreement, no modification, amendment, or
waiver of any provision of this Registration Agreement shall be
effective against the Company or the Holders of Registrable Securities
unless such modification, amendment, or waiver is approved in writing
by the Company and Holders of at least a majority of the Registrable
Securities then in existence. No failure by any party to insist upon
the strict performance of any covenant, duty, agreement, or condition
of this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute a waiver of any such breach or any
other covenant, duty, agreement, or condition.
(c) Nothing contained in this Registration Agreement or
the Standstill Agreement with respect to successors and assigns of the
parties shall be deemed to extend this Agreement beyond the period
specified in Section 7(a) of this Registration Agreement.
-8-
(d) Miscellaneous. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding
masculine, feminine, or neuter forms, and the singular form of nouns,
pronouns, and verbs shall include the plural and visa versa. The use of
the word "including" in this Agreement shall be, in each case, by way
of example and without limitation. The use of the words "or," "either,"
and "any" shall not be exclusive. Reference to any agreement, document,
or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms
thereof, and if applicable hereof.
(e) No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting to this Agreement.
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the
parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
(f) Notices. The Notice provisions of Section 7.1 of the
Standstill Agreement, of which this Registration Agreement is a part,
shall also apply to this Registration Agreement.
(g) Governing Law. This agreement is governed by and
shall be construed in accordance with the laws of the State of Georgia.
The federal and state courts in the Northern District of Georgia shall
have exclusive jurisdiction and venue in the event of any dispute
hereunder.
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