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EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of July 19, 2000, among XXXXXXXXXX.XXX, INC., a Georgia
corporation (the "Company"), XXXXXXX XXXXX GROUP INC. ("BHA"), a Delaware
corporation and wholly owned subsidiary of Omnicom Group Inc. ("Omnicom"), and
ITC HOLDING COMPANY, INC., a Delaware corporation ("ITC") (each of BHA and ITC
may be referred to as an "Investor" and collectively as the "Investors").
R E C I T A L S
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger,
dated as of April 15, 2000, as amended by Amendment No. 1 to Agreement and Plan
of Merger (the "Acquisition Agreement"), among the Company, Resume Acquisition
Corporation, a wholly owned subsidiary of the Company ("Merger Sub"), Omnicom,
BHA, Career Mosaic Inc., a wholly owned subsidiary of BHA ("Career Mosaic"), and
ITC, Career Mosaic will merge with and into Merger Sub (the "Acquisition"), with
the result that the outstanding shares of common stock of Asset Sub ("Asset Sub
Common Stock") will be converted into the right to receive shares of common
stock of the Company (the "Company Common Stock"); and
WHEREAS, the Company has agreed to grant the Investors certain
registration rights; and
WHEREAS, the Company and the Investors desire to define such
registration rights on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Effective Date: shall mean the date on which the Acquisition is
consummated;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities, including the
Investors;
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Initiating Holder: shall mean (1) any Investor who holds any then
outstanding Registrable Securities or (2) any Holder or Holders who in the
aggregate are Holders of more than 5% of the then outstanding Registrable
Securities;
Person: shall mean an individual, partnership, joint stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) the shares of Company Common
Stock (1) issued to BHA under the Acquisition Agreement or to any transferee
thereof, (2) held by ITC at the Effective Date and (3) issuable to ITC (or a
wholly owned subsidiary of ITC) upon exercise of any option or warrant
beneficially owned by ITC (or one of its wholly owned subsidiaries) to purchase
shares of Company Common Stock, and (B) any securities of the Company issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clause (A);
provided, that Registrable Securities shall not include (i) securities with
respect to which a registration statement with respect to the sale of such
securities has become effective under the Securities Act and all such securities
have been disposed of in accordance with such registration statement, (ii) such
securities as are actually sold pursuant to Rule 144 (or any successor provision
thereto) under the Securities Act ("Rule 144"), (iii) such securities as are
acquired by the Company or any of its subsidiaries or (iv) the shares of common
stock issued to BHA under the Acquisition Agreement which are registered for
resale by BHA under the Registration Statement (as defined in the Acquisition
Agreement) and which are actually sold under such Registration Statement;
Registration Expenses: shall mean all expenses incurred by the Company
in compliance with Sections 3(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding Selling
Expenses);
Security, Securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
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2. RESTRICTIONS ON TRANSFER
(a) Prior to any proposed transfer of any Registrable Securities
(other than under the circumstances described in Section 3 hereof), the Holder
thereof shall give written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act, whereupon such
Holder shall be entitled to transfer the Registrable Securities in accordance
with the terms of its notice.
(b) Notwithstanding anything in this Agreement to the contrary, in
connection with any public offering of securities by the Company which closes
within one year of the date of this Agreement, the Holders hereby agree, if and
to the extent agreed to by the Investors and the executive officers of the
Company, not to sell or otherwise dispose of any Company Common Stock for a
period equal to the lesser of (i) 90 days following completion of such public
offering, or (ii) the period agreed to by other shareholders who execute lock-up
agreements in connection with such offering. If requested by an underwriter in
connection with an underwritten public offering of securities by the Company,
each Holder will execute and deliver promptly a lock-up agreement which reflects
the agreements of each Holder contained in this Section 2(b) and such other
terms and conditions as are usual and customary for lock-up agreements in
underwritten public offerings.
3. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company
shall receive from an Initiating Holder, at any time on or after the first
anniversary of the Effective Date, a written request that the Company effect any
registration with respect to (1) all of such Investor's Registrable Securities
or (2) at least such number of Registrable Securities as would yield (based on
then current market prices) an aggregate offering price of at least $5 million,
the Company will, unless all of the Registrable Securities being requested to be
registered under (1) or (2) above are eligible for resale in accordance with
Rule 144 within a three-month period:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) as soon as practicable (and in any event,
within 45 days of any valid request), use its reasonable best efforts
to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale
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and distribution of all or such portion of such Registrable Securities
as are specified in such request, together with all or such portion of
the Registrable Securities of any Holder or Holders joining in such
request as are specified in a written request received by the Company
within ten business days after written notice from the Company is given
under Section 3(a)(i)(A) above; provided that the Company shall not be
obligated to effect, or take any action to effect, any such
registration pursuant to this Section 3(a):
(w) Solely with respect to underwritten
registrations requested pursuant to this Agreement, if the
Company shall have previously effected an underwritten
registration with respect to Registrable Securities pursuant
to Section 3(b) hereof, the Company shall not be required to
effect any underwritten registration pursuant to this Section
3(a) until a period of 180 days shall have elapsed from the
effective date of the most recent such previous registration;
provided that if, in the most recent such previous
registration, participation pursuant to Section 3(b) hereof
shall not have been to the extent requested pursuant to
Section 3(b) hereof, then the Company shall not be required to
effect any underwritten registration pursuant to this Section
3(a) until a period of 90 days shall have elapsed from the
effective date of the most recent such previous registration;
(x) If, upon receipt of a registration request
pursuant to this Section 3(a), the Company is advised in
writing (with a copy to each Initiating Holder) by a
recognized national independent investment banking firm
selected by the Company that, in such firm's opinion, a
registration at the time and on the terms requested would
adversely affect any then pending public offering of
securities of the Company by the Company (other than in
connection with benefit and similar plans) (collectively, a
"Company Offering") with respect to which the Company has
filed a registration statement prior to the receipt of a
registration request pursuant to this Section 3(a), the
Company shall not be required to effect a registration
pursuant to this Section 3(a) until the earlier of (i) 30 days
after the completion of such Company Offering, (ii) promptly
after any abandonment of such Company Offering or (iii) 60
days after the date of receipt of a registration request
pursuant to this Section 3(a); provided, however, that the
periods during which the Company shall not be required to
effect a registration pursuant to this Section 3(a) together
with any periods of suspension under Section 3(i) hereof may
not exceed 90 days in the aggregate during any period of 12
consecutive months;
(y) In any particular jurisdiction in which the
Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or
regulations thereunder;
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(z) After the Company has effected five (5)
such registrations pursuant to this Section 3(a) for each Investor
and two (2) such registrations for Holders other than the
Investors and such registrations have been declared or ordered
effective and the sales of such Registrable Securities shall have
closed; provided, that Holders shall not have the right to request
an underwritten registration pursuant to this Section 3(a) more
than one time in any six-month period.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 3(a)(ii) below,
include other Securities of the Company which are held by Persons who, by virtue
of agreements with the Company, are entitled to include their Securities in any
such registration ("Other Stockholders"); provided, however, that the
registration rights granted in the future to other shareholders will in all
events be subordinate to the rights hereunder and the Company will not grant any
such rights unless proper provision has been made in respect thereof.
(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 3(a). If Other Stockholders request inclusion in any such
registration, the Holders shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 3. The Holders
whose shares are to be included in such registration and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into underwriting and related agreements in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders and reasonably
acceptable to the Company. Such underwriting agreement will contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 3(e) hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 3(d) hereof, and 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
the Holders. The Company shall cooperate fully with the Holders and the
underwriters in connection with any underwritten offering. Notwithstanding any
other provision of this Section 3(a), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the securities of the Company held by Other Stockholders
shall be excluded from such registration to the extent so required by such
limitation. If, after the exclusion of such shares, still further reductions are
still required, the number of shares included in the registration by each Holder
shall be reduced on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply with such
request; provided, that there shall be no reduction in the number of shares
included in the registration by any Holder until all shares of Other
Stockholders have been excluded from such registration; provided further,
however, that
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in the event that the number of shares included in the registration by the
Holder is reduced by greater than one-third of the number of shares requested to
be included by such Holder, then such registration shall not count against such
Investor as a requested registration pursuant to Section 3(a)(i)(B)(z). No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holder. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other securities to be underwritten, the
Company and officers and directors of the Company may include its or their
securities for its or their own account in such registration if the
representative so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register
any of its equity securities either for its own account or for the account of
Other Stockholders, other than a registration relating solely to benefit plans,
or a registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities, the Company will:
(A) promptly give to each of the Holders a
written notice thereof; and
(B) include in such registration (and any
related qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by any Holder within
ten (10) business days after the giving of the written notice from the
Company described in clause (i) above, except as set forth in Section
3(b)(ii) below. Such written request shall specify the amount of
Registrable Securities intended to be disposed of by a Holder and may
specify all or a part of the Holders' Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written notice
of its intention to effect such registration and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such equity securities
the Company may, at its election, give written notice of such determination to
the Holders and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of such
equity securities (but not from its obligation to pay Registration Expenses to
the extent incurred in connection therewith as provided herein), without
prejudice, however,
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to the rights (if any) of Holders immediately to request that such registration
be effected as a registration under Section 3(a) hereof.
(ii) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise each of the Holders as a part of the
written notice given pursuant to Section 3(b)(i)(A). In such event, the right of
each of the Holders to registration pursuant to this Section 3(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to the
extent provided herein. The Holders whose shares are to be included in such
registration shall (together with the Company and the Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for the underwriting by the Company or such
Other Stockholders, as the case may be. Such underwriting agreement will contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 3(f) hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 3(e), and 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 the Holders
whose shares are to be included in such registration. Notwithstanding any other
provision of this Section 3(b), if the representative determines that marketing
factors require a limitation on the number of shares to be underwritten, the
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner: The
securities of the Company held by officers, directors and Other Stockholders
(other than Other Stockholders exercising the contractual right initiating such
registration ("Other Demanding Holders") or to cause their securities to be
included in such registration ("Other Rights Holders")) shall be excluded from
such registration and underwriting to the extent required by such limitation,
and, if a limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting by each of the
Holders and such Other Demanding Holders shall be reduced, on a pro rata basis
(based on the number of shares held by such holder), by such minimum number of
shares as is necessary to comply with such limitation. If any of the Holders or
any officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 3 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered pro rata on the basis of
the number of their shares so registered; provided, however, that if, as a
result of the withdrawal of a request for
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registration by any of the Holders (except if such withdrawal is at the request
of the Company), the registration statement does not become effective, the
Holders and Other Stockholders requesting registration may elect to bear the
Registration Expenses (pro rata on the basis of the number of their shares so
included in the registration request, or on such other basis as such Holders and
Other Stockholders may agree), in which case such registration shall not be
counted as a registration pursuant to Section 3(a)(i)(B)(z).
(d) Registration Procedures. In the case of each
registration effected by the Company pursuant to this Section 3, the Company
will keep the Holders, as applicable, advised in writing as to the initiation of
each registration and as to the completion thereof. At its expense, the Company
will:
(i) keep such registration effective for a period of one
hundred eighty (180) days or until the Holders, have completed the
distribution described in the registration statement relating thereto,
whichever first occurs;
(ii) furnish to each Holder, and to any underwriter before
filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and
any amendments and supplements thereto (including all documents
incorporated or deemed incorporated by reference therein prior to the
effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as
such term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject to the review of the Holders and any such
underwriter for a period of at least five business days, and the
Company shall not file any such registration statement or such
prospectus or any amendment or supplement to such registration
statement or prospectus to which any Holder or any such underwriter
shall reasonably object within five business days after the receipt
thereof; a Holder or such underwriters, if any, shall be deemed to have
reasonably objected to such filing only if the registration statement,
amendment, prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;
(iii) furnish to each Holder and to any underwriter, such
number of conformed copies of the applicable registration statement and
of each amendment and supplement thereto (in each case including all
exhibits) and such number of copies of the prospectus forming a part of
such registration statement (including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule
424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, including without
limitation documents incorporated or deemed to be incorporated by
reference prior to the effectiveness of such registration, as each of
the Holders or any such underwriter from time to time may reasonably
request;
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(iv) to the extent practicable, promptly prior to the
filing of any document that is to be incorporated by reference into any
registration statement or prospectus forming a part thereof subsequent
to the effectiveness thereof, and in any event no later than the date
such document is filed with the Commission, provide copies of such
document to the Holders, if requested, and to any underwriter, and make
representatives of the Company available for discussion of such
document and other customary due diligence matters, and include in such
document prior to the filing thereof such information as any Holder or
any such underwriter reasonably may request;
(v) make available at reasonable times for inspection by
the Holders, any underwriter participating in any disposition pursuant
to such registration and any attorney or accountant retained by the
Holders or any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and cause
the officers, directors and employees of the Company to supply all
information reasonably requested by the Holders and any such
underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration
statement and prior to the effectiveness of the applicable registration
statement;
(vi) use its reasonable best efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such
States of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration shall reasonably request, (y) to keep such registration or
qualification in effect for so long as the applicable registration
statement remains in effect, and (z) to take any other action which may
be reasonably necessary or advisable to enable such sellers to
consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(vii) use its reasonable best efforts to cause all
Registrable Securities covered by such registration
statement to be registered with or approved by such other federal or
state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to the Holders of
Registrable Securities to enable the Holders thereof to consummate the
disposition of such Registrable Securities;
(viii) subject to Section 3(g) hereof, promptly notify each
Holder of Registrable Securities covered by a registration statement
(A) upon discovery that, or upon the happening of any event as a result
of which, the prospectus forming a
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part of such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the
initiation of proceedings for that purpose, (C) of any request by the
Commission for (1) amendments to such registration statement or any
document incorporated or deemed to be incorporated by reference in any
such registration statement, (2) supplements to the prospectus forming
a part of such registration statement or (3) additional information, or
(D) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and at the request of
any such Holder promptly prepare and furnish to it a reasonable number
of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ix) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration, or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction;
(x) if requested by any Initiating Holder or any
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post effective amendment if
necessary, such information as the Initiating Holder and any
underwriter may reasonably request to have included therein, including,
without limitation, information relating to the "plan of distribution"
of the Registrable Securities, information with respect to the
principal amount or number of shares of Registrable Securities being
sold to such underwriter, the purchase price being paid therefor and
any other terms of the offering of the Registrable Securities to be
sold in such offering and make all required filings of any such
prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such prospectus supplement or post effective amendment;
(xi) furnish to the Holders, addressed to them, an opinion
of counsel for the Company, dated the date of the closing under the
underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its reasonable best efforts to furnish to the
Holders, addressed to them, a "cold comfort" letter signed by the
independent certified public accountants who have certified the
Company's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and
the prospectus included therein) and, in the case of such
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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 underwriters
in underwritten public offerings of securities and such other matters
as the Holders may reasonably request;
(xii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least 12 months, but
not more than 18 months, beginning with the first full calendar month
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 promulgated thereunder;
(xiii) provide promptly to the Holders upon request any
document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act;
(xiv) use its reasonable best efforts to cause all
Registrable Securities included in any registration pursuant hereto to
be listed on each securities exchange on which securities of the same
class are then listed, or, if not then listed on any securities
exchange, to be eligible for trading in any over-the-counter market or
trading system in which securities of the same class are then traded;
and
(xv) cause senior management reasonably to participate in
"roadshow" presentations and other customary marketing efforts.
(e) Indemnification.
(i) The Company will indemnify each of the
Holders, as applicable, each of its affiliates and its and any such affiliates'
respective officers, directors, members, partners and other representatives, and
each person controlling each of the Holders, with respect to each registration
which has been effected pursuant to this Section 3, and each underwriter, if
any, and each person who controls any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such person, each such underwriter and each
person who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable
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in any such case if and to the extent that it is finally judicially determined
that any such claim, loss, damage, liability or expense primarily arises out of
or is based primarily on any untrue statement or omission based upon written
information furnished to the Company by the Holders or underwriter and stated to
be specifically for use therein. The indemnity agreement contained in this
paragraph shall not apply to the extent that any claims, losses, damages or
liabilities (or actions in respect thereof) result from the fact that a current
copy of the prospectus was not sent or given to a proposed transferee asserting
any such claim, loss, damage, liability or action, at or prior to the written
confirmation of the sale of the Registrable Securities concerned to such person
if it is determined that the Company provided such prospectus to such Holder in
a timely manner prior to such sale and it was the responsibility of the Holder
under the Securities Act to provide the prospective transferee with a current
copy of the prospectus and such prospectus would have cured the defect giving
rise to such claim, loss, damage, liability or action.
(ii) Each of the Holders will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors, members and partners, and each person controlling such
Other Stockholder against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, partners, members, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case if and to the extent, but only to the extent, that it is finally
judicially determined that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document primarily in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein ("Holder Information"); provided,
however, that the obligations of each of the Holders hereunder and under clause
(vi) below shall be limited to an amount equal to the net proceeds to such
Holder of securities sold as contemplated herein and no Holder will have any
liability hereunder except as to Holder Information about itself.
(iii) Each party entitled to indemnification under this
Section 3(e) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the
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defense of such claim or any litigation resulting therefrom, shall be approved
by the Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's expense
(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of one such counsel for all
Indemnified Parties shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 3 unless and only to the extent that the Indemnifying Party
is materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party (which consent shall not be unreasonably withheld or delayed), consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this
Section 3(e) is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of indemnifying
such Indemnified Party hereunder, shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party 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 Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public
offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the
Company and Holders is subject to the condition that, insofar as they relate to
any loss, claim, liability or damage made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the Commission at
the time the registration statement in question becomes effective or the amended
prospectus filed with the Commission pursuant to
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14
Commission Rule 424(b) (the "Final Prospectus"), such indemnity or contribution
agreement shall not inure to the benefit of any underwriter or Holder (but only
if such Holder was required to deliver such Final Prospectus) if a copy of the
Final Prospectus was furnished to the underwriter and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
(f) Information by the Holders. Each of the Holders
holding securities included in any registration shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the
provisions of Sections 3(a) and (b), if the Board of Directors of the Company
determines in good faith that it is in the best interests of the Company (A) not
to disclose the existence of facts surrounding any proposed or pending
acquisition, disposition, strategic alliance or financing transaction involving
the Company or (B) for any purpose, to suspend the registration rights set forth
herein, the Company may, by notice to the Holders in accordance with Section
6(a), postpone any registration which is requested pursuant to Section 3(a), for
such a period of time as the Board of Directors may reasonably determine;
provided that (x) such periods of suspension together with any periods of
suspension effected pursuant to Section 3(a)(i)(B)(w) hereof may not exceed 90
days in the aggregate during any period of 12 consecutive months and (y) the
Company may not impose such a suspension or a postponement pursuant to Section
3(a)(i)(B)(w) following the printing and distribution of a preliminary
prospectus in any underwritten public offering of Registrable Securities
pursuant to Section 3(a)(i) (except such suspension, not to exceed ten days,
which results from an event that is not within the reasonable control of the
Company).
(h) Assignment. The registration rights set forth in
Section 3 hereof may be assigned, in whole or in part, to any transferee of
Registrable Securities (who shall be considered thereafter to be a Holder and
shall be bound by all obligations and limitations of this Agreement).
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15
4. RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
(ii) use its reasonable best efforts to file with the Commission in
a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and
(iii) so long as there are outstanding any Registrable Securities,
furnish to each Holder, upon request, a written statement by
the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so
filed as such Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such
Holder to sell any such securities without registration.
5. INTERPRETATION OF THIS AGREEMENT
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia, without
giving effect to the principles of conflict of laws of such State.
(b) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
6. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement
shall be in writing and shall be delivered by facsimile or by hand or mailed by
overnight courier or by registered or certified mail, postage prepaid: .
(A) if to the Company, to
XxxxXxxxxx.XXX, Inc., 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000,
(000) 000-0000, Attention: Chief Executive Officer, or at such other address as
it may have furnished in writing to the Investors;
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16
(B) if to the Investors, at the
addresses listed on Schedule I hereto, or at such other addresses as may have
been furnished the Company in writing.
(ii) Any notice so addressed shall be deemed to
be given: if delivered by hand, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing; and if
mailed by registered or certified mail, on the third business day after the date
of such mailing.
(b) Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, any consents, waivers
and modifications which may hereafter be executed may be reproduced by the
Investor by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Investors may destroy any original
document so reproduced. The parties hereto agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Investors in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This
Agreement constitutes the entire understanding of the parties hereto and
supersedes all prior understandings among such parties with respect to the
subject matter hereof. This Agreement may be amended, and the observance of any
term of this Agreement may be waived, with (and only with) the written consent
of the parties.
(e) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement.
(g) Remedies. Each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
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17
(h) 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 and understood that all of the
rights and privileges of each of the Holders shall be enforceable to the fullest
extent permitted by law.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Title: Chief Financial Officer
------------------------------------
INVESTORS:
XXXXXXX XXXXX GROUP INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Title:
------------------------------------
ITC HOLDING COMPANY, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------------
Title: Senior Vice President
------------------------------------
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