REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.6
EXECUTION
COPY
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
made and entered into as of July 3, 2007 by and between Xxxxx X. Xxxxxxx,
Xxxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxxxxx (each, a “Founding Shareholder” and
collectively, the “Founding
Shareholders”)
and
MAIDEN HOLDINGS, LTD., a Bermuda company (the “Company”).
RECITALS
WHEREAS,
each of the Founding Shareholders purchased from the Company 2,600,000 common
shares, par value $0.01 per share, of the Company (the “Common
Shares”),
pursuant to a Subscription Agreement between the Company and each of the
Founding Shareholders (the “Subscription
Agreements”);
WHEREAS,
the Company issued to each of the Founding Shareholders warrants to purchase
1,350,000 Common Shares (the “Founding
Shareholders Warrants”);
WHEREAS,
concurrently with the execution and delivery of this Agreement, the Company
(i) is consummating the issuance and sale of 50,410,101 Common Shares in a
private placement and (ii) in connection with such issuance and sale, is
entering into a Registration Rights Agreement with Friedman, Billings, Xxxxxx
& Co., Inc. for the benefit of, among others, the Persons (as defined below)
who purchased Common Shares in such private placement (the “Private Placement
Registration Rights Agreement”); and
WHEREAS,
in consideration of the Founding Shareholders’ entry into the Subscription
Agreements, the Company has agreed to execute and deliver to the Founding
Shareholders this Agreement;
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto hereby agree as follows:
1. Definitions.
(a) In
addition to the terms defined elsewhere in this Agreement, as used in this
Agreement, the following terms shall have the meanings set forth
below:
“Affiliate”
of
any
specified Person means any other Person who directly, or indirectly through
one
or more intermediaries, is in control of, is controlled by, or is under common
control with, such specified Person. For purposes of this definition, control
of
a Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by contract,
securities ownership or otherwise; and the terms “controlling” and “controlled”
have the respective meanings correlative to the foregoing.
“Agreement”
means
this Registration Rights Agreement, as the same may be amended, supplemented
or
modified from time to time in accordance with the terms hereof.
“Blackout
Period”
has
the
meaning specified in Section 2(c).
“Closing
Date”
means
July 3, 2007, or such other time or such other date as the Company and the
Founding Shareholders may agree.
“Commission”
means
the Securities and Exchange Commission.
“Covered
Shareholder”
means
(x) each Founding Shareholder, but only in respect of Registrable
Securities owned by him and (y) any permitted transferee or assignee of
Registrable Securities who agrees to become bound by all of the terms and
provisions of this Agreement.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder, or any similar successor statute.
“Free
Writing Prospectus”
means
a
free writing prospectus (as such term is defined in Rule 405 under the
Securities Act) relating to Registrable Securities.
“Issuer
Free Writing Prospectus”
means
an issuer free writing prospectus (as such term is defined in Rule 433(h)
under
the Securities Act) relating to Registrable Securities.
“Participating
Covered Shareholder”
means,
with respect to any Registration Statement, each Covered Shareholder whose
Registrable Securities are included or are to be included in such Registration
Statement.
“Person”
means
any individual, partnership, corporation, limited liability company, joint
stock
company, association, trust, unincorporated organization, or a government
agency
or political subdivision thereof.
“Prospectus”
means
the prospectus (including any preliminary prospectus and/or any final prospectus
filed pursuant to Rule 424(b) under the Securities Act and any prospectus
that
discloses information previously omitted from a prospectus filed as part
of an
effective registration statement in reliance on Rule 430A, Rule 430B or Rule
430C under the Securities Act) included in a Registration Statement, as amended
or supplemented by any prospectus supplement or any Issuer Free Writing
Prospectus (as defined in Rule 433(h) under the Securities Act) with respect
to
the terms of the offering or any portion of the Registrable Securities covered
by such Registration Statement and by all other amendments and supplements
to
such prospectus, including all material incorporated by reference in such
prospectus and all documents filed after the date of such prospectus by the
Company under the Exchange Act and incorporated by reference
therein.
“Public
Offering”
means
an offer registered with the Commission and the appropriate state securities
commissions by the Company of its Common Shares and made pursuant to the
Securities Act.
“Registrable
Securities”
means
(i) the
Common Shares purchased pursuant to the Subscription Agreements, (ii) the
Common Shares issuable upon exercise of the Founding Shareholders Warrants,
and
(iii) any shares or other securities issued in respect of such Registrable
Securities by reason of or in connection with any share dividend, share
distribution, share split, purchase in any rights offering or in connection
with
any exchange for or replacement of such Registrable Securities or any
combination of shares, recapitalization, amalgamation, merger or consolidation,
any other equity securities issued in respect of Registrable Securities pursuant
to any other pro rata distribution with respect to the Common Shares;
provided,
however,
that a
Common Share shall cease to be a Registrable Security for purposes of this
Agreement when it no longer is a Restricted Security.
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“Registration
Expenses”
means
any and all expenses incident to the performance of or compliance with this
Agreement, including, without limitation: (i) all Commission, securities
exchange, NASD registration, listing, inclusion and filing fees, (ii) all
fees and expenses incurred in connection with compliance with international,
federal or state securities or blue sky laws (including, without limitation,
any
registration, listing and filing fees and reasonable fees and disbursements
of
counsel in connection with blue sky qualification of any of the Registrable
Securities and the preparation of a blue sky memorandum and compliance with
the
rules of the NASD), (iii) all expenses in preparing or assisting in
preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements, certificates
and any other documents relating to the performance under and compliance
with
this Agreement, (iv) all fees and expenses incurred in connection with the
listing or inclusion of any of the Registrable Securities on any securities
exchange or The Nasdaq Stock Market pursuant to Section 3(l) of this
Agreement, (v) the fees and disbursements of counsel for the Company and of
the independent public accountants of the Company (including, without
limitation, the expenses of any special audit and “cold comfort” letters
required by or incident to such performance), and (vi) any fees and
disbursements customarily paid in issues and sales of securities (including
the
fees and expenses of any experts retained by the Company in connection with
any
Registration Statement); provided,
however,
that
Registration Expenses shall exclude (x) brokers’ or underwriters’ discounts
and commissions, if any, relating to the sale or disposition of Registrable
Securities by any Covered Shareholder and (y) any fees and expenses
incurred by any underwriter, other than such fees and expenses that the Company
shall have agreed in writing with such underwriter to pay.
“Registration
Statement”
means
any registration statement of the Company, which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement.
“Restricted
Security”
means
(i) any Common Share purchased pursuant to the Subscription Agreements,
(ii) any Common Share issuable upon exercise of a Founding Shareholders
Warrant, and (iii) any shares or other securities issued in respect of such
Restricted Securities by reason of or in connection with any share dividend,
share distribution, share split, purchase in any rights offering or in
connection with any exchange for or replacement of such Restricted Securities
or
any combination of shares, recapitalization, amalgamation, merger or
consolidation, any other equity securities issued in respect of Registrable
Securities pursuant to any other pro rata distribution with respect to the
Common Shares; provided, however,
that
Restricted Security shall exclude any of the foregoing securities that
(i) has been registered pursuant to an effective registration statement
under the Securities Act and sold in a manner contemplated by the prospectus
included in such registration statement, (ii) has been transferred by a
Covered Shareholder in compliance with the resale provisions of Rule 144
under
the Securities Act (or any successor provision thereto) or is transferable
by a
Covered Shareholder pursuant to paragraph (k) of Rule 144 under the Securities
Act (or any successor provision thereto), or (iii) otherwise has been
transferred by a Covered Shareholder and a new certificate representing a
Common
Share not subject to transfer restrictions under the Securities Act has been
delivered by or on behalf of the Company.
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“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of
the
Commission thereunder, or any similar successor statute.
“Shelf
S-1 Resale Registration Statement”
means
a
shelf registration statement on Form S-1 to be filed by the Company within
90
days after the Closing Date, as contemplated by Section 2(a) of the Private
Placement Registration Rights Agreement.
“Underwritten
Offering”
means
a
sale of securities of the Company to an underwriter or underwriters for
reoffering to the public.
2. Registration.
(a)
Demand Registration Rights.
(ii) At
any
time after the Shelf S-1 Resale Registration Statement has been withdrawn
or has
ceased to be effective, or if the Shelf S-1 Resale Registration Statement
has
not been filed within 90 days after the Closing Date, if the Company shall
receive a written request from the Covered Shareholders holding a majority
of
the Registrable Securities, the Company shall (A) provide written notice to
all other Covered Shareholders of such request and extend to them the
opportunity to include their Registrable Securities in the proposed
registration, (B) in no event later than 60 days after the receipt of such
request (but subject to any applicable Blackout Periods) (the “Filing
Deadline”),
prepare and file with the Commission a Registration Statement under the
Securities Act on Form S-3 (or such other form as may be available for use
by
the Company) relating to the offer and sale of the Registrable Securities
by the
Covered Shareholders joining in such request, (C) promptly take all actions
that are necessary or advisable in connection with such registration, including
without limitation, providing written responses to any comments made by the
Commission regarding such Registration Statement and filing any necessary
pre-effective amendments and all necessary exhibits thereto, and (D) use
its commercially reasonable efforts to cause such Registration Statement
to be
declared effective by the Commission as soon as possible after the initial
filing thereof. The Company shall, subject to any applicable Blackout Periods,
use its commercially reasonable efforts to keep such Registration Statement
effective for the period beginning on the date such Registration Statement
becomes effective (the “Effectiveness
Date”)
and
terminating on the earlier of (x) two years from the Effectiveness Date and
(y) the date upon which all Registrable Securities then held by the
Participating Covered Shareholders and included in such Registration Statement
either (i) may be resold without restriction of any kind and without need
for such Registration Statement to be effective or (ii) have been disposed
of pursuant to transactions contemplated by the Registration Statement. The
Company’s obligation to file and maintain the effectiveness of a Registration
Statement under this Section 2(a) shall terminate on the date upon which
all Registrable Securities then held by the Participating Covered Shareholders
and included in such Registration Statement either (i) may be resold
without restriction of any kind under the Securities Act and without need
for a
Registration Statement to be effective or (ii) have been disposed of
pursuant to transactions contemplated by the Registration
Statement.
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(iii) If
a
registration pursuant to this Section 2(a) involves a Public Offering that
is an Underwritten Offering, the Company and each other selling security
holder
participating in such Public Offering shall agree to sell any Common Shares
to
be sold by them to the underwriters on the same terms as apply to the Common
Shares to be sold by the Participating Covered Shareholders. If the managing
underwriter thereof advises the Company and the Participating Covered
Shareholders that, in its view, the number of Common Shares that the Company
and
the Participating Covered Shareholders and other selling security holders
(if
any) intend to include in such registration exceeds the largest number of
Common
Shares that can be sold without having an adverse effect on such Public
Offering, including with respect to the price at which such shares can be
sold
(the “Maximum
Offering Size”),
the
Company shall include in such registration only that number of Common Shares
which does not exceed the Maximum Offering Size, in the following order of
priorities: (1) first, all Registrable Securities that the Participating
Covered Shareholders have requested to include therein and (2) second, the
securities proposed to be registered by the Company and by other holders
of
securities entitled to participate in the registration, drawn from them in
such
amounts as may be agreed between the Company and such other
holders.
(iv) The
Company shall be required to register the Registrable Securities not more
than
two (2) times pursuant to this Section 2(a).
(v) At
any
time before a Registration Statement requested by any Covered Shareholder
pursuant to this Section 2(a) has become effective, any Participating
Covered Shareholder may withdraw its request by written notice to the Company
and upon receipt of such notice the Company shall, at its option, either
(x) withdraw the Registration Statement (if any) that it previously filed
in connection with such request (but only if the number of Registrable
Securities withdrawn is more than half of the number of Registrable Securities
included in such Registration Statement) or (y) amend such Registration
Statement to remove any Registrable Securities included therein at the request
of the Participating Covered Shareholders seeking to withdraw their Registrable
Securities, and in either case shall be relieved of all obligations under
this
Section 2(a) with respect to such request; provided
that if
the Company elects to withdraw the Registration Statement and the Participating
Covered Shareholders reimburse the Company for all of the Company’s costs and
expenses incurred in complying with such request through the time the Company
receives notice of the Covered Shareholders’ withdrawal of such request, such
request shall not count as a request to register Registrable Securities for
purposes of Section 2(a)(iii).
(b) Piggyback
Registration Rights.
(i) If
the Company proposes to register any of its Common Shares under the Securities
Act (other than a registration on Form S-8 or S-4 or any successor or similar
forms), whether or not for sale for its own account, it shall at such time
give
prompt written notice at least 20 calendar days prior to the anticipated
filing
date of the registration statement relating to such registration to the Covered
Shareholders, which notice shall set forth such Covered Shareholders’ rights
under this Section 2(b) and shall offer the Covered Shareholders the
opportunity to include in such registration statement such number of Registrable
Securities as the Covered Shareholders may request. Upon the written request
of
any Covered Shareholder made within 15 calendar days of the notice from the
Company (which request shall specify the number of Registrable Securities
such
Covered Shareholder seeks to register), the Company shall use commercially
reasonable efforts to include in such registration all Registrable Securities
that the Company has been so requested to register by any Covered Shareholder,
to the extent requisite to permit the disposition of the Registrable Securities
to be so registered; provided,
however,
that
(A) if such registration involves an underwritten Public Offering, the
Participating Covered Shareholders must sell their Registrable Securities
to the
underwriters on the same terms and conditions as apply to the Company or
other
selling security holders, (B) if such registration does not involve an
underwritten Public Offering, the Participating Covered Shareholders must
sell
their Registrable Securities in accordance with the plan of distribution
set
forth on Exhibit
A
and
(C) if, at any time after giving written notice of its intention to
register any Common Shares pursuant to this Section 2(b) 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
Common Shares, the Company shall give written notice to the Participating
Covered Shareholders and, thereupon, shall be relieved of its obligation
to
register any Registrable Securities in connection with such
registration.
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(ii) If
a
registration pursuant to this Section 2(b) involves an Underwritten
Offering and the managing underwriter thereof advises the Company that, in
its
view, the number of Common Shares that the Company and the Participating
Covered
Shareholders and other selling security holders (if any) intend to include
in
such registration exceeds the Maximum Offering Size, the Company shall include
in such registration only that number of Common Shares which does not exceed
the
Maximum Offering Size, in the following order of priorities: (1) first, all
securities the Company proposes to sell for its own account and all securities
that other holders of securities entitled to participate in the registration
with a priority greater than the priority of the Covered Shareholders, in
such
priority among them as is agreed among the Company and such other holders
of
securities, (2) second, the Registrable Securities of the Participating
Covered Shareholders and the securities requested to be registered by other
holders of securities entitled to participate in the registration having
a
priority equal to the priority of the Covered Shareholders, drawn from them
pro-rata based on the number of shares each has requested to be included
in such
registration and (3) third, the securities requested to be registered by
other holders of securities entitled to participate in the registration having
a
priority lower than the priority of the Covered Shareholders, drawn from
them in
such amounts as may be agreed by such holders.
(iii) If
as a
result of the proration provisions of this Section 2(b), the Participating
Covered
Shareholders are not entitled to include all Registrable Securities that
they
have requested to include in such registration, any Participating Covered
Shareholder may elect to withdraw its request to include any Registrable
Securities in such registration.
(iv) If
any
Participating Covered Shareholder decides not to include all of its Registrable
Securities in any Registration Statement filed by the Company but before
such
Registration Statement becomes effective, such Participating Covered Shareholder
shall nevertheless continue to have the right under this Section 2(b) to
include any Registrable Securities then held by it in any subsequent
Registration Statement as may be filed by the Company with respect to offerings
of its Common Shares.
6
(v) Notwithstanding
the foregoing, the Company shall have no obligations under this
Section 2(b) at any time that the Registrable Securities that the
Participating Covered Shareholders seek to include in a Registration Statement
are the subject of an effective registration statement.
(c) Blackout
Period.
(i) Subject
to the provisions of this Section 2(c) and a good faith determination by a
majority of the independent members of the Board of Directors of the Company
that it is in the best interests of the Company to suspend the use of the
Registration Statement, following the effectiveness of a Registration Statement
(and the filings with any foreign, federal or state securities commissions),
the
Company, by written notice to managing underwriter (if any) and the
Participating Covered Shareholders, may direct the Participating Covered
Shareholders to suspend sales of the Registrable Securities pursuant to a
Registration Statement for such times as the Company reasonably may determine
is
necessary and advisable (but in no event for more than (x) an aggregate of
ninety (90) days in any rolling twelve (12)-month period commencing on the
Closing Date or (y) more than sixty (60) days in any rolling 90-day
period), if any of the following events shall occur: (1) the representative
of the underwriters of an Underwritten Offering of primary shares by the
Company
has advised the Company that the sale of Registrable Securities pursuant
to the
Registration Statement would have a material adverse effect on the Company’s
primary offering; (2) the majority of the independent members of the Board
of Directors of the Company shall have determined in good faith that
(A) the offer or sale of any Registrable Securities would materially
impede, delay or interfere with any proposed financing, offer or sale of
securities, acquisition, amalgamation, merger, tender offer, business
combination, corporate reorganization or other significant transaction involving
the Company or (B) after the advice of counsel, the sale of Registrable
Securities pursuant to the Registration Statement would require disclosure
of
non-public material information not otherwise required to be disclosed under
applicable law, and (C) (x) the Company has a bona fide business
purpose for preserving the confidentiality of the proposed transaction,
(y) disclosure would have a material adverse effect on the Company or the
Company’s ability to consummate the proposed transaction, or (z) the
proposed transaction renders the Company unable to comply with Commission
requirements, in each case under circumstances that would make it impractical
or
inadvisable to cause the Registration Statement (or such filings) to become
effective or to promptly amend or supplement the Registration Statement on
a
post-effective basis, as applicable; or (3) the majority of the independent
members of the Board of Directors of the Company shall have determined in
good
faith, after the advice of counsel, that the Company is required by law,
rule or
regulation or that it is in the best interests of the Company to supplement
the
Registration Statement or file a post-effective amendment to the Registration
Statement in order to incorporate information into the Registration Statement
for the purpose of (A) including in the Registration Statement any
prospectus required under Section 10(a)(3) of the Securities Act;
(B) reflecting in the prospectus included in the Registration Statement any
facts or events arising after the effective date of the Registration Statement
(or of the most recent post-effective amendment) that, individually or in
the
aggregate, represents a fundamental change in the information set forth therein;
or (C) including in the prospectus included in the Registration Statement
any material information with respect to the plan of distribution not disclosed
in the Registration Statement or any material change to such information.
Any
period in which the use of the Registration Statement has been suspended
in
accordance with this Section 2(c) is sometimes referred to herein as a
“Blackout
Period.”
Upon
the occurrence of any such suspension, the Company shall use all reasonable
efforts to cause the Registration Statement to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis
or to
take such action as is necessary to make resumed use of the Registration
Statement compatible with the Company’s best interests, as applicable, so as to
permit the Participating Covered Shareholders to resume sales of the Registrable
Securities as soon as possible.
7
(ii) In
the
case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension
Event”),
the
Company shall give written notice (a “Suspension
Notice”)
to the
managing underwriter (if any) and the Participating Covered Shareholders
to
suspend sales of the Registrable Securities and such notice shall state
generally the basis for the notice and that such suspension shall continue
only
for so long as the Suspension Event or its effect is continuing (but in no
event
longer than the periods specified in Section 2(c)(i)) and that the Company
is using all reasonable efforts and taking all reasonable steps to terminate
suspension of the use of the Registration Statement as promptly as possible.
Such Participating Covered Shareholders shall not effect any sales of their
Registrable Securities pursuant to such Registration Statement (or such filings)
at any time after they have received a Suspension Notice from the Company
and
prior to receipt of an End of Suspension Notice (as defined below). If so
directed by the Company, such Participating Covered Shareholders shall deliver
to the Company (at the expense of the Company) all copies (other than permanent
file copies) then in such Participating Covered Shareholders’ possession of the
Prospectus covering the Registrable Securities at the time of receipt of
the
Suspension Notice. Such Participating Covered Shareholders may recommence
effecting sales of the Registrable Securities pursuant to the Registration
Statement (or such filings) following further notice to such effect (an
“End
of
Suspension Notice”)
from
the Company, which End of Suspension Notice shall be given by the Company
to
such Participating Covered Shareholders and the managing underwriter in the
manner described above promptly following the conclusion of any Suspension
Event
and its effect.
(iii) Notwithstanding
any provision herein to the contrary, if the Company shall give a Suspension
Notice pursuant to this Section 2(c), the Company agrees that it shall
extend the period of time during which the applicable Registration Statement
shall be maintained effective pursuant to this Agreement by the number of
days
during the period from the date of receipt by such Participating Covered
Shareholders of the Suspension Notice to and including the date of receipt
by
such Participating Covered Shareholders of the End of Suspension Notice and
copies of the supplemented or amended Prospectus necessary to resume
sales.
3. Obligations
of the Company.
In
connection with the registration of the Registrable Securities, the Company
shall use commercially reasonable efforts to:
(a) (i)
Prepare and file with the Commission a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under
the Securities Act (as shall be selected by the Company), which Registration
Statement (1) shall be available for the sale of the Registrable Securities
by the Participating Covered Shareholders, (2) shall comply as to form in
all material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the Commission
to be filed therewith or incorporated by reference therein, and (3) shall
comply in all respects with the requirements of Regulation S-T under the
Securities Act, and (ii) cause such Registration Statement to become effective
and remain effective in accordance with Section 2 of this
Agreement.
8
(b) Prepare
and file with the Commission such amendments and post-effective amendments
to
each Registration Statement as may be necessary under applicable law to keep
such Registration Statement effective for the applicable period; and cause
each
Prospectus to be supplemented by any required prospectus supplement or Issuer
Free Writing Prospectus, and cause the Prospectus as so supplemented or any
such
Issuer Free Writing Prospectus, as the case may be, to be filed pursuant
to Rule
424 or Rule 433, respectively (or any similar provision then in force) under
the
Securities Act and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations thereunder applicable to it with
respect to the disposition of all securities covered by each Registration
Statement during the applicable period in accordance with the intended method
or
methods of distribution by the Participating Covered Shareholders thereof
(including sales by any broker-dealer);
(c) Not
prepare, use or file any Issuer Free Writing Prospectus with respect to
Registrable Securities unless such Issuer Free Writing Prospectus has been
approved by the Participating Covered Shareholders holding a majority of
the
Registrable Securities included in such Registration Statement (which approval
shall not be unreasonably withheld);
(d) During
such time as a Registration Statement is effective or such shorter period
that
will terminate when all the Registrable Securities included therein have
been
sold (the “Registration
Period”),
comply with the provisions of the Securities Act with respect to the Registrable
Securities covered by the Registration Statement;
(e) (i)
Prior
to the filing with the Commission of any Registration Statement (including
any
amendments thereto) and the distribution or delivery of any Prospectus
(including any supplements thereto) or Issuer Free Writing Prospectus, provide
draft copies thereof (including a copy of the accountant’s consent letter to be
included in the filing) to the Participating Covered Shareholders and reflect
in
such documents all such comments relating to such Participating Covered
Shareholders and the plan of the distribution of the Registrable Securities
as
such Participating Covered Shareholders reasonably may propose; and
(ii) Furnish
to the Participating Covered Shareholders, without charge, (A) promptly
after the same is prepared and publicly distributed, filed with the Commission
or received by the Company, one copy of the Registration Statement, each
Prospectus, each Issuer Free Writing Prospectus and each amendment or supplement
to any of the foregoing and (B) such number of copies of each Prospectus,
each Issuer Free Writing Prospectus, and all amendments and supplements thereto
and such other documents as such Covered Shareholders may reasonably request
in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by them;
(f) (i)
Register or qualify, or obtain exemption from registration or qualification
for,
the Registrable Securities covered by a Registration Statement under such
securities or “blue sky” laws of such jurisdictions as any Participating Covered
Shareholder shall reasonably request in writing;
9
(ii) Prepare
and file in such jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may
be
necessary to maintain the effectiveness thereof at all times during the
Registration Period;
(iii) Take
all
such other lawful actions as may be necessary to maintain such registrations
and
qualifications in effect at all times during the Registration Period;
and
(iv) Take
all
such other lawful actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions;
provided,
however,
that
the Company shall not be required in connection with any of its obligations
under this Section 3(f) (A) to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 3(f), (B) to subject itself to general taxation in any such
jurisdiction or (C) to file a general consent to service of process in any
such jurisdiction;
(g) Use
its
commercially reasonable efforts to cause all Registrable Securities covered
by
such Registration Statement to be registered and approved by such other
governmental agencies or authorities as may be necessary to enable the
Participating Covered Shareholders to consummate the disposition of such
Registrable Securities; provided, however,
that the
Company shall not be required (A) to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 3(f), (B) to subject itself to general taxation in any such
jurisdiction or (C) to file a general consent to service of process in any
such jurisdiction;
(h) As
promptly as practicable after becoming aware of such event, notify the
Participating Covered Shareholders of the occurrence of any event, as a result
of which the Prospectus included in a Registration Statement, as then in
effect,
or any Issuer Free Writing Prospectus, taken as a whole with the Prospectus,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and
promptly prepare an amendment to a Registration Statement and supplement
to the
Prospectus to correct such untrue statement or omission, and deliver a number
of
copies of such supplement and amendment to such Covered Shareholders as such
Covered Shareholders may reasonably request;
(i) Notify
each Participating Covered Shareholder promptly and, if requested by any
Participating Covered Shareholder, confirm such advice in writing (i) when
a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of the issuance
by the Commission or any state securities authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iii) of any request by the Commission or any
other federal, state or foreign governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information, (iv) of the happening of any event during the period a
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus or any document incorporated by reference
therein contains any 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 case of the Prospectus, in light of the circumstances under
which they were made) not misleading (which information shall be accompanied
by
an instruction to suspend the use of the Prospectus until the requisite changes
have been made) and (v) at the request of any Participating Covered
Shareholder, promptly to furnish to such Participating Covered Shareholder
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 purchaser
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 light of the circumstances under
which they were made, not misleading;
10
(j) Make
every reasonable effort to avoid the issuance of, or if issued, to obtain
the
withdrawal of, any order enjoining or suspending the use or effectiveness
of a
Registration Statement or suspending of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, as promptly as practicable;
(k) Except
as
provided in Section 2(c), upon the occurrence of any event contemplated by
Section 3(i)(iv), use its commercially reasonable efforts to promptly
prepare a supplement or post-effective amendment to a Registration Statement
or
the related Prospectus or any document incorporated therein by reference
or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to
be
stated therein or necessary to make the statements therein, in the light
of the
circumstances under which they were made, not misleading;
(l) Use
its
commercially reasonable efforts (including, without limitation, seeking to
cure
any deficiencies cited by the exchange or market in the Company's listing
or
inclusion application) to cause all the Registrable Securities covered by
a
Registration Statement to be listed on a principal national securities exchange,
or included in an inter-dealer quotation system of a registered national
securities association, on or in which securities of the same class or series
issued by the Company are then listed or included;
(m) Enter
into and perform customary agreements (including in the case of an Underwritten
Offering, an underwriting agreement in customary form) and take all other
action
in connection therewith in order to expedite or facilitate the distribution
of
the Registrable Securities included in such Registration Statement and, in
the
case of an Underwritten Offering, make representations and warranties to
the
Participating Covered Shareholders covered by such Registration Statement
and to
the underwriters in such form and scope as are customarily made by issuers
to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;
(n) Provide
and cause to be maintained a transfer agent and registrar, which may be a
single
entity, for the Registrable Securities not later than the effective date
of the
first Registration Statement;
(o) Cooperate
with the Participating Covered Shareholders to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case
may
be, as such Participating Covered Shareholders reasonably may request and
registered in such names as such Participating Covered Shareholders may request;
and, within three business days after a Registration Statement which includes
Registrable Securities is declared effective by the Commission, deliver to
the
transfer agent for the Registrable Securities (with copies to such Participating
Covered Shareholders) an appropriate instruction and, to the extent necessary,
cause legal counsel selected by the Company to deliver an opinion of such
counsel to such transfer agent;
11
(p) Take
all
such other lawful actions reasonably necessary to expedite and facilitate
the
disposition by such Participating Covered Shareholders of their Registrable
Securities in accordance with the intended methods therefor provided in the
Prospectus which are customary under the circumstances, including without
limitation, by making senior management available to participate in road
shows
and meeting with potential investors as such Participating Covered Shareholders
shall reasonably request.
4. Obligations
of the Covered Shareholders.
In
connection with the registration of the Registrable Securities, the
Participating Covered Shareholders shall have the following
obligations:
(a) It
shall
be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities that the Participating Covered Shareholders shall furnish to the
Company such information regarding themselves, the Registrable Securities
held
by them and the intended method of disposition of the Registrable Securities
held by them as shall be reasonably required to effect the registration of
such
Registrable Securities and shall execute such documents in connection with
such
registration as the Company may reasonably request. At least ten business
days
prior to the first anticipated filing date of a Registration Statement, the
Company shall notify such Participating Covered Shareholders and their counsel,
whether in-house or otherwise (“Counsel”)
of the
information relating to such Covered Shareholders and the Registrable Securities
the Company requires from such Participating Covered Shareholders in order
to
prepare and file a Registration Statement that complies with the Securities
Act
(the “Requested
Information”).
If
four business days prior to the anticipated filing date the Company has not
received the Requested Information from such Participating Covered Shareholders
or their Counsel, then the Company shall send such Participating Covered
Shareholders and their Counsel a reminder of such information request. If
two
business days prior to the anticipated filing date the Company still has
not
received the Requested Information from any such Participating Covered
Shareholder or its Counsel, then the Company may file the Registration Statement
without including Registrable Securities of such Participating Covered
Shareholder. However, promptly upon receipt of the Requested Information,
and at
such Participating Covered Shareholder’s expense, the Company shall file such
amendment(s) to the Registration Statement as may be necessary to include
therein the Registrable Securities of such Participating Covered
Shareholder.
(b) Each
Covered Shareholder agrees to cooperate with the Company in connection with
the
preparation and filing of such Registration Statement hereunder, unless such
Covered Shareholder has notified the Company in writing of its election in
accordance with the terms and conditions of this Agreement to exclude all
of its
Registrable Securities from such Registration Statement.
12
(c) The
Covered Shareholders shall not prepare or use any Free Writing Prospectus
(as
such term is defined in Rule 405 under the Securities Act) unless any and
all
issuer information included therein has been approved by the Company (such
approval not be unreasonably withheld).
(d) As
promptly as practicable after becoming aware of such event, each Participating
Covered Shareholder shall notify the Company of the occurrence of any event,
as
a result of which the Prospectus included in a Registration Statement, as
then
in effect, includes an untrue statement of a material fact or omits to state
a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) Upon
receipt of any notice from the Company of the occurrence of any event of
the
kind described in Section 3(g) or 3(h), the Participating Covered
Shareholders shall immediately discontinue their disposition of Registrable
Securities pursuant to a Registration Statement covering such Registrable
Securities until the Participating Covered Shareholders’ receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(g) and,
if so directed by the Company, the Participating Covered Shareholders shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies (other than permanent
file copies) in their possession of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
5. Expenses
of Registration.
All
Registration Expenses shall be paid by the Company. The Participating Covered
Shareholders selling Registrable Securities shall pay the underwriting discount
attributable to their Registrable Securities, any transfer taxes payable
with
respect thereto and all fees and expenses, including fees and expenses of
such
Participating Covered Shareholders’ counsel, incurred by the Participating
Covered Shareholders.
6. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless (i) the Covered Shareholders,
(ii) each Person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange
Act), any such Person described in clause (i) (any of the Persons referred
to in this clause (ii) being hereinafter referred to as a “Controlling
Person”),
and
(iii) the respective officers, directors, partners, employees,
representatives and agents of any such Person or any Controlling Person (any
Person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as a “Purchaser
Indemnitee”),
to
the fullest extent lawful, from and against any and all losses, claims, damages,
judgments, actions, out-of-pocket expenses, and other liabilities (the
“Liabilities”),
including without limitation and as incurred, reimbursement of all reasonable
costs of investigating, preparing, pursuing or defending any claim or action,
or
any investigation or proceeding by any governmental agency or body, commenced
or
threatened, including the reasonable fees and expenses of counsel to any
Purchaser Indemnitee, joint or several, directly or indirectly related to,
based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
or
Prospectus (as amended or supplemented if the Company shall have furnished
to
such Purchaser Indemnitee any amendments or supplements thereto), or any
preliminary Prospectus or Issuer Free Writing Prospectus taken as a whole
with
the preliminary Prospectus, or any omission or alleged omission to state
therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except insofar as such Liabilities arise out of or are based
upon (i) any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating
to
any Purchaser Indemnitee furnished to the Company or any underwriter in writing
by such Purchaser Indemnitee expressly for use therein, or (ii) any untrue
statement contained in or omission from or alleged untrue statement contained
in
or alleged omission from a preliminary Prospectus if a copy of the preliminary
Prospectus (as then amended or supplemented, if the Company shall have furnished
or made available to or on behalf of the applicable Participating Covered
Shareholders any amendments or supplements thereto) was not sent or given
by or
on behalf of the applicable Participating Covered Shareholder to the Person
asserting any such Liabilities who purchased the Registrable Securities,
if such
preliminary Prospectus (or preliminary Prospectus as amended or supplemented)
is
furnished or made available to the Participating Covered Shareholders prior
to
the time of sale of such Common Shares to such Person and the untrue statement
contained in or omission from or alleged untrue statement contained in or
alleged omission from such preliminary Prospectus was corrected in the
preliminary Prospectus, as amended or supplemented. The Company shall notify
the
Covered Shareholders promptly of the institution, threat or assertion of
any
claim, proceeding (including any governmental investigation), or litigation
of
which it shall have become aware in connection with the matters addressed
by
this Agreement which involves the Company or a Purchaser Indemnitee. The
indemnity provided for herein shall remain in full force and effect regardless
of any investigation made by or on behalf of any Purchaser
Indemnitee.
13
(b) Indemnification
by the Covered Shareholders.
In
connection with any Registration Statement that includes Registrable Securities
of a Participating Covered Shareholder, each Participating Covered Shareholder
agrees, severally and not jointly, to indenmify and hold harmless the Company,
each Person who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act and the respective
partners, directors, officers, members, representatives, employees and agents
of
such Person or Controlling Person to the same extent as the foregoing indemnity
from the Company to each Purchaser Indemnitee, but only with reference to
untrue
statements or omissions or alleged untrue statements or omissions made in
reliance upon and in strict conformity with information relating to such
Participating Covered Shareholder furnished to the Company in writing by
such
Participating Covered Shareholder expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto or any preliminary
Prospectus or Issuer Free Writing Prospectus. The liability of any Participating
Covered Shareholder pursuant to this paragraph shall in no event exceed the
net
proceeds received by such Participating Covered Shareholder from sales of
Registrable Securities giving rise to such obligations.
(c) Notice
of Claims, etc.
If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any
Person
in respect of which indemnity may be sought pursuant to paragraph (a) or
(b) above, such Person (the “Indemnified
Party”),
shall
promptly notify the Person against whom such indemnity may be sought (the
“Indemnifying
Party”)
in
writing of the commencement thereof (but the failure to so notify an
Indemnifying Party shall not relieve it from any liability which it may have
under this Section 6, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party
and any
others the Indemnifying Party may reasonably designate in such action, suit,
proceeding, claim or demand and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding. Notwithstanding
the foregoing, in any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall
be at the expense of such Indemnified Party, unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed in writing to
the
contrary, (ii) the Indemnifying Party failed within a reasonable time after
notice of commencement of the action to assume the defense and employ counsel
reasonably satisfactory to the Indemnified Party, or (iii) the named
parties to any such action (including any impleaded parties) include both
such
Indemnified Party and the Indemnifying Party, or any Affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that either (x) there may be one or more legal defenses
available to it which are different from or additional to those available
to the
Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a
conflict may exist between such Indemnified Party and the Indemnifying Party
or
such Affiliate of the Indemnifying Party (in which case the Indemnifying
Party
shall not have the right to assume nor direct the defense of such action
on
behalf of such Indemnified Party, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such action or separate
but substantially similar or related actions arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than
one separate firm of attorneys (in addition to any local counsel), for all
such
Indemnified Parties, and any such separate firm for the Indemnifying Party,
the
directors, the officers and such control Persons of the Indemnified Party
as
shall be designated in writing by the Indemnifying Party). The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, which consent shall not be unreasonably withheld, but
if
settled with such consent or if there is a final judgment for the plaintiff,
the
Indemnifying Party agrees to indemnify any Indemnified Party from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party,
effect
any settlement of any pending or threatened proceeding in respect of which
any
Indemnified Party is or could have been a party and indemnity could have
been
sought hereunder by such Indemnified Party, unless such settlement includes
an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.
14
(d) Contribution.
If the
indemnification provided for in paragraphs (a) and (b) of this
Section 6 is for any reason held to be unavailable to an Indemnified Party
in respect of any Liabilities referred to therein (other than by reason of
the
exceptions provided therein) or is insufficient to hold harmless a party
indemnified thereunder, then each Indemnifying Party under such paragraphs,
in
lieu of indemnifying such Indemnified Party thereunder, shall contribute
to the
amount paid or payable by such Indemnified Party as a result of such Liabilities
(i) in such proportion as is appropriate to reflect the relative benefits
of the Indemnified Party on the one hand and the Indemnifying Party(ies)
on the
other in connection with the statements or omissions that resulted in such
Liabilities, or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Indenmifying Party(ies) and the Indemnified Party,
as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and any Purchaser Indemnitees on the other shall
be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state
a material fact relates to information supplied by the Company or by such
Purchaser Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
15
(e) The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro
rata
allocation (even if such Indemnified Parties were treated as one entity for
such
purpose), or by any other method of allocation that does not take account
of the
equitable considerations referred to in Section 6(d) above. The amount paid
or payable by an Indemnified Party as a result of any Liabilities referred
to in
Section 6(d) shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by
such
Indemnified Party in connection with investigating or defending any such
action
or claim. Notwithstanding the provisions of this Section 6, in no event
shall a Purchaser Indemnitee be required to contribute any amount in excess
of
the amount by which proceeds received by such Purchaser Indemnitee from sales
of
Registrable Securities exceeds the amount of any damages that such Purchaser
Indemnitee has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of
this
Section 6, each Person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) any
Covered Shareholder shall have the same rights to contribution as the Covered
Shareholders and each Person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) the
Company, and each officer, director, partner, employee, representative, agent
or
manager of the Company shall have the same rights to contribution as the
Company. Any party entitled to contribution shall, promptly after receipt
of
notice of commencement of any action, suit or proceeding against such party
in
respect of which a claim for contribution may be made against another party
or
parties, notify each party or parties from whom contribution may be sought,
but
the omission to so notify such party or parties shall not relieve the party
or
parties from whom contribution may be sought from any obligation it or they
may
have under this Section 6 or otherwise, except to the extent that any party
is materially prejudiced by the failure to give notice. 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.
(f) The
indemnity and contribution agreements contained in this Section 6 shall be
in addition to any liability which the Indemnifying Parties may otherwise
have
to the Indemnified Parties referred to above. The Covered Shareholders’
obligations to contribute pursuant to this Section 6
are
several in proportion to the respective number of Common Shares sold by each
of
the Covered Shareholders hereunder and not joint.
7. Assignment.
The
rights to have the Company register Registrable Securities pursuant to this
Agreement may be assigned or transferred only with the prior written consent
of
the Company, and any such assignment or transfer without such consent shall
be
void and of no effect. In the event of any such permitted assignment or transfer
by any Covered Shareholder to any permitted transferee of all or any portion
of
such Registrable Securities such transfer shall be allowed only if: (a) the
Covered Shareholder agrees in writing with the transferee or assignee to
assign
such rights and a copy of such agreement is furnished to the Company within
a
reasonable time after such assignment, (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written
notice
of (i) the name and address of such transferee or assignee and
(ii) the Registrable Securities with respect to which such registration
rights are being transferred or assigned, (c) immediately following such
transfer or assignment, the Registrable Securities so transferred or assigned
to
the transferee or assignee constitute Restricted Securities, (d) at or
before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, and
(e) the Company is furnished with an opinion of counsel, which counsel and
opinion shall be reasonably satisfactory to the Company, to the effect that
the
permitted assignment would be in compliance with the Securities Act and any
applicable state or other securities laws.
16
8. Amendment
and Waiver.
The
provisions of this Agreement, including the provisions of this sentence,
may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given, without the written consent
of the
Company and Covered Holders beneficially owning not less than a majority
of the
then outstanding Registrable Securities; provided, however,
that for
purposes of this Section 8, Registrable Securities that are owned, directly
or indirectly, by the Company shall not be deemed to be outstanding. No
amendment shall be deemed effective if by its terms it expressly discriminates
against any Covered Shareholder. Notwithstanding the foregoing, a waiver
or
consent to or departure from the provisions hereof with respect to a matter
that
relates exclusively to the rights of a Covered Shareholder whose securities
are
being sold pursuant to a Registration Statement and that does not directly
or
indirectly affect, impair, limit or compromise the rights of other Covered
Shareholders may be given by such Covered Shareholder; provided
that the
provisions of this sentence may not be amended, modified or supplemented
except
in accordance with the provisions of the immediately preceding
sentence.
9. Miscellaneous.
(a) Holders
of Registrable Securities.
A
Person shall be deemed to be a holder of Registrable Securities whenever
such
Person owns of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the registered owner of
such
Registrable Securities.
(b) Notices.
Except
as may be otherwise provided herein, any notice or other communication or
delivery required or permitted hereunder shall be in writing and shall be
delivered personally or sent by certified mail, postage prepaid, by a nationally
recognized overnight courier service or by facsimile as follows, and shall
be
deemed given when actually received.
17
If
to the
Company, to:
0
Xxxx
Xxxxxx
Xxxxxxxx
XX 00 Xxxxxxx
Xxxxxxxxx:
Xxx Xxxxx
Fax:
(000) 000-0000
With
a
copy (which shall not constitute notice) to:
LeBoeuf,
Lamb, Xxxxxx & XxxXxx LLP
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxx, Esq.
Fax:
(000) 000-0000
If
to any
Covered Shareholder, to it at the address set forth below its name on the
signature page of this Agreement or, in the case of a Covered Shareholder
who
becomes such as a result of an assignment in accordance with Section 7,
on the
instrument by which such Person agrees to be bound by the provisions contained
herein.
The
Company or any Covered Shareholder may, by notice given pursuant to this
Section 9(b), change the address for notices to it.
(c) Implied
Waivers.
Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate
as a
waiver thereof.
(d) Remedies;
Specific Performance.
The
remedies provided in this Agreement are cumulative and not exclusive of any
remedies provided by law. In the event of a breach by the Company of any
of its
obligations under this Agreement, each Covered Shareholder, in addition to
being
entitled to exercise all rights provided herein, or granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. Subject to Section 6, the Company agrees that
monetary damages would not be adequate compensation for any loss incurred
by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would
be
adequate.
(e) Governing
Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF
THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH
OF THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE
COURT
IN THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK IN RESPECT
OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
18
(f) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth
herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use good faith efforts to find
and
employ an alternative means to achieve the same or substantially the same
result
as that contemplated by such term, provision, covenant or restriction. It
is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
(g) Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties hereto with
respect
to the subject matter hereof. There are no restrictions, promises, warranties
or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and undertakings among the parties hereto
with
respect to the subject matter hereof.
(h) Persons
Bound.
Subject
to the requirements of Section 7 hereof, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties
hereto.
(i) Registrable
Shares Held by the Company or its Affiliates.
Whenever the consent or approval of Covered Shareholders holding a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held directly or indirectly by the Company shall not be counted
in
determining whether such consent or approval was given by Covered Shareholders
holding such required percentage.
(j) Adjustment
for Stock Splits, etc.
Wherever
in this Agreement there is a reference to a specific number of shares or
liquidated damages payable with respect to any Registrable Securities, then
upon
the occurrence of any subdivision, combination, or stock dividend of such
shares, the specific number of shares or amount of liquidated damages payable
with respect to any Registrable Securities so referenced in this Agreement
shall
automatically be proportionally adjusted to reflect the effect on the
outstanding shares of such class or series of stock by such subdivision,
combination, or stock dividend.
(k) Survival.
The
indemnification and contribution obligations under Section 6 of this
Agreement shall survive the termination of the Company's obligations under
Section 2 of this Agreement.
19
(l) Interpretation.
All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning thereof.
(m) Further
Assurances.
From
and after the date of this Agreement, upon the request of the Covered
Shareholders or the Company, the Company and the Covered Shareholders shall
execute and deliver such instruments, documents or other writings as may
be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
(n) Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument. Signatures delivered by facsimile shall be deemed to
be
original signatures.
[Signature
Page Follows]
20
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
a
Bermuda
company
By: /s/
Xxx
Xxxxx
Name: Xxx
Xxxxx
Title: Chief
Operating Officer, General Counsel and
Secretary
THE
FOUNDING SHAREHOLDERS
By: /s/
Xxxxxx Xxxxxxxxx
Name: Xxxxxx
Xxxxxxxxx
Address
for notices:
AmTrust
Financial Services, Inc.
00
Xxxxxx
Xxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
By: /s/
Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Address
for notices:
AmTrust
Financial Services, Inc.
00
Xxxxxx
Xxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
By: /s/
Xxxxx
X. Xxxxxxx
Name: Xxxxx
X.
Xxxxxxx
Address
for
notices: AmTrust
Financial Services, Inc.
00
Xxxxxx
Xxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Exhibit
A
Plan
of Distribution
The
selling shareholder and any of its donees, transferees, pledgees, assignees
and
successors-in-interest may sell, from time to time, any or all of their common
shares on any stock exchange, market or trading facility on which the shares
are
traded or in private transactions. These sales may be at fixed or negotiated
prices. The selling shareholder may use any one or more of the following
methods
when selling shares:
· ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
· block
trades in which the broker-dealer so engaged will attempt to sell the shares
as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
· purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
· over-the-counter
distribution in accordance with the rules of the Nasdaq Stock
Market;
· privately
negotiated transactions;
· short
sales;
· broker-dealers
may agree with the selling shareholder to sell a specified number of such
shares
at a stipulated price per share;
· a
combination of any such methods of sale; and
· any
other
method permitted pursuant to applicable law.
Under
applicable rules and regulations under the Securities Exchange Act of 1934,
as
amended (the “Securities Exchange Act”), any person engaged in a distribution of
the common shares covered by this prospectus may be limited in its ability
to
engage in market activities with respect to such shares. The selling
shareholder, for example, will be subject to applicable provisions of the
Securities Exchange Act and the rules and regulations under it, including,
without limitation, Regulation M, which provisions may restrict certain
activities of the selling shareholder and limit the timing of purchases and
sales of any common shares by the selling shareholder. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities
with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. The foregoing may affect the marketability of the shares offered
by
this prospectus.
To
the
extent required, this prospectus may be amended or supplemented from time
to
time to describe a specific plan of distribution.
In
connection with distributions of the shares or otherwise, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers
or
other financial institutions may engage in short sales of our common shares
in
the course of hedging the positions they assume with selling shareholders.
The
selling shareholders may also sell our securities short and redeliver the
shares
to close out such short positions. The selling shareholders may also enter
into
option or other transactions with broker-dealers or other financial institutions
that require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares the broker-dealer or other
financial institution may resell pursuant to this prospectus, as supplemented
or
amended to reflect such transaction.
The
selling shareholder may also engage in short sales against the box, puts
and
calls and other transactions in our securities or derivatives of our securities
and may sell or deliver shares in connection with these trades. The selling
shareholder may pledge its shares to its brokers under the margin provisions
of
customer agreements. If the selling shareholder defaults on a margin loan,
the
broker may offer and sell, from time to time, the pledged shares.
The
selling shareholder may sell shares directly to market makers acting as
principals and/or broker-dealers acting as agents for itself or its customers.
Broker-dealers engaged by the selling shareholder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions,
concessions or discounts from the selling shareholder (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts
to be
negotiated. The selling shareholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Market makers and block purchasers that purchase the shares will do so for
their
own account and at their own risk. It is possible that a selling shareholder
will attempt to sell shares in block transactions to market makers or other
purchasers at a price per share that may be below the then-current market
price.
We cannot make assurances that all or any of the common shares will be issued
to, or sold by, the selling shareholder.
In
addition, any shares that qualify for sale pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended (the “Securities Act”), may be sold
under Rule 144 rather than pursuant to this prospectus.
The
selling shareholder and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of
the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
In
certain states, the applicable state securities laws will require a holder
of
shares desiring to sell its shares to sell its shares only through registered
or
licensed brokers or dealers. In addition, in certain states the shares may
not
be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement
is
available and is complied with.
We
are
required to pay all fees and expenses incident to the registration of the
shares. We have agreed to indemnify the selling shareholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
In
addition, we will make copies of this prospectus available to the selling
shareholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling shareholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities
Act.
At
the
time a particular offer of shares is made, if required, a prospectus supplement
will be distributed that will set forth the number of shares being offered
and
the terms of the offering, including the name of any underwriter, dealer
or
agent, the purchase price paid by any underwriter, any discount, commission
and
other item constituting compensation, any discount, commission or concession
allowed or reallowed or paid to any dealer, and the proposed selling price
to
the public.
