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EXHIBIT 10(a)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made this
8th day of November, 1995 by and among Xxxxx Enterprises, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Basic Shareholder").
W I T N E S S E T H:
WHEREAS, the Company, BA Acquisition Corp., a Georgia corporation and
a wholly owned subsidiary of the Company (the "Subsidiary"), Basic American
Medical Products, Inc., a Georgia corporation ("Basic") and the Basic
Shareholder, have entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated as of October 6, 1995, providing for the acquisition of Basic
by the Company through a merger (the "Merger") of the Subsidiary into Basic
with Basic being the corporation surviving the Merger;
WHEREAS, the Basic Shareholder upon consummation of the Merger will
hold in the aggregate approximately 13.53% of the issued and outstanding common
stock, $2.50 par value, of the Company (the "Common Stock"); and
WHEREAS, the parties to the Merger Agreement and the Basic
Shareholder desire the Company to register the shares under the Securities Act
(as hereinafter defined) for resale by the Basic Shareholder and the execution
and delivery of this Agreement is a condition precedent to the consummation of
the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. Certain Definitions.
For purposes of this Agreement, the following terms have the
following meanings when used herein:
(a) "Business Day" means any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a day on which banking institutions in Atlanta,
Georgia are authorized by law, regulation or executive order to close.
(b) "Closing" means the date of the consummation of the
Merger as set forth in the Merger Agreement.
(c) "Commission" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(d) "Common Stock" means the Common Stock, par value
$2.50 per share, of the Company.
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(e) "Company" means Xxxxx Enterprises, Inc., a Delaware
corporation, and its successors and assigns.
(f) "Demand Registration" means any registration of
Registrable Securities effected pursuant to Section 3 hereof.
(g) "Exchange Act" means the Securities Exchange Act of
1934, as amended (or any similar successor federal statute), and the rules and
regulations thereunder, as in effect from time to time.
(h) "Holder" means any Person that owns Registrable
Securities, including such successors and assigns as acquire Registrable
Securities, directly or indirectly, from such Person. For purposes of this
Agreement, the Company may deem and treat the registered holder of a
Registrable Security as the Holder and absolute owner thereof.
(i) "Initial Holder" means Xxxx X. Xxxxxxx.
(j) "Majority Registered Holders" means in the case of
any registration statement, the Holders of a majority of the Registrable
Securities proposed to be covered (or so covered) in such registration
statement.
(k) "Majority Sellers" means (i) in the case of any
offering or proposed offering pursuant to a shelf "draw-down" of Registrable
Securities registered pursuant to a Shelf Registration, the Holders of a
majority of the Registrable Securities so offered or proposed to be so offered,
and (ii) in the case of any other offering or proposed offering pursuant to any
Registration, the Majority Registered Holders of the applicable registration
statement.
(l) "Person" means any individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, or other entity, or a government or
any political subdivision or agency.
(m) "Piggyback Registration" means any registration of
Registrable Securities effected pursuant to Section 4 hereof.
(n) "Registrable Securities" means (i) the 600,000 shares
of Common Stock issued to the Basic Shareholder in the Merger and (ii) any
securities issued or issuable in respect of or in exchange for any of the
shares of Common Stock referred to in clause (i) above by way of a stock
dividend or other distribution on the Common Stock, stock split or combination
of shares, recapitalization, reclassification, merger, consolidation or
exchange offer. For purposes of this Agreement, a Registrable Security ceases
to be a Registrable Security when either (1) it has been effectively registered
under the Securities Act and sold or distributed to any Person pursuant to an
effective registration statement covering it or (2) it has been sold or
distributed to any
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Person pursuant to Rule 144.
(o) "Registration" means any Shelf Registration, Demand
Registration or Piggyback Registration.
(p) "Rule 10b-6" means Rule 10b-6 promulgated by the
Commission under the Exchange Act, as such Rule may be amended from time to
time, or any similar successor rule that may be promulgated by the Commission.
(q) "Rule 144," Rule 145," "Rule 415" and "Rule 424"
mean, respectively, Rule 144, Rule 145, Rule 415 and Rule 424, each promulgated
by the Commission under the Securities Act, in each case as amended from time
to time, or any similar successor rule thereto that may be promulgated by the
Commission.
(r) "Securities Act" means the Securities Act of 1933, as
amended (or any similar successor federal statute), and the rules and
regulations thereunder, as the same are in effect from time to time.
(s) "Shelf Period" means the period (i) beginning one
year after the Closing Date and (ii) ending four years after the Closing Date
(or, if earlier, on expiration of the period during which a Shelf Registration
must remain effective under this Agreement).
(t) "Shelf Registration" means any registration of
Registrable Securities effected pursuant to Section 2 hereof.
2. Shelf Registrations.
(a) Effective Registration. At any time after
commencement of the Shelf Period, upon written notice to the Company from one
or more Holders (the "Initiating Shelf Holders") of a majority of the
Registrable Securities, requesting that the Company effect, pursuant to this
Section 2(a) a Shelf Registration covering the Registrable Securities then
constituting no more than 50% of the Registrable Securities on any appropriate
form pursuant to Rule 415, the Company shall promptly (but in any event within
20 days) give written notice of such requested registration to all other
Holders and thereupon the Company shall as expeditiously as possible, use its
reasonable efforts to effect the registration under the Securities Act of:
(A) The Registrable Securities that the Initiating
Shelf Holders have requested the Company to register; and
(B) All other Registrable Securities the Holders of
which have made a written request to the Company for registration
thereof (which request shall specify such Registrable Securities and
the proposed amounts thereof) within 30 days after receipt of such
written notice from the Company,
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all to the extent requisite to permit the disposition by Holders of the
securities then constituting Registrable Securities so to be registered.
(b) Proration. To the extent that the amount of
Registrable Securities requested to be registered under the Shelf Registration
shall exceed 50% of the Registrable Securities, the amount of Registrable
Securities to be offered for the accounts of Holders shall be reduced pro rata
to the extent necessary so that amount of Registrable Securities to be
registered shall not exceed 50% of the Registrable Securities.
(c) Duration. The Company shall use its reasonable
efforts to have such "shelf" registration statement declared effective as soon
as practicable after its filing and to keep such registration statement
continuously effective until the fourth anniversary of the Closing Date or
until all Registrable Securities included therein have been sold, if earlier.
If necessary, the Company shall cause to be filed, and shall use its reasonable
efforts to have declared effective as soon as practicable following filing,
additional "shelf" registration statements or amendments as necessary to
maintain such effectiveness during the Shelf Period.
(d) Shelf "Draw-Downs". If any Holder effects, pursuant
to a Shelf Registration, a public offering of all or a part of its Registrable
Securities a shelf "draw-down") and wishes the Company to perform, in
connection with such shelf "draw-down," any procedures specified in Section
6(a) hereof in addition to those the Company is otherwise obligated to perform
with respect to such Shelf Registration pursuant to Sections 2(a) and 6(a)
hereof, such Holder shall deliver to the Company, at least five Business Days
before such "draw-down" is to be made, a written notice describing in
reasonable detail its proposed offering and requesting the performance of such
additional procedures pursuant to this Section 2(d) and such Section 6(a). The
Company shall be required to perform such additional procedures in advance of a
particular shelf "draw-down" only if such Holder shall have requested such
performance as provided above. In addition, the Company shall be required to
perform such additional procedures (other than those required under the
securities laws) in connection with a particular shelf "draw-down" only if one
or more Holders shall have notified the Company pursuant to this Section 2(d)
of their intention to offer to the public Registrable Securities with an
aggregate market value (on the date the written notice referred to above is
delivered) of at least $2 million pursuant to such "draw-down." During the
first three years of the Shelf Period a shelf "draw-down" that is an
underwritten offering shall constitute a Demand Registration for purposes of
the first sentence of Section 3(b).
(e) Inclusion of Other Securities. No Shelf Registration
shall include any securities other than Registrable Securities; provided that
this Agreement shall not prohibit the filing of other "shelf" registration
statements by the Company.
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3. Demand Registrations.
(a) Effective Registration. At any time after one year
following the Closing Date, upon written notice to the Company from one or more
Holders (the "Initiating Demand Holders") of Registrable Securities holding in
the aggregate Registrable Securities with a market value (on the date the
written notice is delivered) of at least $2 million, requesting that the
Company effect, pursuant to this Section 3, the registration of any of such
Initiating Demand Holders' Registrable Securities under the Securities Act
(which notice shall specify the Registrable Securities so requested to be
registered, the proposed amounts thereof and the intended method or methods of
disposition by such Demand Initiating Holders), the Company shall promptly (but
in any event within 20 days) give written notice of such requested registration
to all Holders, and thereupon the Company shall, as expeditiously as possible,
use its reasonable efforts to effect the registration under the Securities Act
of:
(A) the Registrable Securities that the Initiating
Demand Holders have requested the Company to register, for
disposition in accordance with the intended method or methods of
disposition stated in their notice to the Company; and
(B) all other Registrable Securities the Holders of
which shall have made a written request to the Company for
registration thereof (which request shall specify such Registrable
Securities and the proposed amounts thereof) within 30 days after the
receipt of such written notice from the Company,
all to the extent requisite to permit the disposition by Holders of the
securities then constituting Registrable Securities so to be registered.
(b) Frequency; Duration. The Company shall not be
required to effect more than two Demand Registrations pursuant to this
Agreement. The Company shall not be required to effect a Demand Registration
pursuant to this Section 3: (i) if it shall have so effected a Demand
Registration during the previous 12 months; (ii) if the Initiating Demand
Holders shall have requested such Demand Registration after the third
anniversary of the Closing Date; or (iii) during the Shelf Period, unless the
requested Demand Registration is to be underwritten, on either a firm
commitment or best efforts basis, and the managing underwriter or underwriters
have requested in a written opinion to the Initiating Demand Holders and the
Company that a new registration statement be filed in the interest of the
proposed offering; provided, however, that a Demand Registration shall not be
deemed to have been effected for purposes of Section 3(b)(i) if the applicable
registration statement has not been declared effective and kept effective until
the earlier of (i) four months following the date on which such registration
statement was declared effective and (ii) the sale pursuant to such
registration statement of the Registrable Securities covered thereby.
(c) Inclusion of Other Securities. The Company shall not
register any securities other than Registrable Securities in any Demand
Registration without the
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prior written consent of Holders of a majority of the Registrable Securities
requested to be included in such Demand Registration. If any securities other
than Registrable Securities are so registered, securities requested to be
registered by the Company for sale for its own account shall have absolute
priority over securities requested to be registered by third parties.
4. Piggyback Registrations.
(a) Effective Registration. If the Company proposes to
file a registration statement under the Securities Act with respect to any
class of equity securities (other than in connection with the registration of
equity securities issued or issuable pursuant to an employee stock option,
stock purchase, stock bonus or similar plan or pursuant to a merger, exchange
offer or transaction of the type specified in Rule 145(a) under the Securities
Act) at any time on or prior to the fifth anniversary of the Closing Date, then
the Company shall give written notice of such proposed filing to the Holders at
least 15 days before the anticipated filing date, and such notice shall offer
the Holders the opportunity to register such amount of Registrable Securities
as each such Holder may request. The Company shall use its reasonable efforts
to cause the managing underwriter or underwriters of a proposed underwritten
offering to permit the inclusion therein of any Registrable Securities the
Holders of which request, within 5 days after receiving written notice of the
proposed filing from the Company, such inclusion, on the same terms and
conditions as any similar securities of the Company so included. Any Holder's
request for such inclusion may be withdrawn, in whole or in part, at any time
prior to the effective date of the registration statement for such offering.
(b) Cut-Backs. Notwithstanding the provisions of Section
4(a) hereof, if the managing underwriter or underwriters of a proposed
underwritten offering as described in such Section 4(a) deliver a written
opinion to the Holders requesting inclusion of their Registrable Securities
stating that the total amount or kind of securities that they and any other
Persons seek to include in such offering would materially and adversely affect
the success of such offering, then the amount or kind of Registrable Securities
to be offered for the accounts of Holders shall be reduced pro rata to the
extent necessary to reduce the total amount of Registrable Securities to be
included in such offering to that recommended by such managing underwriter or
underwriters (which amount may be zero); provided, however, that if the amount
of any kind of Registrable Securities to be offered for the accounts of Holders
is reduced in accordance with this Section 4(b), the Company may not include in
such offering any securities other than (i) Registrable Securities and (ii)
securities, if any, that the Company is offering for sale for its own account
in a primary underwritten offering.
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5. Holdback Agreements.
(a) Restrictions on Public Sales by Holders of
Registrable Securities. To the extent not inconsistent with applicable law,
each Holder that is timely notified in writing by the managing underwriter or
underwriters shall not effect any public sale or distribution (including a sale
pursuant to Rule 144) of any issue being registered in an underwritten offering
(other than pursuant to an employee stock option, stock purchase, stock bonus
or similar plan, pursuant to a merger, exchange offer or a transaction of the
type specified in Rule 145(a) under the Securities Act or pursuant to a "shelf"
registration), any securities of the Company similar to any such issue or any
securities of the Company convertible into or exchangeable or exercisable for
any such issue, during the 10-day period prior to, and during the 90-day period
beginning on, the effective date of the applicable registration statement,
except as part of such registration.
(b) Restrictions on Public Sales by the Company. The
Company shall not effect any public sale or distribution of any issue being
registered in an underwritten offering (other than pursuant to an employee
stock option, stock purchase, stock bonus or similar plan or pursuant to a
merger, exchange offer or a transaction of the type specified in Rule 145(a)
under the Securities Act or pursuant to a "shelf" registration), any securities
of the Company similar to any such issue or any securities of the Company
convertible into or exchangeable or exercisable for any such issue, during the
10-day period prior to, and during the 30-day period beginning on, the
effective date of the applicable registration statement, except as part of such
registration.
6. Registration Procedures.
(a) Company Procedures. Whenever the Company is required
by this Agreement to effect the registration of any Registrable Securities
under the Securities Act pursuant to a registration statement, the Company
shall use its reasonable efforts to effect each such registration to permit the
sale of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company shall, as soon
as practicable:
(i) prepare and file with the Commission the
requisite registration statement to effect such registration and thereafter use
its reasonable efforts to cause such registration statement to be declared
effective as soon as practicable and to remain continuously effective for the
time period required by this Agreement to the extent permitted under the
Securities Act, provided that as soon as practicable but in no event later than
three Business Days before filing such registration statement, any related
prospectus or any amendment or supplement thereto, other than any amendment or
supplement made solely as a result of incorporation by reference of documents
filed with the Commission subsequent to the filing of such registration
statement (or, in the case of any prospectus supplement or post-effective
amendment relating to a proposed shelf "draw-down" pursuant to Section 2
hereof, two Business
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Days before the filing thereof), the Company shall furnish to the Holders of
the Registrable Securities covered by such registration statement (or, in the
case of any prospectus supplement or post-effective amendment relating to a
proposed shelf "draw-down" pursuant to Section 2 hereof, to the Selling
Holders) and the underwriters, if any, copies of all such documents proposed to
be filed, which documents shall be subject to the review of such Holders and
underwriters; the Company shall not file any registration statement or
amendment thereto or any prospectus or any supplement thereto (other than any
amendment or supplement made solely as a result of incorporation by reference
of documents filed with the Commission subsequent to the filing of such
registration statement) to which the managing underwriters of the applicable
offering, if any, or the Majority Registered Holders (or, in the case of any
prospectus supplement or post-effective amendment relating to a proposed shelf
"draw-down" pursuant to Section 2 hereof, the Majority Sellers) shall have
reasonably objected in writing within two Business Days after receipt of such
documents to the effect that such registration statement or amendment thereto
or prospectus or supplement thereto does not comply in all material respects
with the requirements of the Securities Act (provided that the foregoing shall
not limit the right of any Holder whose Registrable Securities are covered by a
registration statement to reasonably object, within two Business Days after
receipt of such documents, to any particular information that is to be
contained in such registration statement, amendment, prospectus or supplement
and relates specifically to such Holder, including, without limitation, any
information describing the manner in which such Holder acquired such
Registrable Securities and the intended method or methods of distribution of
such Registrable Securities), and if the Company is unable to file any such
document due to the objections of such underwriters or such Holders, the
Company shall use its reasonable efforts to cooperate with such underwriters
and Holders to prepare, as soon as practicable, a document that is responsive
in all material respects to the reasonable objections of such underwriters and
Holders;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to such registration statement as may
be necessary to keep such registration statement continuously effective and
current for the period required by this Agreement to the extent permitted under
the Securities Act; and cause each related prospectus to be supplemented by any
prospectus supplement as may be required, and as so supplemented to be filed
pursuant to Rule 424; and otherwise comply with the provisions of the
Securities Act as may be necessary to facilitate the disposition of all
Registrable Securities covered by such registration statement during the
applicable period in accordance with the intended method or methods of
disposition by the selling Holders thereof set forth in such registration
statement or such prospectus or prospectus supplement;
(iii) notify the Holders and the managing
underwriters, if any, of the applicable offering (providing, if requested by
any such Persons, confirmation in writing) as soon as practicable after
becoming aware of: (A) the filing of any prospectus or prospectus supplement or
the filing or effectiveness (or anticipated date
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of effectiveness) of such registration statement or any post-effective
amendment thereto; (B) any request by the Commission for amendments or
supplements to such registration statement or the related prospectus or for
additional information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation
of any proceedings for that purpose; (D) the receipt by the Company of any
notification with respect to the suspension of the qualification or
registration (or exemption therefrom) of any Registrable Securities for sale in
any jurisdiction in the United States or the initiation or threatening of any
proceeding for such purposes; or (E) the happening of any event that makes any
statement made in such registration statement or in any related prospectus,
prospectus supplement, amendment or document incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
such registration statement or in any such prospectus, supplement, amendment or
other such document so that it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of any prospectus in
the light of the circumstances under which they were made) not misleading;
(iv) make every reasonable effort to obtain at the
earliest possible moment the withdrawal of any order or other action suspending
the effectiveness of any such registration statement or suspending the
qualification or registration (or exemption therefrom) of the Registrable
Securities for sale in any jurisdiction;
(v) if reasonably requested by the managing
underwriters, if any, of the applicable offering, or by the Majority Sellers,
as soon as practicable incorporate in a prospectus supplement or post-effective
amendment such information as such underwriters or the Majority Sellers, as the
case may be, agree should be included therein relating to the sale and offering
of the applicable Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold to
any underwriters, the purchase price being paid therefor by any such
underwriters and any other terms of the offering of the Registrable Securities;
and make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable following receipt of notice of the matters to
be incorporated therein;
(vi) as soon as practicable after filing such
documents with the Commission, furnish to the Holders and each of the
underwriters, if any, without charge, at least one manually signed or conformed
copy of such registration statement and any post-effective amendment thereto,
including financial statements and schedules (or, in the case of any
post-effective amendment relating to a shelf "draw-down" pursuant to Section 2
hereof, to the Selling Holders); and as soon as practicable after the request
of any Holder or underwriter, furnish to such Holder or underwriter, as the
case may be, at least one copy of any document incorporated by reference in
such registration statement or in any related prospectus, prospectus supplement
or amendment, together with all exhibits thereto (including those previously
furnished or
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incorporated by reference);
(vii) deliver to the Holders and to each of the
underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; subject to Section
6(b)(i) hereof, the Company consents to the use of any such prospectus or any
amendment or supplement thereto by the Holders and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
any such prospectus or any amendment or supplement thereto;
(viii) prior to any public offering of Registrable
Securities, register or qualify (or obtain an exemption therefrom), or
cooperate with the Holders, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption
therefrom) of, such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions in the United States as the
Holders or the underwriters, if any, shall reasonably request in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period during which such registration statement is required to be
kept effective pursuant to this Agreement, to the extent permitted under the
Securities Act; and do any and all other acts and things reasonably necessary
or advisable to facilitate the disposition in such jurisdictions of the
Registrable Securities covered by such registration statement; provided that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not be required to qualify but for this Section
6(a)(viii);
(ix) cooperate with Holders participating in such
registration and the underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing the Registrable Securities to be
sold; and enable such Registrable Securities to be in such denominations and
registered in such names as the underwriters, if any, may request at least two
Business Days prior to any sale of Registrable Securities to the underwriters;
(x) use its reasonable efforts to cause the
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities in the
United States as may be reasonably necessary to enable the Holders or the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(xi) as soon as practicable after the occurrence of
any event described in Section 6(a)(iii)(E) hereof, prepare a supplement or
post-effective amendment to such registration statement or to 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 being sold thereunder, such prospectus shall not contain
an untrue statement of a material fact or
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omit to state any material fact necessary to make the statements therein not
misleading; if any event described in Section 6(a)(iii)(B) hereof occurs, use
its reasonable efforts to cooperate with the Commission to prepare, as soon as
practicable, any amendment or supplement to such registration statement or such
related prospectus and any other additional information, or to take other
action that may have been requested by the Commission;
(xii) use its reasonable efforts to cause all Common
Stock constituting Registrable Securities covered by such registration
statement to be listed on each securities exchange (or quotation system
operated by a national securities association) on which the Common Stock of the
Company is then listed (or included), if so requested by the Majority
Registered Holders or the underwriters, if any, and enter into customary
agreements including, if necessary, a listing application and indemnification
agreement in customary form, and provide a transfer agent for such Registrable
Securities no later than the effective date of such registration statement; use
its reasonable efforts to cause any other Registrable Securities covered by
such registration statement to be listed (or included) on each securities
exchange (or quotation system operated by a national securities association) on
which securities of the same class and series, if any, are then listed (or
included) (or on any exchange or quotation system on which any Person other
than a Holder shall have the right to have securities of the same class and
series, if any, listed or included), if so requested by the Majority Registered
Holders or the underwriters, if any, and enter into customary agreements
including, if necessary, a listing application and indemnification agreement in
customary form, and, if necessary, provide a transfer agent for such securities
no later than the effective date of such registration statement;
(xiii) provide a CUSIP number for the
Registrable Securities no later than the effective date of such registration
statement;
(xiv) enter into customary agreements (including, in
the case of an underwritten offering, an underwriting agreement in customary
form for the managing underwriters with respect to issuers of similar market
capitalization and reporting and financial histories) and take all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of the Registrable Securities included in such registration
statement and, in the case of an underwritten offering: (A) make
representations and warranties to each Holder of Registrable Securities
participating in such offering and to each of the underwriters, in such form,
substance and scope as are customarily made to the managing underwriters by
issuers of similar market capitalization and reporting and financial histories
and confirm the same to the extent customary if and when requested; (B) obtain
opinions of counsel to the Company and updates thereof addressed to each Holder
of Registrable Securities participating in such offering and to each of the
underwriters, such opinions and updates to be in customary form and covering
the matters customarily covered in opinions obtained in underwritten offerings
by the managing underwriters for issuers of similar market capitalization and
reporting and financial histories; (C) obtain "comfort" letters and
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updates thereof from the Company's independent certified public accountants
addressed to each Holder of Registrable Securities participating in such
offering and to each of the underwriters, such letters to be in customary form
and covering matters of the type customarily covered in "comfort" letters to
the managing underwriters in connection with underwritten offerings by them for
issuers of similar market capitalization and reporting and financial histories;
(D) provide, in the underwriting agreement to be entered into in connection
with such offering, indemnification provisions and procedures of the type
customarily contained in underwriting agreements for offerings by issuers of
similar market capitalization and reporting and financial histories; and (E)
deliver such customary documents and certificates as may be reasonably
requested by the Majority Sellers and the managing underwriters to evidence .
compliance with clause (A) of this paragraph (xiv) and with any customary
conditions contained in the underwriting agreement entered into by the Company
in connection with such offering;
(xv) make available, for inspection by the Holders
of the Registrable Securities included in such registration, any underwriter
participating in any disposition of Registrable Securities pursuant to such
registration statement, and any attorney, accountant or other representative
retained by such selling Holders or by any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such underwriter, attorney,
accountant or other representative in connection with such registration;
(xvi) otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the Commission relating to such
registration and the distribution of the securities being offered (including,
without limitation, Rule 10b-6, with respect to which the Company shall also
use its reasonable efforts timely to apprise each Holder of any bids and
purchases by the Company, and of any known bids and purchases by each
"affiliated purchaser" (as defined in Rule 10b-6) of the Company, that would in
the opinion of the Company be prohibited under Rule 10b-6 in connection with a
"distribution" (as so defined) by such Holder of securities of the Company) and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act, no later than 60 days
after the end of any 12-month period (or 120 days, if such period is a fiscal
year) commencing at the end of any fiscal quarter in which the Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering, or, if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of such registration statement, which earning
statements shall cover such 12-month periods;
(xvii) cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc. and in
the performance of any customary or required due diligence investigation by
any underwriter; and
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13
(xviii) use its reasonable efforts to take all
other reasonable steps necessary and appropriate to effect such registration in
the manner contemplated by this Agreement.
(b) Holder Procedures.
(i) Each Holder agrees, by acquisition of the
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event described in Section 6(a)(iii)(B), 6(a)(iii)(C),
6(a)(iii)(D) or 6(a)(iii)(E) hereof, such Holder shall forthwith discontinue
disposition of any Registrable Securities (but, in the case of an event
described in Section 6(a)(iii)(D), in the affected jurisdiction or
jurisdictions only) covered by the affected registration statement or
prospectus until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6(a)(iii) or 6(a)(xi) hereof or
until such Holder is (it being agreed by the Company that the underwriters, if
any, shall also be) advised in writing (the "Advice") by the Company that the
use of the applicable prospectus may be resumed. If the Company shall have
given any such notice during a period when a Shelf Registration or a Demand
Registration is in effect, the Shelf Period or four-month period mentioned in
Section 2(a) or 3(b) hereof, as the case may be, shall be extended by the
number of days from and including the date of the giving of such notice to and
including the date when each Holder of Registrable Securities included in such
Registration shall have received the copies of the supplemented or amended
prospectus contemplated by Section 6(a)(iii) or 6(a)(xi) hereof or the Advice,
as the case may be.
(ii) In connection with any underwritten public
offering of Registrable Securities pursuant to a Shelf Registration or Demand
Registration, the managing underwriter of such offering shall be a nationally
recognized investment banking firm selected by the Majority Sellers and shall
be reasonably acceptable to the Company.
7. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications or registrations (or the obtaining of exemptions therefrom)
of the Registrable Securities), printing expenses (including expenses of
printing prospectuses), messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), reasonable fees and
disbursements of its counsel and its independent certified public accountants
(including the reasonable expenses of any special audit or "comfort" letters
required by or incident to such performance or compliance), securities acts
liability insurance (if the Company elects to obtain such insurance),
reasonable fees and expenses of any special
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14
experts retained by the Company in connection with any registration hereunder,
reasonable fees and expenses of other Persons retained by the Company,
reasonable fees and expenses of one counsel for the Holders, selected by the
Majority Sellers, incurred in connection with each registration hereunder, and
reasonable out-of-pocket expenses of the Holders (all such expenses being
herein referred to as "Registration Expenses"), shall be borne by the Company;
provided that Registration Expenses shall not include any underwriting
discounts, commissions or fees attributable to the sale of the Registrable
Securities.
8. Indemnification; Contribution.
(a) Indemnification by the Company. The Company shall
indemnify, to the full extent permitted by law, each Holder of Registrable
Securities, and if applicable, its officers, directors, employees and agents,
and if applicable, each Person who controls such Holder (within the meaning of
the Securities Act), against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and legal expenses)
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any registration statement covering any Registrable
Securities, any related prospectus or preliminary prospectus, or any amendment
or supplement thereto, or any omission or alleged omission to state in any
thereof a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus or prospectus supplement, in
light of the circumstances under which they were made) not misleading, except
in each case insofar as the same arises out of or is based upon an untrue
statement or alleged untrue statement of a material fact or an omission or
alleged omission to state a material fact in such registration statement,
prospectus, preliminary prospectus, amendment or supplement, as the case may
be, made or omitted, as the case may be, in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use therein. This indemnity is in addition to any liability that the Company
may otherwise have. The Company shall also indemnify any underwriters of the
Registrable Securities and their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of Holders
and other specified Persons.
(b) Indemnification by Holders of Registrable Securities.
In connection with any registration statement covering Registrable Securities,
each Holder any of whose Registrable Securities are covered thereby shall
furnish to the Company in writing such information and affidavits with respect
to such Holder as the Company reasonably requests for use in connection with
such registration statement, any related prospectus or preliminary prospectus,
or any amendment or supplement thereto, and shall indemnify, to the full extent
permitted by law, the Company, the Company's directors, officers, employees and
agents and each Person who controls the Company (within the meaning of the
Securities Act), against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and legal expenses) arising out of
or based upon any untrue or alleged untrue statement of a material fact
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15
contained in any registration statement covering any Registrable Securities,
any related prospectus or preliminary prospectus, or any amendment or
supplement thereto, or any omission or alleged omission to state in any thereof
a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus or prospectus supplement, in
light of the circumstances under which they were made) not misleading, in each
case to the extent, but only to the extent, that the same arises out of or is
based upon an untrue statement or alleged untrue statement of a material fact
or an omission or alleged omission to state a material fact in such
registration statement or in such related prospectus, preliminary prospectus,
amendment or supplement, as the case may be, made or omitted, as the case may
be, in reliance upon and in conformity with written information furnished to
the Company by such Holder expressly for use therein. This indemnity is in
addition to any liability that a Holder may otherwise have. Each Holder
participating in an offering of Registrable Securities shall, if requested by
the managing underwriter or underwriters of such offering, also indemnify any
underwriters of such Registrable Securities and their officers and directors
and each Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Company and other specified Persons.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification under this Section 8 agrees to give prompt written
notice to the indemnifying party after the receipt by such Person of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such Person will
claim indemnification or contribution pursuant to this Agreement and, unless in
the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and the indemnifying party with respect to
such claim, permit the indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to such indemnified party. If the
indemnifying party is not entitled to, or elects not to, assume the defense of
a claim, it shall not be obligated to pay the reasonable fees and expenses of
more than one counsel with respect to such claim, unless in the reasonable
judgment of counsel to such indemnified party, expressed in a writing delivered
to the indemnifying party, a conflict of interest may exist between such
indemnified party and any other indemnified party with respect to such claim,
in which event the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such additional counsel or counsels (which shall be
limited to one counsel per indemnified party). The indemnifying party shall
not be subject to any liability for any settlement made without its consent,
which consent shall not be unreasonably withheld.
(d) Contribution.
(i) If the indemnification provided for in this
Section 8 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to
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16
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties, relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. 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.
(iii) If indemnification is available under this
Section 8, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 8(a) and 8(b) hereof without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 8(d).
9. Participation in Underwritten Registrations
No Person may participate in any underwritten registration hereunder
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (c) agrees to pay such Person's pro rata portion of all
underwriting discounts and commissions.
10. Cooperation with the Company.
Each Holder by the acceptance of Registrable Securities agrees to use
its reasonable efforts to cooperate with the Company in all reasonable respects
in connection with the preparation and filing of Registrations hereunder in
which such
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17
Registrable Securities are included or requested to be included.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to any of its securities that
contains provisions more favorable to the holders thereof than the provisions
contained in this Agreement without providing for the granting of comparable
rights to the Holders in this Agreement.
(b) Remedies. Each Holder of Registrable Securities, in
addition to being entitled to exercise all rights in an action at law,
including recovery of damages, shall 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.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company shall have obtained the prior written
consent of (i) the Holders of a majority of the securities then constituting
Registrable Securities and (ii) each Holder materially and adversely affected
by such amendment, modification, supplement, waiver or departure.
(d) Notices. All notices, requests, waivers, releases,
consents, and other communications required or permitted by this Agreement
(collectively, "Notices") shall be in writing. Notices shall be deemed
sufficiently given for all purposes under this Agreement when delivered in
person, when dispatched by telegram or (upon written confirmation of receipt)
by electronic facsimile transmission or (upon written confirmation of receipt)
when dispatched by a nationally recognized overnight courier service, or five
Business Days after being deposited in the mail, postage prepaid, if mailed.
All Notices shall be delivered as follows:
(i) if to a Holder of Registrable Securities, at
the address indicated on Company's registrar relating to such securities or at
such other address as such Holder may have furnished to the Company in writing;
and
(ii) if to the Company, at:
Xxxxx Enterprises, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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Attention: Xxxx X. Xxxxx, Xx.
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
with a copy to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
(e) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties hereto, including any successors by merger to the Company.
(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings; Construction. The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. Unless the context otherwise requires,
all references to Sections are to Sections of this Agreement, "or" is
inclusively disjunctive, and words in the singular include the plural and vice
versa. In computing any period of time specified in this Agreement, the date
of the act or event from which such period of time is to be measured shall be
included, any such period shall expire at 5:00 p.m., Atlanta time, on the last
day of such period, and any such period denominated in months shall expire on
the date in the last month of such period that has the same numerical
designation as the date of the act or event from which such period is to be
measured; provided, however, that if there is no date in the last month of such
period that has the same numerical designation as the date of such act or
event, such period shall expire on the last day of the last month of such
period.
(h) Certain Adjustments. Notwithstanding anything to the
contrary contained in this Agreement, the Board of Directors of the Company may
make or provide for such adjustments in the numbers of shares of Common Stock
or other Registrable Securities specified in any other provision of this
Agreement specifying a number or percentage of Registrable Securities, as the
Board may determine after consultation with the Initial Holder (or, if the
Initial Holder no longer holds any securities then constituting the Registrable
Securities, Holders holding a majority of the securities then constituting the
Registrable Securities), is equitably required to
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prevent diminution or enlargement of the rights of Holders that otherwise would
result from any stock dividend, stock split, combination of shares,
recapitalization, or other similar change in the capital structure of the
Company.
(i) Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Georgia,
without regard to the principles of conflicts of laws thereof.
(j) Severability. If one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect, for any reason, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be in any way affected or impaired thereby, and the provision held to be
invalid, illegal or unenforceable shall be reformed to the minimum extent
necessary, and in a manner as consistent with the purposes thereof as is
practicable, so as to render it valid, legal and enforceable, it being intended
that all of the rights and privileges of the Holders hereunder shall be
enforceable to the fullest extent permitted by law.
(k) Entire Agreement. This Agreement is intended by the
Company and the Initial Holder to be a final expression thereof and are
intended to be a complete and exclusive statement of the agreement and
understanding of the Company and the Initial Holder in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the Company and any
Holders with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
XXXXX ENTERPRISES, INC.
By:
--------------------------------
Name:
Title:
-------------------------------- (SEAL)
XXXX X. XXXXXXX
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