Exhibit 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 21, 2000 by and among Vesta Insurance Group, Inc., a
Delaware corporation (the "Company"), and Capital Z Financial Services Fund II,
L.P. and Capital Z Financial Services Private Fund II, L.P., together with their
permitted transferees (the "Purchasers").
WHEREAS, the Company sold 555,738 shares of its common stock (the
"Shares") to the Purchasers in reliance upon the exemption from registration
under the Securities Act of 1933, as amended (the "Securities Act") provided by
Section 4(2) thereof and Rule 506 thereunder;
WHEREAS, the Company has agreed to register the resale of the Shares
by the Purchasers on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
1. DEMAND REGISTRATION. Following the second anniversary of the
Closing Date, the Purchaser may request the Company, in writing (a "Demand
Request"), to effect the registration under the Securities Act (a "Demand
Registration") of all of the Shares. Subject to Section 1.1 below, the Company
shall take such actions as may be required under Section 3 below.
1.1 Effective Registration; Withdrawal. Subject to Section
3, a registration will not count as a Demand Registration until it has become
effective (unless the Purchaser withdraws their Shares and the Company has
performed its obligations hereunder in all material respects, in which case such
demand will count as a Demand Registration); provided, that if, after it has
become effective, an offering of Shares pursuant to a registration is interfered
with by any stop order, injunction, or other order of the Commission (as
hereinafter defined) or other Governmental Authority, such registration will be
deemed not to have been effected and will not count as a Demand Registration. In
the event material adverse changes in the U.S. capital markets render it
unfeasible to complete the proposed offering on terms reasonably acceptable to
the Purchaser, the Purchaser may elect to withdraw the registration and it will
not count as a Demand Registration.
1.2 Manner of Offering. The offering of Shares pursuant to
a Demand Registration may, at Purchasers' option, be in the form of a "firm
commitment" underwritten offering, in which event the Purchaser may select one
investment banking firm acceptable to the Company to manage the underwritten
offering.
1.3 Deferral. The Company may defer the filing of a Demand
Registration until a date not later than one hundred eighty (180) days after the
Required Filing Date (or, if longer, one hundred eighty (180) days after the
effective date of the registration statement contemplated by clause (ii) below)
if (i) at the time the Company receives the Demand Request, the Company or any
of its Subsidiaries are engaged in confidential negotiations or other
confidential business activities, disclosure of which would be required in such
registration statement (but would not be required if such registration statement
were not filed), and the Board of Directors of the Company determines in good
faith that such disclosure would be materially adverse to the Company and its
stockholders, or (ii) prior to receiving the Demand Request, the Board of
Directors had determined to effect a registered underwritten public offering of
the Company's securities for the Company's account and the Company had taken
substantial steps (including, but not limited to, selecting a managing
underwriter for such offering) and is proceeding with reasonable diligence to
effect such offering. A deferral of the filing of a registration statement
pursuant to this Section 1.3 shall be lifted, and the requested registration
statement shall be filed within 30 days of such lifting of the deferral, if, in
the case of a deferral pursuant to clause (i) of the preceding sentence, the
negotiations or other activities are disclosed or terminated, or, in the case of
a deferral pursuant to clause (ii) of the preceding sentence, the proposed
registration for the Company's account is abandoned or delayed by the Company.
In order to defer the filing of a registration statement pursuant to this
Section 1.3, the Company shall promptly (but in any event within ten (10) days),
upon determining to seek such deferral, deliver to the Purchaser a certificate
signed by an executive officer of the Company stating that the Company is
deferring such filing pursuant to this Section 1.3 and a general statement of
the reason for such deferral and an approximation of the anticipated delay.
Within twenty (20) days after receiving such certificate, the Purchaser may
withdraw such Demand Request by giving notice to the Company; if withdrawn, the
Demand Request shall be deemed not to have been made for all purposes of this
Agreement.
1.4 Expenses of Demand Registration. Subject to the next
sentence, the Company shall pay all fees and expenses incurred in connection
with the Demand Registration, including registration fees, filing fees, fees of
Company counsel, any fees of Purchaser's counsel reasonably incurred in
connection with their review of the Registration Statement, and amendments and
supplements thereto, and the Company's accountants' fees incurred in connection
with their review of the registration statement and any consents necessary to
permit such registration statement to be filed. The Purchaser shall pay all fees
and expenses incurred by the underwriter (including all commissions and
underwriters discounts) and underwriter's counsel, and shall pay all accountants
fees incurred in connection with obtaining any "comfort letters" or other
accountants work product that may be requested by the Purchaser or the
underwriters.
2. PIGGYBACK REGISTRATION. From and after the first anniversary of
the Closing Date, each time the Company proposes to register its common stock
(other than pursuant to an Excluded Registration (as defined below)), under the
Securities Act for sale to the public (whether for the account of the Company or
the account of any securityholder of the Company) and the form of registration
statement to be used permits the registration of Shares, the Company shall give
prompt written notice to the Purchaser (which notice shall be given not less
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than thirty (30) days prior to the effective date of the Company's registration
statement), which notice shall offer each Purchaser the opportunity to include
all of its Shares in such registration statement, subject to the limitations
contained in Section 2.1 below. If the Purchaser desires to have its Shares
included in such registration statement, Purchaser shall so advise the Company
in writing within twenty (20) days after the date of such notice from the
Company, which advice may be withdrawn (by subsequent written notice) at any
time prior to the filng of such registration statement. Subject to 2.1 below,
the Company shall include in such registration statement all the Shares;
provided, however, that the Company may at any time withdraw or cease proceeding
with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of all other common stock originally proposed
to be registered. As used herein, "Excluded Registration" means a registration
under the Securities Act of (i) securities registered pursuant to a Demand
Registration pursuant to Section 1 hereof, (ii) securities registered on Form
S-4 or S-8 or any similar successor form and (iii) securities registered to
effect the acquisition by the Company of, or combination by the Company with,
another Person or registered to effect an offering solely to the Company's
existing stockholders.
2.1 Cutback. If the registration involves an underwritten
offering, and the managing underwriter or underwriters advise the Company that
the inclusion of the Purchaser's Shares would materially and adversely affect
the price or success of the offering (a "Material Adverse Effect"), then (i) the
number of Purchaser's Shares to be included in the registration statement shall
be reduced to an amount which, in the judgment of the managing underwriter or
underwriters, would eliminate such Material Adverse Effect, or (ii) if no such
reduction would, in the judgment of the managing underwriter or underwriters
eliminate such Material Adverse Effect, then the Company shall have the right to
exclude all such Shares from such registration statement. If Purchaser desires
to include its Shares in such a registration statement, it shall (x) agree to
sell its Shares on the basis provided in any underwriting arrangements approved
by the Company and (y) complete and execute all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents, each in
customary form, reasonably required under the terms of such underwriting
arrangements.
2.2 Expenses. The Company shall pay all fees and expenses
incurred in connection with the filing of any registration statement
contemplated by this Section 2.
3. PROCEDURES. Whenever required under this Agreement to effect the
registration of Shares, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 or Form S-3
(or such other successor "short-form" as may be authorized by the Commission at
that time), as appropriate, relating to the sale of the Shares by the Purchasers
(the "Registration Statement"), and use its best efforts to cause such
Registration Statement to become effective;
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(b) Promptly prepare and file with the Commission such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith, to the extent necessary to keep the Registration
Statement effective for a period of not less than one hundred eighty (180) days
(or such lesser period as is necessary for the underwriters in an underwritten
offering to sell unsold allotments) and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement; provided, however, that the Company will not be required pursuant to
this Agreement to effect a shelf registration pursuant to Rule 415 promulgated
under the Securities Act;
(c) Furnish to the Purchasers with respect to the Shares
registered under the Registration Statement (and to each underwriter, if any, of
such Shares) such number of copies of such Registration Statement, each
amendment and supplement thereto, the prospectus included in such Registration
Statement (including each preliminary prospectus), any documents incorporated by
reference therein and such other documents as the Purchasers (or such
underwriter) may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Purchasers (it being
understood that, subject to the requirements of the Securities Act and
applicable state securities laws, the Company consents to the use of the
prospectus and any amendment or supplement thereto by the Purchaser and the
underwriters in connection with the offering and sale of the Shares covered by
the registration statement of which such prospectus, amendment or supplement is
a part);
(d) Use its commercially reasonable efforts to register or
qualify such Shares under such other securities or blue sky laws of such
jurisdictions as the managing underwriter or underwriters reasonably request
(or, in the event the registration statement does not relate to an underwritten
offering, as the holders of a majority of such Shares may reasonably request);
use its commercially reasonable efforts to keep each such registration or
qualification (or exemption therefrom) effective during the period in which such
registration statement is required to be kept effective; and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the Purchaser to consummate the disposition of the Shares owned by the Purchaser
in such jurisdictions (provided, however, that the Company will not be required
to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (B) consent to
general service of process in any such jurisdiction);
(e) Promptly notify the Purchaser and each underwriter and
(if requested by any such Person) confirm such notice in writing (A) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (B) of the issuance by any state
securities or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Shares under state
securities or "blue sky" laws or the initiation of any proceedings for that
purpose, and (C) of the happening of any event which makes any statement made in
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a Registration Statement or related prospectus untrue or which requires the
making of any changes in such registration statement, prospectus or documents so
that they 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 not misleading, and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish a supplement or amendment to
such prospectus so that, as thereafter deliverable to the purchasers of such
Shares, such prospectus will not contain any untrue statement of a material fact
or omit a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(f) Make generally available to the Company's
securityholders an earnings statement satisfying the provisions of Section 11(a)
of the Securities Act no later than thirty (30) days after the end of the twelve
(12) month period beginning with the first day of the Company's first fiscal
quarter commencing after the effective date of a registration statement, which
earnings statement shall cover said twelve (12) month period, and which
requirement will be deemed to be satisfied if the Company timely files complete
and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and
otherwise complies with Rule 158 under the Securities Act;
(g) If requested by the managing underwriter or
underwriters or the Purchaser, promptly incorporate in a prospectus supplement
or post-effective amendment such information as the managing underwriter or
underwriters or the Purchaser reasonably requests to be included therein,
including, without limitation, with respect to the Shares being sold by the
Purchaser, the purchase price being paid therefor by the underwriters and with
respect to any other terms of the underwritten offering of the Shares to be sold
in such offering, and promptly make all required filings of such prospectus
supplement or post-effective amendment;
(h) As promptly as practicable after filing with the
Commission of any document which is incorporated by reference into a
Registration Statement (in the form in which it was incorporated), deliver a
copy of each such document to the Purchaser;
(i) Cooperate with the Purchaser and the managing
underwriter or underwriters to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless required under
applicable law) representing securities sold under any Registration Statement,
and enable such securities to be in such denominations and registered in such
names as the managing underwriter or underwriters or the Purchaser may request
and keep available and make available to the Company's transfer agent prior to
the effectiveness of such registration statement a supply of such certificates;
(j) Promptly make available for inspection by the
Purchaser, any underwriter participating in any disposition pursuant to any
Registration Statement, and any attorney, accountant or other agent or
representative retained by any the Purchaser or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due diligence
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responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, that, unless the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in the registration
statement or the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, the Company shall not be
required to provide any information under this subparagraph (x) if (A) the
Company believes, after consultation with counsel for the Company, that to do so
would cause the Company to forfeit an attorney-client privilege that was
applicable to such information, (B) either (1) the Company has requested and
been granted from the Commission confidential treatment of such information
contained in any filing with the Commission or documents provided supplementally
or otherwise or (2) the Company reasonably determines in good faith that such
Records are confidential and so notifies the Inspectors in writing, unless prior
to furnishing any such information with respect to (A) or (B) the Purchaser
agrees to enter into a confidentiality agreement in customary form and subject
to customary exceptions or (C) the information is subject to a confidentiality
agreement restricting its disclosure; and provided further, that the Purchaser
agrees that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action and to prevent
disclosure of the Records deemed confidential;
(k) Furnish to the Purchaser and underwriter a signed
counterpart of (A) an opinion or opinions of counsel to the Company, and (B) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Purchaser or managing underwriter reasonably requests;
(l) Cooperate with the Purchaser and each underwriter
participating in the disposition of such Shares and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.;
(m) During the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
(n) Notify the Purchaser promptly of any request by the
Commission for the amending or supplementing of such Registration Statement or
prospectus or for additional information;
(o) Prepare and file with the Commission promptly any
amendments or supplements to such Registration Statement or prospectus which, in
the opinion of counsel for the Company or in the reasonable opinion of counsel
for the managing underwriter, is required in connection with the distribution of
the Shares;
(p) Enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) as are customary in
connection with an underwritten registration; and
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(q) Advise the Purchaser, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
4. AGREEMENTS OF THE PURCHASERS.
(a) Purchasers hereby covenant with the Company not to make
any sale of the Shares under the Registration Statement without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied, and the Purchaser acknowledges and agrees that no transfer of Shares
purported to be sold under the Registration Statement will be reflected on the
books and records of the Company unless the Purchasers certify to the Company's
transfer agent that (i) the Shares have been sold in accordance with the
Registration Statement, the Securities Act and any applicable state securities
or blue sky laws and (ii) the requirement of delivering a current prospectus has
been satisfied.
(b) Purchasers acknowledge that there may occasionally be
times when the Company must suspend the use of the prospectus forming a part of
the Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the
Commission, or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Exchange Act. The Purchasers hereby covenant
that they will not sell any Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives the Purchasers written notice
of the suspension of the use of said prospectus and ending at the time the
Company gives the Purchasers written notice that the Purchasers may thereafter
effect sales pursuant to said prospectus (a "Blackout Period"). No single
Blackout Period will be longer than sixty (60) days, and, in the aggregate, all
Blackout Periods in any twelve month period shall not include more than sixty
(60) calendar days. The Purchasers further covenant to notify the Company
promptly of the sale of all of their Shares.
5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Purchasers against any Damages (as defined below) that the Purchasers may suffer
or become obligated to pay under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise, insofar as such Damages arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the prospectus (including any preliminary
prospectus), financial statements and schedules, and all other documents filed
as a part thereof, as amended at the time of effectiveness of the Registration
Statement, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state in any of them a material fact
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required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. For
this purpose, "Damages" includes (without limitation): (A) any and all costs and
expenses (including reasonable fees and disbursements of counsel) as may be
reasonably incurred in investigating, preparing, or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission and (B) any amount paid in settlement of any
litigation or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission. Notwithstanding the foregoing, the Company shall
not be required to indemnify the Purchasers against any Damages which arise out
of or are based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or any amendment
or supplement thereto in reliance upon and in strict conformity with written
information furnished to the Company by or on behalf of the Purchasers or an
underwriter designated by or with the consent of the Purchasers expressly for
use therein, or (ii) the failure of such Purchasers to comply with the covenants
and agreements contained in Section 4 hereof respecting the sale of the Shares,
or (iii) any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchasers prior to the
pertinent sale or sales by the Purchasers. The reimbursements required by this
Section will be made by periodic payments during the course of the investigation
or defense, as and when bills are received or expenses incurred.
(b) Each Purchaser will jointly and severally indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, against any Damages that such persons may suffer or become
obligated to pay under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
insofar as such Damages arise out of or are based upon (i) any failure to comply
with the covenants and agreements contained in Section 4 hereof respecting the
sale of the Shares or (ii) any untrue or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements in the Registration Statement or any amendment
or supplement thereto not misleading in the light of the circumstances under
which they were made, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement or any amendment or supplement
thereto, in reliance upon and in strict conformity with written information
furnished to the Company by the Purchaser expressly for use therein, and will
reimburse the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person for any legal and other expense
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reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such Damages;
provided, that the liability of each Purchaser will be in proportion to, and
limited to, the net amount received by such Purchaser from the sale of Shares
pursuant to such registration statement; provided, further, that such Purchaser
shall not be liable in any such case to the extent that prior to the filing of
any such registration statement or prospectus (or amendment thereof or
supplement thereto from which such loss has arisen), such person has furnished
in writing to the Company information expressly for use in such registration
statement or prospectus or any amendment thereof or supplement thereto which
corrected or made not misleading information previously furnished to the
Company.
(c) Promptly after receipt by an indemnified party under
this Section 5 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 5, promptly notify the indemnifying party
in writing thereof (provided that the failure to give such notice shall not
limit the rights of such Person unless the indemnifying party is materially
prejudiced thereby). In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
defendants in any such action include both the indemnified party and the
indemnifying party, and each of the indemnifying party and the indemnified party
shall have reasonably concluded, based upon the advice of their counsel, that
there may be a conflict of interest between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action, or
that there may be legal defenses available to the indemnified party which are
different from or additional to those available to the indemnifying party, in
which event the indemnified party may engage separate counsel reasonably
satisfactory to the indemnifying party to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
representing the indemnified party) or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in which event the indemnified party may engage counsel
of its selection. In the event the indemnified party engages its own counsel
pursuant to the provisos set forth in the preceding sentence, the indemnifying
party shall pay all reasonable fees and expenses of such counsel. If such
defense is not assumed by the indemnifying party as permitted hereunder, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). If such defense is assumed by the indemnifying party
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pursuant to the provisions hereof, such indemnifying party shall not settle or
otherwise compromise the applicable claim unless (i) such settlement or
compromise contains a full and unconditional release of the indemnified party or
(ii) the indemnified party otherwise consents in writing, such consent not to be
unreasonably withheld.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 5(a) or Section 5(b) are
unavailable to hold harmless an indemnified party in respect of any losses
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the actions which resulted in
the losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 5(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5(d). The amount paid or payable by an indemnified party as a
result of the losses referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or, except as provided in Section 5(c), defending
any such action or claim. Notwithstanding the provisions of this Section 5(d),
no Purchaser shall be required to contribute an amount greater than the dollar
amount by which the net proceeds received by such Purchaser with respect to the
sale of any Shares exceeds the amount of damages which such Purchaser has
otherwise been required to pay by reason of any and all untrue or alleged untrue
statements of material fact or omissions or alleged omissions of material fact
made in any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto related to such sale of Securities. 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. Each Purchaser's
obligations in this Section 5(b) to contribute shall be several in proportion to
the amount of Shares registered by them and not joint. If indemnification is
available under this Section 5, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Section 5(a) and Section 5(b)
without regard to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in Section 5(d) subject,
in the case of each Purchaser, to the limited dollar amounts set forth in
Section 5(b).
[Signature Pages Attached]
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IN WITNESS WHEREOF, each of the Capital Z and Vesta has
caused this Agreement to be duly signed as of the date first written above.
VESTA INSURANCE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx, III
---------------------------------------
Name: Xxxxxx X. Xxxxx, III
Title: President
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
By: Capital Z Partners, L.P., its sole general
partner
By: Capital Z Partners, Ltd., its sole
general partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
By: Capital Z Partners, L.P., its sole general partner
By: Capital Z Partners, Ltd., its sole
general partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
