Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of May
3, 1999, is made between Hilb, Xxxxx and Xxxxxxxx Company, a Virginia
corporation (the "Company"), PM Holdings, Inc., a Connecticut corporation
("Holdings"), and Phoenix Home Life Mutual Insurance Company, a New York life
insurance company ("PHL").
W I T N E S S E T H:
WHEREAS, the Company, Holdings, PHL and Xxxxxx X. Xxxxxxx, III entered
into a Stock Purchase Agreement dated March 29, 1999 (the "Stock Purchase
Agreement"), under which the Company agreed to acquire from Holdings and Xxxxxx
X. Xxxxxxx, III all of the issued and outstanding shares of the capital stock of
American Phoenix Corporation, a Connecticut corporation ("APC"); and
WHEREAS, pursuant to the Stock Purchase Agreement, (i) Holdings
acquired 865,042 shares of the Company's Common Stock (as hereinafter defined)
and $22,000,000 principal amount of the Company's Subordinated Debentures (as
hereinafter defined), and (ii) PHL acquired $10,000,000 principal amount of the
Company's Subordinated Debentures; and
WHEREAS, the Subordinated Debentures acquired by Holdings and PHL
pursuant to the Stock Purchase Agreement are convertible into shares of Common
Stock pursuant to the terms of the Subordinated Debentures; and
WHEREAS, the Company has agreed to enter into this Agreement to provide
certain registration rights to Holdings in order to facilitate the distribution
of the shares of Common Stock acquired by Holdings pursuant to the Stock
Purchase Agreement and any shares of Common Stock that may be acquired by
Holdings, PHL or their Affiliates upon conversion of the Subordinated
Debentures.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and in the Stock Purchase Agreement, the Company, Holdings and
PHL hereby agree as follows:
ARTICLE I
Definitions
Except as otherwise specified herein, capitalized terms used in this
Agreement shall have the respective meanings assigned to such terms in the Stock
Purchase Agreement. For purposes of this Agreement, the following terms have the
following meanings:
(a) "Affiliate" shall mean, as to any specified Person, each other
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with that specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, or by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. Notwithstanding the
foregoing, the following shall not be deemed to be an Affiliate of Holdings or
PHL for purposes of this Agreement: (i) Phoenix Investment Partners, Ltd., a
Delaware corporation, and its subsidiaries (or any successor thereof), and (ii)
any Person registered as an investment company under the Investment Company Act
of 1940, as amended.
(b) "Blue Sky Filing" shall mean a filing made in connection with
the registration or qualification of the Registrable Shares under a particular
state's securities or blue sky laws.
(c) "Common Shares" shall mean the 865,042 shares of Common Stock
that Holdings acquired from the Company pursuant to the Stock Purchase Agreement
and such additional shares of Common Stock that the Company may issue with
respect to such shares pursuant to any stock splits, stock dividends,
recapitalizations, restructurings, reclassifications or similar transactions.
(d) "Common Stock" shall mean the Common Stock, without par value,
of the Company.
(e) "Effective Period," with respect to the Registrable Shares,
shall mean the period from the date of effectiveness of the Registration
Statement relating to the Registrable Shares under Section 2.3 below to the date
that is two years from the date of such effectiveness; provided, that, for each
Holdback Period required by the Company under Article III of this Agreement and
for each Discontinuance Period (as defined in Section 2.5(k) below), the
Effective Period shall be extended by the number of days during which the
applicable Holdback Period or Discontinuance Period was in effect.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(g) "NYSE" shall mean the New York Stock Exchange.
(h) "Person" shall have the meaning set forth in Section 3(a)(9)
of the Exchange Act as in effect on the date of this Agreement, and shall
include, without limitation, corporations, partnerships, limited liability
companies and trusts.
(i) "Prospectus" shall mean the prospectus included in a
Registration Statement (including a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Shares covered by such Registration
Statement, and all other amendments and supplements to such prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in any such prospectus.
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(j) "Registrable Shares" shall mean collectively (i) the Common
Shares and (ii) the aggregate number of shares of Common Stock into which the
Subordinated Debentures are convertible pursuant to the terms of the
Subordinated Debentures and such additional shares of Common Stock that the
Company may issue with respect to such shares pursuant to any stock splits,
stock dividends, recapitalizations, restructurings, reclassifications or similar
transactions.
(k) "Registration Statement" shall mean a registration statement
of the Company under the Securities Act that covers the resale of the
Registrable Shares pursuant to the terms of this Agreement, including the
related Prospectus, all amendments and supplements to such registration
statement, including pre-and post-effective amendments, all exhibits thereto and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
(l) "SEC" shall mean the Securities and Exchange Commission.
(m) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(n) "Subordinated Debentures" shall mean the Company's 5.25%
Convertible Subordinated Debentures (Due 2014), in the aggregate principal
amount of $32,000,000.
(o) "Voting and Standstill Agreement" shall mean the Voting and
Standstill Agreement, dated May 3, 1999, executed by the Company, Holdings and
PHL in connection with the Stock Purchase Agreement.
ARTICLE II
Registration of Securities
Section 2.1. Securities Subject to this Agreement. The securities
entitled to the benefits of this Agreement are the Registrable Shares. For the
purposes of this Agreement, one or more of the Registrable Shares will no longer
be subject to this Agreement when and to the extent that (i) a Registration
Statement covering such Registrable Shares has been declared effective under the
Securities Act and such Registrable Shares have been sold pursuant to such
effective Registration Statement, (ii) such Registrable Shares are distributed
to the public pursuant to Rule 144 under the Securities Act, (iii) such
Registrable Shares shall have been otherwise transferred or disposed of, new
certificates therefor not bearing a legend restricting further transfer or
disposition shall have been delivered by the Company and, at such time,
subsequent transfer or disposition of such securities shall not require
registration or qualification of such Registrable Shares under the Securities
Act or any similar state law then in force, or (iv) such Registrable Shares have
ceased to be outstanding.
Section 2.2. Registration Rights. Holdings may exercise the demand and
piggy-back registration rights to which it is entitled under this Agreement only
at a time at which the Holdings Ownership Percentage (as such term is defined in
the Voting and Standstill Agreement) exceeds
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10% or Holdings is otherwise deemed by the Company to be an Affiliate of the
Company. Holdings may not exercise any such rights after May 3, 2014.
Section 2.3. Demand Registration.
(a) Holdings shall have the right, subject to Section 2.2 above,
to make one written request to the Company for the registration of all of the
Registrable Shares subject to this Agreement that are beneficially owned by
Holdings, PHL and their Affiliates at the time of the request. The Company shall
not be obligated to register any of the Registrable Shares held by an Affiliate
of Holdings or PHL unless and until such Affiliate shall have agreed in writing
to indemnify the Company pursuant to Section 4.2 of this Agreement.
(b) Upon the receipt of the request described in Section 2.3(a)
above, the Company shall (i) within 45 days of such request, file a Registration
Statement with the SEC under the Securities Act to register the resale of the
Registrable Shares as set forth in such request and (ii) use its best efforts to
cause such Registration Statement to become effective as soon as practicable
after the filing thereof with the SEC. On or before the Closing Date, the
Company shall have listed on the NYSE, on a when issued basis, the Registrable
Shares.
(c) The Company shall use its best efforts to maintain the
effectiveness of the Registration Statement relating to the Registrable Shares,
and maintain the listing of such shares, as applicable, on the NYSE or any
exchange or automated interdealer quotation system on which the Common Stock is
then listed or quoted, during the Effective Period.
(d) If the Company is required to effect a Registration Statement
pursuant to this Section 2.3, the Company may, in its discretion, include
securities, other than Registrable Shares, among the securities covered by such
registration.
(e) The Company shall not be required to effect more than one
registration under this Section 2.3.
Section 2.4 Piggy-Back Registration.
(a) In the event that the Company shall propose to file a
registration statement under the Securities Act relating to a public offering by
or through one or more underwriters of shares of Common Stock for the Company's
own account or for the account of any holder of shares of Common Stock other
than Holdings, PHL or any of their Affiliates (a "Selling Shareholder") and on a
form and in a manner that would permit the registration of any of the
Registrable Shares for sale to the public under the Securities Act, the Company
shall (i) give written notice to Holdings of its intention to do so and of the
right of Holdings, subject to Section 2.2 above, to have any or all of the
Registrable Shares subject to this Agreement that are beneficially owned by
Holdings, PHL and their Affiliates at the time of such notice included among the
securities to be covered by such registration statement and (ii) at the written
request of Holdings given to the Company within 20 days after the Company
provides such notice, use its best efforts to include among the securities
covered by such registration statement the number of such Registrable Shares
that
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Holdings shall have requested be so included (subject, however, to reduction in
accordance with Section 2.4(b) below). None of Holdings, PHL and their
Affiliates, however, shall be entitled to participate in any offering pursuant
to this Section 2.4(a) unless and until Holdings, PHL, if participating, and any
participating Affiliate have entered into an underwriting or other agreement
with such underwriter or underwriters for such offering in such customary form
as such underwriter or underwriters shall reasonably determine.
(b) Holdings may include Registrable Shares in any registration
statement relating to any offering pursuant to Section 2.4(a) above to the
extent that the inclusion of such shares shall not reduce the number of shares
of Common Stock to be offered and sold by the Company or the Selling
Shareholder, as the case may be. If the lead managing underwriter selected by
the Company for any such offering determines that marketing factors require a
limitation on the number of Registrable Shares to be offered and sold by
Holdings, PHL and their Affiliates in such offering, there shall be included in
such offering only that number of Registrable Shares, if any, that such lead
managing underwriter reasonably and in good faith believes will not jeopardize
the success of the offering of all shares of Common Stock that the Company or
the Selling Shareholder, as the case may be, desires to sell for its own
account. In such event and provided that the lead managing underwriter has so
notified the Company in writing, the shares of Common Stock to be included in
such offering shall consist of (i) the securities that the Company or the
Selling Shareholder, as the case may be, proposes to sell, and (ii) the number,
if any, of Registrable Shares requested to be included in such registration
that, in the opinion of such lead managing underwriter, can be sold without
jeopardizing the success of the offering of the shares of Common Stock that the
Company or the Selling Shareholder, as the case may be, desires to sell for its
own account.
(c) Nothing in this Section 2.4 shall create any liability on the
part of the Company to Holdings, PHL or any of their Affiliates if the Company
for any reason should decide not to file a registration statement proposed to be
filed under Section 2.4(a) above or to withdraw such registration statement
subsequent to its filing, regardless of any action whatsoever that Holdings may
have taken, whether as a result of the issuance by the Company of any notice
hereunder or otherwise.
Section 2.5. Registration Procedures. In order to comply with the
requirements of Sections 2.3 and 2.4 above, the Company will:
(a) prepare and file with the SEC a Registration Statement
covering the Registrable Shares on any form or forms for which the Company then
qualifies and that counsel for the Company shall deem appropriate, and which
form shall be available for the sale of the Registrable Shares
(i) in connection with the registration of the
Registrable Shares pursuant to Section 2.3 above, on a delayed or
continuous basis in accordance with Rule 415 under the Securities Act
(or any successor rule); provided, however, that the methods of
distribution permitted by such Registration Statement shall not include
underwritten offerings; or
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(ii) in connection with a registration that includes any
Registrable Shares pursuant to Section 2.4 above, in accordance with
the intended methods of distribution thereof.
(b) prepare and file with the SEC pre- and post-effective
amendments to the Registration Statement and such amendments and supplements to
the Prospectus used in connection therewith as may be required by the rules,
regulations or instructions applicable to the registration form utilized by the
Company, or by the Securities Act or the rules and regulations thereunder, and
cause the Prospectus as so supplemented to be filed pursuant to Rule 424 under
the Securities Act, and otherwise comply with the provisions of the Securities
Act with respect to the disposition of the Registrable Shares;
(c) furnish to Holdings such number of copies of the Registration
Statement and each pre- and post-effective amendment thereto, any Prospectus or
Prospectus supplement and each amendment thereto and such other documents as
Holdings may reasonably request in order to facilitate the transfer or
disposition of the Registrable Shares by Holdings;
(d) make such Blue Sky Filings, if necessary, to register or
qualify the Registrable Shares under such state securities or blue sky laws of
such jurisdictions as Holdings may reasonably request, and do any and all other
acts that may be reasonably necessary or advisable to enable Holdings to
consummate the transfer or disposition in such jurisdictions of the Registrable
Shares, except that the Company shall not for any such purpose be required (i)
to qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this Section 2.5(d), it would not be
obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction, or (iii) to consent to general service of process in any such
jurisdiction;
(e) notify Holdings, at any time when a Prospectus is required to
be delivered under the Securities Act with respect to one or more of the
Registrable Shares, of the Company's becoming aware that a Prospectus included
in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and prepare and furnish to Holdings a reasonable number of
copies of an amendment to such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(f) notify Holdings
(1) when any Prospectus or Prospectus supplement or pre-
or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when such Registration
Statement or post-effective amendment has become effective;
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(2) of any request by the SEC or any other applicable
regulatory authority for amendments or supplements to the Registration Statement
or Prospectus or for additional information;
(3) of the issuance by the SEC or any other applicable
regulatory authority of any stop order of which the Company or its counsel is
aware suspending the effectiveness of the Registration Statement or any order
preventing the use of a related Prospectus, or the initiation or any threats of
any proceedings for such purpose; and
(4) of the receipt by the Company of any written
notification of the suspension of the registration or qualification of any of
the Registrable Shares for sale in any jurisdiction, or the initiation or any
threats of any proceeding for such purpose;
(g) make generally available to the Company's shareholders, as
soon as reasonably practicable, an earnings statement that shall satisfy the
provisions of Section 11(a) of the Securities Act, provided that the Company
shall be deemed to have complied with this Section 2.5(g) if it has complied
with Rule 158 under the Securities Act;
(h) use its best efforts to provide a transfer agent and registrar
for the Registrable Shares covered by the Registration Statement no later than
the effective date of such Registration Statement;
(i) cooperate with Holdings to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
the securities to be sold under the Registration Statement, and enable such
securities to be in such denominations and registered in such names as Holdings
may reasonably request;
(j) provide Holdings and any attorney, accountant or other agent
retained by Holdings (collectively, the "Inspectors") with reasonable access
during normal business hours to appropriate officers of the Company and its
subsidiaries to ask questions and to obtain information that any such Inspector
may reasonably request and make available for inspection all financial and other
records, pertinent corporate documents and properties of any of the Company and
its subsidiaries (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility; provided,
however, that the Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors in writing are confidential
shall not be disclosed to any Inspector unless such Inspector signs or is
otherwise bound by a confidentiality agreement reasonably satisfactory to the
Company; and
(k) in the event of the issuance of any stop order of which the
Company or its counsel is aware suspending the effectiveness of the Registration
Statement or any order suspending or preventing the use of any related
Prospectus or suspending the registration or qualification of any Registrable
Shares for sale in any jurisdiction, the Company promptly will use its best
efforts to obtain its withdrawal.
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Holdings shall furnish to the Company in writing such information
regarding Holdings, PHL and their Affiliates as is required to be disclosed
pursuant to the Securities Act. Holdings agrees to notify the Company promptly
of any inaccuracy or change in information previously furnished by Holdings to
the Company or of the happening of any event in either case as a result of which
the Registration Statement, a Prospectus, or any amendment or supplement thereto
contains an untrue statement of a material fact regarding Holdings, PHL or any
of their Affiliates or omits to state a material fact regarding Holdings, PHL or
any of their Affiliates required to be stated therein or necessary to make the
statements therein not misleading and to furnish promptly to the Company any
additional information required to correct and update any previously furnished
information or required so that such Registration Statement, Prospectus, or
amendment or supplement, shall not contain, with respect to Holdings, PHL or any
of their Affiliates, 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 not misleading.
Holdings agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Sections 2.5(e) or (k)
above, Holdings will forthwith discontinue (and cause any Affiliate, and PHL and
any of its Affiliates, to discontinue) the transfer or disposition of any
Registrable Shares pursuant to the Prospectus relating to the Registration
Statement covering such Registrable Shares until Holdings' receipt of the copies
of the amended or supplemented Prospectus contemplated by Section 2.5(e) or the
withdrawal of any order contemplated by Section 2.5(k), and, if so directed by
the Company, Holdings will deliver to the Company all copies, other than
permanent file copies then in Holdings' possession, of the Prospectus covering
such Registrable Shares at the time of receipt of such notice. The period during
which any discontinuance under this paragraph is in effect is referred to herein
as a "Discontinuance Period."
Section 2.6. Registration Expenses.
(a) In connection with the registration of the Registrable Shares
pursuant to Section 2.3 above, the Company will pay any and all out-of-pocket
expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation, (i) all registration and filing fees
with the SEC relating to the shares of Common Stock into which the Subordinated
Debentures are convertible pursuant to the terms of the Subordinated Debentures,
(ii) all fees and expenses of complying with state securities or blue sky laws,
(iii) all printing and delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of the Registrable Shares on the NYSE, or any other
exchange or automated interdealer quotation system as then applicable, (v) the
fees and disbursements of the Company's counsel and of its independent public
accountants, and (vi) the fees and expenses of any special experts retained by
the Company in connection with the requested registration, and Holdings shall
pay any and all out-of-pocket expenses incurred by Holdings, including, without
limitation, (x) all registration and filing fees with the SEC relating to the
Common Shares, (y) all fees or disbursements of counsel to Holdings and (z) all
brokerage commissions, fees and expenses and all transfer taxes and documentary
stamp taxes, if any, relating to the sale or disposition of the Registrable
Shares.
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(b) In connection with a registration that includes any
Registrable Shares pursuant to Section 2.4 above, Holdings will pay any and all
out-of-pocket expenses attributable to such Registrable Shares, including,
without limitation, (i) all registration and filing fees with the SEC and the
National Association of Securities Dealers, Inc., (ii) all fees and expenses
associated with qualifying the Registrable Shares with state securities or blue
sky laws, (iii) any fees or disbursements of counsel to Holdings, and (iv) any
brokerage commissions and fees, underwriting discounts and commissions, transfer
taxes and documentary stamp taxes, if any, relating to the sale or disposition
of the Registrable Shares.
ARTICLE III
Holdback Period
If one or more underwritten public offerings of shares of Common Stock
(other than the Registrable Shares) by the Company occur during the Effective
Period, then, in connection with each such public offering, the Company may
require Holdings, PHL and their Affiliates to refrain from, and Holdings, PHL
and their Affiliates will refrain from, selling any of the Registrable Shares
for a period determined by the Company but not to exceed 120 days (or such
lesser period as the Company may require its officers and directors or other
holders of shares of Common Stock to so refrain) (each such period referred to
as a "Holdback Period") so long as the Company delivers written notice to
Holdings of the Company's requirement of a Holdback Period and the length of
such Holdback Period prior to commencement of the Holdback Period.
ARTICLE IV
Indemnification; Contribution
Section 4.1. Indemnification by the Company. The Company will, and
hereby agrees to, indemnify and hold harmless, to the fullest extent permitted
by law, and, subject to Section 4.3 below, defend Holdings, PHL, each of their
Affiliates (i) to whom Holdings or PHL transferred Registrable Shares in a
manner permitted by the Voting and Standstill Agreement and (ii) who is listed
as a selling shareholder in the Prospectus, and their respective officers,
directors, employees, agents, representatives and each other Person, if any, who
controls Holdings within the meaning of the Securities Act (each, a "Company
Indemnitee"), against any and all losses, claims, damages, liabilities and
expenses, joint or several, to which they or any of them may become subject
under the Securities Act or any other statute or common law, including any
amount paid in settlement of any action or proceeding, commenced or threatened,
and to reimburse them for any reasonable legal or other expenses incurred by
them in connection with investigating any claims and defending any actions
(collectively, "Losses"), with respect to sales of Registrable Shares under the
Registration Statement, insofar as any Losses arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any pre- or post-effective amendment thereto or in
any Blue Sky Filing, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus or any amendment or supplement
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thereto, or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the indemnification agreement contained herein shall not (i) apply to
Losses arising out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Company Indemnitee from time to time
specifically for use in the Registration Statement, the Prospectus or any such
amendment or supplement thereto or any Blue Sky Filing or (ii) inure to the
benefit of any Person, to the extent that any such Loss arises out of such
Person's failure to send or give a copy of the Prospectus, as the same may be
then supplemented or amended, to the Person asserting an untrue statement or
alleged untrue statement, or omission or alleged omission, at or prior to the
written confirmation of the sale of the Registrable Shares to such Person if
such statement or omission was corrected in the Prospectus or any amendment or
supplement thereto prior to the written confirmation of the sale. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Company Indemnitee or any other Person and shall survive the
transfer of such securities by such Company Indemnitee.
Section 4.2. Indemnification by Holdings. Holdings and PHL will, and
hereby agree to, indemnify and hold harmless and, subject to Section 4.3 below,
defend (in the same manner and to the same extent as set forth in Section 4.1
above), and cause each of their Affiliates who is listed as a selling
shareholder in the Prospectus to so indemnify, hold harmless and defend, the
Company and the Company's officers, directors, employees, agents,
representatives and each other Person, if any, who controls the Company within
the meaning of the Securities Act, with respect to any such untrue statement or
alleged untrue statement in, or any such omission or alleged omission from, the
Registration Statement, any Prospectus, or any amendment or supplement thereto,
if such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by Holdings, PHL or any of their
Affiliates from time to time specifically for use in the Registration Statement,
the Prospectus, and any such amendment or supplement thereto. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or any other Person
and shall survive the transfer of such securities by Holdings and PHL. The
liability of an indemnifying party under this Section 4.2 shall be limited to
the amount of the net proceeds received by such indemnifying party upon the
resale of any Registrable Shares pursuant to the Registration Statement creating
such liability.
Section 4.3. Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Sections 4.1 and 4.2 above, such indemnified
party will give, if a claim in respect thereof is to be made against an
indemnifying party, written notice to the latter of the commencement of such
action, provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Article IV, except to the extent that the indemnifying party is
actually prejudiced in any material respect by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to
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assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of reasonable investigation. If the
indemnifying party advises an indemnified party that it will contest a claim for
indemnification hereunder, or fails, within 30 days of receipt of any
indemnification notice to notify, in writing, such Person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the indemnified party may, at its option, defend, settle or
otherwise compromise or pay such action or claim in each case at the
indemnifying party's expense. In any event, unless and until the indemnifying
party elects in writing to assume and does so assume the defense of any such
claim, proceeding or action, the indemnified party's reasonable costs and
expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party that relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
informed at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense, except that the indemnifying party shall be liable for such reasonable
costs and expenses if, in such indemnified party's reasonable judgment, a
conflict of interest between such indemnified and indemnifying parties may exist
as described above. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party informed at all times as to
the status of the defense; provided, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the written consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
general written release from all liability with respect to such claim or
litigation.
Section 4.4. Indemnification Payments. The indemnification required by
this Article IV shall be made by periodic payments of the amount thereof during
the course of the investigation or defense as and when bills are received or
Losses are incurred, subject to the receipt of such documentary support therefor
as the indemnifying party may reasonably request.
Section 4.5. Contribution. If the indemnification provided for in this
Article IV is unavailable to or insufficient to hold harmless a party otherwise
entitled to be indemnified thereunder in respect to any Losses referred to
therein, then the parties required to provide indemnification under this Article
IV shall contribute to the amount paid or payable by such party
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as a result of Losses in such proportion as is appropriate to reflect the
relative fault of each such indemnifying party in connection with the statements
or omissions that resulted in such Losses. The relative fault of each
indemnifying party shall be determined by reference to whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, Holdings and PHL agree that it would not be just and equitable if
contributions pursuant to this Section 4.5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 4.5. 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 is not
guilty of such fraudulent misrepresentation.
Section 4.6. Other Rights and Liabilities. The indemnity and
contribution agreements contained herein shall be in addition to (i) any cause
of action or similar right of the indemnified party against the indemnifying
party or others and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
ARTICLE V
Rule 144 Representations
The Company covenants that, for the time that the Holdings Ownership
Percentage (as such term is defined in the Voting and Standstill Agreement)
exceeds 10% or Holdings is otherwise deemed by the Company to be an Affiliate of
the Company, it will use its best efforts to:
(i) file with the SEC all reports and other documents
required to be filed by the Company under the Exchange Act and the
rules and regulations promulgated thereunder;
(ii) if not required to file such reports and documents
referred to in subsection (i) above, keep publicly available certain
information regarding the Company, as contemplated by Rule 144(c)(2)
under the Securities Act; and
(iii) take all other actions reasonably necessary to enable
Holdings, PHL and their Affiliates to sell the Registrable Shares
without registration under the Securities Act within the limitation of
the exemption provided by Rule 144 under the Securities Act.
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ARTICLE VI
Miscellaneous
Section 6.1. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to the Company, Hilb, Xxxxx and Xxxxxxxx Company
to it at: 0000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx., Esquire
If to Holdings PM Holdings, Inc.
or PHL, to them at: Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esquire
Phoenix Home Life Mutual Insurance Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Executive Vice President and
Chief Financial Officer
With a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esquire
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Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three Business
Days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
Section 6.2. Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by an instrument in writing signed by Holdings and by the Company
following approval thereof by a majority of the Continuing Directors (as such
term is defined in the Voting and Standstill Agreement).
Section 6.3. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent, which consent
will not be required in the event of the transfer of all of the Registrable
Shares beneficially owned by Holdings in accordance with Sections 4.1(g) or
4.1(h) of the Voting and Standstill Agreement.
Section 6.4. Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement and the Stock Purchase Agreement.
Section 6.5. Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
Section 6.6. Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
Section 6.7. No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and
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any custom or practice of the parties at variance with the terms hereof, shall
not constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
Section 6.8. No Third Party Beneficiaries. Except as provided in
Article IV above, this Agreement is not intended to be for the benefit of and
shall not be enforceable by any Person who or which is not a party hereto.
Section 6.9. Consent to Jurisdiction. Each party to this Agreement, by
its execution hereof, (i) hereby irrevocably submits, and agrees to cause each
of its Affiliates to submit, to the jurisdiction of the federal courts located
either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and in the event that such federal courts shall not have subject
matter jurisdiction over the relevant proceeding, then of the state courts
located either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, for the purpose of any Action (as such term is defined in the Stock
Purchase Agreement) arising out of or based upon this Agreement or relating to
the subject matter hereof or the transactions contemplated hereby, (ii) hereby
waives, and agrees to cause each of its Affiliates to waive, to the extent not
prohibited by applicable law, and agrees not to assert, and agrees not to allow
any of its Affiliates to assert, by way of motion, as a defense or otherwise, in
any such Action, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution, that any such proceeding brought in one of the above-named courts
is improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (iii) hereby agrees not to commence or to
permit any of its Affiliates to commence any Action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before one of
the above-named courts nor to make any motion or take any other action seeking
or intending to cause the transfer or removal of any such Action to any court
other than one of the above-named courts whether on the grounds of inconvenient
forum or otherwise. Each party hereby consents to service of process in any such
proceeding in any manner permitted by Virginia or Connecticut law, as the case
may be, and agrees that service of process by registered or certified mail,
return receipt requested, at its address specified pursuant to Section 6.1 above
is reasonably calculated to give actual notice. Notwithstanding anything
contained in this Section 6.9 to the contrary with respect to the parties' forum
selection, if an Action is filed against a party to this Agreement, including
its Affiliates, by a person who or which is not a party to this Agreement, an
Affiliate of a party to this Agreement, or an assignee thereof (a "Third Party
Action"), in a forum other than the federal district court or a state court
located in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and such Third Party Action is based upon, arises from, or
implicates rights, obligations or liabilities existing under this Agreement or
acts or omissions pursuant to this Agreement, then the party to this Agreement,
including its Affiliates, joined as a defendant in such Third Party Action shall
have the right to file cross-claims or third-party claims in the Third Party
Action against the other party to this Agreement, including its Affiliates, and
even if not a defendant therein, to intervene in such Third Party Action with or
without also filing cross-claims or third-party claims against the other party
to this Agreement, including its Affiliates.
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Section 6.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
Section 6.11. Name, Captions. The name assigned to this Agreement and
the section captions used herein are for convenience of reference only and shall
not affect the interpretation or construction hereof.
Section 6.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
Section 6.13. Expenses. Each of the parties hereto shall bear their own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
Section 6.14. Severability. In the event that any provision of this
Agreement would, under applicable law, be invalid or unenforceable in any
respect, such provision shall (to the extent permitted under applicable law) be
construed by modifying or limiting it so as to be valid and enforceable to the
maximum extent compatible with, and possible under, applicable law. The
provisions of this Agreement are severable, and in the event that any provision
hereof should be held invalid or unenforceable in any respect, it shall not
invalidate, render unenforceable or otherwise affect any other provision hereof.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Registration Rights Agreement to be executed, as of the
date first above written by their respective officers thereunto duly authorized.
HILB, XXXXX AND XXXXXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
PM HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President/Chief Financial Officer
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer