REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of July 14, 2000, by and between The Xxxx Group Inc., a Louisiana
corporation (the "Company"), and Stone & Xxxxxxx, Incorporated, a Delaware
corporation ("S&W" and, together with its subsidiaries set forth on the
signature page hereto, the "Holders" and each, a "Holder").
This Agreement is made pursuant to that certain Asset Purchase
Agreement, dated as of July 14, 2000, between the Company and S&W (as amended
from time to time, the "Purchase Agreement"). In order to induce S&W to enter
into the Purchase Agreement, the Company has agreed to provide the Holders the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement by the Company and S&W is a condition to the closing of the
transactions contemplated in the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
All capitalized terms used but not otherwise defined herein have the
meanings ascribed to such terms in the Purchase Agreement. In addition to any
other terms defined in this Agreement, the following capitalized terms have the
following meanings:
Exchange Act: the Securities Exchange Act of 1934, as amended from
time to time.
Holders and Holder: as defined in the preamble to this Agreement.
NASD: the National Association of Securities Dealers, Inc.
Prospectus: the prospectus included in any Registration Statement, as
amended or supplemented by any amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference
in such prospectus.
Registrable Securities: the 1,976,085 shares of Common Stock issued to
the Holders pursuant to the Purchase Agreement (including the shares that are
held in the Indemnity Deposit and the LC Deposit), and any Common Stock or other
security issued or issuable with respect to such shares of Common Stock by
reason of a dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization of the
Company; provided, however, that a security ceases to be a Registrable Security
when (i) a Registration Statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement, (ii) the entire amount of then outstanding Registrable Securities may
be sold within a three- month period pursuant to Rule 144 (or any successor
provision then in effect) promulgated under the Securities Act ("Rule 144"),
(iii) such Registrable Securities have been sold to a Person other than a Holder
of Subsidiary or Affiliate thereof pursuant to Rule 144 or (iv) such Registrable
Securities are transferred to a Person other than a Holder or Subsidiary or
Affiliate thereof in accordance with Section 9(b).
Registration Statement: a registration statement covering the registration
of Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such Registration
Statement or Prospectus, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration Statement.
SEC: means the Securities and Exchange Commission.
Securities Act: means the Securities Act of 1933, as amended.
Underwritten Offering: a registration in which securities of the Company
(including any Registrable Securities included therein) are sold to an
underwriter or underwriters on a firm commitment or best efforts basis for
reoffering to the public.
2. Shelf Registration.
(a) Filing and Effectiveness of Shelf Registration. As soon as practical
after the Closing Date, but in no event later
than the 45th day after the Closing Date, the Company shall file with the SEC a
Registration Statement under the Securities Act for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable
Securities. The Company shall use its commercially reasonable efforts to cause
the SEC to declare such Registration Statement to become effective as soon as
possible after filing and, after it has been declared effective, to keep it
continuously effective until the earlier of (i) one year after the SEC declares
the Registration Statement effective (as such period may be extended pursuant to
Section 2(b)), (ii) the date that all of the Registrable Securities covered by
such Registration Statement have been sold and (iii) the date the Registrable
Securities cease to be Registrable Securities (the earliest of such dates being
hereinafter referred to as the "Termination Date").
(b) Suspension of Effectiveness of Shelf Registration. If after the
Registration Statement has become effective the Company furnishes to the Holders
a certificate signed by the President of the Company that in the good faith
judgment of the Board of Directors of the Company it would be detrimental to the
Company or its stockholders for such Registration Statement to remain effective
as long as such Registration Statement would otherwise be required to remain
effective, because (i) such action would materially interfere with a significant
acquisition, corporate reorganization or other similar transaction involving the
Company, (ii) such action would require disclosure of material information that
the Company has a bona fide business purpose for preserving as confidential or
(iii)(A) disclosure is required in the Registration Statement of financial
information of any person or entity other than the Company or its subsidiaries
and affiliates pursuant to Article 3 or Article 11 of Regulation S-X under the
Securities Act and (B) any of such required financial information (including
related audit reports and consents of independent accountants) is not available
to the Company after use of commercially reasonable efforts to obtain such
financial information, the Company shall have the right to suspend such
effectiveness for a period of not more than 90 days; provided, however, that the
Company may not exercise this right more than twice; provided, further, however,
that if the effectiveness of the Registration Statement is suspended pursuant to
this provision, the period of such suspension shall be added to the end of the
period that the Registration Statement would otherwise be required to be
effective under this Agreement so that the aggregate period that the
Registration Statement remains effective equals at least one year.
(c) Road Show Support of Shelf Registration. The Company shall at its
sole cost and expense make available such officers of the Company as the Holders
and their financial advisor shall reasonably request in writing in advance to
participate in "road show" presentations to potential purchasers of the
Registrable Securities covered thereby. This participation shall include
reasonable assistance in the preparation of materials and attendance at meetings
of a nature as underwriters in an Underwritten Offering would reasonably
require, but in no case shall participation in the actual road show
presentations by officers of the Company exceed an aggregate of fifteen days.
3. Piggyback Registration.
(a) Notice and Issuance. If at any time prior to the Termination Date the
Company proposes to register any of its equity securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration solely for or in connection with employee benefit or incentive
plans or (ii) pursuant to registrations on Form S-4 or any equivalent or
successor form or otherwise in connection with any exchange offer, merger, sale
of substantially all of the assets or other reorganization or recapitalization
of the Company, the Company will:
(A) promptly give written notice (each, a "Notice of Registration")
to each Holder of such proposed registration; and
(B) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting related to such
registration, the amount the Registrable Securities specified in a written
request(each, a "Piggyback Notice") made by any Holder within 20 days after
receipt of the Notice of Registration.
(b) Underwriting. The Company shall select the managing underwriter for
any Underwritten Offering commenced pursuant to the terms of this Agreement. If
the proposed registration for which the Company gives a Notice of Registration
is an Underwritten Offering, the Company shall so advise the Holders in the
Notice of Registration. In such event, each Holder's right to participate in the
Underwritten Offering shall be conditioned upon such Holder's participation in
the underwriting and the inclusion of such Holder's Registrable Securities in
the Underwritten Offering to the extent provided herein. No Holder may
participate in any Underwritten Offering hereunder unless, among other things,
such Holder (i) enters into an underwriting agreement in customary form with the
managing underwriter selected by the Company and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents and instruments required under the terms of such underwriting
arrangements.
(c) Cutback. Notwithstanding any other provision of this Agreement, if
the managing underwriter in any Underwritten Offering determines in good faith
that marketing factors require a limitation on the number of shares to be
included in the Underwritten Offering, the Company shall be required to include
in such offering:
(i) first, all of the securities of the Company;
(ii) second, up to all of the Registrable Securities to be offered for
the account of the Holders pursuant toSection 3(a), pro rata based on the
relative amount of Registrable Securities then held by such Persons
requesting inclusion in the Underwritten Offering; and
(iii) third, up to all of the other securities requested to be
included in such Underwritten Offering, pro rata based on the relative
amount of such securities then held by each security holder requesting
inclusion in the Underwritten Offering.
If, in the good faith judgment of a Holder, the terms of any Underwritten
Offering differ materially from the customary terms and conditions for such an
Underwritten Offering, such Holder may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any Registrable Securities
so withdrawn shall not be transferred in a public distribution by the applicable
Holders prior to 90 days after the effective date for the registration statement
relating to the Underwritten Offering, or such shorter period of time as the
Company or the managing underwriter may require.
(d) Right to Terminate Registration. The Company may terminate or
withdraw any registration initiated by it pursuant to Section 3(a) prior to the
effectiveness of such registration, whether or not any Holder shall have
requested inclusion of Registrable Securities in such registration; provided
that such termination or withdrawal shall not relieve the Company of its
obligations under Section 2.
4. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities covered by a Registration Statement filed
pursuant to Section 2(a) or Section 3(a) hereof agrees, if requested by the
Company or the managing underwriters in an Underwritten Offering, not to effect
any sale or other distribution of equity securities of the Company, including
any sale pursuant to Rule 144 under the Securities Act (except as part of such
Underwritten Offering), during the 30-day period prior to, and during the 90-day
period beginning with, the effectiveness of such Registration Statement, or any
greater time period reasonably requested by the managing underwriters in an
Underwritten Offering, to the extent timely notified in writing by the Company
or the managing underwriters.
(b) Restrictions on Sale of Equity Securities by the Company. To the
extent timely requested by the managing underwriters in an Underwritten
Offering, the Company agrees not to effect any offer, sale or other distribution
of its equity securities, including a sale pursuant to Regulation D under the
Securities Act, during the 30-day period prior to, and during the 90-day period
beginning with, the effectiveness of a Registration Statement filed under
Section 2(a), or any greater time period reasonably requested by the managing
underwriters in an Underwritten Offering (except as part of such Underwritten
Offering or pursuant to registrations on Forms S-4 or S-8 or any successor forms
or otherwise in connection with any exchange offer, merger, sale of
substantially all assets or other reorganization or recapitalization of the
Company or the issuance of securities in connection with employee stock options,
stock awards or other employee benefit plans).
5. Registration Procedures. In connection with the Company's registration
obligations hereunder and except as otherwise provided herein or permitted
hereunder, the Company will use its commercially reasonable efforts to effect
such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will use its commercially reasonable efforts to as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on any form
for which the Company then qualifies or which counsel for the Company deems
appropriate for the proposed registration and which form is available for the
sale of the Registrable Securities in accordance with the intended method of
distribution; cooperate and assist in any filings required to be made with the
NASD; and cause such Registration Statement to become effective; provided,
however, that before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, the Company will furnish to the Holders of
the Registrable Securities covered by such Registration Statement and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the reasonable review of such Holders and any
underwriters, and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto to which the
Holders of the Registrable Securities covered by such Registration Statement or
any such underwriters shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep the
Registration Statement effective for the duration required under this Agreement;
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the Holders thereof set forth in such Registration Statement,
as amended, or Prospectus or supplement thereto;
(c) notify the selling Holders of Registrable Securities and the managing
underwriters, if any, (i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed and, with respect to the Registration
Statement or any post- effective amendment, when the same has become effective;
(ii) of any request by the SEC for amendments or supplements to the Registration
Statement or the Prospectus or for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iv) if at any
time the representations and warranties of the Company contemplated by paragraph
(k) below cease to be true and correct in any material respect; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and (vi) of the
happening of any event which makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
the Registration Statement, the Prospectus or any document incorporated therein
by reference in order to make the statements therein not misleading;
(d) obtain the withdrawal of any order suspending the effectiveness of
the Registration Statement at the earliest possible time;
(e) if requested by the managing underwriter or underwriters in connection
with an Underwritten Offering, incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters
reasonably believe should be included therein relating to the plan of
distribution of such Registrable Securities, including, without limitation,
information with respect to (i) the principal amount of Registrable Securities
being sold to the underwriters, (ii) the purchase price being paid and (iii) all
other material terms of the Underwritten Offering; and make all required filings
of any Prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(f) furnish to each selling Holder of Registrable Securities and each
managing underwriter, upon request and without charge, at least one signed copy
of the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference);
(g) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
of Registrable Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities,register or
qualify or cooperate with any underwriters and the selling Holders of
Registrable Securities, and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any underwriter
or selling Holder reasonably requests in writing and do any and all other acts
or things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by the Registration Statement; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process in any such
jurisdiction where it is not already subject;
(i) cooperate with any managing underwriters and the selling Holders of
Registrable Securities to (i) facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold that do not bear
restrictive legends and (ii) enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(j) upon the occurrence of any event contemplated by paragraph (c)(vi)
above, prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, the Prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
(k) enter into such agreements and take all such other actions necessary
to expedite or facilitate the disposition of such Registrable Securities and in
such connection, whether or not the registration is an Underwritten Offering (i)
make such representations and warranties to any underwriters and the Holders of
such Registrable Securities in form, substance and scope as are customarily made
by issuers to underwriters in primary Underwritten Offerings; (ii) obtain
opinions of counsel to the Company and updates thereof addressed to any
underwriters and each selling Holder covering the matters customarily covered in
opinions requested in Underwritten Offerings; (iii) obtain "cold comfort"
letters and updates thereof from the Company's independent certified public
accountants addressed to any underwriters and the selling Holders of Registrable
Securities, such letters to be in customary form and covering matters
customarily addressed in "cold comfort" letters to underwriters in connection
with primary Underwritten Offerings; and (iv) deliver such documents and
certificates as may be requested by any managing underwriters and the Holders of
a majority of the Registrable Securities being sold to evidence compliance with
clause (j) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company;
(l) make available for inspection by a representative of any underwriter
participating in any Underwritten Offering or the Holders of a majority of the
Registrable Securities being registered therein, and any attorney or accountant
retained by such underwriters or selling Holders, all 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 representative, underwriter, attorney or
accountant; provided, however, that any records, information or documents that
are designated by the Company in writing as confidential shall be kept
confidential by such Persons unless disclosure of such records, information or
documents is required pursuant to a judicial or administrative order;
(m) comply with all applicable rules and regulations of the SEC and the
relevant state blue sky commissions; and make available to the Company's
security holders, as soon as reasonably practicable, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and covering a
period of 12 months, beginning within three months after the effective date of
the Registration Statement; and
(n) cause all such Registrable Securities to be listed on each securities
exchange on which the Common Stock is then listed, provided that the applicable
listing requirements are satisfied.
The Company may require each selling Holder of Registrable Securities to
furnish to the Company such information regarding the distribution of such
Registrable Securities as the Company may from time to time request in writing.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(j) hereof, such Holder
will forthwith discontinue disposition of its Registrable Securities until such
Holder receives copies of the supplemented or amended Prospectus contemplated by
Section 5(j) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the Prospectus may be resumed, and receives copies of
any additional or supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by the Company, such Holder will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company gives such a notice, the time periods regarding the
maintenance of the effectiveness of any Registration Statement filed pursuant to
Section 3(a) hereof will be extended by the number of days from the date the
Company notifies the applicable Holders pursuant to Section 5(c)(vi) through the
date when each Holder of Registrable Securities covered by such Registration
Statement receives either the copies of the supplemented or amended prospectus
contemplated by Section 5(j) hereof or the Advice.
6. 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 associated with filings required to be made with the NASD
(including, if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules and regulations of
the NASD), fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel for the underwriters or
selling Holders in connection with blue sky qualifications of the Registrable
Securities), printing expenses (including expenses of printing certificates for
the Registrable Securities in a form eligible for deposit with The Depository
Trust Company and of printing prospectuses), messenger, telephone and delivery
expenses, and fees and disbursements of counsel for the Company and of all
independent certified public accountants of the Company (including the expenses
of any special audit and "cold comfort" letters required by or incident to such
performance), underwriters (excluding discounts, commissions or fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities or
legal expenses of any Person other than the Company), securities acts liability
insurance if the Company so desires and fees and expenses of other Persons
retained by the Company (all such expenses being herein called "Registration
Expenses") will be borne by the Company. The Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the fees and expenses incurred in connection with the
listing of the Registrable Securities to be registered on any securities
exchange on which the Common Stock is then listed and the fees and expenses of
any Person retained by the Company. The Holders of Registrable Securities shall
pay the reasonable fees and disbursements of legal counsel and other Persons
retained by them and the portion of the discounts, commissions or fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities.
7. Indemnification and Contribution.
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless, to the full extent permitted by law, each Holder, its officers,
directors and employees and each Person who controls such Holder (within the
meaning of the Securities Act) against all losses, claims, costs, 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, Prospectus or
preliminary Prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same arise out of or are based
upon any information furnished in writing to the Company by any Holder expressly
for use therein; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any such preliminary Prospectus or
included in a Registration Statement if (i) any Holder, being obligated to do
so, fails to deliver a copy of the Prospectus prior to or concurrently with the
sale of the Registrable Securities to the Person asserting such loss, claim,
damage, liability or expense after the Company had furnished such Holder with a
sufficient number of copies of the same and (ii) the Prospectus corrected such
untrue statement or omission; and provided, further, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
cost, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is corrected in an amendment or supplement to the Prospectus
and the Holder thereafter fails to deliver such Prospectus as so amended or
supplemented prior to or concurrently with the sale of the Registrable
Securities to the Person asserting such loss, claim, damage, liability or
expense after the Company had furnished such Holder with a sufficient number of
copies of the same.
(b) Indemnification by Holders. In connection with each Registration
Statement, each Holder will furnish to the Company such information and
affidavits as the Company requests for use in connection with any Registration
Statement or Prospectus (or amendment or supplement to either) and agrees to
indemnify and hold harmless, to the full extent permitted by law, the Company,
its directors, officers and employees and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, costs,
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, Prospectus
or preliminary Prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, to the extent that such untrue statement or omission
relates to the Holders and is contained in any information or affidavit so
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement, Prospectus or preliminary Prospectus. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any preliminary Prospectus, Prospectus or Registration Statement,
if requested.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") will (i) give prompt written
notice to the indemnifying party (the "Indemnifying Party") of any claim with
respect to which it intends to seek indemnification or contribution hereunder
and (ii) permit such Indemnifying Party to assume the defense of such claim with
counsel reasonably satisfactory to the Indemnified Party; provided, however,
that the failure to provide such written notice shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that such
Indemnifying Party is materially prejudiced or otherwise forfeits substantive
rights or defenses by reason of such failure or any resulting delays; provided,
further, however, that any Indemnified Party shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (A) the Indemnifying Party has agreed to pay such fees or expenses, or
(B) the Indemnifying Party fails to assume the defense of such claim and employs
counsel reasonably satisfactory to the Indemnified Party or (C) in the
reasonable judgment of the Indemnified Party, based upon advice of its counsel,
an actual or potential conflict of interest exists between the Indemnified Party
and the Indemnifying Party with respect to such claims (in which case, if the
Indemnified Party notifies the Indemnifying Party in writing that the
Indemnified Party elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such claim on behalf of the Indemnified Party). The Indemnifying
Party will not be subject to any liability for any settlement made without its
consent (but such consent will not be unreasonably withheld). No Indemnifying
Party or Indemnified Party will be required to consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability with respect to such claim or litigation. An
Indemnifying Party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all Indemnified Parties with respect to such claim, unless in the
reasonable judgment of any such Indemnified Party a conflict of interest exists
between such Indemnified Party and any other of such Indemnified Parties with
respect to such claim, in which event the Indemnifying Party shall be obligated
to pay the fees and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification provided for in
Section 7(a) or Section 7(b) is unavailable to an Indemnified Party or is
insufficient to hold it harmless as contemplated by Section 7(a) or Section
7(b), then the Indemnifying Party shall contribute to the amount paid or payable
by the Indemnified Party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnified Party and the Indemnifying Party, but also the
relative fault of the Indemnified Party and the Indemnifying Party, as well as
any other relevant equitable considerations; provided, however, that no Holder
shall be required to contribute an amount greater than the dollar amount of the
net proceeds received by such Holder with respect to the sale of any Registrable
Securities. The parties to this Agreement agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in this Section 7(d). 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.
(e) Additional Indemnification and Contribution. In the event of an
Underwritten Offering, the Company and each Holder of Registrable Securities
participating in a registration will provide such additional indemnification and
contribution as is reasonably required by the underwriters and as is customarily
contained in underwriting agreements.
8. Rule 144.
The Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder or, if the Company is not required to file such
reports, it will, upon the request of the Holders of a majority of the
Registrable Securities make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 under the Securities Act. The
Company further covenants that it will take such further action as the Holders
of a majority of the Registrable Securities may reasonably request, all to the
extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar or successor rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
9. Restrictions on Transfer.
(a) Restrictive Legend. Each certificate representing Restricted
Securities shall be stamped or otherwise imprinted with a legend substantially
in the following form (unless otherwise permitted or unless the Registrable
Securities evidenced by such certificate shall have been registered under the
Securities Act), in addition to any legend required under applicable state
securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. SUCH SHARES MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT. THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER PURSUANT TO A REGISTRATION RIGHTS AGREEMENT
AMONG THE COMPANY AND THE HOLDER OF SUCH SHARES, A COPY
OF WHICH MAY BE OBTAINED WITHOUT CHARGE FROM THE
COMPANY.
Upon request of a Holder of such a certificate, the Company shall remove
the foregoing legend from the certificate or issue to such Holder a new
certificate free of any transfer legend, if, with such request, the Company
receives the opinion referred to in Section 9(b) to the effect that any transfer
by such Holder of Registrable Securities evidenced by such certificate will not
violate the Securities Act and applicable state securities laws, unless any such
transfer legend may be removed pursuant to Rule 144(k), in which case no such
opinion shall be required.
(b) Notice of Proposed Transfers. The Holder of each certificate
representing Registrable Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 9(b). Any Person (other than
another Holder or a Subsidiary or Affiliate of the transferring Holder) to whom
any Holder proposes to transfer Registrable Securities must be a bona fide third
party with sufficient financial resources to purchase such Registrable
Securities, and any such proposed transfer must be on reasonable terms
negotiated on an arm's-length basis. Prior to any proposed transfer of any
Registrable Securities other than transfers in compliance with Rule 144(k)
promulgated under the Securities Act or pursuant to an effective Registration
Statement or to a Holder's Subsidiaries or Affiliates under circumstances
expressly contemplated herein, the Holder thereof shall give written notice
(each, a "Transfer Notice") to the Company of such Holder's intention to effect
such transfer. Each Transfer Notice shall describe the manner and circumstances
of the proposed transfer in sufficient detail (including the identity of the
proposed transferee, the proposed price per share and any other material terms
and conditions of the proposed transfer), and shall be accompanied (except in
transfers in compliance with Rule 144(k) promulgated under the Securities Act or
pursuant to an effective Registration Statement or to a Holder's Subsidiaries or
Affiliates) by a written opinion to the Holder and the Company from legal
counsel and in form and substance reasonably satisfactory to the Company, to the
effect that the proposed transfer of the Registrable Securities may be effected
without registration under the Securities Act, whereupon, subject to the
Company's rights set forth in Section 10, the Holder of such Registrable
Securities shall be entitled to transfer such Registrable Securities in
accordance with the terms of the Transfer Notice. Each certificate evidencing
Registrable Securities transferred as provided above shall bear the restrictive
legend set forth in Section 9(a), except that such certificate shall not bear
such restrictive legend if the opinion of counsel referred to above expressly
indicates that such legend is not required in order to establish compliance with
the Securities Act or if such legend is no longer required pursuant to Rule
144(k).
10. Purchase Right. Upon receipt of (a) a Piggyback Request pursuant to
Section 3(a) or (b) a Transfer Notice, the Company may, in its sole discretion,
elect to purchase all of the subject Registrable Securities by written notice
(each, a "Purchase Notice") to the Holder requesting the registration or
proposing the transfer of such Registrable Securities within five business days
after the date of delivery of the Piggyback Notice or Transfer Notice, as the
case may be. The purchase price per share of such Registrable Securities shall
be (i) the average closing price of a share of Common Stock as reported on the
New York Stock Exchange composite tape for the 5 trading day period preceding
the date of the Purchase Notice, in the case of a purchase pursuant to clause
(a) above or (ii) the price per share specified in the Transfer Notice, in the
case of a purchase pursuant to clause (b) above. In each case, the closing of
any purchase of Registrable Securities pursuant to this Section 10(a) shall be
consummated no later than 10 business days after the Company delivers the
Purchase Notice, or at such other time as the Company and the applicable Holders
may agree, and the aggregate purchase price for any such purchase shall be paid
in cash, by wire transfer of immediately available funds, at any such closing.
11. Transfer of Rights. The rights granted to Holders pursuant to this
Agreement may not be transferred, conveyed or assigned to any Person without the
prior written consent of the Company, whether pursuant to or in connection with
a transfer of Registrable Securities in accordance with Section 9(b) or
otherwise; provided, however, that any Holder may transfer its Registrable
Securities to any other Holder or Subsidiary or Affiliate of the transferring
Holder in accordance with Section 9(b) and any such transferee Holder or
Subsidiary or Affiliate shall be entitled to exercise the rights afforded to
Holders hereunder with respect to any such validly transferred Registrable
Securities.
12. Miscellaneous.
(a) Remedies. Each party to this Agreement, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Each party
to this Agreement 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.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority of the Registrable Securities.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand- delivery, registered
first-class mail, telecopier, or air or land courier guaranteeing overnight
delivery to the following addresses, or such other address as any party may
provide the other parties in writing:
if to a Holder: c/o Stone & Xxxxxxx, Incorporated
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
if to the Company: The Xxxx Group Inc.
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
All such notices and communications shall be deemed to have been duly given
at the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; upon receipt of
confirmation of transmission, if telecopied; and on the next business day if
timely delivered to an air or land courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties.
(e) Counterparts; Execution. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. This Agreement
may be executed by facsimile signature.
(f) Headings. The headings in this Agreement are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware without giving effect to its
conflicts of laws principles.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous written or oral agreements and understandings with
respect to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold and issued pursuant to the Purchase Agreement.
(j) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
remedy available in law or at equity.
[signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
STONE & XXXXXXX, INCORPORATED
By:
Name:
Title:
STONE & XXXXXXX GROUP LIMITED
By:
Name:
Title:
THE XXXX GROUP INC.
By:
Name:
Title:
