REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of January 26, 1996, by and among XXXXXX INDUSTRIES,
INC., a Delaware corporation (the "Company"), and each of the persons listed on
Schedule I annexed hereto (collectively, the "Holders" and individually, the
"Holder").
W I T N E S S E T H:
WHEREAS, pursuant to a Note Purchase Agreement dated as of December 28,
1995 (the "Purchase Agreement"), by and among the Company and the Holders, the
Company is selling certain subordinated promissory notes of the Company (the
"Notes") in the aggregate principal amount of $15,000,000, one of which Notes is
in the principal amount of $7,500,000 and is exchangeable as herein provided
(the "Avondale Note") and another of which Notes is in the principal amount of
$3,750,000 and may be exchangeable as herein provided (the "Initial Gintel
Note");
WHEREAS, the Company intends to make a common stock rights offering (the
"Rights Offering") to the holders of shares of the Company's common stock, $.25
par value per share (the "Common Stock"), and the Holders are willing to act as
standby purchasers with respect to the Rights Offering pursuant to a standby
agreement among the Company and the Holders (the "Standby Agreement");
WHEREAS, as set forth in the Purchase Agreement, if, (a) by May 31, 1996,
the Rights Offering is not consummated, or (b) an "Event of Default occurs (as
defined in the Avondale Note or the Initial Gintel Note) or, if prior to May 31,
1996, (c) the stockholders of the Company vote to not approve the Rights
Offering and the transactions contemplated thereby and in the Purchase
Agreement, (d) the Company publicly announces that it will not proceed with the
Rights Offering or (e) any other event takes place which effectively prohibits
the Company from lawfully consummating the Rights Offering by May 31, 1996
(the date of occurrence of any of the events described in clauses (a) through
(e) above being referred to as the "Conversion Date"), then the Holders shall
have the right (subject, in the case of Xxxxxx Xxxxxx, to the Company's receipt
of any requisite consents) to exchange the Avondale Note and the Initial Gintel
Note for certain convertible 10% subordinated notes of the Company in like
principal amounts (the "Replacement Notes"), such Replacement Notes to be
convertible into shares of Common Stock of the Company at the rate of $7.00 per
share;
WHEREAS, in connection with the sale by the Company of the Notes, the
Company is agreeing, subject to its prior receipt of all requisite approvals and
consents, including, without limitation, those of the New York Stock Exchange
and/or the Company's stockholders, to issue and sell to one of the Holders,
five-year warrants (the "Warrants") to purchase up to 125,000 shares of the
Company's Common Stock at $7.00 per share; and
WHEREAS, the Company and the Holders agree that the Holders shall have the
registration rights set forth herein with respect to any shares of Common Stock
acquired by the Holders pursuant to the Standby Agreement, upon the conversion
of the Replacement Notes and/or upon the exercise of the Warrants or any shares
issued or issuable in respect of such Common Stock upon any stock dividend,
recapitalization or similar event (collectively, the "Registrable Shares").
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the parties hereby agree as follows:
1. Restrictive Legend. Each certificate representing the Registrable Shares
shall (unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Securities Act of 1933, as
amended (the "Securities Act")) be stamped or otherwise imprinted with a legend
in the following form (in addition to any legend required under applicable state
securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
1.0.1 In addition, the Company may place, or instruct its transfer agent
and registrar to place, stop transfer orders against certificates which have the
aforementioned restrictive legend thereon. For purposes of this Agreement,
"Restricted Securities" shall mean securities of the Company which are required
to bear the aforementioned legend thereon.
1.1 Upon request of a Holder holding Registrable Shares which are
Restricted Securities, the Company shall remove the foregoing legend from the
certificate or issue to such Holder a new certificate therefor free of any
transfer legend and without any stop transfer against such Registrable Shares,
if, with such request, the Company shall have received either an opinion of
counsel or a "no-action" letter referred to in Section 2 hereof to the effect
that any transfer by such Holder of the Registrable Shares evidenced by such
certificate will not violate the Securities Act and applicable state securities
laws or the Shares have been sold pursuant to an effective registration
statement under the Securities Act. The Company shall promptly reimburse the
transferring holder for all reasonable legal fees and expenses incurred by such
Holder in obtaining the legal opinion or "no action" letter referenced in this
Section 1(b).
2. Notice of Proposed Transfers. Prior to any proposed transfer of any
Restricted Securities (other than under circumstances described in Sections 3
and 4 hereof), the Holder thereof shall give written notice (the "Notice") to
the Company of such Holder's intention to effect such transfer. Each Notice
shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall be accompanied (except in transactions in
compliance with Rule 144) by either (i) a written opinion of legal counsel, who
shall be reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act, or (ii) a "no action" letter from
the staff of the Securities and Exchange Commission (the "Commission") to the
effect that the distribution of such Securities without registration will not
result in a recommendation by the staff of the Commission that action be taken
with respect thereto, whereupon the Holder of such Restricted Securities shall
be entitled to transfer such Restricted Securities in accordance with the terms
of the Notice. The Company shall promptly reimburse the transferring Holder for
all reasonable legal fees and expenses incurred by such Holder in obtaining the
legal opinion or "no action" letter referenced in this Section 2(a).
2.1 Prior to any proposed transfer requested in the Notice and as a
condition thereto, each Holder will, if requested by the Company, and if
required because any of the Restricted Securities are not to be sold pursuant to
an effective registration statement under the Securities Act or a "no action"
letter or an opinion of counsel described in the foregoing subsection, deliver
to the Company (i) an investment covenant signed by the proposed transferee,
(ii) an agreement by such transferee to the impression of the restrictive legend
set forth in Section 1(a) on the certificates representing the Registrable
Shares to be transferred to such transferee, (iii) an agreement by such
transferee that the Company may place a "stop transfer order" with its transfer
agent and registrar, if any, with respect to the Shares proposed to be
transferred, (iv) an agreement by the transferee to assume the transferor's
obligations under this Agreement, and (v) an agreement by the transferee to
indemnify the Company to the same extent as set forth in Subsection (c) below.
Any transferee complying with this Subsection (b) shall also be deemed a
"Holder" for purposes of the registration rights under Sections 3 and 4 herein.
2.2 Each Holder agrees to indemnify the Company against any and all losses,
claims, damages, expenses or liabilities to which the Company may become subject
under any federal or state securities law, at common law, or otherwise, insofar
as such losses, claims, damages, expenses or liabilities arise out of or are
based upon (i) any transfer by such Holder of such Registrable Shares in
violation of the Securities Act, or the rules and regulations promulgated
thereunder, (ii) any transfer by such Holder of Shares in violation of the
provisions of this Section 2 or (iii) any untrue statement or omission to state
any material fact in connection with such Holder's investment representations or
with respect to the facts and representations supplied to counsel to the Company
upon which its opinion as to a proposed transfer by such Holder was given.
3. Demand Registration. At any time after receipt by any Holder of
Registrable Shares that the Company receives a written request executed by one
or more of the Holders (the "Initiating Holder") requesting registration of a
number of shares of Common Stock at least equal to (i) thirty percent (30%) or
more of the Registrable Shares then held by the Holders or (ii) the entire
remaining number of Registrable Shares owned by the Initiating Holder, the
Company will give notice of such request to each other Holder (the "Other
Holders") and give them the right to participate therein in accordance with this
Section 3.
3.1 As soon as practicable after receipt of the request given pursuant to
Subsection (a) above, the Company shall prepare and file a registration
statement (the "Registration Statement") under the Securities Act covering the
Registrable Shares requested to be sold under a Registration Statement (the
"Registered Shares") and shall otherwise comply with its obligations under
Section 5.
3.2 The Company's obligations under this Section 3 shall be limited to six
(6) effective Registration Statements under the Securities Act, three of which
may be initiated by each of Xxxxxx X. Xxxxxx and Avondale Xxxxx, Inc. or their
respective transferees in accordance with Section 8(b) hereof.
3.3 If a registration pursuant to this Section 3 is for a registered public
offering involving an underwriting, the Company shall so advise the Holders. In
such event, the right of any Holder to registration shall be conditioned upon
such Holder's participation in the underwriting arrangements required by this
Section 3(d), and the inclusion of such Holder's Registrable Shares in the
underwriting to the extent requested shall be limited to the extent provided
herein.
The Company shall (together with the Initiating Holder and Other Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company, but subject to the reasonable
approval of the Initiating Holder. Notwithstanding any other provision of this
Section 3, if the managing underwriter advises the Company in writing that
market factors require a limitation of the number of shares to be underwritten,
then the Company shall so advise the Initiating Holder and the Other Holders,
and the number of shares that may be included in the registration and
underwriting shall be allocated, first, to the Initiating Holder, and second,
among the Other Holders in proportion to the number of shares proposed to be
included in such registration by such Other Holders. No Registrable Shares
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. To facilitate the allocation
of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any holder to the
nearest one hundred (100) shares. If any such limitation results in the
Initiating Holder being able to sell less than 75% of the Registrable Shares
requested to be included by the Initiating Holder in such offering, the offering
shall not be counted as a demand registration by the Initiating Holder for the
purposes of Section 3(c).
If any Holder disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Holder. The Registrable Securities and/or other
securities withdrawn from such underwriting shall also be withdrawn from such
registration.
4. Piggy Back Registration Rights. At any time after the receipt by the
Holders of any Registrable Shares, the Company will send written notice to the
Holders then owning Restricted Securities as defined in Section 1(a)(ii), at
least twenty (20) days prior to the filing of each and every Registration
Statement filed by the Company, whether or not pursuant to this Agreement (other
than a Registration Statement covering exclusively securities under an employee
option or stock purchase plan, a merger, acquisition or similar transaction) and
give to such Holders the right to have included therein any Registrable Shares
then held by the Holders. Such notice must specify the proposed offering price
and the plan of distribution. The Company must receive written notice from such
Holders within fifteen days after the date of the Company's written notice,
indicating the full name and address of each Holder desiring to have Registrable
Shares included for sale in such Registration Statement and the number of
Registrable Shares requested to be covered.
4.1 If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
4(a). In such event the right of any Holder to registration pursuant to Section
4 shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of Registrable Securities in the underwriting to the extent
provided in this Section 4(b).
All Holders proposing to distribute their securities through such
underwriting shall, together with the Company, enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company. The Company shall use its reasonable best efforts
to cause the managing underwriter of such proposed underwritten offering to
permit the Registrable Shares proposed to be included in such registration to be
included in the registration statement for such offering on the same terms and
conditions as any similar securities of the Company included therein.
Notwithstanding any other provision of this Section 4, the Company shall be
entitled to include in the registration all of the shares which the Company
desires to sell for its own account, and if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Shares to be
included in such registration. The Company shall so advise all Holders
requesting to participate in such registration, and the number of shares that
may be included in the registration and underwriting by all Holders shall be
allocated among them, as nearly as practicable, first, to Avondale Xxxxx, Inc.
and, second, to Xxxxxx X. Xxxxxx, or his or its respective transferees. To
facilitate the allocation of shares in accordance with the above provisions, the
Company may round the number of shares allocated to any Holder to the nearest
one hundred (100) shares.
If any Holder disapproves of the terms of any such underwriting, such
person may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting also shall be withdrawn from such registration, and shall not be
transferred prior to one hundred eighty (180) days after the effective date of
the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
5. Miscellaneous Registration Provisions.
5.1 In connection with any Registration Statement filed pursuant to
Sections 3 or 4 hereof:
5.1.1 The Company's obligation under this Agreement to include Registrable
Shares in a Registration Statement shall mean shares of Common Stock or any
security received by a Holder in exchange or upon reclassification of the
present Common Stock;
5.1.2 the Holders of Registered Shares (herein "Registering Holders") shall
furnish to the Company in writing such appropriate information (relating to the
intention of such Holders as to proposed methods of sale or other disposition of
the Registered Shares) and the identity of and compensation to be paid to any
proposed underwriters to be employed in connection therewith as the Company, any
underwriter, or the Commission or any other regulatory authority may request;
5.1.3 the Registering Holders and the Company shall enter into the usual
and customary form of underwriting agreement agreed to by the Company and any
underwriter with respect to any such offering, if required, and such
underwriting agreement shall contain the customary reciprocal rights of
indemnity and contribution between the Company, the underwriters, and the
selling shareholder, including the Registering Holders, to the extent set forth
in Subsections (g) and (h) herein;
5.1.4 the Registering Holders shall agree that they shall execute, deliver
and/or file with or supply to the Company, any underwriters, the Commission
and/or any state or other regulatory authority such information, documents,
representations, undertakings and/or agreements necessary to carry out the
provisions of the registration covenants contained in this Agreement and/or to
effect the registration or qualification of their Registrable Shares under the
Securities Act and/or any of the laws and regulations of any state or
governmental instrumentality;
5.1.5 the Registering Holders shall furnish the Company with such
questionnaires and other documents regarding their identity and background as
the Company may reasonably request; and
5.1.6 the Company's obligation to include the Registering Holders'
Registrable Shares in a Registration Statement shall be subject to the written
agreement of the Holders to offer the Registrable Shares in the same manner and
on the same terms and conditions as the other securities of the same class are
being offered pursuant to the Registration Statement, if such shares are being
underwritten.
5.2 if and whenever the Company is required to effect the registration of
any Registrable Shares pursuant to Section 3 or 4, the Company will use its best
efforts to effect such registration to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto it will, as promptly as is practicable:
5.2.1 before filing a Registration Statement or prospectus or any
amendments or supplements thereto, furnish to the counsel of the Holders of the
Registrable Shares covered by such Registration Statement copies of all
documents proposed to be filed, which documents will be made available on a
timely basis, for review by such counsel to the Holders;
5.2.2 prepare and file with the Commission, as soon as practicable, and use
its best efforts to cause to become effective, a Registration Statement to be
offered on such form under the Securities Act as the Initiating Holder and the
Company or, if not filed pursuant to Section 3 hereof, the Company, determines
and for which the Company then qualifies;
5.2.3 prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Shares covered
by such Registration Statement until the earlier of such time as all of such
Registrable Shares have been disposed of in accordance with the intended methods
of disposition set forth in such Registration Statement or the expiration of one
hundred eighty (180) days after such Registration Statement becomes effective;
provided that such one hundred eighty (180) day period shall be extended in the
case of a registration pursuant to Section 3 hereof for such number of days that
equals the number of days elapsing from (A) the date the written notice
contemplated by Section 5(b)(vii) hereof is given by the Company to (B) the date
on which the Company delivers to the Selling Holders the supplement or amendment
contemplated by Section 5(b)(vii) hereof;
5.2.4 furnish to the Holders and to any underwriter of Registrable Shares
such number of conformed copies of such Registration Statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such Registration Statement
(including each preliminary prospectus and any summary prospectus) and any
amendment or supplement thereto, in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such Registration
Statement or prospectus, and such other documents, as the Holders or such
underwriter may reasonably request, and, if requested, a copy of any and all
transmittal letters or other correspondence to, or received from, the Commission
or any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to
such offering;
5.2.5 make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of such Registration Statement at the earliest
possible moment;
5.2.6 if required by a Holder, (A) furnish to each Holder and to any
underwriter an opinion of counsel for the Company addressed to each Holder and
underwriter and dated the date of the closing under the underwriting agreement
(if any) (or if such offering is not underwritten, dated the effective date of
the Registration Statement), (B) use its best efforts to furnish to each Holder
a "cold comfort" or "special procedures" letter addressed to each Holder and
signed by the independent public accountants who have audited the Company's
financial statements included in such Registration Statement and (C) make such
representations and warranties to the Holders and, in connection with any
underwritten offering, to the underwriters, in each such case covering
substantially the same matters with respect to such Registration Statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters and in
underwriting agreements in underwritten public offerings of securities and such
other matters as the Holders may reasonably request, and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, provided, however, that the Company shall not be obligated
to cause the legal counsel and accountants' letters contemplated by this
Subsection (b)(vi) to be delivered to the Holders if the Company would be
required to incur unreasonable expenses to cause such letters to be delivered.
5.2.7 immediately notify the Holders in writing (A) at anytime when a
prospectus relating to a registration hereunder is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(B) of any request by the Commission or any other regulatory body or other body
having jurisdiction for any amendment of or supplement to any Registration
Statement or other document relating to such offering, and in either such case,
at the request of a Holder, prepare and furnish to such Holders a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Shares, such prospectus shall not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading;
5.2.8 use its best efforts to list all such Registrable Shares covered by
such Registration Statement on the principal securities exchange and
inter-dealer quotation system on which a class of common equity securities of
the Company is then listed, and to pay all fees and expenses in connection
therewith;
5.2.9 upon the transfer of shares by a Holder in connection with a
registration hereunder (other than to an "affiliate" of the Company as such term
is defined in Rule 144(a)), furnish unlegended certificates representing
ownership of the Registrable Shares in such denominations as shall be requested
by the Holders or the underwriters;
5.2.10 promptly notify the Holders and the managing underwriter, if any,
and if requested by any such Person, confirm such advice in writing,
(A) of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose,
(B) of the Company's becoming aware at any time that the representations
and warranties of the Company contemplated by Section 5(b)(vii)
(C) above have ceased to be true and correct, and (C) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Shares for sale in any jurisdiction or the initiation or
threat of any proceeding for such purpose;
5.2.11 if reasonably requested by the managing underwriter, if any, or a
majority in interest of the Registrable Shares being sold in connection with an
underwritten offering, immediately include in a prospectus supplement or
post-effective amendment to such Registration Statement such information as the
managing underwriter or such majority in interest of the Registrable Shares
being sold reasonably request to have included therein relating to the plan of
distribution with respect to such Registrable Shares, including, without
limitation, information with respect to the amount of Registrable Shares being
sold to such underwriters and any other terms of the underwritten (or
best-efforts underwritten) offering of the Registrable Shares to be sold in such
of offering; and make all required filings of such prospectus supplement or
post-effective amendment to such Registration Statement as soon as notified of
the matters to be incorporated in such prospectus supplement or post-effective
amendment to such Registration Statement;
5.2.12 prior to any public offering of Registrable Shares, register or
qualify or reasonably cooperate with the Holders, the managing underwriter, if
any, 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 Holder or managing
underwriter reasonably requests and do any and all other facts or things
necessary to enable the disposition in such jurisdictions of the Registrable
Shares covered by such Registration Statement;
5.2.13 cooperate and assist in any filings required to be made with the
NASD and any performance of any due diligence investigation by any underwriter
(including any "qualified independent underwriter" as required to be retained in
accordance with the rules and regulations of the NASD); and
5.2.14 otherwise use its best efforts to comply with the Securities Act,
the Exchange Act, all applicable rules and regulations of the Commission and all
applicable state blue sky and other securities laws, rules and regulations.
5.3 The Company shall pay all out-of-pocket expenses and disbursements
incurred by the Company and the Holders in connection with the Registration
Statements filed by it pursuant to Sections 3 or 4, including, without
limitation, all legal and accounting fees, Commission filing fees, National
Association of Securities Dealers ("NASD") filing fees, printing costs,
registration or qualification fees and expenses to comply with Blue Sky or other
state securities laws, the fees of other experts, and any expenses or other
compensation paid to the underwriters; provided, however, that such registration
expenses shall not include underwriting commissions and discounts and transfer
taxes, if any.
5.4 The Company shall be obligated to keep any Registration Statement filed
by it under Sections 3 and 4 effective under the Securities Act for a period of
180 days after the actual effective date of such Registration Statement and to
prepare and file such supplements and amendments necessary to maintain an
effective Registration Statement for such period. As a condition to the
Company's obligation under this Subsection (d), the Registering Holders will
execute and deliver to the Company such written undertakings as the Company and
its counsel may reasonably require in order to assure full compliance with
relevant provisions of the Securities Act.
5.5 The Company shall use its best efforts to register or qualify the
Registered Shares under such securities or blue sky laws in such jurisdictions
within the United States as the Registering Holders may reasonably request;
provided, however, that the Company reserves the right, in its sole discretion,
not to register or qualify such Registered Shares in any jurisdiction where such
Registered Shares do not meet with the requirements of such jurisdiction after
having taken reasonable steps to meet such requirements or where the Company is
required to qualify as a foreign corporation to do business in such jurisdiction
and is not so qualified therein or is required to file any general consent to
service of process.
5.6 In the event all the Registered Shares have not been sold on or prior
to the expiration of the period specified in Subsection (d) above, the
Registering Holders hereby agree that the Company may deregister by
post-effective amendment any shares covered by the Registration Statement, but
not sold on or prior to such date. The Company agrees that it will notify the
Registering Holders of the filing and effective date of such post-effective
amendment.
5.7 The Registering Holders agree that upon notification by the Company
that the prospectus in respect to any public offering covered by the provisions
hereof is in need of revision, they shall immediately upon receipt of such
notification (i) cease to offer or sell any securities of the Company which must
be accompanied by such prospectus; (ii) return all such prospectuses in their
hands to the Company; and (iii) shall not offer or sell any securities of the
Company until they have been provided with a current prospectus and the Company
has given them notification permitting them to resume offers and sales.
5.8 As a condition to the filing of a Registration Statement pursuant to
this Agreement, the Company shall indemnify and hold harmless the Registering
Holders and the underwriter(s) and controlling person(s) of such underwriter(s)
who may purchase from or sell for the Registered Holders, any Registrable
Shares, from and against any and all losses, claims, damages, expenses or
liabilities caused by any failure of the Company to comply with the Securities
Act or any rule or regulation promulgated thereunder in connection with the
registration of the Registrable Securities or any untrue statement of a material
fact contained in the Registration Statement, any post-effective amendment to
such registration statements, or any prospectus included therein required to be
filed or furnished by reason of this Agreement or caused by 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
such losses, claims, damages or liabilities are caused by any such untrue
statements or alleged untrue statements or omissions based upon information
furnished or required to be furnished in writing to the Company by the party
seeking indemnification expressly for use therein; which indemnification shall
include each person, if any, who controls any such underwriter within the
meaning of the Securities Act and each officer, director, employee and agent of
such underwriter; provided, however, that the Company shall not be obligated to
so indemnify the Registering Holders or any such underwriter or other person
referred to above unless the Registering Holders or underwriter or other person,
as the case may be, shall at the same time indemnify the Company, its directors,
each officer signing the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any registration statement or any prospectus required to
be filed or furnished by reason of this Agreement or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement or
omission based upon information furnished in writing to the Company by the
Holder or underwriter expressly for use therein.
5.9 Each party entitled to indemnification under paragraph (h) above (the
"Indemnified Party") shall, promptly after receipt of notice of any claim or the
commencement of any action against such Indemnified Party in respect of which
indemnity may be sought, notify the party required to provide indemnification
(the "Indemnifying Party") in writing of the claim or the commencement thereof;
provided that the failure of the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which it may
have to an Indemnified Party pursuant to the provisions of paragraph (h), unless
the Indemnifying Party was materially prejudiced by such failure, and in no
event shall such failure relieve the Indemnifying Party from any other liability
which it may have to such Indemnified Party. If any such claim or action shall
be brought against an Indemnified Party, it shall notify the Indemnifying Party
thereof and the Indemnifying Party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable (except to the extent the
proviso to this sentence is applicable, in which event it will be so liable) to
the Indemnified Party under paragraph (h) for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation: provided that each
Indemnified Party shall have the right to employ separate counsel to represent
it and assume its defense (in which case, counsel to the Indemnifying Party
shall not represent it) if (i) upon the advice of counsel, the representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party will not have the right to assume the defense of such claim or action on
behalf of such Indemnified Party), or (ii) in the event the Indemnifying Party
has not assumed the defense thereof within ten (10) days of receipt of notice of
such claim or commencement of action, in which case the fees and expenses of one
such separate counsel shall be paid by the Indemnifying Party. If any
Indemnified Party employs such separate counsel it will not enter into any
settlement agreement which is not approved by the Indemnifying Party, such
approval not to be unreasonably withheld. If the Indemnifying Party so assumes
the defense thereof (and by so assuming shall be solely responsible for
liabilities relating to such claim or action, and shall release the Indemnified
Party from such liabilities to the extent permitted by law, except to the extent
the Indemnified Party is not entitled to be indemnified pursuant to paragraph
(h), it may not agree to any settlement of any such claim or action as the
result of which any remedy or relief, other than monetary damages for which the
Indemnifying Party shall be responsible hereunder, shall be applied to or
against the Indemnified Party, without the prior written consent of the
Indemnified Party. No Indemnified Party will 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 release
from all liability in respect of such claim or action. In any action hereunder
as to which the Indemnifying Party has assumed the defense thereof with counsel
satisfactory to the Indemnified Party, the Indemnified Party shall continue to
be entitled to participate in the defense thereof, with counsel of its own
choice, but, except as set forth above, the Indemnifying Party shall not be
obligated hereunder to reimburse the Indemnified Party for the costs thereof.
5.10 If for any reason the indemnification provided for above is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, 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.
6. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to:
6.1 Make and keep public information available at all times, as those terms
are understood and defined in Rule 144 under the Securities Act (as such Rule
may be amended from time to time) or any similar rule hereinafter adopted by the
Commission;
6.2 File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); and
6.3 Take such further action as any Holder may reasonably request, all to
the extent required from time to time, to enable such Holder to sell Registrable
Shares without registration under the Securities Act, including, without
limitation, issuing appropriate instructions to the Company's transfer agent and
registrar and exchanging legended certificates for certificates without legend
and processing in requisite time frames counsel opinions, if any.
7. No Other Registration Rights. The Company represents and warrants to the
Holders that except as set forth in this Agreement and the Purchase Agreement,
there are no other registration rights with respect to the Company's securities
currently outstanding or other rights currently outstanding which could require
the Company to register for sale pursuant to the Securities Act any securities
of the Company (collectively, "Registration Rights"). In addition, the Company
covenants and warrants to the Holders that at all times while the Holders have
the right to request the registration of Registrable Shares hereunder, the
Company will not, without the prior written consent of the Holders, grant to any
person Registration Rights, the effect of which could (a) limit, in any
registration statement subsequently filed by the Company, the number of
Registrable Shares that the Purchasers may include in such registration
statement or (b) otherwise adversely affect the priority of the Registration
Rights being granted to the Holders hereunder.
8. Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and the successors and assigns of the Company and
the permitted transferees of the Holders.
8.1 Upon acquisition of any Registrable Shares, the Holders agree that the
Registrable Shares shall not be transferable except upon the conditions set
forth in this Agreement, which conditions are intended to insure compliance with
the provisions of the Securities Act. Each Holder in any transfer subject to
Section 2 herein shall cause any proposed transferee of Registrable Shares held
by that Holder to agree to take and hold those securities subject to the rights
and obligations and upon the conditions specified in this Agreement.
8.2 This Agreement contains the entire agreement among the parties hereto
with respect to the subject matter herein, and cannot be modified, changed,
discharged or terminated except by an instrument in writing signed by the party
against whom the enforcement of any modification, change, discharge or
termination is sought.
8.3 References to the Holders or some of them by use of masculine pronoun
is for convenience only and shall, where appropriate, be deemed to be reference
by feminine or neuter pronouns. 8.4 Any notice, request, instruction or other
document to be given hereunder shall be in writing and shall be delivered
personally or sent by registered or certified mail as follows: (i) If to the
Company: 0000 Xxxxx Xxxxx Xxxxx 000, Ashley Corporate Center Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000 Attn: President
With a copy to:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
(ii) If to the Holders, at the address specified next to their respective
names on Schedule I hereto or to such other address as any party hereto
hereinafter designates in writing to any other party hereto, and
in the case of Xxxxxx X. Xxxxxx, to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
and, in the case of Avondale Xxxxx, Inc., to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, III
Upon receiving notice from a Holder (or any permitted transferee of an
Holder) that Registrable Shares have been transferred and if the transferee is
entitled to any rights under this Agreement, the Company shall give notices to
such transferee as contemplated by this Agreement.
8.5 The captions herein are inserted for convenience only and shall not
affect the construction of this Agreement.
8.6 This Agreement is executed and delivered in, and shall be construed in
accordance with, and governed by, the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
8.7 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Executive vice President and
Chief Financial Officer
HOLDERS:
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
AVONDALE XXXXX, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
Name: Xxxx X. Xxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
SCHEDULE I
Holders
Xxxxxx X. Xxxxxx
Address: 0 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Avondale Xxxxx, Inc.
Address: 000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
