Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of January 26, 2005, is made by and among XXXXXX HOLDING COMPANY, a Delaware
corporation (the "Company"), XXXXXXXXX XXXXXXXXX XXXXXX, INC., a California
corporation ("MPF"), R. XXXXXXX XXXXXXX, XXXXXX XXXXX, XXXXXXX XXXXX, III
(together with R. Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx, the "Founders") and each
shareholder of the Company who executes a joinder hereto in the form attached
hereto as Exhibit A. Capitalized terms used herein but not otherwise defined
herein shall have the meaning set forth in Section 1 hereof.
WHEREAS, MPF holds shares of Preferred Stock that are
convertible into Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings.
"Affiliate" means, when used with reference to a specified
Person, any Person that directly or indirectly controls or is controlled by or
is under common control with the specified Person. As used in this definition,
"control" (including, with its correlative meanings, "controlled by" and "under
common control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).
"Common Stock" means, collectively, (i) the Company's common
stock, par value $0.0001 per share, (ii) any other class of common stock of the
Company, and (iii) any capital stock of the Company issued or issuable with
respect to the securities referred to in clauses (i) or (ii) above whether by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Holder" means, at any applicable time, the holders of
Registrable Securities.
"NASD" means National Association of Securities Dealers, Inc.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, a bank, a trust company, a land
trust, a business trust, a governmental entity or any department, agency or
political subdivision thereof or any other entity or organization, whether or
not it is a legal entity.
"Piggyback Registration" has the meaning set forth in Section
3(a).
"Preferred Stock" means the Company's Series A Convertible
Preferred Stock, par value $0.0001 per share.
"Qualified Public Offering" means any underwritten public
offering of the Company's Common Stock registered under the Securities Act
following the date hereof with net proceeds to the Company in excess of $3
million.
"Registrable Securities" means (i) any shares of Common Stock
acquired by, or issued or issuable to, any Person as a result of the conversion
of shares of Preferred Stock on or after the date hereof and (ii) all equity
securities issued or issuable directly or indirectly with respect to any shares
of Common Stock described in clause (i) above by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public in compliance with Rule 144. For purposes
of this Agreement, a Person will be deemed to be a holder of Registrable
Securities whenever such Person has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing and distributing expenses, messenger
and delivery expenses, fees and expenses of custodians, internal expenses
(including all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses and fees for listing the securities to
be registered on any securities exchange or the NASD automated quotation system,
and fees and disbursements of counsel for the Company and all independent
certified public accountants, underwriters (excluding discounts and commissions)
and other Persons retained by the Company.
"Rule 144" means Rule 144 under the Securities Act (or any
similar rule then in force).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a
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partnership, limited liability company, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
partnership, limited liability company, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, limited
liability company, association or other business entity gains or losses or shall
be or control the managing director, managing member, manager or a general
partner of such partnership, limited liability company, association or other
business entity.
2. Demand Registrations.
(a) Requests for Registration. A majority of the Registrable Securities
may, following a Qualified Public Offering, request registration under the
Securities Act of all or any portion of its Registrable Securities on Form S-1
or any similar long-form registration (a "Long-Form Registration"), or on Form
S-2 or S-3 or any similar short-form registration (a "Short-Form Registration"),
if such a short form is available. All registrations requested pursuant to this
Section 2(a) are referred to herein as "Demand Registrations". Each request for
a Demand Registration (a "Demand Request") shall specify the approximate number
of Registrable Securities requested to be registered, the anticipated method or
methods of distribution, and the anticipated per share price range for such
offering. Within ten days after receipt of any such Demand Request, the Company
will give written notice of such requested registration (which shall specify the
intended method of disposition of such Registrable Securities) to all other
Holders (a "Company Notice") and the Company will include (subject to the
provisions of this Agreement) in such registration, all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within 20 days after the delivery of such Company Notice; provided, that
any such other holder may withdraw its request for inclusion at any time prior
to executing the underwriting agreement or, if none, prior to the applicable
registration statement becoming effective.
(b) Long-Form Registrations. MPF will be entitled to up to two (2)
Long-Form Registration in the aggregate. A registration will not count as the
permitted Long-Form Registration for purposes of the preceding sentence unless
and until it has become effective and no Long-Form Registration will count as a
Long-Form Registration for purposes of the preceding sentence unless MPF sells
at least 50% of the Registrable Securities requested to be included by them in
such registration.
(c) Short-Form Registrations. MPF will be entitled to four (4) Short-Form
Registrations. Demand Registrations by MPF will be Short-Form Registrations
whenever the Company is permitted to use any applicable short form. After the
Company has become subject to the reporting requirements of the Exchange Act,
the Company will use its commercially reasonable efforts to make Short-Form
Registrations on Form S-3 available for the sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company will not include in any
Demand Registration any securities which are not Registrable Securities unless
the holder(s) of at least a majority of the Registrable Securities included in
such Demand Registration otherwise consent. If a Demand Registration is an
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underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities, requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range specified
in the Demand Request pursuant to Section 2(a) and without adversely affecting
the marketability of the offering, then the Company will include in such Demand
Registration (A) first, the number of Registrable Securities requested to be
included in such Demand Registration, pro rata among the Holders of such
Registrable Securities based on the number of Registrable Securities requested
by each such Holder to be so included, and (B) second, any other securities of
the Company requested to be included in such registration, in such manner as the
Company may determine.
(e) Restrictions on Demand Registrations. The Company will not be obligated
to file any registration statement with respect to any Demand Registration
within 180 days after the effective date of a previous Demand Registration or a
previous Piggyback Registration.
(f) Selection of Underwriters. If the Demand Registration is an
underwritten offering, the Company will have the right to select the investment
banker(s) and manager(s) to administer the offering (which investment banker(s)
and manager(s) will be nationally or regionally recognized) subject to the
Company's approval, which approval will not be unreasonably withheld.
(g) Other Registration Rights. Except as provided in this Agreement and the
Acquisition Agreement by and Xxxxxx Holding Company, Inc., Xxxxxx Acquisition
Company, Inc., FLF, Inc. (d/b/a Diversified Risk Insurance Brokers) and the
Shareholders named therein dated as of November 22, 2004, after the date hereof,
the Company will not grant to any Persons the right to request the Company to
register any equity or similar securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without the
prior written consent of the holders of at least a majority of the Registrable
Securities; provided, that no consent shall be required to grant any holder of
equity securities of the Company registration rights where such holder's rights
are pari passu or subordinated to the rights of the Holders.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any of
its Common Stock under the Securities Act for its own account or for the account
of any holder of the Common Stock (other than pursuant to a Demand Registration,
and other than pursuant to a registration statement on Form S-8 or S-4 or any
successor form or form for similar registration purposes or in connection with a
registration the primary purpose of which is to register debt securities i.e.,
in connection with a so-called "equity kicker") (a "Piggyback Registration"),
the Company will give prompt written notice to all Holders of its intention to
effect such a registration and of such Holders' rights under this Section 3(a).
Upon the written request of any Holder, the Company shall include in such
registration (subject to the provisions of this Agreement) all Registrable
Securities requested to be registered pursuant to this Section 3(a), subject to
Section 3(b) or 3(c), below, as applicable, with respect to which the Company
has received written requests for inclusion therein within 20 days after the
receipt of the Company's notice; provided, that any such other Holder may
withdraw its request for inclusion at any time prior to executing the
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underwriting agreement or, if none, prior to the applicable registration
statement becoming effective.
(b) Priority on Primary Registrations. If a Piggyback Registration is in
part an underwritten primary registration on behalf of the Company and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the Company and without adversely affecting the
marketability of the offering, then the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities (other than the Founders' Registrable
Securities)requested to be included in such registration, pro rata among the
Holders (other than the Founders) based on the number of Registrable Securities
requested by each such Holder to be so included, (iii) third, the Founders'
Registrable Securities requested to be included in such registration, pro rata
among the Founders based on the number of Registrable Securities requested by
each such Founder to be so included and (iv) fourth, any other securities
requested to be included in such registration, in such manner as the Company may
determine.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company's
securities and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders initially requesting
such registration and without adversely affecting the marketability of the
offering, then the Company will include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Securities (other than the Founders'
Registrable Securities) requested to be included in such registration, pro rata
among the Holders (other than the Founders) based on the number of Registrable
Securities requested by each such Holder to be so included; provided, that in no
event shall the Registered Securities request to be so included by cut-back by
more than 70%, (iii) third, the Founders' Registrable Securities requested to be
included in such registration, pro rata among the Founders based on the number
of Registrable Securities requested by each such Founder to be so included and
(iv) fourth, any other securities requested to be included in such registration,
in such manner as the Company may determine.
(d) Selecting Underwriters. If any Piggyback Registration is an
underwritten offering, the investment banker(s) and manager(s) to administer the
offering (which investment banker(s) and manager(s) will be nationally or
regionally recognized) will be selected by the Company.
(e) Other Registrations. If the Company has previously filed a registration
statement with respect to Registrable Securities pursuant to this Section 3, and
if such previous registration has not been withdrawn or abandoned, then the
Company will not file or cause to be effected any other registration of any of
its equity or similar securities or securities convertible or exchangeable into
or exercisable for its equity or similar securities under the Securities Act
(except on Forms S-4 or S-8, or any successor form or form for similar
registration purposes, or in connection with a Demand Registration or in
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connection with a registration the primary purpose of which is to register debt
securities i.e., in connection with a so-called "equity kicker"), whether on its
own behalf or at the request of any Holder or holders of such securities, until
a period of at least 180 days has elapsed from the effective date of such
previous registration.
4. Holdback Agreements.
(a) Each Holder hereby agrees not to effect any sale or distribution of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 180-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration), unless the underwriters managing such
underwritten registration otherwise agree.
(b) The Company (i) will not effect any sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 180-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Forms S-4 or S-8 or any successor
form or form for similar registration purposes), unless the underwriters
managing such underwritten registration otherwise agree, and (ii) will use its
commercially reasonable efforts to cause each holder of the Common Stock or any
securities convertible into or exchangeable or exercisable for the Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any sale or
distribution of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the underwriters
managing such underwritten registration otherwise agree.
5. Registration Procedures. Whenever the Holders have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will use its commercially reasonable efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its commercially reasonable efforts to cause
such registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to the counsel selected pursuant to Section 10 below
copies of all such documents proposed to be filed, which documents will be
subject to the prompt review and reasonable comment of such counsel), and upon
filing such documents, the Company shall promptly notify in writing such counsel
of the receipt by the Company of any written comments by the SEC with respect to
such registration statement or prospectus or any amendment or supplement thereto
or any written request by the SEC for the amending or supplementing thereof or
for additional information with respect thereto;
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(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 180 days and comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement and
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;
(c) furnish to each seller of Registrable Securities such number of copies
of such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
seller;
(d) use its commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction in any jurisdiction where it is not so
subject, or (iii) consent to general service of process (i.e., service of
process which is not limited solely to securities law violations) in any such
jurisdiction where it is not so subject);
(e) promptly notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the discovery of the happening of
any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and, at the request of any such
seller, the Company will, as soon as reasonably practicable, file and furnish to
all sellers a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
(f) cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed and,
if not so listed, to be listed on the Nasdaq National Market System ("Nasdaq
Market") and, if listed on the Nasdaq Market, use its commercially reasonable
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a Nasdaq "National Market System security" within the
meaning of Rule 11Aa2-1 under the Exchange Act or, failing that, to secure
Nasdaq Market authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with the
National Association of Securities Dealers;
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(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting agreements
in customary form) and take all such other actions as the holders of a majority
of the Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a split or a combination of
stock or units); provided, that no holder of Registrable Securities shall have
any indemnification or contribution obligations inconsistent with Section 7
hereof;
(i) make available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information and
participate in due diligence sessions reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement;
(j) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first day of the Company's
first full calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 promulgated thereunder;
(k) use commercially reasonable efforts to prevent the issuance of any stop
order ("Stop Order") suspending the effectiveness of a registration statement,
or of any order suspending or preventing the use of any related prospectus or
suspending the qualification of any securities included in such registration
statement for sale in any jurisdiction, and, in the event of such issuance, the
Company shall immediately notify the holders of Registrable Securities included
in such registration statement of the receipt by the Company of such
notification and shall use its commercially reasonable efforts promptly to
obtain the withdrawal of such order;
(l) use its commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities, and cooperate and assist with any filings to be made with the NASD;
(m) obtain one or more "cold comfort" letters, dated the effective date of
such registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), signed by the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by "cold comfort"
letters as the holders of a majority of the Registrable Securities being sold
reasonably request; and
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(n) provide a legal opinion of the Company's outside counsel, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature.
If any such registration or comparable statement refers to any Holder by name or
otherwise as the Holder of any securities of the Company and if in such Holder's
sole and exclusive judgment, such Holder is or might be deemed to be an
underwriter or a controlling person of the Company, such Holder shall have the
right to require (i) the insertion therein of language, in form and substance
satisfactory to such Holder and presented to the Company in writing, to the
effect that the holding by such Holder of such securities is not to be construed
as a recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Holder; provided, that with respect to this
clause (ii), if requested by the Company, such holder shall furnish to the
Company an opinion of counsel to such effect, which opinion and counsel shall be
reasonably satisfactory to the Company.
6. Registration Expenses. The Company will bear all Registration
Expenses whether or not the Demand Registration or Piggyback Registration
pursuant to which such Registration Expenses are incurred have become effective.
7. Indemnification.
(a) By the Company. The Company agrees to, and will cause each of its
Subsidiaries to agree to, indemnify, to the fullest extent permitted by law,
each Holder, its officers, directors, members, employees, agents, stockholders
and general and limited partners and each Person who controls (within the
meaning of the Securities Act and Exchange Act) such Holder against any and all
losses, claims, damages, liabilities and expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof), joint or several, arising
out of or based upon any untrue or alleged untrue statement of material fact
contained in any registration statement, reports required and other documents
filed under the Exchange Act, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, together with any documents
incorporated therein by reference, or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation or alleged violation by the Company or
any of its Subsidiaries of any federal, state, foreign or common law rule or
regulation and relating to action or inaction in connection with any such
registration, disclosure document or other document and shall reimburse such
holder, officer, director, member, employee, agent, stockholder, partner or
controlling Person for any legal or other expenses, including any amounts paid
in any settlement effected with the consent of the Company, which consent will
not be unreasonably withheld or delayed, incurred by such holder, officer,
director, member, employee, agent, stockholder, partner or controlling Person in
connection with the investigation or defense of such loss, claim, damage,
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liability or expense, except insofar as the same are caused by or contained in
any information furnished in writing to the Company by such holder expressly for
use therein. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers, directors, agents and employees and
each Person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the holders of Registrable Securities.
(b) By the Holders. In connection with any registration statement in which
a Holder is participating, each such Holder will furnish to the Company in
writing such information and affidavits about such Holder as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, will indemnify the Company,
its directors and officers and each Person who controls (within the meaning of
the Securities Act) the Company and the other holders of Registrable Securities
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such holder
which authorizes its use in the applicable document; provided, that the
obligation to indemnify will be individual, not joint and several, for each
Holder and will be limited to the net amount of cash proceeds received by such
Holder from the sale of Registrable Securities pursuant to such registration
statement.
(c) Claim Procedures. Any Person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice will not impair any Person's right to indemnification hereunder to
the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit the indemnifying party to assume the defense thereof, jointly with
any other indemnifying party similarly notified to the extent it may wish, with
counsel reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld or delayed) and the indemnifying party shall
not, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof, a release from all liability in respect of such claim or
litigation provided by the claimant or plaintiff to such indemnified party. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay (i) the fees and expenses of more than
one counsel for all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim or (ii) any settlement made
by any indemnified party without such indemnifying party's consent (but such
consent will not be unreasonably withheld).
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(d) Survival; Contribution. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, agent or employee
and each other Person who participates as an underwriter in the offering or sale
of such securities and each other Person, if any, who controls (within the
meaning of the Securities Act) such indemnified party, and will survive the
transfer of securities. The Company also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party in
the event the Company's indemnification is unavailable for any reason.
8. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements (including, without limitation, pursuant to the
terms of any over-allotment or "green shoe" option requested by the managing
underwriter(s), so long as no Holder will be required to sell more than the
number of Registrable Securities that such Holder has requested the Company to
include in any registration) and (b) completes and executes all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements;
provided, that no Holder included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification or contribution obligations to the Company or the underwriters
with respect thereto, except as otherwise provided in Section 7.
9. Rule 144 Reporting. With a view to making available to the holders of
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees at its expense to use its commercially
reasonable efforts to:
(a) make and keep current public information available, within the meaning
of Rule 144 or any similar or analogous rule promulgated under the Securities
Act, at all times after it has become subject to the reporting requirements of
the Exchange Act;
(b) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Securities Act and Exchange Act (after it has
become subject to such reporting requirements); and
(c) so long as any party hereto owns any Registrable Securities, furnish to
such Person forthwith upon request, a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time
commencing 90 days after the effective date of the first registration filed by
the Company for an offering of its securities to the general public), the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as such Person may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
- 11 -
10. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered if delivered
personally, sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient, or if sent by certified or registered mail, return
receipt requested, will be deemed to have been given two business days
thereafter. Such notices, demands and other communications will be sent to the
address indicated below:
To the Company:
Xxxxxxx Xxxxx, III, Co-Chairman, Co-CEO and CFO and
R. Xxxxxxx Xxxxxxx, President
Xxxxxx Holding Company, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to the Company)
to:
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
To MPF:
c/o XxxXxxxxx Xxxxxxxxx Xxxxxx, Inc.
Attn: Xxxx Xxxxxxxxx, Vice President & General
Counsel
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
or such other address, telecopy number or to the attention of such other Person
as the recipient party shall have specified by prior written notice to the
sending party.
11. Miscellaneous.
(a) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages and costs (including reasonable attorneys' fees) caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this Agreement and
that any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
(b) Amendments and Waivers. No modification, amendment or waiver of any
provision of this Agreement shall be effective against the Company or the
- 12 -
Holders unless such modification, amendment or waiver is approved in writing by
the Company and the Holders of at least a majority of the Registrable
Securities; provided, that any such modification, amendment or waiver which
materially and adversely affects any Holder and is prejudicial to such Holder
relative to all of the other Holders cannot be effected without the consent of
such Holder. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
(c) Successors and Assigns. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto will bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. In addition, whether or not any express assignment has been
made, the provisions of this Agreement which are for the benefit of purchasers
or Holders are also for the benefit of, and enforceable by, any subsequent
Holder.
(d) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(e) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same Agreement.
(f) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(g) Governing Law. The corporate law of the State of Delaware shall govern
all issues and questions concerning the relative rights and obligations of the
Company and its stockholders. All other issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California.
(h) Computation of Time. Whenever the last day for the exercise of any
privilege or the discharge or any duty hereunder shall fall upon a Saturday,
Sunday, or any date on which banks in New York City, New York are authorized to
be closed, the party having such privilege or duty may exercise such privilege
or discharge such duty on the next succeeding day which is a regular business
day.
(i) Waiver of Jury Trial. The parties to this Agreement each hereby waives,
to the fullest extent permitted by law, any right to trial by jury of any claim,
demand, action, or cause of action (i) arising under this Agreement or (ii) in
any way connected with or related or incidental to the dealings of the parties
- 13 -
hereto in respect of this Agreement or any of the transactions related hereto,
in each case whether now existing or hereafter arising, and whether in contract,
tort, equity, or otherwise. The parties to this Agreement each hereby agrees and
consents that any such claim, demand, action, or cause of action shall be
decided by court trial without a jury and that the parties to this Agreement may
file an original counterpart of a copy of this Agreement with any court as
written evidence of the consent of the parties hereto to the waiver of their
right to trial by jury.
12. Jurisdiction. Each of the parties hereto submits to the jurisdiction
of any state or federal court sitting in San Francisco, California, in any
action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court and hereby expressly submits to the personal
jurisdiction and venue of such court for the purposes hereof and expressly
waives any claim of improper venue and any claim that such courts are an
inconvenient forum. Each of the parties hereby irrevocably consent to the
service of process of any of the aforementioned courts in any such suit, action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to its address set forth in Section 10, such service to become
effective 10 days after such mailing.
13. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party hereto by virtue of the
authorship of any of the provisions of this Agreement.
14. Entire Agreement. This Agreement and the agreements and documents referred
to herein contain the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, whether written or oral, relating to such subject
matter in any way.
* * * * *
- 14 -
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
XXXXXX HOLDING COMPANY, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title: Co-Chief Executive Officer
XXXXXXXXX XXXXXXXXX XXXXXX, INC.
By: /s/ XXXX X. XXXXXX
------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
EXHIBIT A
FORM OF JOINDER TO
REGISTRATION RIGHTS AGREEMENT
THIS JOINDER (this "Joinder") to the Registration Rights Agreement,
dated as of January [__], 2005, by and between Xxxxxx Holding Company, a
Delaware corporation (the "Company"), and XxxXxxxxx Xxxxxxxxx Xxxxxx Inc., a
[__] corporation (the "Agreement"), is made and entered into as of [_________]
by and between the Company and [_________________] ("Investor"). Capitalized
terms used herein but not otherwise defined shall have the meanings set forth in
the Agreement.
WHEREAS, (i) Investor has acquired certain shares of Preferred Stock
pursuant to the Purchase Agreement by and between the Company and Investor dated
as of the date hereof (the "Purchase Agreement"), (ii) the Company desires to
grant to Investor certain registration rights in accordance with the terms of
the Agreement, and (iii) it is a condition to the transfer or issuance to the
Investor of such shares of Preferred Stock that Investor agrees to be bound by
the terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Joinder hereby agree as
follows:
1. Agreement to be Bound. Investor hereby agrees that upon execution of
this Joinder, Investor shall become a party to the Agreement and shall
be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and
shall be deemed a Investor for all purposes thereof. In addition,
Investor hereby agrees that all Preferred Stock acquired by Holder
pursuant to the Purchase Agreement held by Investor shall be deemed
Registrable Securities for all purposes of the Agreement.
2. Successors and Assigns. Except as otherwise provided herein, this
Joinder shall bind and inure to the benefit of and be enforceable by
the Company and its successors and assigns and Investor and any
subsequent holders of the Registrable Securities held by Investor and
the respective successors and assigns of each of them, so long as they
hold such Registrable Securities.
3. Counterparts. This Joinder may be executed in separate counterparts
each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Governing Law. The corporate law of the State of Delaware shall govern
all issues and questions concerning the relative rights and obligations
of the Company and its stockholders. All other issues and questions
concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to any
choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
California.
5. Jurisdiction. Each of the parties hereto submits to the jurisdiction of
any state or federal court sitting in San Francisco, California, in
any action or proceeding arising out of or relating to this Agreement
and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court and hereby expressly submits
to the personal jurisdiction and venue of such court for the purposes
hereof and expressly waives any claim of improper venue and any claim
that such courts are an inconvenient forum. Each of the parties hereby
irrevocably consent to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to its address to become effective 10 days after such
mailing.
6. Waiver of Jury Trial. The parties to this Joinder each hereby waives,
to the fullest extent permitted by law, any right to trial by jury of
any claim, demand, action, or cause of action (i) arising under this
Joinder or (ii) in any way connected with or related or incidental to
the dealings of the parties hereto in respect of this Joinder or any
of the transactions related hereto, in each case whether now existing
or hereafter arising, and whether in contract, tort, equity, or
otherwise. The parties to this Joinder each hereby agrees and consents
that any such claim, demand, action, or cause of action shall be
decided by court trial without a jury and that the parties to this
Agreement may file an original counterpart of a copy of this Joinder
with any court as written evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
7. Descriptive Headings. The descriptive headings of this Joinder are
inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of the
date first above written.
XXXXXX HOLDING COMPANY, INC.
By: ----------------------------------
Name:
Title:
-----------------------------------
[INVESTOR]
