REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of this the 9th day of August, 1993 by and between
Xxxxx Equities, Inc., a Florida corporation, and TCW Special Credits, a
California general partnership ("TCW Special Credits"), for itself and,
as general partner or investment advisor, on behalf of TCW Special
Credits Fund III, Weyerhauser Company Master Pension Trust, The Common
Fund for Bond Investments and TCW Special Credits Trust (collectively,
the "Shareholders").
This Agreement is entered into in connection with the Plan (as
defined below) which provides for the reorganization of Xxxxx Properties,
Inc., a Florida corporation, through a merger of Xxxxx Properties, Inc.
into Xxxxx Equities, Inc.
The Company (as defined below) and TCW Special Credits, for
itself and on behalf of the Shareholders, are simultaneously herewith
entering into a Shareholders Agreement (the "Shareholders Agreement")
providing, among other things, that TCW Special Credits shall vote or
direct the Shareholders to vote for the Plan and the merger contemplated
thereby. As a condition to its willingness to enter into the
Shareholders Agreement, TCW Special Credits has requested that the
Company grant certain registration rights as provided in this Agreement.
To induce TCW Special Credits to enter into, and in
consideration of its entering into, the Shareholders Agreement, and for
and in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the following meanings when used herein:
(a) "BUSINESS DAY" means any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a day on which banking institutions in New
York, New York are authorized by law, regulation or executive order to
close.
(b) "COMMISSION" means the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
(c) "COMMON STOCK" means the Common Stock, par value $.0l
per share of the Company.
(d) "COMPANY" means Xxxxx Equities, Inc., a Florida
corporation, and its successors and assigns.
(e) "DEMAND REGISTRATION" means any registration of
Registrable Securities effected pursuant to SECTION 3 hereof.
(f) "EFFECTIVE DATE" means the effective date of the
Plan.
(g) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended (or any similar successor federal statute), and the
rules and regulations thereunder, as in effect from time to time.
(h) "INITIATING HOLDERS" shall have the meaning ascribed
to such term in SECTION 3(A) HEREOF.
(i) "HOLDER" mean any Person that owns Registrable
Securities, including such successors and assigns as acquire Registrable
Securities, directly or indirectly, from such Person. For purposes of
this Agreement, the Company may deem and treat the registered of a
Registrable Security as the Holder and absolute owner thereof.
(j) "MAJORITY REGISTERED HOLDERS" means in the case of
any registration statement, the Holders of a majority of the Registrable
Securities proposed to be covered (or so covered) in such registration
statement.
(k) "PERSON" means any individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, or other entity, or a
government or any political subdivision or agency.
(l) "PIGGYBACK REGISTRATION" means any registration of
Registrable Securities effected pursuant to SECTION 4 hereof.
(m) "PLAN" means the plan of reorganization of Xxxxx
Properties, Inc., as amended to date, filed with the Bankruptcy Court in
Chapter 11 Case No. 91-12294-8P1 in the United States Bankruptcy Court
for the Middle District of Florida, Tampa Division and distributed to
creditors pursuant to that order of the Bankruptcy Court dated June 8,
1993 in said Chapter 11 Case approving the Third Amended and Restated
Disclosure Statement (the "Disclosure Statement").
(n) "REGISTRABLE SECURITIES" means (i) the 552,600 shares
of Common Stock held by the Shareholders on the date hereof and the
shares of Common Stock to be issued to the Shareholders pursuant to the
Plan, and (ii) any securities issued or issuable in respect of or in
exchange for any of the shares of Common Stock referred to in clause (i)
above by way of a stock dividend or other distribution on the Common
Stock, stock split or combination of shares, recapitalization,
reclassification, merger, consolidation or exchange offer. For purposes
of this Agreement, a Registrable Security ceases to be a Registrable
Security when (1) it has been effectively registered under the Securities
Act and sold or distributed to any Person pursuant to an effective
registration statement covering it, (2) it has been sold or distributed
to any Person pursuant to Rule 144, or (3) it has been sold or
distributed pursuant to an exemption from the registration requirements
of the Securities Act to any Person other than any investment fund for
which TCW Special Credits acts as manager, any partnership or other
entity for which TCW Special Credits acts directly or indirectly as a
general partner or controlling stockholder, any Person otherwise
affiliated with TCW Special Credits, The TCW Group, Inc. and its direct
or indirect subsidiaries.
(o) "REGISTRATION" means any Demand Registration or
Piggyback Registration.
(p) "RULE 10B-6" means Rule 10b-6 promulgated by the
Commission under the Exchange Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(q) "RULE 144," "RULE 145," "RULE 415" AND "RULE 424"
mean, respectively, Rule 144, Rule 145, Rule 415 and Rule 424, each
promulgated by the Commission under the Securities Act, in each case as
amended from time to time, or any similar successor rule thereto that may
be promulgated by the Commission.
(r) "SECURITIES ACT" means the Securities Act of 1933, as
amended (or any similar successor federal state), and the rules and
regulations thereunder, as the same are in effect from time to time.
2. [RESERVED]
3. DEMAND REGISTRATIONS.
(a) At any time after six months following the Effective
Date, upon written notice to the Company from one or more Holders (the
"Initiating Holders") of Registrable Securities holding in the aggregate
the greater of (i) 10% of the initial Registrable Securities and (ii) an
amount of Registrable Securities consisting of at least 250,000 shares of
Common Stock or securities issued or issuable in respect of or in
exchange for such shares of Common Stock by way of a stock dividend or
other distribution on the Common Stock, stock split or combination of
shares, recapitalization, reclassification, merger or exchange offer,
requesting that the Company effect, pursuant to this SECTION 3, the
registration of any of such Initiating Holders' Registrable Securities
under the Securities Act (which notice shall specify the Registrable
Securities so requested to be registered which amount of Registrable
Securities to be so registered shall be equal to or greater than 10% of
the initial Registrable Securities, the proposed amounts thereof and the
intended method or methods of disposition by such Initiating Holders
(including whether or not the proposed offering is to be underwritten)),
the Company shall promptly (but in any event within 15 days) give written
notice of such requested registration to all Holders, and thereupon the
Company shall use its best efforts to effect the registration under the
Securities Act of:
(A) the Registrable Securities that the Initiating
Holders have requested the Company to register, for disposition in
accordance with the intended method or methods of disposition stated
in their notice to the Company; and
(B) all other Registrable Securities the Holders of
which shall have made a written request to the Company for
registration thereof (which request shall specify such Registrable
Securities and the proposed amounts thereof) within 15 days after
the receipt of such written notice from the Company;
as expeditiously as possible (but in any event shall file such
registration statement within 45 days of the receipt of such request),
all to the extent requisite to permit the disposition by Holders of the
securities then constituting Registrable Securities so to be registered.
(b) FREQUENCY; DURATION. The Company is obligated to
effect only four registrations pursuant to this SECTION 3 with respect to
all Holders. Notwithstanding the foregoing, the Company shall not be
required to effect a Demand Registration pursuant to this SECTION 3: (i)
if it shall have so effected a Demand Registration during the previous
seven months; (ii) if the Initiating Holders shall have requested such
Demand Registration after the eighth anniversary of the Effective Date or
(iii) during the period starting with the date 30 days prior to the
Company's good faith estimate of the date of filing of, and ending on the
date 90 days following the effective date of, a registration statement
pertaining to an underwritten public offering for the account of the
Company with respect to which Holders have piggyback registration rights
pursuant to SECTION 4 hereof; PROVIDED, HOWEVER, that a Demand
Registration shall not be deemed to have been effected for purposes of
SECTION 3(B)(I) if the applicable registration statement has not been
declared effective and kept effective until the earlier of (i) four
months flowing the date on which such registration statement was declared
effective and (ii) the sale pursuant to such registration statement of
the Registrable Securities covered thereby, and FURTHER, PROVIDED, that
in the event a request for registration is refused pursuant to clause
(iii) above, if the Company then elects not to file a registration
statement or, if a registration statement is filed, the Company elects
not to complete the proposed offering, the Company shall notify in
writing the Holders whose request for registration has been refused
pursuant to clause (iii) above, and such Holders shall have the right,
within 10 days after receiving written notice of the Company's election
to request the Company to effect the registration of Registrable
Securities for the account of Holders, and such registration shall be
considered a Demand Registration under SECTION 3 hereof.
(c) RIGHT TO DELAY REGISTRATION. The Company shall have
the right to delay the filing of a registration statement required to be
riled under this SECTION 3 if the Company shall furnish the Initiating
Holders a certificate signed by the President of the Company (the
"Certificate") (i) stating that in the good faith judgment of a majority
of the disinterested members of the Board of Directors of the Company an
undisclosed material event has occurred and is continuing or is likely to
occur within 90 days the public disclosure of which would have a material
adverse effect on the Company or on a proposed material transaction
involving the Company or a substantial amount of its assets and (ii)
describing in reasonable detail the undisclosed material event. The
filing of the registration statement may be delayed by the Company
pursuant to this SECTION 3(C) until such time as the undisclosed material
event referred to in the Certificate shall have been publicly disclosed
or shall have ceased to be material but in no event more than 90 days
after receipt of the demand registration request from the Initiating
Holders; PROVIDED, HOWEVER, that the Company may not utilize the right
set forth in this SECTION 3(C) more than once in any 24-month period; and
FURTHER, PROVIDED, HOWEVER, that if, following the receipt of the
Certificate the Initiating Holders elect to withdraw their registration
request, the last proviso of SECTION 7 hereof (relating to payment of
registration expense or forfeiture of a Demand Registration right upon
withdrawal of demand registration request) shall not apply to such
withdrawal.
(d) INCLUSION OF OTHER SECURITIES. The Company may
include in a Demand Registration securities held by other Persons who
have piggyback registration rights pursuant to written agreements with
the Company. If any securities other than Registrable Securities are
included, Registrable Securities shall have absolute priority over
securities included by the Company at the request of such other Persons.
The Shareholders hereby acknowledge and recognize that if any Registrable
Securities are included in a registration statement filed by the Company
pursuant to demand registration rights granted by the Company to Persons
other than the Holders, the Company may provide in the appropriate
agreement that such other Persons' securities shall have absolute
priority over Registrable Securities requested by Holders to be included,
pursuant to SECTION 4 hereof, in such other Persons' demand registration.
4. PIGGYBACK REGISTRATIONS.
(a) EFFECTIVE REGISTRATION. If, but without any
obligation to do so, the Company proposes to file a registration
statement under the Securities Act with respect to any class of equity
securities (other than in connection with the registration of equity
securities issued or issuable pursuant to an employee stock option, stock
purchase, stock bonus or similar plan or dividend reinvestment plan or
pursuant to a merger, exchange offer or transaction of the type specified
in Rule 145(a) under the Securities Act), including, but not limited to,
a registration statement pursuant to demand registration rights granted
by the Company to Persons other than the Holders, at any time on or prior
to the eighth anniversary of the Effective Date, then the Company shall
give written notice of such proposed filing to the Holders at least 15
days before the anticipated filing date, and such notice shall offer the
Holders the opportunity to register such amount of Registrable Securities
as each such Holder may request. The Company shall use its reasonable
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the inclusion therein of any Registrable
Securities the Holders of which request, within 10 days after receiving
written notice of the proposed filing from the Company, such inclusion,
on the same terms and conditions as any similar securities of the Company
so included. Any Holder's request for such inclusion may be withdrawn,
in whole or in part, at any time prior to five days prior to the
effective date of the registration statement for such offering. The
Company shall be under no obligation to complete any offering of its
securities it proposes to make under this SECTION 4 and shall incur no
liability to any Holder for its failure to do so except for any
obligation it may have under SECTION 3(B) hereof.
(b) CUT-BACKS. Notwithstanding the provisions of SECTION
4(A) hereof, if the managing underwriter or underwriters of a proposed
underwritten offering as described in such SECTION 4(A) advise in writing
the Holders requesting inclusion of their Registrable Securities that the
total amount or kind of securities that they and any other Persons seek
to include in such offering would materially and adversely affect the
success of such offering, then the amount or kind of securities,
including Registrable Securities, to be offered for the accounts of
Holders and of Persons exercising piggyback registration rights pursuant
to written agreements with the Company shall be reduced PRO RATA to the
extent necessary to reduce the total amount of securities, including
Registrable Securities, to be included in such offering to that
recommended by such managing underwriter or underwriters (which amount
may be zero).
5. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON SALES BY HOLDERS OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, each
Holder of Registrable Securities that is timely notified in writing by
the managing underwriter or underwriters of any equity securities or
securities convertible into or exchangeable for equity securities being
registered in an underwritten offering (other than pursuant to an
employee stock option, stock purchase, stock bonus or similar plan, or
dividend reinvestment plan pursuant to a merger, exchange offer or a
transaction of the specified in Rule 145(a) under the Securities Act or
pursuant to a "shelf" registration), shall not effect any sale or
distribution (including a sale pursuant to Rule 144) of any Registrable
Securities that are similar to any such securities or any Registrable
Securities convertible into or exchangeable or exercisable for any such
securities, during the 10-day period prior to, and during the 90-day
period beginning on, the effective date of the applicable registration
statement, except as part of such registration, without the prior written
consent of such underwriters.
(b) RESTRICTIONS ON SALES BY THE COMPANY. The Company
shall not effect any sale of any securities of the Company similar to any
Registrable Securities being offered in an underwritten offering under a
registration statement filed pursuant to SECTION 3 hereof or any
securities of the Company convertible into or exchangeable or exercisable
for any such Registrable Securities, during the 10-day period prior to,
and during the 90-day period beginning on, the effective date of such a
registration statement, except pursuant to an employee stock option,
stock purchase, stock bonus or similar plan or dividend reinvestment plan
or pursuant to a merger, exchange offer or a transaction specified in
Rule 145(a) under the Securities Act.
6. REGISTRATION PROCEDURES.
(a) COMPANY PROCEDURES. Whenever the Company is required
by this Agreement to effect the registration of any Registrable
Securities under the Securities Act pursuant to a registration statement,
the Company shall use its best efforts to effect each such registration
to permit the sale of such Registrable Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto
the Company shall, as soon as practicable:
(i) prepare and file with the Commission the
requisite registration statement to effect such registration and
thereafter use its best efforts to cause such registration statement to
be declared effective as soon as practicable and to remain continuously
effective for the time period required by this Agreement to the extent
permitted under the Securities Act, PROVIDED that as soon as practicable
but in no event later than three Business Days before filing such
registration statement, any related prospectus or any amendment or
supplement thereto, other than any amendment or supplement made solely as
a result of incorporation by reference of documents filed with the
Commission subsequent to the filing of such registration statement, the
Company shall furnish to the Holders of the Registrable Securities
covered by such registration statement and the underwriters, if any,
copies of all such documents proposed to be filed; the Company shall not
file any registration statement or amendment thereto or any prospectus or
any supplement thereto (other than any amendment or supplement made
solely as a result of incorporation by reference of documents filed with
the Commission subsequent to the filing of such registration statement)
to which the managing underwriters of the applicable offering, if any, or
the Majority Registered Holders shall have reasonably objected in writing
within two Business Days after receipt of such documents to the effect
that such registration statement or amendment thereto or prospectus or
supplement thereto does not comply in all material respects with the
requirements of the Securities Act (PROVIDED that the foregoing shall not
limit the right of any Holder whose Registrable Securities are covered by
a registration statement to reasonably object within two Business Days
after receipt of such documents, to any particular information that is to
be contained in such registration statement, amendment, prospectus or
supplement and relates specifically to such Holder, including, without
limitation, any information describing the manner in which such Holder
acquired such Registrable Securities and the intended method or methods
of distribution of such Registrable Securities), and if the Company is
unable to file any such document due to the objections of such
underwriters or such Holders, the Company shall use its best efforts to
cooperate with such underwriters and Holders to prepare, as soon as
practicable, a document that is responsive in all material respects to
the reasonable objections of such underwriters and Holders;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to such registration statement
as may be necessary to keep such registration statement continuously
effective and current for the period required by this Agreement to the
extent permitted under the Securities Act; and cause each related
prospectus to be supplemented by any prospectus supplement as may be
required, and as so supplemented to be filed pursuant to Rule 424; and
otherwise comply with the provisions of the Securities Act as may be
necessary to facilitate the disposition of all Registrable Securities
covered by such registration statement during the applicable period in
accordance with the intended method or methods of disposition by the
selling Holders thereof set forth in such registration statement or such
prospectus or prospectus supplement.
(iii) notify the Holders and the managing
underwriters, if any, of the applicable offering (providing, if requested
by any such Persons, confirmation in writing) as soon as practicable
after becoming aware of: (A) the filing of any prospectus or prospectus
supplement or the filing or effectiveness (or anticipated date of
effectiveness) of such registration statement or any post-effective
amendment thereto; (B) any request by the Commission for amendments or
supplements to such registration statement or the related prospectus or
for additional information; (C) 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; (D) the receipt by
the Company of any notification with respect to the suspension of the
qualification or registration (or exemption therefrom) of any Registrable
Securities for sale in any jurisdiction in the United States or the
initiation or threatening of any proceeding for such purposes; or (E) the
happening of any event that makes any statement made in such registration
statement or in any related prospectus, prospectus supplement, amendment
or document incorporated therein by reference untrue in any material
respect or that requires the making of any changes in such registration
statement or in any such prospectus, supplement, amendment or other such
document so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus
in the light of the circumstances under which they were made) not
misleading;
(iv) make every reasonable effort to obtain the
withdrawal of any order or other action suspending the effectiveness of
any such registration statement or suspending the qualification or
registration (or exemption therefrom) of the Registrable Securities for
sale in any jurisdiction;
(v) if reasonably requested by the managing
underwriters, if any, of the applicable offering, or by the Majority
Registered Holders, as soon as practicable incorporate in a prospectus
supplement or post-effective amendment such information as such
underwriters or the Majority Registered Holders, as the case may be,
agree should be included therein relating to the sale and offering of the
applicable Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being
sold to any underwriters, the purchase price being paid therefor by any
such underwriters and any other terms of the offering of the Registrable
Securities; and make all required filings of such prospectus supplement
or post-effective amendment as soon as practicable following receipt of
notice of the matters to be incorporated therein;
(vi) as soon as practicable after filing such
documents with the Commission, furnish to the Holders and each of the
underwriters, if any, without charge, at least one manually signed or
conformed copy of such registration statement and any post-effective
amendment thereto, including financial statements and schedules; and as
soon as practicable after the request of any Holder or underwriter,
furnish to such Holder or underwriter, as the case may be, at least one
copy of any document incorporated by reference in such registration
statement or in any related prospectus, prospectus supplement or
amendment, together with all exhibits thereto (including those previously
furnished or incorporated by reference);
(vii) deliver to the Holders and to each of the
underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; subject to
SECTION 6(B)(I) hereof, the Company consents to the use of any such
prospectus or any amendment or supplement thereto by the Holders and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by any such prospectus or any amendment or
supplement thereto;
(viii) use its best efforts to register or qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be,
required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any
such states or jurisdiction or to subject itself to taxation in any such
jurisdiction or to consent to any material condition which is not
reasonable in the judgment of the Board of Directors of the Company;
(ix) cooperate with Holders participating in such
registration and the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable
Securities to be sold; and enable such Registrable Securities to be in
such denominations and registered in such names as the underwriters, if
any, may request as provided in the underwriting agreement;
(x) as soon as practicable after the occurrence of
any event described in SECTION 6(A)(III)(E) hereof, prepare a supplement
or post-effective amendment to such registration statement or to the
related prospectus or any document incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, such
prospectus shall not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading; if any event described in SECTION 6(A)(III)(B) hereof
occurs, use its best efforts to cooperate with the Commission to prepare,
as soon as practicable, any amendment or supplement to such registration
statement or such related prospectus and any other additional
information, or to take other action that may have been requested by the
Commission;
(xi) use its best efforts to cause all Common Stock
constituting Registrable Securities covered by such registration
statement to be listed on each securities exchange (or quotation system
operated by a national securities association) on which the Common Stock
of the Company is then listed (or included), if so requested by the
Majority Registered Holders or the underwriters, if any, and enter into
customary agreements including, if necessary, a listing application in
customary form, and provide a transfer agent for such Registrable
Securities no later than the effective date of such registration
statement; use its best efforts to cause any other Registrable Securities
covered by such registration statement to be listed (or included) on each
securities exchange (or quotation system operated by a national
securities association) on which securities of the same class and series,
if any, are then listed (or included) (or on any exchange or quotation
system on which any Person other than a Holder shall have the right to
have securities of the same class and series, if any, listed or
included), if so requested by the Majority Registered Holders or the
underwriters, if any, and enter into customary agreements including, if
necessary, a listing application in customary form, and, if necessary,
provide a transfer agent for such securities no later than the effective
date of such registration statement;
(xii) provide a CUSIP number for the Registrable
Securities no later than the effective date of such registration
statement;
(xiii) enter into customary agreements
(including, in the case of an underwritten offering, an underwriting
agreement in customary form with the managing underwriters with respect
to issuers of similar market capitalization and reporting and financial
histories) and take all such other reasonable actions in connection
therewith in order to expedite or facilitate the disposition of the
Registrable Securities included in such registration statement and, in
the case of an underwritten offering: (A) make representations and
warranties to each of the underwriters, in such form, substance and scope
as are customarily made to the managing underwriters by issuers of
similar market capitalization and reporting and financial histories and
confirm the same to the extent customary if and when requested; (B)
obtain opinions of counsel to the Company and updates thereof addressed
to each Holder of Registrable Securities participating in such offering
and to each of the underwriters, such opinions and updates to be in
customary form and covering the matters customarily covered in opinions
obtained in underwritten offerings by the managing underwriters for
issuers of similar market capitalization and reporting and financial
histories; (C) obtain "comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to each
Holder of Registrable Securities participating in such offering and to
each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "comfort" letters to
the managing underwriters in connection with underwritten offerings by
them for issuers of similar market capitalization and reporting and
financial histories; (D) provide, in the underwriting agreement to be
entered into in connection with such offering, indemnification in such
form, substance and scope as are customarily provided by issuers of
similar market capitalizations and reporting and financial histories; and
(E) deliver such customary documents and certificates as may be
reasonably requested by the Majority Registered Holders and the managing
underwriters to evidence compliance with clause (A) of this paragraph
(xiv) and with any customary conditions contained in the underwriting
agreement entered into by the Company in connection with such offering;
(xiv) in the case of any non-underwritten offering:
(A) obtain an opinion of counsel to the Company at the time of the sale
of Registrable Securities covered by such registration statement)
addressed to each Holder of any Registrable Securities covered by such
registration statement, covering matters that are no more extensive in
scope than would be customarily covered in opinions obtained in
underwritten offerings by issuers with similar market capitalization and
reporting and financial histories; (B) obtain a "comfort" letter from the
Company's independent certified public accountants at the time of sale of
Registrable Securities covered by such registration statement and, upon
the request of the Majority Registered Holders, updates thereof, in each
case addressed to each Holder of Registrable Securities participating in
such offering and covering matters that are no more extensive in scope
than would be customarily covered in "comfort" letters and updates
obtained in underwritten offerings by issuers with similar market
capitalization and reporting and financial histories; and (C) deliver a
certificate of a senior executive officer of the Company at the time of
sale of Registrable Securities covered by such registration statement
such certificates to cover matters no more extensive in scope than those
matters customarily covered in officers' certificates delivered in
connection with underwritten offerings by issuers with similar market
capitalization and reporting and financial histories;
(xv) make available, for inspection by the Holders
of the Registrable Securities included in such registration, any
underwriter participating in any disposition of Registrable Securities
pursuant to such registration statement, and any attorney, accountant or
other representative retained by such selling Holders or by any such
underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such underwriter, attorney, accountant or
other representative in connection with such registration;
(xvi) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission relating to such
registration and the distribution of the securities being offered
(including, without limitation, Rule 10b-6 and make generally available
to its security holders earning statements satisfying the provisions of
SECTION 11 (A) of the Securities Act, no later than as provided in the
underwriting agreement in an underwritten offering, or, if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of
such registration statement, which earning statements shall cover the 12-
month periods thereafter;
(xvii) cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc. and
in the performance of any customary or required due diligence
investigation by any underwriter; and
(xviii) use its best efforts to take all other
reasonable steps necessary and appropriate to effect such registration in
the manner contemplated by this Agreement.
(b) FURNISHED INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action pursuant
to this Agreement that the selling Holders shall furnish to the Company
such information regarding themselves or the Registrable Securities held
by them, and the intended method of disposition of such securities as
shall be required to effect the registration of their Registrable
Securities.
(c) HOLDER PROCEDURES.
(i) Each Holder agrees that upon receipt of any
notice from the Company of the happening of any event described in
SECTION 6(A) paragraphs (iii)(B), (iii)(C), (iii)(D) or (iii)(E) hereof,
such Holder shall forthwith discontinue disposition of any Registrable
Securities (but, in the case of an event described in SECTION
6(A)(III)(D), in the affected jurisdiction or jurisdictions only) covered
by the affected registration statement or prospectus until such Holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by SECTION 6(A) paragraphs (iii) or (xi) hereof or until
such Holder is (it being agreed by the Company that the underwriters, if
any, shall also be) advised in writing (the "Advice") by the Company that
the use of the applicable prospectus may be resumed. If the Company
shall have given any such notice during a period when a Demand
Registration is in effect, the four-month period mentioned in SECTION
3(B) hereof, shall be extended by the number of days from and including
the date of the giving of such notice to and including the date when each
Holder of Registrable Securities included in such Registration shall have
received the copies of the supplemented or amended prospectus
contemplated by SECTION 6(A) paragraphs (iii) or (xi) hereof or the
Advice, as the case may be.
(ii) In connection with any underwritten public
offering of Registrable Securities pursuant to a Demand Registration, the
managing underwriter of such offering shall be an investment banking firm
selected by the Majority Registered Holders and shall be reasonably
acceptable to the Company.
7. REGISTRATION EXPENSES. All expenses incident to the
Company's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees
and disbursements of counsel in connection with blue sky qualifications
or registrations (or the obtaining of exemptions therefrom) of the
Registrable Securities), printing expenses (including expenses of
printing prospectuses), messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees of the Company performing legal or accounting
duties), fees and disbursements of its counsel and its independent
certified public accountants (including the expenses of any special audit
or "comfort" letters required by or incident to such performance or
compliance), securities acts liability insurance (if the Company elects
to obtain such insurance), reasonable fees and expenses of any special
experts retained by the Company in connection with any registration
hereunder, reasonable fees and expenses of other Persons retained by the
Company, reasonable fees and expenses of one counsel for the Holders,
selected by the Majority Registered Holders, incurred in connection with
each registration hereunder (all such expenses being herein referred to
as "Registration Expenses"), shall be borne by the Company; PROVIDED that
Registration Expenses shall not include any underwriting discounts,
commissions or fees attributable to the sale of the Registrable
Securities, PROVIDED, FURTHER, that the Company shall not be required to
pay for any expenses of any registration proceeding begun pursuant to
SECTION 3 if the registration request is subsequently withdrawn at any
time at the request of the Majority Registered Holders (in which case all
participating Holders shall bear such expenses), unless the Majority
Registered Holders agree to forfeit their right to one Demand
Registration pursuant to SECTION 3.
8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event any
Registrable Securities are included in a registration statement under
this Agreement, the Company shall indemnify, to the full extent permitted
by law, each Holder of Registrable Securities, its officers, directors,
employees and agents, each Person who controls such Holder (within the
meaning of the Securities Act) and any investment adviser thereof or
agent therefor, against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and legal expenses)
arising out of or based upon any untrue of alleged untrue statement of a
material fact contained in any registration statement covering any
Registrable Securities, any related prospectus or any amendment or
supplement thereto, or any omission or alleged omission to state in any
thereof a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus or prospectus
supplement, in light of the circumstances under which they were made) not
misleading unless such untrue statement or alleged untrue statement or
omission or alleged omission was contained in a preliminary prospectus
and corrected in a final or amended prospectus and the seller failed to
deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the Registrable Securities to the persons
asserting any such loss, claim, damage or liability in the case where
such delivery by the selling Holder is required by the Securities Act,
except in each case insofar, but only insofar, as the same arises out of
or is based upon an untrue statement or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact
in such registration statement, prospectus, preliminary prospectus,
amendment or supplement, as the case may be, made or omitted, as the case
may be, in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use therein;
PROVIDED, HOWEVER, that in no event shall the disability of any holder
for indemnification under this SECTION 8(B) exceed the proceeds received
by such holder from the sale of Registrable Securities under the
applicable registration statement. This indemnity is in addition to any
liability that the Company may otherwise have. The Company shall also
indemnify any underwriters of the Registrable Securities, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution and their officers and directors and
each Person who controls such underwriters or other Persons (within the
meaning of the Securities Act) to the extent provided in the, applicable
underwriting agreement.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES.
In connection with any registration statement covering Registrable
Securities, each Holder any of whose Registrable Securities are covered
thereby shall furnish to the Company in writing such information and
affidavits with respect to such Holder as the Company reasonably requests
for use in connection with such registration statement, any related
prospectus or preliminary prospectus, or any amendment or supplement
thereto, and shall indemnify, to the full extent permitted by law, the
Company, the Company's directors, officers, employees and agents, each
Person who controls the Company (within the meaning of the Securities
Act) and any investment adviser thereof or agent therefor against all
losses, claims, damages, liabilities costs of investigation and legal
expenses) using out of or based upon any untrue or alleged untrue
statement of a material fact contained in any registration statement
covering any Registrable Securities, any related prospectus or
preliminary prospectus, or any amendment or supplement thereto, or any
omission or alleged omission to state in any thereof a material fact
required to be stated therein or necessary to make the statements therein
(in the case of a prospectus or prospectus supplement, in light of the
circumstances under which they were made) not misleading, in each case to
the extent, but only to the extent, that the same arises out of or is
based upon an untrue statement or alleged untrue statement of a material
fact or an omission or alleged omission to state a material fact in such
registration statement or in such related prospectus, preliminary
prospectus, amendment or supplement, as the case may be, made or omitted,
as the case may be, in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly for use
therein; PROVIDED, HOWEVER, that in no event shall the liability of any
Holder for indemnification under this SECTION 8(B) exceed the proceeds
received by such Holder from the sale of Registrable Securities under the
applicable registration statement. This indemnity is in addition to any
liability that a Holder may otherwise have. Each Holder participating in
an offering of Registrable Securities shall, if requested by the managing
underwriter or underwriters of such offering, also indemnify any
underwriters of such Registrable Securities, selling brokers, dealer
managers and similar securities industry professionals participating in
the distribution of such Registrable Securities and their officers and
directors and each Person who controls such underwriters or other Persons
(within the meaning of the Securities Act) to the extent provided in the
applicable underwriting agreement.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification under this SECTION 8 agrees to give prompt
written notice to the indemnifying party after the receipt by such Person
of any written notice of the commencement of any action, suit, proceeding
or investigation or threat thereof made in writing for which such Person
will claim indemnification or contribution pursuant to this Agreement and
the indemnifying party shall have the right to participate in, and,
unless in the reasonable judgment of such indemnified party a conflict of
interest may exist between such indemnified party and the indemnifying
party with respect to such claim, permit the indemnifying party to assume
the defense of such claim with counsel reasonably and mutually
satisfactory to the parties. If the indemnifying party is not entitled
to, or elects not to, assume the defense of a claim, it shall not be
obligated to pay the reasonable fees and expenses of more than one
counsel with respect to such claim, unless in the reasonable judgment of
counsel to such indemnified party, expressed in a writing delivered to
the indemnifying party, a conflict of interest may exist between such
indemnified party and any other indemnified party with respect to such
claim, in which event the indemnifying party shall be obligated to pay
the reasonable fees and expenses of such additional counsel or counsels
(which shall be limited to one counsel per indemnified party). The
indemnifying party shall not be subject to any liability for any
settlement made without its consent, which consent shall not be
unreasonably withheld. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party
under this SECTION 8 to the extent of such prejudice.
(d) CONTRIBUTION.
(i) If the indemnification provided for in this
SECTION 8 from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations; PROVIDED, HOWEVER, that in no event shall the
liability of any Holder for contribution under this SECTION 8(D) exceed
the. proceeds received by such Holder from the sale of Registrable
Securities under the applicable registration statement. The relative
fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party
or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in SECTION 8(C) hereof, any
legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this SECTION 8(D) were
determined by PRO RATA allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
the immediately preceding paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.
(iii) If indemnification is available under this
SECTION 8, the indemnifying parties shall indemnify each indemnified
party to the full extent provided in SECTION 8(A) and SECTION 8(B) hereof
without regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration provided for in
this SECTION 8(D).
9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Person may participate in any underwritten registration
hereunder unless such Person (a) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements, (b) completes
and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements and (c) agrees to pay such
Person's PRO RATA portion of all underwriting discounts and commissions.
10. COOPERATION WITH THE COMPANY.
Each Holder by the acceptance of Registrable Securities
agrees to use its best efforts to cooperate with the Company in all
reasonable respects in connection with the preparation and filing of
Registrations hereunder in which such Registrable Securities are included
or requested to be included.
11. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company shall not
hereafter enter into any agreement with respect to any of its securities
that contains provisions more favorable in any material respect to the
holders thereof than the provisions contained in this Agreement without
providing for the granting of comparable rights to the Holders in this
Agreement or that contains provisions that conflict with the provisions
hereof in any material respect. TCW Special Credits, for itself and on
behalf of the Shareholders, hereby acknowledges and agrees, however, that
the Company may grant to other Persons registration rights, and that if
such registration rights are granted, except as otherwise specifically
provided herein, the registration rights granted to such Persons shall be
PARI PASSU with the registration rights of the Holders as provided
herein.
(b) REMEDIES. Each Holder of Registrable Securities, in
addition to being entitled to exercise ail rights in an action at law,
including recovery of damages, shall be entitled to specific performance
of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate confirmation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(c) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the company shall have obtained the prior
written consent of (i) the Holders of a majority of the securities then
constituting Registrable Securities and (ii) each Holder materially and
adversely affected by such amendment, modification, supplement, waiver or
departure.
(d) NOTICES. All notices, requests, waivers, releases,
consents, and other communications required or permitted by this
Agreement (collectively, "Notices") shall be in writing. Notices shall
be deemed sufficiently given for all purposes under this Agreement when
delivered in person, when dispatched by telegram or (upon written
confirmation of receipt) by electronic facsimile transmission or (upon
written confirmation of receipt), when dispatched by a nationally
recognized overnight courier service, or five Business Days after being
deposited in the mail, postage prepaid, if mailed. All Notices shall be
delivered as follows:
(i) if to a Holder of Registrable Securities, at the
address indicated on Company's registrar relating to such securities or
at such other address as such Holder may have furnished to the Company in
writing; and
(ii)if to the Company, at:
Xxxxx Equities, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
with a copy to:
Xxxxxxx X. XxXxxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx.
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each
of the parties hereto, including any successors by merger to the Company.
(f) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(g) HEADINGS; CONSTRUCTION. The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. Unless the context otherwise
requires, all references to Sections are to Sections of this Agreement,
"or" is inclusively disjunctive, and words in the singular include the
plural and VICE VERSA. In computing any period of time specified in this
Agreement, the date of the act or event from which such period of time is
to be measured shall be included, any such period shall expire at 5:00
p.m., New York City time, on the last day of such period, and any such
period denominated in months shall expire on the date in the last month
of such period that has the same numerical designation as the date of the
act or event from which such period is to be measured; PROVIDED, HOWEVER,
that if there is no date in the last month of such period that has the
same numerical designation as the date of such act or event, such period
shall expire on the last day of the last month of such period.
(h) CERTAIN ADJUSTMENTS. Notwithstanding anything to the
contrary contained in this Agreement, the Board of Directors of the
Company may make or provide for such adjustments in the numbers of shares
of Common Stock or other Registrable Securities specified in any other
provision of this Agreement specifying a number or percentage of
Registrable Securities, as the Board may determine after consultation
with TCW Special Credits on behalf of the Shareholders (or, if TCW
Special Credits and the Shareholders are no longer Holders, Holders
holding a majority of the securities then constituting Registrable
Securities), is equitably required to prevent diminution or enlargement
of the rights of Holders that otherwise would result from any stock
dividend, stock split, combination of shares, recapitalization, or other
similar change in the capital structure of the Company.
(i) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of
Florida, without regard to the principles of conflicts of laws thereof.
(j) SEVERABILITY. If one or more of ft provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect, for any reason, the
validity, legality and enforceability of the remaining provisions
contained herein shall not be in any way affected or impaired thereby,
and the provision held to be invalid, illegal or unenforceable shall be
reformed to the minimum extent necessary, and in a manner as consistent
with the purposes thereof as is practicable, so as to render it valid,
legal and enforceable, it being intended that all of the rights and
privileges of the Holders hereunder shall be enforceable to the fullest
extent permitted by law.
(k) AGREEMENT. This Agreement is intended by the Company
and TCW Special Credits to be a final expression thereof and is intended
to be a complete and exclusive statement of the agreement and
understanding of the Company and TCW Special Credits, for itself and on
behalf of the Shareholders, in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the Company and
any Holders with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
XXXXX EQUITIES, INC.
By:________________________________
Name:
Title:
TCW SPECIAL CREDITS, a California
general partnership, for itself and on
behalf of the Shareholders (as defined
herein)
By: TCW ASSET MANAGEMENT COMPANY, its managing
general partner
By:________________________________
Name:
Title:
___________________________________
Name:
Title:
