REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of June 30,
2004 (the "Effective Date"), by and between AssuranceAmerica Corporation, a
Nevada corporation (the "Company"), and certain holders of the Series A
Convertible Preferred Stock (the "Series A Preferred Stock") of the Company as
set forth on Schedule I hereto.
WHEREAS, certain shareholders of the Company have acquired shares of
Series A Preferred Stock; and
WHEREAS, the Company has agreed to grant to such shareholders the rights
and benefits provided herein.
NOW THEREFORE, for and in consideration of the covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
(b) "Common Stock" shall mean the Company's $0.01 par value common
stock or such other voting equity securities of the Company or any
successor thereto as the holders of Common Stock shall receive or be
entitled to receive as a result of any recapitalization, merger or
combination, or other like transaction affecting the Company or its
securities.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations
of the Commission issued under such Act, as they each may, from time to
time, be in effect.
(d) "Holder" shall mean each shareholder listed on Schedule I hereto
so long as such shareholder holds at least 25% of the Shares originally
purchased by such shareholder and any transferee of such shareholder so
long as such transferee holds at least 1% of the outstanding capital stock
of the Company and provided such transferee agrees in writing with the
Company to hold such stock subject to all the restrictions of this
Agreement. Additional Holders (other than any such transferee) may be
added as parties hereto only with the written consent of the Company by
execution of a counterpart signature page hereto.
(e) "Registrable Securities" shall mean (i) the shares of Common
Stock issued or issuable upon conversion of the Shares as provided in the
Company's Articles of Incorporation, as hereafter amended, and, and (ii)
any securities issued as a dividend or other distribution with respect to,
or in exchange or in replacement of, the securities referred to in
subsection (k).
(f) "Registration Expenses" shall mean all expenses (except for
"Selling Expenses" as defined below) incurred by the Company in complying
with Sections 2 or 3 of this Agreement, including, without limitation, all
registration and filing fees, printing
expenses, road show expenses, fees and disbursements of counsel for the
Company and, the fees and disbursements of one counsel for the selling
Holders.
(g) The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a Registration
Statement under the Securities Act, and the declaration or ordering of the
effectiveness of such Registration Statement.
(h) "Registration Statement" shall mean a registration statement on
Form S-1 or Form S-3 (or successor form) filed by the Company with the
Commission for a public offering and sale of securities of the Company.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the Commission issued under such Act, as they each may, from time to time,
be in effect.
(j) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities
pursuant to Sections 2 or 3.
(k) "Shares" shall mean the shares of Series A Convertible Stock of
the Company outstanding on the date hereof.
2. Required Registrations.
(a) If at any time prior to three years following the Effective
Date, the Company shall be requested in writing by the Holder(s) of at
least 50% of the outstanding shares of Registrable Securities to effect
the registration under the Securities Act of outstanding shares of
Registrable Securities having an anticipated selling price (i.e.,
aggregate gross proceeds) of no less than $5,000,000, the Company shall
promptly give written notice of such proposed registration to all record
Holders of Registrable Securities. Such Holders shall have the right, by
giving written notice to the Company within 30 days from receipt of the
Company's notice, to elect to include in such registration such of their
Registrable Securities as such Holders may request in such notice of
election. Thereupon, the Company shall, as expeditiously as practicable,
use its best efforts to effect the registration, on a form of general use
under the Securities Act, of all shares of Registrable Securities which
the Company has been requested to register. The Company shall not be
obligated to cause to become effective more than one registration
statement pursuant to which Registrable Securities are sold under this
Section 2(a).
Notwithstanding the foregoing, if the Company shall furnish to the
Holders of Registrable Securities requesting registration pursuant to this
Section 2(a) a certificate signed by the President of the Company stating
that the Board has made the good faith judgment that it would be
materially detrimental to the Company and its stockholders for such
registration statement to become effective or to remain effective as long
as such registration statement would otherwise be required to remain
effective because such action (x) would materially interfere with a
significant acquisition, corporate reorganization or other similar
transaction involving the Company, (y) would require premature disclosure
of material information that the Company has a bona fide business purpose
for preserving as confidential or (z) would render the Company unable to
comply with requirements under the Securities Act or Exchange Act, the
Company shall have the right to defer taking action with respect to such
filing for a period of not more than ninety
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(90) days after receipt of the request of the Holders; provided, however,
that the Company may not utilize this right more than once in any
twelve-month period and provided further that the Company shall not
register any securities for the account of itself or any other stockholder
during such ninety (90) day period other than a registration relating
solely to employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction or any Rule adopted by the Commission in
substitution therefor or in amendment thereto, or a registration on any
registration form which does not include substantially the same
information as would be required to be included in a Registration
Statement covering the sale of Registrable Securities.
(b) The Company may include in a registration requested under this
Section 2: (i) any authorized but unissued shares of Common Stock for sale
by the Company, and (ii) any shares of its Common Stock held by employees,
consultants, directors or other advisers of the Company and with respect
to which registration rights have been granted by the Company ("Management
Stock"); provided, however, that such shares shall not be included to the
extent that the underwriter of the shares so proposed to be registered (if
the offering is underwritten) or, if the offering is not underwritten, the
Holders of a majority of the shares of Registrable Securities included
therein determine in good faith that the inclusion of such shares will
interfere with the successful marketing of the shares of Registrable
Securities to be included therein. If the offering to which a Registration
Statement under this Section 2 relates is an underwritten offering, and
if, after all shares of Common Stock proposed to be offered by the Company
and all such shares of Management Stock have been excluded from such
registration, a greater number of shares of Registrable Securities is
offered for participation in such underwriting than in the opinion of the
managing underwriter can be accommodated without adversely affecting the
underwriting, the amount of Registrable Securities proposed to be offered
in the underwriting shall be reduced, pro-rata (based upon the amount of
Registrable Securities owned) among all Holders participating in such
registration, to a number deemed satisfactory by the managing underwriter.
3. Incidental Registrations.
(a) If at any time or from time to time (but prior to the expiration
of three years from the Effective Date) the Company shall determine to
register any of its Common Stock, for its own account or for the account
of any of its shareholders (other than the Holders), other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction or any Rule adopted
by the Commission in substitution therefor or in amendment thereto, or a
registration on any registration form which does not include substantially
the same information as would be required to be included in a Registration
Statement covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such
securities under the applicable Blue Sky or other state
securities laws); and
(ii) include in such registration (and any related
qualification under Blue Sky laws or other compliance),
and in any underwriting involved therein, all of the
Registrable Securities and Management Stock specified in
a written request or requests
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received by the Company within twenty (20) days after
the giving of such written notice by the Company, by any
Holder or Holders, subject to the limitations set forth
in Section 3(b).
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwritten public offering, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(a)(i). All Holders proposing to include their
securities in such underwritten public offering shall (together with the
Company and the other Holders distributing their securities through such
underwritten public offering) enter into an underwriting agreement in form
reasonably acceptable to such Holders with the underwriter or underwriters
selected for such underwritten public offering by the Company.
Notwithstanding any other provision of this Section 3, if the underwriter
determines in good faith that marketing factors require a limitation of
the number of shares to be underwritten, all shares to be sold by the
Company shall be included in such offering before any Registrable
Securities are so included, and further, the underwriter otherwise may
limit the number of Registrable Securities to be included in the
registration and underwritten public offering. The Company shall so advise
all Holders of such limitation (except those Holders who have not elected
to distribute any of their Registrable Securities through such
underwritten public offering), and the number of shares of Registrable
Securities and shares of Management Stock that may be included in the
registration and underwritten public offering shall be allocated first
among such Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities owned by such Holders at the
time of filing the Registration Statement, and second to the holders of
Management Stock. No Registrable Securities or shares of Management Stock
excluded from the underwritten public offering by reason of the
underwriter's marketing limitation shall be included in such registration.
If the terms of any such underwritten public offering differ materially
from the terms (including range of offering price) previously communicated
to any Holder, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, which notice, to be effective,
must be received by the Company at least two (2) business days before the
anticipated effective date of the Registration Statement. The Registrable
Securities and/or other securities so withdrawn from such underwritten
public offering shall also be withdrawn from such registration; provided,
however, that if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other selling Holders may
be included in such registration (up to the maximum of any limitation
imposed by the underwriters) then the Company shall include in such
registration in place of such withdrawn Registrable Securities such
additional Registrable Securities held by other selling Holders whose
Registrable Securities were excluded pursuant to limitation by the
underwriter pursuant to this Section 3(b) in the same proportion as such
Registrable Securities were excluded pursuant to such underwriter
limitation (with no more Registrable Securities being so included than
were withdrawn). In the event that the contemplated sale does not involve
an underwritten public offering and a determination that the inclusion of
the Registrable Securities adversely affects the marketing of the shares
shall be made by the Board of Directors of the Company in its good faith
discretion, then no Registrable Securities are required hereby to be
included in the contemplated sale.
(c) The Company may at any time withdraw or abandon any Registration
Statement which triggers the provisions of this Section 3 without any
liability to the Holders.
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4. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification and compliance hereunder shall
be paid by the Company. All Selling Expenses incurred in connection with any
such registration shall be paid by the selling Holders on a pro rata basis. If,
notwithstanding this Agreement, applicable authorities in any state wherein
Registrable Securities are to be sold require an allocation of Registration
Expenses, each Holder agrees to pay its apportioned share thereof.
5. Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities, and use its best efforts in
good faith to cause such Registration Statement to become and remain
effective as provided herein;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus included in
such Registration Statement as may be necessary or advisable to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement or as may be
necessary to keep such Registration Statement effective and current, but
for no longer than six (6) months subsequent to the effective date of such
registration;
(c) furnish to each selling Holder such number of copies of such
Registration Statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such
other documents as any such selling Holder may reasonably request in order
to facilitate the disposition of the Registrable Securities held by such
selling Holder;
(d) enter into such customary agreements and take all such other
action in connection therewith as any selling Holder may reasonably
request in order to expedite or facilitate the disposition of such
Registrable Securities;
(e) use its best efforts in good faith to register and qualify the
Registrable Securities covered by such Registration Statement under such
securities or Blue Sky laws of such jurisdictions as any selling Holder on
behalf of itself or any other selling Holder shall reasonably request and
do any and all such other acts and things as may be reasonably necessary
or advisable to enable such selling Holder to consummate the disposition
in such jurisdictions of the Registrable Securities held by such selling
Holder; provided, however, that the Company shall not be required in
connection therewith to qualify to do business or file a general consent
to service of process in any such jurisdiction unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act nor shall the Company be required to take
any position or change in accounting methods in order to effect such
registration if the Board of Directors determines in good faith that the
same would be materially detrimental to the Company;
(f) furnish, at the request of any Holder of Registrable Securities,
on the date that such shares of Registrable Securities are delivered to
the underwriters for sale pur-
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suant to such registration or, if such Registrable Securities are not
being sold through underwriters, on the date that the registration
statement with respect to such shares of Registrable Securities becomes
effective, (1) an opinion, dated such date, of the counsel representing
the Company for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Securities are not being
sold through underwriters, then to the Holders making such request, in
customary form and covering matters of the type customarily covered in
such legal opinions; and (2) a comfort letter dated such date, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and if such Registrable Securities are not being
sold through underwriters, then to the Holder making such request and, if
such accountants refuse to deliver such letter to such Holder, then to the
Company, in a customary form and covering matters of the type customarily
covered by such comfort letters and as the underwriters or such Holder
shall reasonably request;
(g) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than
eighteen (18) months after the effective date of the Registration
Statement, an earnings statement covering the period of at least twelve
(12) months beginning with the first full month after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(h) cooperate reasonably with any managing underwriter to effect the
sale of Registrable Securities, including but not limited to attendance of
the Company's executive officers at any planned "road show" presentations
to the extent that such attendance does not unduly impact the performance
of such officer's duties;
(i) notify the Holders and the underwriter(s), if any, at any time
when the offering documents include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and at the request of the Holders or any
underwriter, prepare and furnish to such person(s) such reasonable number
of copies of any amendment or supplement to the offering documents as may
be necessary so that, as thereafter delivered to the purchasers of such
Shares, such offering documents shall not include any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and to deliver to purchasers of
any other securities of the Company included in the offering copies of
such offering documents as so amended or supplemented;
(j) keep the Holders informed of the Company's best estimate of the
earliest date on which the offering documents will become effective, and
promptly notify the Holders of (A) the effectiveness of such offering
documents, (B) a request by the Commission for an amendment or supplement
to such offering documents, (C) the issuance by the Commission of an order
suspending the effectiveness of the offering documents, or of the threat
of any proceeding for that purpose, and (D) the suspension of the
qualification of any securities to be included in the offering documents
for sale in any jurisdiction or the initiation or threat of any proceeding
for that purpose;
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(k) cause all Registrable Securities registered hereunder to be
listed on each securities exchange on which similar securities issued by
the Company are then listed, if any; and
(l) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration.
Before filing any offering documents (including any documents
incorporated by reference therein), the Company shall furnish to one
counsel designated by the Holders and to the underwriter(s), if any,
copies of all such offering documents, which offering documents shall be
subject to the review of such counsel and the underwriter(s), if any, and,
where feasible, the Company shall make such changes in the offering
documents as are reasonably requested by such counsel or underwriter(s).
It shall be a condition precedent to the obligation of the Company
to take any action pursuant to this Section 5 in respect of the securities
which are to be registered at the request of any Holder that such Holder
shall furnish to the Company such information regarding the securities
held by such Holder and the intended method of disposition thereof as the
Company shall reasonably request and as shall be required in connection
with the action taken by the Company.
Notwithstanding the foregoing provisions of this Section 5, (1)
selling Holders will not (until further notice) effect sales thereof after
receipt of electronic, facsimile or written notice from the Company to
suspend sales to permit the Company to correct or update such Registration
Statement or prospectus; provided, the obligations of the Company with
respect to maintaining any Registration Statement current and effective
shall be extended by a period of days equal to the period such suspension
is in effect; and (2) at the end of any period during which the Company is
obligated to keep any Registration Statement current and effective as
provided by this Section 5, the selling Holders shall discontinue sales of
shares pursuant to such Registration Statement upon notice from the
Company of its intention to remove from registration the Registrable
Securities covered by such Registration Statement which remain unsold, and
such selling Holders shall notify the Company of the number of shares
registered which remain unsold promptly after receipt of such notice from
the Company.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Holder, each
of the officers, directors, members and partners of such Holder and each
person controlling such Holder, if Registrable Securities held by such
Holder are included in the securities with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement,
and each underwriter of such Registrable Securities, if any, and each
person who controls such underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on
(i) any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other similar document
(including any related Registration Statement, notification or the like)
incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made, or (ii) any violation by the Company of any
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federal, state or common law rule or regulation applicable to the Company
and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and will
reimburse such Holder, each of the officers, directors and partners of
such Holder, and each person controlling such Holder, such underwriter and
each person who controls such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, provided that the
Company will not be liable to a Holder or underwriter in any such case to
the extent that such claim, loss, damage, liability or expense arises out
of or is based on (i) any untrue statement or omission made in reliance
upon and in conformance with written information furnished to the Company
by or on behalf of such Holder or underwriter and which was furnished
specifically for the purpose of being used therein or (ii) a failure by
any Holder to deliver a final prospectus to its transferee if any material
change has been made to the preliminary prospectus.
(b) Each Holder will severally and not jointly, if Registrable
Securities held by such Holder are included in the securities as to which
such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by
such registration, qualification or compliance, each person who controls
the Company or such underwriter within the meaning of the Securities Act,
and each other Holder, each of the officers, directors and partners of
each such other Holder and each person controlling such other Holder,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other similar document, or any
omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made,
and will reimburse the Company, such other Holders, such directors,
officers, partners, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in
such Registration Statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder and which was
furnished specifically for the purpose of being used therein; provided,
however, that the liability of such Holder under this Section 6 shall be
limited to an amount equal to the net proceeds to such Holder of
Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party, at such party's expense,
to assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense (except for the payment of fees, costs and expenses provided for
below), and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying
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Party of its obligations under this Agreement, unless such failure to give
notice shall materially and adversely affect the Indemnifying Party's
defense of any such claim or any such litigation. No Indemnifying Party,
in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
Notwithstanding the election of the Indemnifying Party to assume the
defense of any such claim or litigation, the Indemnified Party shall have
the right to employ separate counsel and to participate in the defense of
such claim or litigation, and the Indemnifying Party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of the counsel chosen by the Indemnifying Party to represent the
Indemnified Party would present such counsel with a conflict of interest;
(ii) the defendants in, or targets of, any such claim or litigation
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it or to other Indemnified Parties which are
different from or additional to those available to the Indemnifying Party
(in which case the Indemnifying Party shall not have the right to direct
the defense of such action on behalf of the Indemnified Party); (iii) in
the exercise of the Indemnified Party's reasonable judgment, the
Indemnifying Party shall not have employed satisfactory counsel to
represent the Indemnified Party within a reasonable time after notice of
the institution of such claim or litigation; or (iv) the Indemnifying
Party shall authorize the Indemnified Party to employ separate counsel at
the expense of the Indemnifying Party. The Indemnified Party shall not
settle any such claim or litigation without the consent of the
Indemnifying Party.
(d) If the indemnification provided for in this Section 6 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 which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. 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 any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by
any other method of allocation which 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.
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7. Information by Holder. Each selling Holder shall furnish to the Company
in writing such information regarding such selling Holder and the distribution
proposed by such selling Holder as the Company may reasonably request in writing
and as shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
8. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Company's capital stock to the public without registration, at all
times after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public, the Company agrees to use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act.
9. Market "Stand-off" Agreement. The Holders shall agree not to sell or
otherwise transfer or dispose of any Common Stock (or other securities) of the
Company (other than securities of the Company acquired in the open market on or
after a public offering) held by the Holders for such period of time as
reasonably requested by the Company and the underwriter of the public offering,
which shall not exceed 180 days from the effective date thereof; provided that
such restrictions shall only apply to a Registration Statement filed with
respect to an underwritten public offering by the Company; and provided,
further, that all officers, directors and 3% Holders of the Company enter into
similar agreements. Such agreement shall be in writing in form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction.
10. Rule 144 Sales. Notwithstanding anything contained in Sections 2 or 3
to the contrary, a Holder of Registrable Securities shall not have any
registration rights pursuant to Sections 2 or 3 herein if the Company obtains an
opinion of independent counsel, reasonably satisfactory to counsel for such
Holder, that a Holder's Registrable Securities (together with any Affiliate of
such Holder with whom such Holder must aggregate its sales under Commission Rule
144) may be sold without restriction under Commission Rule 144(k) within a
ninety (90) day period.
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia and may not be amended or
modified without the prior written consent of the Company and the Holders of at
least fifty percent (50%) of the Registrable Securities. This Agreement reflects
the entire understanding of the parties hereto with respect to the subject
matter hereof. This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and same instrument. The Company
may add additional parties hereto from time to time by execution of a
counterpart signature page.
12. Equitable Relief. It is hereby acknowledged that irreparable harm
would occur in the event that any of the provisions of this Agreement were not
performed fully by the parties hereto in accordance with the terms specified
herein, and that monetary damages are an inadequate remedy for breach of this
Agreement because of the difficulty of ascertaining and quantifying the amount
of damage that will be suffered by the parties relying hereon in the event that
the undertakings and provisions contained in this Agreement were breached or
violated. Accordingly, each party hereto hereby agrees that each other party
hereto shall be entitled to an injunction or injunctions to restrain, enjoin and
prevent breaches of the undertakings and provisions hereof and to enforce
specifically the undertakings and provisions hereof in any court of the United
States or any state having jurisdiction over the matter; it being understood
that such
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remedies shall be in addition to, and not in lieu of, any other rights and
remedies available at law or in equity.
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IN WITNESS WHEREOF, the parties have hereunto affixed their hands and
seals as of the date first above written.
HOLDER: COMPANY:
Heritage Assurance Partners, L.P. AssuranceAmerica Corporation
By: Heritage Fund Advisors, LLC,
General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President and
----------------------- Chief Executive Officer
Title: Treasurer
-----------------------
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