EXHIBIT 4.5
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REGISTRATION RIGHTS AGREEMENT
Dated as of___________, 1997
By and Among
LITIGATION RESOURCES OF AMERICA, INC.,
and
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
and made as of ___________, 1997, by and among LITIGATION RESOURCES OF AMERICA,
INC., a Texas corporation having its headquarters at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and _______________________________ AND
_______________________________ (herein collectively referred to as
"Shareholders" and individually as a "Shareholder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, _______________ has been issued _______________ shares of
Common Stock, as such term is hereinafter defined (the " _______ Common Shares")
of the Company in connection with that certain
_____________________________________________ by and between _______________,
the Company, Litigation Resources of America- _______________, Inc., and
_____________________________ ;and
WHEREAS, pursuant to that certain (i) Registration Rights Agreement
dated as of January 17, 1997 by and between the Company and the Purchasers
listed on the signature pages thereto (the "Purchasers"), the Company has
granted certain demand and piggyback rights to the Purchasers (the "Pecks
Registration Rights Agreement"), (ii) Registration Rights Agreement dated as of
January 17, 1997 by and between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Company has
granted certain piggyback rights to ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "▇▇▇▇▇ Registration
Rights Agreement"), (iii) Registration Rights Agreement dated as of January 17,
1997 by and between the Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Company has granted
certain piggyback rights to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Registration Rights
Agreement"), (iv) Registration Rights Agreement dated as of May 14, 1997 by and
among the Company and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, the Company has granted
certain piggyback rights to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ (the "SFRS
Registration Rights Agreement"), (v) Registration Rights Agreement dated as of
May 19, 1997 by and among the Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
individually and as Trustees of the ▇▇▇▇▇▇▇▇▇ Family Trust, the Company has
granted certain piggyback rights to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
individually and as Trustees of the ▇▇▇▇▇▇▇▇▇ Family Trust (the "▇▇▇▇▇▇▇▇▇
Registration Rights Agreement"), (vi) Registration Rights Agreement dated as of
August 19, 1997 by and among the Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇ and Seaquestor Trust,
the Company has granted certain piggyback rights to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and Seaquestor
Trust (the "Rapidtext Registration Rights Agreement"), (vii) Registration Rights
Agreement dated as of August 28, 1997, by and among the Company and ▇▇▇▇▇▇▇
Enterprises, Inc. d/b/a Encore Reporting, the Company has granted certain
piggyback rights to Encore Reporting (the "Encore Reporting Registration Rights
Agreement"), (viii) Registration Rights Agreement dated August 29, 1997, by and
among the Company and Legal Enterprise, Inc., the Company has granted certain
piggyback rights to Legal Enterprise, Inc. ( the "Legal Enterprises Registration
Rights Agreement"), (ix) Registration Rights Agreement dated effective September
4, 1997, by and between the Company and ▇▇▇▇▇▇ ▇. Block, the Company has granted
certain piggyback rights to ▇▇▇▇▇▇ ▇. Block (the "Block Registration Rights
Agreement") and (x) Registration Rights Agreement dated September 4, 1997, by
and between the Company and Amicus One Support Services, Inc., the Company has
granted certain
piggyback rights to Amicus One Support Services, Inc. (the "Amicus One
Registration Rights Agreement;
WHEREAS, pursuant to the Purchase Agreement, the Company issued to
Shareholders a % Convertible Junior Subordinated Promissory Note due
_________________________, in the original principal amount of $____________
(the "Note");
WHEREAS, the Note is convertible into shares of common stock of the
Company ("Common Stock") as provided therein (the Common Stock issuable upon
conversion of the Note being referred to as the "Note Shares");
WHEREAS, the Company has agreed to grant certain piggyback
registration rights to Shareholders relating to such Common Shares;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms have the
respective meanings set forth below or set forth in the Section or paragraph
following such term:
ADVICE - Section 3.1.
AFFILIATE - a Person who, with respect to that Person, directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, or is acting as agent on behalf of, or as an
officer or director of, that Person. As used in the definition of Affiliate,
the term "control" (including the terms "controlling," "controlled by," or
"under common control with") means the possession, direct or indirect, of the
power to direct, cause the direction of, or influence the management and
policies of a Person, whether through the ownership of voting securities, by
contract, through the holding of a position as a partner, director or officer of
such Person, as a trustee, or otherwise.
AGENT - Section 5.1.
AGREEMENT - introductory paragraph.
BUSINESS DAY - day other than a Saturday, Sunday or legal holiday for
commercial banks in the State of Texas.
COMMISSION - the United States Securities and Exchange Commission.
COMMON SHARES - the _______ Shares.
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COMMON STOCK - the Company's Common Stock, $.01 par value per share, or
any successor class of the Company's Common Stock.
COMPANY - introductory paragraph.
EXCHANGE ACT - the Securities Exchange Act of 1934, as amended.
HOLDER - Shareholder or any other person that has properly assumed or been
properly assigned Shareholder's rights and obligations hereunder in accordance
with Section 6.12.
INSPECTORS - Section 3.1.
IPO - shall mean the initial public offering of securities of the Company
under registration statement filed and ordered effective under the 1933 Act
pursuant to a managed underwritten offering.
LIABILITIES - Section 5.1.
SHAREHOLDER OR SHAREHOLDERS - introductory paragraph.
1933 ACT - the Securities Act of 1933, as amended.
PERSON - any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or a political subdivision, agency or instrumentality
thereof or other entity or organization of any kind.
PIGGYBACK REGISTRATION - Section 2.1.
PRIOR REGISTRATION RIGHTS AGREEMENTS - the Pecks Registration Rights
Agreement, ▇▇▇▇▇ Registration Rights Agreement, Looney Registration Rights
Agreement, SFRS Registration Rights Agreement, ▇▇▇▇▇▇▇▇▇ Registration Rights
Agreement, Rapidtext Registration Rights Agreement, Encore Reporting
Registration Rights Agreement, Legal Enterprise Registration Rights Agreement,
the Block Registration Rights Agreement, and the Amicus One Registration Rights
Agreement, collectively.
RECORDS - Section 3.1.
REGISTRABLE SECURITIES - any (i) Common Shares, (ii) Note Shares as of the
execution date hereof, and (iii) securities issued in exchange for, as a
dividend on, or in replacement or upon conversion of, or otherwise issued in
respect of (including securities issued in a stock dividend, split or
recombination or pursuant to the exercise of preemptive rights) any shares of
Common Stock or other securities described in clause (i), until such time as
such securities have been transferred to a Person that does not qualify as a
Holder pursuant to Section 6.12. In no event shall the Convertible Notes be
deemed to be Registrable Securities.
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REGISTRATION EXPENSES - Section 2.3.
REQUESTED SECURITIES - Section 2.1.
RESTRICTION - Section 2.2.
SELLER REGISTRATION RIGHTS - Section 3.3.
SECTION 2. REGISTRATION RIGHTS.
2.1 PIGGYBACK REGISTRATION.
(a) If at any time or from time to time prior to the fifth anniversary of
an IPO the Company proposes to file a registration statement under the 1933 Act
with respect to an offering by the Company for its own account or for the
account of any other Person of any class of equity security of the Company,
including any security convertible into or exchangeable for any such equity
security, then the Company shall in each case give written notice of such
proposed filing to the Holder at least thirty days before the anticipated filing
date, and such notice shall offer the Holder the opportunity to register such
number of Registrable Securities as the Holder may request (a "Piggyback
Registration"). The Company shall use reasonable diligence to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the
Holder to include the Registrable Securities requested by the Holder to be
included in the registration statement and in such offering on the same terms
and conditions as any similar securities of the Company included therein (except
to the extent provided otherwise in the Pecks Registration Rights Agreement), to
the extent permitted by applicable law. Notwithstanding the foregoing, if the
managing underwriter or underwriters of such offering informs the Company and
the Holders requesting such registration by letter of its belief that the number
of securities requested to be included in such registration (the "Requested
Securities") exceeds the number which can be sold in (or during the time of)
such offering or that the inclusion would adversely affect the marketing or the
selling price of the securities to be sold, then the amount or kind of Requested
Securities to be offered for the accounts of all Persons whose shares of
Requested Securities were requested to be included in such offering shall be
reduced pro rata with respect to each such Person to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount recommended by such managing underwriter, such a reduction not to include
(i) if the registration initially occurs at the insistence of the Company,
shares of the Company, (ii) if such registration occurs due to a demand
registration right, shares of the Person making that demand, or (iii) shares of
the Purchaser under the Pecks Registration Rights Agreement, to the extent
provided otherwise in such Pecks Registration Rights Agreement.
(b) Notwithstanding anything to the contrary contained in Section 2.1(a),
the Company shall not be required to include Registrable Securities in any
registration statement pursuant to this Section 2.1 if the proposed registration
is (i) a registration of a stock option or other employee incentive compensation
plan or of securities issued or issuable pursuant to any such plan, (ii) a
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registration of securities issued or issuable pursuant to a stockholder
reinvestment plan or other similar plan, (iii) a registration of securities
issued in exchange for any securities or any assets of, or in connection with a
merger or consolidation with, an unaffiliated company, or (iv) a registration of
securities pursuant to a "rights" or other similar plan designed to protect the
Company's stockholders from a coercive or other attempt to take control of the
Company.
(c) The Company may withdraw any registration statement and abandon any
proposed offering initiated by the Company without the consent of the Holder
notwithstanding the request of the Holder to participate therein in accordance
with this provision, if the Company determines that such action is in the best
interests of the Company and its stockholders (for this purpose, the interests
of the Holder shall not be considered except generally as a stockholder).
2.2 HOLDBACK AGREEMENTS; REQUIREMENTS OF THE HOLDER.
(a) Restrictions on Public Sale by the Holder. To the extent not
inconsistent with applicable law, the Holder agrees that Holder will not effect
any public sale or distribution of the issue being registered or a similar
security of the Company or any securities convertible into or exchangeable or
exercisable for such securities (such agreement, as hereinbefore set forth in
this sentence being sometimes hereinafter referred to as the "Restriction")
during the 14 days prior to, and during the 90-day period (or such shorter
period as may be agreed with the managing underwriter) beginning on, the
effective date of such registration statement (except as part of such
registration), but only if and to the extent (i) requested in writing (with
reasonable prior notice) by the managing underwriter or underwriters in the case
of an underwritten public offering by the Company of securities similar to the
Registrable Securities, and (ii) similarly situated shareholders of the Company
(e.g. persons who sold their businesses in exchange for common stock) are
required to agree to the Restriction.
(b) Cooperation by Holder. The offering of Registrable Securities by the
Holder shall comply in all respects with the applicable terms, provisions and
requirements set forth in this Agreement, and the Holder shall timely convert
such portions of the Convertible Notes so as enable the Registrable Securities
to be sold on a timely basis and provide the Company with all information and
materials required to be included in a registration statement that (a) relate to
the offering, (b) are in possession of the Holder, and (c) relate to the Holder,
and to take all such action as may be reasonably required in order not to delay
the registration and offering of the securities by the Company. The Company
shall have no obligation to include in such registration statement shares of the
Holder if the Holder has failed to furnish such information or materials and if,
in the opinion of counsel to the Company, such information and materials are
required in order for the registration statement to be in compliance with the
1933 Act.
2.3 REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation,
all Commission and securities exchange or National Association of Securities
Dealers, Inc. registration and filing fees, all fees and expenses relating to
compliance with securities or blue sky laws (including fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), all printing
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expenses, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), fees and expenses incurred in connection with the
listing of the securities to be registered on securities exchanges, fees and
disbursements of counsel for the Company and its independent certified public
accountants (including the expenses required for "cold comfort" letters required
by or incident to such performance), and fees and expenses of any special
experts retained by the Company in connection with such registration (but not
including any underwriting fees, discounts or commissions directly attributable
to the sale of Holder's Registrable Securities) (all such expenses being herein
called "Registration Expenses"), will be borne by the Company; provided, however
that, the Company shall not be obligated to pay (i) the fees and disbursements
of any counsel for the Holder or liability insurance related to the offering (if
the Company elects to obtain such insurance with the Holder's consent) for the
Holder, or (ii) any out-of-pocket expenses of the Holder, which fees,
disbursements and expenses described in clauses (i) and (ii) preceding shall be
borne by the Holder.
SECTION 3. COVENANTS OF THE COMPANY.
3.1 REGISTRATION PROCEDURES. Whenever any Registrable Securities are to
be registered pursuant to Section 2, the Company will use reasonable diligence
to effect the registration of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable and in
accordance with the provisions of Section 2. In connection with any offering of
Registrable Securities pursuant to the Agreement, the Company shall as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement that
includes the Registrable Securities requested to be included therein in
accordance with Section 2 and use reasonable diligence to cause such
registration statement to become effective; provided, however, that at least
five Business Days before filing a registration statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference
therein, the Company will furnish to the Holder, and the underwriters, if any,
draft copies of all such documents proposed to be filed, which documents will be
subject to the review of the Holder and such underwriters, and the Company will
not file any registration statement or prospectus or amendment or supplement
thereto (including such documents incorporated by reference) to which the Holder
or the underwriters with respect to such Registrable Securities, if any, shall
reasonably object within five days of receipt of any of such documents; and
provided further, however, that if the Company, in the case of a Piggyback
Registration, despite the reasonable objection of the Holder, desires to proceed
with the registration of its shares, the Holder may withdraw the Registrable
Securities from being included in such offering, using its good-faith efforts to
minimize delay caused by such withdrawal, and the Company may then,
notwithstanding anything to the contrary in the immediately preceding proviso,
proceed with such offering; the Company and the Holder acknowledge that such
withdrawal by the Holder will delay such offering for as much time as is
necessary to amend such registration statement or prospectus to reflect the
withdrawal of such Registrable Securities from such offering;
(b) prepare and file with the Commission such amendments and post-
effective amendments to the registration statement as may be necessary to keep
the registration statement effective for a period of six months (or such shorter
period which will terminate when all Registrable
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Securities covered by such registration statement have been sold or withdrawn,
but not prior to the expiration of the 90-day period referred to in Section 4(3)
of the 1933 Act and Rule 174 thereunder, if applicable); cause the prospectus to
be supplemented by any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the 1933 Act; and comply with the provisions
of the 1933 Act applicable to it with respect to the disposition of all
securities covered by such registration statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such registration statement or supplement to the prospectus; the
Company shall not be deemed to have complied with its obligations hereunder to
keep a registration statement effective during the applicable period if it
voluntarily takes any action that would result in the prevention of the Holder
from selling such Registrable Securities during that period unless such action
is required under applicable law;
(c) furnish to the Holder and the underwriter or underwriters, if any,
without charge, such reasonable number of conformed copies of the registration
statement and any post-effective amendment thereto and such reasonable number of
copies of the prospectus (including each preliminary prospectus) and any
amendments or supplements thereto, and any documents incorporated by reference
therein, as the Holder or underwriter may request in order to facilitate the
disposition of the Registrable Securities being sold by the Holder (it being
understood that the Company consents to the use of the prospectus and any
amendment or supplement thereto by the Holder and the underwriter or
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by the prospectus or any amendment or supplement
thereto);
(d) notify the Holder at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, when the Company becomes aware of
the happening of any event as a result of which the prospectus included in such
registration statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and, as promptly as practicable thereafter, prepare and file with the
Commission and furnish a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(e) use reasonable diligence to cause all Registrable Securities included
in such registration statement to be listed, by the date of the first sale of
Registrable Securities pursuant to such registration statement, on each
securities exchange on which the Common Stock of the Company is then listed or
proposed to be listed, if any;
(f) make generally available to its security holders an earnings
statement satisfying the provisions of Section 11(a) of the 1933 Act no later
than 90 days after the end of the 12-month period beginning with the first day
of the Company's first fiscal quarter commencing after the effective date of the
registration statement, which earnings statement shall cover said 12-month
period, which requirement will be deemed to be satisfied if the Company timely
files complete and
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accurate information on such forms and reports as the Company may be required to
file under the Exchange Act and otherwise complies with Rule 158 under the 1933
Act as soon as feasible;
(g) notify the Holder of any stop order issued or threatened by the
Commission in connection therewith and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered, and make every
reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of the registration statement at the earliest possible moment;
(h) if requested by the managing underwriter or underwriters, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or the Holder reasonably
requests to be included therein, including, without limitation, the purchase
price being paid therefor by such underwriter or underwriters and any other
terms of the underwritten offering of such Registrable Securities (excluding,
however, information with respect to the number of Registrable Securities being
sold to such underwriter or underwriters by the Holder), and promptly make all
required filings of such prospectus supplement or post-effective amendment;
(i) as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver to the Holder as many copies of that document as may be reasonably
requested by the Holder;
(j) on or prior to the date on which the registration statement is
declared effective, use reasonable diligence to register or qualify, and
cooperate with the Holder the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of the Registrable
Securities covered by the registration statement for offer and sale under the
securities or blue sky laws of each state and other jurisdiction of the United
States as the Holder or underwriter reasonably requests in writing, to use
reasonable diligence to keep each such registration or qualification effective,
including through new filings, or amendments or renewals, during the period such
registration statement is required to be kept effective and to do any and all
other acts or things necessary or advisable to enable the disposition in all
such jurisdictions of the Registrable Securities covered by the applicable
registration statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject; and provided,
further, however, that while it is the present intention of the Holder to
cooperate with the Company to keep the costs of compliance with state blue sky
laws to a minimum, the Holder shall have the right to require compliance by the
Company with the blue sky laws of as many states as the managing underwriter
deems reasonably necessary in its good faith judgment to realize the maximum
possible value for the Registrable Securities included in such registration
statement;
(k) cooperate with the Holder and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing securities to be sold under the registration statement
and enable such securities to be in such denominations and registered in
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such names as the managing underwriter or underwriters, if any, may request,
subject to the underwriters' obligation to return any certificates representing
securities not sold;
(l) use reasonable diligence to cause the Registrable Securities covered
by the registration statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such securities;
(m) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holder or the underwriters retained by the Holder participating in an
underwritten public offering, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(n) make available for inspection by the Holder, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such seller or
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records"), as shall be necessary to enable them to exercise their due diligence
responsibility; and cause the Company's officers, directors and employees to
make available for inspection and/or copying all Records reasonably requested by
any such Inspector in connection with such registration statement; and
(o) list such securities on or with a national securities exchange (which
term shall include the NASDAQ National Market System) and comply with all
applicable exchange listing requirements and rules and regulations thereof;
(p) use reasonable diligence to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters covering
registration statements similar to the registration statement at issue as the
Holder reasonably requests.
The Holder, upon receipt of any notice from the Company of the occurrence
of any event of the kind described in subsection (d) of this Section 3.1, will
forthwith discontinue disposition of the Registrable Securities until the
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (d) of this Section 3.1 and copies of any additional
or supplemental filings which are incorporated by reference in the prospectus,
or until Holder is advised in writing (the "Advice") by the Company that the use
of the prospectus may be resumed. If so directed by the Company, the Holder
shall deliver to the Company (at the Company's expense) all copies in Holder's
possession or control, other than permanent file copies then in the Holder's
possession, of the prospectus covering such Registrable Securities. In the event
the Company shall give any such notice, the time periods mentioned in subsection
(b) of this Section 3.1 shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including
the date when each seller of Registrable Securities covered by such
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registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by subsection (d) of this Section 3.1 hereof or
the Advice.
If such registration statement refers to the Holder by name or otherwise as
the holder of any securities of the Company then the Holder shall have the right
to require (i) the insertion therein of language, in form and substance
satisfactory to the Holder to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation of such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that the Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder.
3.2 RULE 144; INFORMATION. The Company covenants that, upon any
registration statement covering Company securities becoming effective, it will
file the reports required to be filed by it under the 1933 Act and the Exchange
Act and the rules and regulations adopted by the Commission thereunder (or, if
the Company is not required to file such reports, it will, upon the request of
the Holder make publicly available other nonconfidential information as is
necessary to permit sales under Rule 144 under the 1933 Act), and it will take
such other action as the Holder may reasonably request, all to the extent
required from time to time to enable the Holder to sell Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by (a) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
Commission; provided further that if the Company is not required to file reports
under the 1933 Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder, the Company shall, upon the request of the Holder,
provide the Holder audited financial statements and access to the books and
records of the Company and, if requested by the Holder sufficient information to
enable the Holder to comply with Rule 144 or Rule 144A under the 1933 Act. Upon
the request of the Holder, the Company will deliver to the Holder a written
statement as to whether it has complied with such requirements.
3.3 FUTURE RIGHTS. From the date of this Agreement until the fifth
anniversary of the IPO, the Company will not grant to any Person (excluding the
Holder) any registration rights with respect to any securities of the Company
other than (i) the registration rights previously granted under the Prior
Registration Rights Agreements or (ii) new registration rights that are granted
in connection with (A) the investment in the Company by such grantee (or group
of grantees) of at least $1,000,000 or (B) the acquisition of a court reporting
or related business by the Company or any Affiliate in a transaction in which
all or part of the consideration is Common Stock or securities convertible into
Common Stock (such rights granted in connection with such sale of a business
being referred to herein as "Seller Registration Rights"). Such Seller
Registration Rights must be of no greater priority or right than, nor be broader
than or superior to, the registration rights granted by the Company under this
Agreement, and a copy of the agreements granting such Seller Registration Rights
must be made available to the Holder upon request to the Company. Additionally,
Seller Registration Rights may not be granted without expressly providing that
the Holder has a piggyback right upon the exercise of such Seller Registration
Rights and shall be included in any related
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registration statement on the same terms and conditions as the holders of the
Seller Registration Rights, subject to possible reduction at the initiative of
the managing underwriter or underwriters, on terms substantially equivalent to
those set forth in Section 2.2.
3.4 REPRESENTATION AND WARRANTY. The Company hereby represents and
warrants to Shareholder that on or prior to the date hereof, (a) the Company has
not granted registration rights to any Person except for the registration rights
granted under this Agreement and the Prior Registration Rights Agreements and
except as set forth in the Pecks Registration Rights Agreement, and (b) no
consent, approval, authorization or waiver of any Person is required to permit
the Company to (i) execute or deliver this Agreement or (ii) perform this
Agreement in accordance with its terms other than with respect to registration
under the 1933 Act and comparable registrations with state securities
commissions, and (c) the execution, delivery and performance of this Agreement
by the Company is not inconsistent with its charter or by-laws or any agreement
to which the Company is a party.
SECTION 4. COVENANTS OF HOLDER.
4.1 PARTICIPATION IN UNDERWRITING REGISTRATIONS. Holder may not
participate in any underwritten registration hereunder unless the Holder (a)
agrees to sell Holder's securities on the terms of and on the basis provided in
any underwriting arrangements approved by the Company and (b) completes and
executes all questionnaires, powers of attorney, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
SECTION 5. INDEMNIFICATION; CONTRIBUTION.
5.1 INDEMNIFICATION; CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder of Registrable Securities, its officers, directors,
partners and each Person who controls such Holder (within the meaning of the
1933 Act), and any Agent (as hereinafter defined) or investment advisor thereto
against all losses, claims, damages, liabilities and expenses, joint or several
(including reasonable costs of investigation, and attorneys fees and expenses as
further provided in Section 5.1(c)) (collectively, "Liabilities") arising out of
or based upon any untrue or alleged untrue statement of material fact contained
in any registration statement, and amendment or supplement thereto, or any
prospectus or preliminary prospectus contained therein, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
any such Liabilities arise out of or are based upon any untrue statement or
omission based upon and in conformity with information regarding such
indemnified Person furnished in writing to the Company by such indemnified
Person expressly for use therein. In connection with an underwritten offering,
the Company will indemnify the underwriters thereof, their officers and
directors and each Person who controls such underwriters (within the meaning of
the ▇▇▇▇ ▇▇▇) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities or to such other extent
as the Company and such underwriters may agree. For purposes of this Section
5.1(a), an "Agent" of a Holder of
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Registrable Securities is any Person acting for or on behalf of such Holder with
respect to the holding or sale of such Registrable Securities.
5.2 INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In connection
with any registration statement in which the Holder is participating, the Holder
will furnish to the Company in writing such information with respect to the name
and address of the Holder and the amount of Registrable Securities held by the
Holder and such other information as the Company shall reasonably request for
use in connection with any such registration statement or prospectus, and agrees
to indemnify, to the extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
▇▇▇▇ ▇▇▇) against any losses, claims, damages, liabilities and expenses, joint
or several, resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or any amendment thereof
or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission is based upon and in
conformity with any information regarding the Holder furnished in writing by the
Holder specifically for inclusion in any prospectus or registration statement.
In connection with an underwritten offering, the Holder participating in such
offering will indemnify the underwriters thereof, their officers and directors
and each Person who controls such underwriters (within the meaning of the ▇▇▇▇
▇▇▇) to the same extent, and solely to such extent, as provided in the
immediately preceding sentence with respect to indemnification of the Company.
In no event shall the liability of the Holder hereunder be greater in amount
than the dollar amount of the proceeds received by the Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
5.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder 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 may claim indemnification or contribution
pursuant to this Agreement and, unless in the written opinion of counsel for
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, at the sole cost and expense of the indemnifying
party, the defense of such claim with counsel reasonably satisfactory to such
indemnified party. Whether or not such defense is assumed by the indemnifying
party, neither the indemnifying party nor the indemnified party shall have the
authority to bind the other with respect to any settlement made without the
other's consent. No indemnifying party will 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 of such claim or litigation. If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, the indemnified party shall be entitled to hire counsel reasonably
satisfactory to it, the fees and expenses of which shall be borne by, in their
entirety, the indemnifying party; provided, however, that the indemnifying party
shall not be obligated to pay the fees and expenses of more than one counsel
with respect to such claim, unless in the opinion of counsel for any indemnified
party a conflict of interest may exist between such indemnified party and any
other
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of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
5.4 CONTRIBUTION. If the indemnification provided for in this Section 5
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, 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 5.3, 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 5.4 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.
Notwithstanding the provisions of this Section 5.4, the Holder shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of the Holder were offered to the
public exceeds the amount of any damages which the Holder has otherwise been
required to pay by reason of such untrue statement or omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
The obligations of the Company pursuant to this Section 5.4 shall be
further subject to such additional express agreements of the Company as may be
required to facilitate an underwritten offering, provided that no such agreement
shall in any way limit the rights of the Holder under this Agreement, or create
additional obligations of the Holder not set forth herein, except as otherwise
expressly agreed in writing by the Holder.
SECTION 6. MISCELLANEOUS.
6.1 RECAPITALIZATION, EXCHANGES, ETC. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Registrable
Securities, to any and all shares of equity capital of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Registrable Securities, in each case as the amounts of such
securities outstanding
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are appropriately adjusted for any equity dividends, splits, reverse splits,
combinations, recapitalization and the like occurring after the date of this
Agreement.
6.2 OPINIONS. When any legal opinion is required to be delivered
hereunder, such opinion may contain such qualifications as may be customary or
otherwise appropriate for legal opinions in similar circumstances.
6.3 NOTICES. (a) All communications under this Agreement shall be in
writing to the following addresses:
(i) If to Company, to: Litigation Resources of America , Inc.
650 First City Tower, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Phone: 713/▇▇▇-▇▇▇▇
Fax: 713/▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated
Nine ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: 713/▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Holders, to:
--------------------------
--------------------------
--------------------------
or to such other address as any party may furnish to the others in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
(b) Any communication so addressed and mailed by first class registered
or certified mail, postage prepaid, shall be deemed to be received on the third
Business Day after so mailed, and if delivered by personal delivery (including
by courier) or facsimile to such address, upon delivery during normal business
hours.
6.4 APPLICABLE LAW. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
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6.5 AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by the
Holder and the Company. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
6.6 REMEDY FOR BREACH OF CONTRACT; EQUITABLE RELIEF. The parties agree
that in the event there is any breach or asserted breach of the terms, covenants
or conditions of this Agreement, the remedy of the parties hereto shall be in
law and in equity and specific enforcement, injunctive and other equitable
relief shall lie for the enforcement of or relief from any provisions of this
Agreement. If any remedy or relief is sought and obtained by any party against
one of the other parties pursuant to this Section 6.6, the other party shall, in
addition to the remedy of relief so obtained, be liable to the party seeking
such remedy or relief for the reasonable expenses incurred by such party in
successfully obtaining such remedy or relief, including the fees and expenses of
such party's counsel.
6.7 SEVERABILITY. It is a desire and intent of the parties that the
terms, provisions. covenants and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant or remedy of this Agreement or the application thereof to any Person or
circumstances shall, to any extent, be construed to be invalid or unenforceable
in whole or in part, then such term, provision, covenant or remedy shall be
construed in a manner so as to permit its enforceability under the applicable
law to the fullest extent permitted by law. In any case, the remaining
provisions of this Agreement or the application thereof to any Person or
circumstances other than those to which they have been held invalid or
unenforceable, shall remain in full force and effect.
6.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
6.9 HEADINGS. The section and paragraph headings have been inserted for
purposes of convenience and shall not be used for interpretive purposes.
6.10 BINDING EFFECT. Unless otherwise provided herein, the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and
permitted assigns, and are not intended to confer upon any other Person any
right or remedies hereunder.
6.11 ENTIRE AGREEMENT. This Agreement, together with the other agreements
referenced herein, constitutes the entire agreement and supersedes all prior
agreements, understandings, both written and oral, among the parties with
respect to the subject matter hereof.
6.12 ASSIGNMENT. This Agreement, and the rights and obligations of the
parties hereunder, are not assignable or transferable to any other Person (other
than by operation of law, will or the laws relating to descent or distribution)
without the prior written consent of all parties to this Agreement.
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6.13 WAIVER. Any waiver to be enforceable must be in writing and executed
by the party against whom the waiver is sought to be enforced.
6.14 ARBITRATION. Any controversy, dispute or claim arising out of, in
connection with, or in relation to, the interpretation, performance or breach of
this Agreement, including, without limitation, the validity, scope and
enforceability of this Section which cannot first be settled through ordinary
negotiation between the Parties shall be submitted in good faith to mediation by
and in accordance with the Commercial Mediation Rules of the American
Arbitration Association or any successor organization. In the event that
mediation of such controversy, dispute or claim cannot be settled through the
mediation proceeding, the Parties agree that the controversy, dispute or claim
shall be submitted to binding and final arbitration conducted in Los Angeles,
California by and in accordance with the then existing Rules for Commercial
Arbitration of the American Arbitration Association or any successor
organization. Any such arbitration shall be to a three member panel selected
through the rules governing selection and appointment of such panels of the
American Arbitration Association or any successor organization. The award
rendered by the arbitrators may be confirmed, entered and enforced as a judgment
in any court of competent jurisdiction; however, the Parties otherwise waive any
rights to appeal the award except with regard to fraud by the panel. Any such
action must be brought within two years of the date the cause of action accrues.
The arbitrators shall award the Party which substantially prevails in any
arbitration proceeding recovery of that Party's attorneys' fees, the
arbitrators' fees and all costs in connection with the arbitration from the
Party who does not substantially prevail. The Parties' remedies are limited
solely to the specific remedies provided in this Agreement or in the other. The
parties waive any entitlement to punitive damages, consequential damages and
lost profits and will limit any damage claim to actual economic damages
incurred. Nothing in this Section 6.14 shall restrict any Parties' ability to
seek injunctive or other equitable relief in any court of competent jurisdiction
prior to initiating mediation or arbitration. In the event that such injunctive
or equitable relief is sought by any Party, such Party is specifically entitled
to enforce the appropriate provisions of the Agreement in obtaining such relief
in any court of competent jurisdiction and, thereafter, submit the remaining
controversy, dispute or claim to arbitration in accordance with this Section
6.14.
6.15 SUBORDINATION OF REGISTRATION RIGHTS. Notwithstanding any provision
of this Agreement, the Holder acknowledges and agrees that the registration
rights granted to the Holder pursuant to Section 2.1(a) are subordinate to the
registration rights granted to the Purchasers pursuant to the Pecks Registration
Rights Agreement. In the event of any conflict between this Agreement and any
terms or provisions of the Pecks Registration Rights Agreement a copy of which
is attached as Exhibit A, the terms or provision of the Pecks Registration
Rights Agreement shall prevail.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
LITIGATION RESOURCES OF AMERICA, INC.,
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a Texas corporation
By:
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▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer
SHAREHOLDERS:
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