EXHIBIT 10.05
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
May 6, 1997 by and among LAW COMPANIES GROUP, INC., a Georgia corporation (the
"Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, each a resident of the
State of Georgia (jointly and severally, "Buyer").
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into that certain Securities
Purchase Agreement (the "Securities Purchase Agreement") effective as of March
21, 1997.
WHEREAS, pursuant to the Securities Purchase Agreement, the Company agreed
to grant Buyer certain registration rights.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Buyer" shall mean Buyer or any permitted transferee thereof who then
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holds any outstanding Registrable Securities.
"Commission" shall mean the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $1.00 par value per share,
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of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Options" shall mean the options issued pursuant to the Independent
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Options Agreement and the Plan Option Agreement (each as defined in the
Securities Purchase Agreement).
"Preferred Shares" shall in this Agreement mean the Preferred Shares
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issued pursuant to the Securities Purchase Agreement.
The terms "register," "registered" and "registration" refer to a
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registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means (i) shares of Common Stock issued
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pursuant to the conversion of the Preferred, which have not been resold,
transferred or otherwise conveyed by Buyer, (ii) shares of Common Stock issued
in respect of the shares of the Company's Common Stock or other securities
issued pursuant to the conversion of the Preferred upon any stock split, stock
dividend, recapitalization or similar event, which have not been resold,
transferred or otherwise conveyed by Buyer, (iii) shares of Common Stock issued
pursuant to the exercise of the Warrants, which have not been resold,
transferred or otherwise conveyed by Buyer, (iv) shares of Common Stock issued
pursuant to the exercise of the Options, which have not been resold, transferred
or otherwise conveyed by Buyer, and (v) shares of Common Stock issued upon
conversion, exchange or exercise of any securities acquired pursuant to the
exercise of the Warrants or the Options referred to in clauses (iii) and (iv) of
this paragraph, which have not been resold, transferred or otherwise conveyed by
Buyer, other than to a permitted assignee.
"Registration Expenses" shall mean all expenses other than Selling
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Expenses incurred by the Company in complying with Section 2 hereof, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, and the expense of any special audits incident to or
required by any such registration in connection with any registration hereunder.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and selling
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commissions applicable to the sale by, and all fees and disbursements of counsel
or other professionals for, Buyer (other than as set forth in the definition of
Registration Expenses).
"Warrants" shall mean the warrants issued pursuant to the Securities
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Purchase Agreement.
2. COMPANY REGISTRATION.
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(a) If, at any time or from time to time, the Company shall determine
to register any of its securities, either for its own account or for the account
of any shareholder of the Company, or both, other than (x) a registration
relating solely to employee benefit plans on Form ▇-▇, ▇-▇ or S-8 or similar
forms which may be promulgated in the future, or (y) a registration on Form S-4
or similar form which may be promulgated in the future relating solely to a
Securities and Exchange Commission Rule 145 transaction, the Company will:
(i) promptly give to Buyer 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 Registrable Securities
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specified in a written request or requests made to the Company by Buyer within
15 days after receipt of such written notice from the Company to Buyer.
(b) Piggy-Back Registration Rights. If the registration of which the
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Company gives notice is for a registered public offering involving a firm
commitment underwriting, the Company shall so advise Buyer as a part of the
written notice given pursuant to Section 2(a)(i) hereof. In such event the
right of Buyer to registration pursuant to Section 2 hereof shall be conditioned
upon Buyer agreeing to participate in such underwriting and in the inclusion of
Buyer's Registrable Securities in the underwriting to the extent provided
herein. If Buyer proposes to distribute his securities through such
underwriting, then Buyer shall (together with the Company and the other
shareholders distributing their securities through such underwriting (the "Other
Buyers")) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may reduce the number of Registrable
Securities requested to be registered, first by reducing the Registrable
Securities held by those shareholders without a contractual right to participate
in the offering, and then if necessary, by reducing the Registrable Securities,
pro rata, held by all other shareholders. The Company shall so advise Buyer and
the Other Buyers requesting to distribute their securities through such
underwriting, and the number of Registrable Securities and other securities that
may be included in the registration. If Buyer disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by giving written notice
to the Company and the underwriter prior to the effective date of such
registration statement.
(c) Demand Registration Rights. Buyer shall have the right, which
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right may be exercised one time and only after a "Listing Event" (as defined in
the Restated Articles of Incorporation of the Company), to request the Company
to register under the Securities Act, any portion of the shares of Common Stock
of the Company then owned by Buyer. Upon receipt of such request in writing,
the Company shall use its reasonable efforts to promptly effect such
registration under the Securities Act (including any related qualification under
Blue Sky laws or other compliance).
3. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
Section 2 shall be borne by the Company. All Selling Expenses relating to
securities so registered by Buyer shall be borne by Buyer.
4. REGISTRATION PROCEDURES. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep Buyer 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) Keep such registration, qualification or compliance effective for
a period of one hundred twenty (120) days or until Buyer has completed the
distribution described in the registration statement relating thereto, whichever
first occurs;
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(b) Furnish such number of prospectuses and other documents incident
thereto as Buyer from time to time may reasonably request;
(c) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement and with the provisions of
Section 4(a) of this Agreement;
(d) Use its best efforts to register and 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 Buyer, 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 jurisdictions;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form and, in the case of a registration pursuant to Section 2 hereof, reasonably
satisfactory to Buyer who shall be a party thereto, with the managing
underwriter of such offering. Buyer shall also enter into and perform its
obligations under such an agreement; and
(f) Notify Buyer of Registrable Securities covered by such
registration statement, at any time (i) when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, or (ii) when the Commission has suspended the effectiveness of such
registration statement or has requested that the Company amend or supplement
such registration statement.
5. INDEMNIFICATION.
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(a) The Company will indemnify Buyer and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including without limitation any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, 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, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and will pay to Buyer, each such underwriter and each person who controls any
such underwriter, as actually incurred, any legal and any other expenses
reasonably and actually incurred
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in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by Buyer or
underwriter and stated to be specifically for use therein.
(b) Buyer will, if Registrable Securities held by Buyer are included
in the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each such Other Buyer, each of
its officers and directors and partners and each person controlling such Other
Buyer within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including without limitation any of the foregoing incurred in
settlement of any litiga tion commenced or threatened, 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 document, or any amendment or supplement thereto, 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, in the light of the circumstances in
which they were made, not misleading, and will pay to the Company, such Other
Buyers, such directors, officers, partners, persons, underwriters or control
persons, as actually incurred, any legal or any other expenses reasonably and
actually incurred in connection with investigating, preparing 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 or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by an instrument duly executed by Buyer and stated to be
specifically for use therein; provided, however, that the obligations of Buyer
hereunder shall be limited to an amount equal to the proceeds to Buyer of
Registrable Securities sold as contemplated herein, unless such liability arises
out of or is based on gross negligence or willful misconduct by Buyer.
(c) Each party entitled to indemnification under this Section 5 (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 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 be unreasonably
withheld), and the Indemnified Party may participate in such defense at its own
expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement unless such failure to give such notice is
materially prejudicial to the Indemnifying Party's ability to defend such
action. Notwithstanding the above, however, if representation of one or more
Indemnified Parties by the counsel retained by the Indemnifying Party would be
inappropriate due to actual conflicting
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interests between such Indemnified Parties (the "Conflicting Indemnified
Parties") and any other party represented by such counsel in such proceeding,
then such Conflicting Indemnified Parties shall have the right to retain one
separate counsel, chosen by Buyers of a majority of the Registrable Securities
included by such Conflicting Indemnified Parties in the registration, at the
expense of the Indemnifying Party. No Indemnifying Party, (i) in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, which consent shall not be unreasonably withheld, 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, or (ii)
shall be liable for amounts paid in any settlement if such settlement is
effected without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld.
6. INFORMATION ABOUT BUYER. Buyer shall furnish to the Company such
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information regarding Buyer and the distribution proposed by Buyer as the
Company may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
7. RULE 144. With a view to making available the benefits of certain
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rules and regulations of the Commission which may at any time permit the sale of
the Registrable Securities to the public without registration, the Company
agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times;
(b) 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; and
(c) So long as Buyer owns any Registrable Securities to furnish to
Buyer forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as Buyer may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Buyer to sell any such securities
without registration.
8. TRANSFER OF REGISTRATION RIGHTS. The registration rights granted to
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Buyer under Section 2 may be assigned, transferred or otherwise conveyed only in
connection with such assignments and transfers permitted by (i) the Securities
Purchase Agreement, (ii) the Preferred Shareholder Agreement, (iii) the
Warrant, (iv) the Stock Option Agreement, and (v) the Plan Option Agreement, all
of even date herewith.
9. TERMINATION OF REGISTRATION RIGHTS. The registration rights granted
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pursuant to this Agreement shall terminate as to Buyer at such time as all
Registrable Securities held by such Buyer can be sold within a given three-month
period without compliance with the registration requirements of the Securities
Act pursuant to Rule 144 supported by a written opinion of legal counsel for the
Company.
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10. "MARKET STAND OFF" AGREEMENT. Buyer hereby agrees that he shall not,
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to the extent requested by the Company and an underwriter of Common Stock (or
other securities) of the Company, sell or otherwise transfer or dispose (other
than to donees who agree to be similarly bound) of any Registrable Securities
during a period of up to one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act;
provided, however, that such agreement shall not apply to Registrable Securities
being registered and sold pursuant to such registration statement.
11. MISCELLANEOUS.
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(a) Any notice, request, instruction or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered personally or sent by registered or certified mail (including by
overnight courier or express mail service), postage or fees prepaid,
if to the Company to:
Law Companies Group, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Long ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. F. T. ▇▇▇▇▇, ▇▇.
if to Buyer to:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Arnall Golden & ▇▇▇▇▇▇▇, LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or the office of such party. Any notice which is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the fourth business day after
the day it is so placed in the mail or, if earlier, the time of actual receipt.
(b) This Agreement is being made in, and shall be construed in
accordance with and governed by the laws of the State of Georgia, without giving
effect to, the principles of conflicts of law thereof.
(c) This Agreement, together with the other "Transaction Documents"
(as defined in the Securities Purchase Agreement), constitute the sole
understanding of the parties with respect to the subject matter hereof.
(d) The headings of the Sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
(e) This Agreement may be executed in multiple counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE COMPANY: LAW COMPANIES GROUP, INC.
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By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, CEO & President
BUYER:
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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