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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _____________, 1996 (the
"Agreement"), among AMERISAFE, Inc., a Texas corporation (the "Company"),
Millard E. Morris ("Morris") and Mark R. Anderson ("Anderson") (Morris and
Anderson being hereinafter referred to collectively as the "Holders").
1. Effectiveness of Agreement. On the date of this
Agreement, (a) Morris is the record and beneficial owner of 17,126,521 shares
of Class B Common Stock, par value $.01 per share, of the Company (the "Class B
Common Stock") and (b) Anderson is the record and beneficial owner of 273,479
shares of Class B Common Stock. Pursuant to the terms of the Company's Amended
and Restated Articles of Incorporation (the "Restated Articles"), each share of
Class B Common Stock will be automatically converted, without any action on the
part of the Holder, into shares of Class A Common Stock, par value $.01 per
share, of the Company (the "Class A Common Stock") upon the transfer of such
shares of Class B Common Stock by the Holder, except as otherwise provided in
the Restated Articles. The Company has filed with the Commission the Company's
registration statement on Form S-1, Registration No. 333-_____, with respect to
the registration of the offering and sale of up to 12,650,000 shares of Class A
Common Stock in an initial public offering. This Agreement shall become
effective upon the consummation of the Company's initial public offering in
which shares of Class A Common Stock are sold.
2. Definitions. As used herein, unless the context
otherwise requires, the following terms have the following respective meanings:
Affiliate: With respect to any Person, any Person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control
with, such Person. "Control" shall mean the power to cause
the election of a majority of the members of the board of
directors or other governing body of any Person.
Class A Common Stock: As defined in Section 1.
Class B Common Stock: As defined in Section 1.
Commission: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities
Act.
Company: As defined in the introductory paragraph of this
Agreement.
Demand Holder: As defined in Section 3.1.
Exchange Act: The Securities Exchange Act of 1934, as
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. Reference to a particular
section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar federal
statute.
Holders: As defined in the introductory paragraph of this
Agreement.
Person: An individual, corporation, partnership or other
legal entity.
Registrable Securities: (a) Any shares of Class A Common
Stock owned by the Holders and their successors and assigns or
any other securities of the Company convertible into shares of
Class A Common Stock, (b) any shares of Class A Common Stock
owned by Persons to whom the Company shall hereafter grant
registration rights, consistent with this
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Agreement, and (c) any securities issued or issuable with
respect to any of the securities referred to in clauses (a)
and (b) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise.
As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such
securities shall have become effective under the Securities
Act and such securities shall have been sold or otherwise
transferred in accordance with such registration statement,
(ii) they shall have been sold or otherwise transferred
pursuant to Rule 144 (or any successor rule) under the
Securities Act, (iii) they shall have been otherwise
transferred, new certificates representing such Registrable
Securities not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent
disposition of them shall not require registration or
qualification under the Securities Act or any similar state
law then in force, (iv) they shall have been transferred to
any Person, which, after such transfer, holds fewer than
500,000 Registrable Securities, or (v) they shall have ceased
to be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 3, including,
without limitation, all registration, filing and National
Association of Securities Dealers fees, all fees and expenses
of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses,
telecommunications, messenger, mailing and delivery expenses,
the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of
any special audits or "cold comfort" letters required by or
incident to such performance and compliance, premiums and
other costs of policies of insurance against liabilities
arising out of the public offering of the Registrable
Securities being registered and any fees and disbursements of
underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and
commissions and transfer taxes, if any, provided that, in any
case, where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of Company
personnel or general overhead expenses of the Company, but
shall include all out- of-pocket expenses of the Company
incident to its performance of or compliance with Section 2
(including, but not limited to, fees and disbursements of
outside counsel or independent public accountants retained by
the Company in order to perform its obligations under Section
2), unless such expenses would have been incurred by the
Company in the ordinary course of its business or which the
Company would have incurred in any event.
Securities Act: The Securities Act of 1933, as 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. References to a particular section of the
Securities Act shall include a reference to the comparable
section, if any, of any such similar federal statute.
3. Registration under Securities Act, Etc.
3.1 Registration on Request. (a) At any time after June
30, 1997, upon the written request of Morris (the "Demand Holder") that the
Company effect the registration under the Securities Act of all or part of the
Registrable Securities then owned by the Demand Holder, specifying the intended
method of disposition thereof and whether or not such requested registration is
to be an underwritten offering, the Company will use its reasonable best
efforts to effect the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register by the Demand
Holder, to the extent required to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities so to
be registered; provided that no such request shall be for the registration of
less than 1,000,000 of the Registrable Securities unless at the time of such
request the Demand Holder owns less than 1,000,000 shares of Registrable
Securities in which case such request shall be for all of the Registrable
Securities owned by the Demand Holder; provided, further, that in the event
that four
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registrations requested pursuant to this Section 3.1 shall already have been
effected or deemed to have been effected, the Company will not be required to
effect any additional requested registration. The Company shall have the
absolute right to terminate any registration of less than 1,000,000 Registrable
Securities initiated pursuant to this Section 3.1 unless such registration
relates to all Registrable Securities held by the Demand Holder.
(b) Registration of Other Securities. Whenever the
Company shall effect a registration pursuant to this Section 3.1 in connection
with an underwritten offering, no securities other than the Demand Holder's
Registrable Securities and, in the Company's discretion, securities of the
Company to be sold for the account of the Company shall be included among the
securities covered by such registration if the managing underwriter of such
offering shall have advised the Company that the inclusion of such other
securities would adversely affect such offering.
(c) Registration Statement Form. Registrations under
this Section 3.1 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and (ii) as shall permit the
disposition of the Demand Holder's Registrable Securities in accordance with
the intended method or methods of disposition specified in the Demand Holder's
request for such registration.
(d) Expenses. The Company will pay all Registration
Expenses in connection with any registration requested pursuant to this Section
3.1. The underwriting discounts and commissions if any, in connection with
each registration requested under this Section 3.1 shall be allocated among all
Persons on whose behalf securities of the Company are included in such
registration, on the basis of the respective amounts of the securities then
being registered on their behalf. If the Company terminates a registration
pursuant to the last sentence of Section 3.1(a), but the Demand Holder pays all
of the Registration Expenses incurred in connection with such registration
prior to the date of such termination and any Registration Expenses incurred in
connection with the Company's withdrawing such registration statement, the
Demand Holder shall have the right to make an additional written request for
registration pursuant to and in accordance with this Section 3.1.
(e) Effective Registration Statement. A registration
requested pursuant to this Section 3.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has become
effective, or (ii) if after such registration statement has become effective,
the Registrable Securities to be registered fail to be sold because (A) of any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, or (B) the conditions to closing
(other than closing conditions to be met by the Demand Holder) specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied.
(f) Selection of Underwriters. If a requested
registration pursuant to this Section 3.1 involves an underwritten offering,
the underwriter or underwriters thereof shall be selected by the Demand Holder
with the consent of the Company (which consent shall not be unreasonably
withheld).
(g) Priority in Requested Registrations. If a requested
registration pursuant to this Section 3.1 involves an underwritten offering,
and the managing underwriter shall advise the Company that, in its judgment,
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering within a price range acceptable
to the Demand Holder, the Company will include in such registration to the
extent of the number which the Company is so advised can be sold in such
offering (i) first, the Registrable Securities held by the Demand Holder
requested to be included in such registration, (ii) second, if all of the
Demand Holder's Registrable Securities requested to be registered have been
included, securities of the Company to be sold for the Company's account, and
(iii) third, if all of the securities sought to be registered under the
preceding clauses (i) and (ii) have been included, all other Registrable
Securities of the Company requested to be included in such registration pro
rata on the basis of the number of such Registrable Securities so requested to
be included in the registration or otherwise in accordance with any written
agreement to which the Company is a party.
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(h) Intervals. The Company shall not be required to
effect a registration pursuant to this Section 3.1 earlier than twelve months
after the effective date of a prior registration effected under this Section
3.1.
(i) Deferral of Registration. If, in the good faith
judgment of the Company, a registration at the time and on the terms requested
would interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company that had been contemplated
prior to the notice by the Demand Holder requesting registration, the Company
will not be required to commence using its reasonable best efforts to effect a
registration pursuant to this Section 3.1 until the later of (i) 180 days after
the date of such written notice or if earlier, 60 days after the abandonment or
completion of such financing or other transaction, and (ii) the termination of
any "black-out" period required by the underwriters, if any, in connection with
such financing or other transaction. If, while a registration request is
pending pursuant to this Section 3.1, the Company determines in the good faith
judgment of its legal advisors that the filing of a registration statement
would require the disclosure of material information which the Company has a
bona fide business purpose for preserving as confidential, the Company will not
be required to commence using its reasonable best efforts to effect a
registration pursuant to this Section 3.1 until the earlier of (i) the date
upon which such material information is disclosed to the public or ceases to be
material, or (ii) 135 days after the Company makes such good faith
determination.
(j) Inclusion of Financial Statements. The Company will
not be obligated to file any registration statement pursuant to this Section
3.1 at any time if the Company would be required to include financial
statements audited as of any date other than the end of its fiscal year.
3.2 Incidental Registration. (a) Right to Include
Registrable Securities. If, at any time after June 30, 1997, the Company
proposes to register any of its common stock or options, warrants, rights or
other securities convertible or exercisable into or exchangeable for its common
stock under the Securities Act (other than pursuant to Section 3.1), whether or
not for sale for its own account, it will each such time give prompt written
notice to all holders of Registrable Securities of its intention to do so and
of such holders' rights under this Section 3.2. Upon the written request of
any such holder made within 30 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such holder and the intended method of disposition thereof), the Company will
use its reasonable best efforts to effect the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the holders thereof, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered, provided that if, at any time
after giving written notice of its intention to register any such securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may,
at its option, give written notice of such determination to each holder of
Registrable Securities and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), and (ii) in the case of
a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering
such other securities. No registration effected under this Section 3.2 shall
be deemed to have been effected pursuant to Section 3.1 or shall relieve the
Company of its obligation to effect any registration upon request under Section
3.1. The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 3.2.
The underwriting discounts and commissions, if any, in connection with each
registration requested under this Section 3.2 shall be allocated among all
Persons on whose behalf securities of the Company are included in such
registration, on the basis of the respective amounts of the securities then
being registered on their behalf.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 3.2 involves an underwritten offering of
the securities so being registered, whether or not for sale for the account of
the Company, to be distributed (on a firm commitment basis) by or through one
or more underwriters of nationally recognized standing under underwriting terms
appropriate for such a transaction, and (ii) the
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managing underwriter of such underwritten offering shall inform the Company of
its belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering, then the Company will include in such registration, to the
extent of the number which the Company is so advised can be sold in (or during
the time of) such offering, first, all securities proposed by the Company to be
sold for its own account, second, such Registrable Securities of the Holders
requested to be included in such registration pro rata on the basis of the
number of shares of such securities so proposed to be sold and so requested to
be included, and third, all other Registrable Securities of the Company
requested to be included in such registration pro rata on the basis of the
number of shares of such securities so proposed to be sold and so requested to
be included.
(c) Other Registration Rights. The Company retains the
right to grant registration rights to other holders of the Company's
securities, including its officers and directors, subject to the rights of the
Holders hereunder and otherwise consistent with the provisions of this
Agreement.
(d) Effect on Company Financing. The Company will not be
required to effect any registration of Registrable Securities under this
Section 3.2 if, in the reasonable judgment of its managing underwriter or
underwriters, inclusion of any Registrable Securities in the Company's
registration statement at that time would adversely affect the Company's own
financing.
(e) Other Exclusions. The Company will not be required
to effect any registration of Registrable Securities under this Section 3.2
incidental to the registration of any of its securities in connection with
mergers, acquisitions, exchange offers, rights or subscription offers, dividend
reinvestment plans or stock option or other employee benefit plans.
3.3 Registration Procedures. If and whenever the Company
is required to use its reasonable best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Sections 3.1
and 3.2, the Company will as expeditiously as possible:
(a) prepare and file with the Commission the
appropriate registration statement to effect such registration
and thereafter use its best efforts to cause such registration
statement to become effective;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such
registration statement until the earlier of such time as all
of such securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the
expiration of 90 days after such registration statement
becomes effective;
(c) furnish to each seller of Registrable Securities
covered by such registration statement such number of
conformed copies of such registration statement and of each
such amendment and supplement thereto (including, if
requested, all exhibits), such number of copies of the
prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus and any
other prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities
Act) and such other documents, as such seller may reasonably
request;
(d) use reasonable efforts to register or qualify
all Registrable Securities and other securities covered by
such registration statement under such other securities or
blue sky laws of such jurisdictions in the United States as
each seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such
registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable
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to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except
that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements
of this subdivision (d) be obligated to be so qualified or to
consent to general service of process in any such
jurisdiction;
(e) furnish to each seller of Registrable Securities
a signed counterpart, addressed to such seller (and the
underwriters, if any) of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (and,
if such registration includes an underwritten public
offering, dated the date of the closing under the
underwriting agreement), and
(ii) a "comfort" letter, dated the effective date of
such registration statement (and, if such
registration includes an underwritten public
offering, dated the date of the closing under the
underwriting agreement), signed by the independent
public accountants who have certified the Company's
financial statements included in such registration
statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein)
and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements,
such matters as are customarily covered in accountants'
letters delivered to the underwriters in underwritten public
offerings and such other financial matters, and, in the case
of the legal opinion, such other legal matters, as such
seller, or the underwriters, if any, may reasonably request;
(f) notify each seller of Registrable Securities
covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that or upon the happening
of any event as a result of which, the prospectus included in
such registration statement, as then if effect, includes an
untrue statement of a material fact or omits to state any
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 promptly prepare
and furnish to each such seller a reasonable number of copies
of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not
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 the
light of the circumstances under which they were made;
(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, an earnings statement covering the period of at
least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(h) use reasonable efforts to list all Registrable
Securities covered by such registration statement on any
securities exchange on which any of the Registrable Securities
is then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing.
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Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that upon receipt of any notice from the Company of the
happening of any event of the kind described in clause (f) of this Section 3.3,
such holder will forthwith discontinue such holder's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by clause (f) of this Section 3.3 and, if so
directed by the Company, will deliver to the Company all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the 90-day period
referred to in clause (b) of this Section 3.3 shall be extended by a number of
days equal to the number of days during the period from and including the
giving of notice pursuant to clause (f) of this Section 3.3 to and including
the date when each seller of any Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by clause (f) of this Section 3.3.
3.4 Underwritten Offerings. (a) Requested Underwritten
Offerings. If requested by the underwriters for any underwritten offering by
the Demand Holder of Registrable Securities pursuant to a registration
requested under Section 3.1, the Company will enter into an underwriting
agreement with such underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Demand Holder and the
underwriters and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type,
including, without limitation, indemnities to the effect and to the extent
provided in Section 3.5. The Demand Holder of Registrable Securities to be
distributed by such underwriters shall be a party to such underwriting
agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the Demand Holder of Registrable Securities. The Demand
Holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding the
Demand Holder, the Demand Holder's Registrable Securities and the Demand
Holder's intended method of distribution and any other representation required
by law.
(b) Incidental Underwritten Offerings. If the Company at
any time proposes to register any of its securities under the Securities Act as
contemplated by Section 3.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in Section 3.2 and subject to the
provisions of Section 3.2(b), arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such holder with the
securities to be distributed by such underwriters. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and may
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities. Any such holder of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.
(c) Holdback Agreements. Each holder of Registrable
Securities agrees that, if so required by the managing underwriter, it will not
effect any public sale or distribution of any equity securities of the Company,
during the seven days prior to and the 90 days after any underwritten
registration pursuant to Section 3.1 or 3.2 has become effective.
3.5 Indemnification. (a) Indemnification by the
Company. In the event of any registration of any securities of the Company
under the Securities Act, the Company will, and hereby does, in the case of any
registration statement filed pursuant to Section 3.1 or 3.2, indemnify and hold
harmless the seller of any Registrable Securities covered by such registration
statement, its directors and officers, each other Person who participates as an
underwriter in the offering or sale of such securities and each other
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Person, if any, who controls such seller or any such underwriter within the
meaning of the Securities Act, from and against any losses, claims, damages or
liabilities (whether or not resulting from third-party claims and including
interest and penalties), joint or several, to which such seller or holder or
any such director or officer or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, 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, and
the Company will reimburse such seller, such holder and each such director,
officer, underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding or in asserting any of their
respective rights under this Section 3.5; provided that the Company shall not
be liable in any such case to the extent that any such loss, claim damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such seller specifically stating that it is for use in the
preparation thereof; provided, further, that the Company shall not be liable to
any Person who participates as an underwriter, in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or
amended, to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of such seller or any such director, officer, underwriter or
controlling person and shall survive the transfer of such securities by such
seller.
(b) Indemnification by the Sellers. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to Section 3.2, that the Company shall
have received an undertaking satisfactory to it from the prospective seller of
such securities, to indemnify and hold harmless (in the same manner and to the
same extent as set forth in clause (a) of this Section 3.5) the Company, each
director of the Company, each officer of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act, insofar
as such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, 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, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller specifically stating that
it is for use in the preparation of such registration or supplement. Such
indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling Person and shall survive the transfer of such securities by such
seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section
3.5, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 3.5, except to
the extent that the indemnifying
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party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to
that specified in the preceding provisions of this Section 3.5 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
(e) Indemnification Payments. The indemnification
required by this Section 3.5 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred.
3.8 Adjustments Affecting Registrable Securities. Upon
the occurrence of any combination, subdivision or recapitalization which
affects the Registrable Securities, the minimum number of Registrable
Securities that the Holders may request to be registered pursuant to Section
3.1, and the number of shares of Registrable Securities a Person must hold in
order for such securities to continue to be deemed Registrable Securities under
clause (iv) in the definition of Registrable Securities in Section 2, shall
automatically be adjusted to appropriately reflect such combination,
subdivision or recapitalization and to preserve the original rights and
obligations of the parties hereto under this Agreement. The Company will not
effect or permit or occur any combination or subdivision of shares or any other
recapitalization which would otherwise adversely affect the ability of any of
the undersigned holders of Registrable Securities to initiate or include such
Registrable Securities in any registration of its securities contemplated by
Section 3 or the marketability of such Registrable Securities under any such
registration.
4. Rule 144: If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, all to the extent required from time to
time to enable such holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
(a) Rule 144 under the Securities Act, as such Rule may be amended from time to
time or (b) any similar rule or regulation hereafter adopted by the Commission.
5. Amendments and Waivers. This Agreement may be
amended and the Company may take any action herein prohibited or omit to
perform any act herein required to be performed by it, only if the Company
shall have obtained the written consent to such amendment, action or omission
to act, of the holders of record of two-thirds or more of the shares (by number
of shares) of the Registrable Securities held by the Holders. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that
any Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election, be treated as the
holder of such Registrable Securities for purposes of any request or other
action by any holder
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or holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.
7. Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be (a) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (b) transmitted by hand delivery or
overnight courier, or (c) transmitted by telecopy and, in each case, addressed
(i) if to the Company, to AMERISAFE, Inc. 1807 Highway 190 West, DeRidder,
Louisiana 70634, Telecopy: (318) 463-7298, ATTN: Secretary, (ii) if to a
holder of Registrable Securities, at the address on the Company's records, or
(iii), in each case, at such other address as may be specified in writing to
the other parties hereto.
8. Assignment. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Company shall also be for the
benefit of and enforceable by any subsequent holder of Registrable Securities,
subject to the provisions respecting the minimum numbers or percentages of
shares of Registrable Securities required in order to be entitled to certain
rights, or take certain actions, contained herein.
9. Term. This Agreement shall expire on June 30, 2007.
10. Descriptive Headings. The descriptive headings of
the several sections and paragraphs of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning hereof.
11. Specific Performance. The parties hereto recognize
and agree that money damages may be insufficient to compensate the holders of
any Registrable Securities for breaches by the Company of the terms hereof and,
consequently, that the equitable remedy of specific performance of the terms
hereof will be available in the event of any such breach.
12. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Texas, without giving effect to the choice of law
principles thereof.
13. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the date first above written.
AMERISAFE, Inc.
By:
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Name:
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Title:
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Millard E. Morris
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Mark R. Anderson
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