CONSULTING AGREEMENT
AGREEMENT effective of the 31st of March 1997, by and between Tiger
Financial Group, LLC, a Delaware corporation, with its principal executive
offices at 000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Consultant")
and Nicollet Process Engineering, Inc., a Minnesota corporation, with its
principal executive offices at 000 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxxx, Xxxxxxxxx 00000 (the "Company").
WITNESSETH:
WHEREAS, Consultant is being engaged to assist the Company in investor
relations, strategic planning, public relations, the development of business
plans and in conceiving, arranging, structuring, and negotiating business
combinations.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto hereby agree as follows:
1. TERM. Until this Agreement is terminated in accordance with Section 7
herein, Consultant hereby agrees to act as consultant on behalf of the Company
for a twelve (12) month term commencing on the date hereof ("Effective Date")
and terminating on the twelve (12) month anniversary of the Effective Date, and
as such will provide the consulting services described herein.
2. SERVICES. The consulting services to be provided by Consultant
pursuant to the terms of this Agreement shall include, but shall not be limited
to: assisting the Company in disseminating information concerning it to the
investment banking community as indicated in the
attached Schedule A, the evaluation and analysis of potential mergers; asset,
business of other acquisitions; and other business combinations (hereinafter
"Business Combinations") that the Company may ask the Consultant to undertake;
review and analysis of documents relating to said Business Combinations; and
introducing and/or arranging for introductions between members of the business
community and the Company. The foregoing are collectively referred to as the
"Consulting Services." The Consultant will not and is not required to perform
any capital raising services for the Company. The Consultant acknowledges that
the Company is entitled to engage any other party(ies) to perform services
similar or identical to the Consulting Services during the term of this
Agreement and thereafter.
Consultant further agrees to devote such time toward the performance of its
duties hereunder as is necessary. Consultant will spend a minimum of 40 hours
per month in performing the Consulting Services under this Agreement. The
Company acknowledges that Consultant and/or its affiliates will provide
consulting advice (of all types contemplated by this Agreement and otherwise) to
others. Nothing herein contained shall be construed to limit or restrict
Consultant in conducting such business with respect to others, or rendering such
advice to others, provided however, that during the term of this Agreement,
neither the Contractor nor the Contractor's employees, officers, directors,
members, affiliates and agents will be engaged by any other business, as an
employee, independent contractor, owner or otherwise, in a managerial,
technical, consulting or other capacity, in a manner competitive with the
Company, and will not, in any way, employ or attempt to employ any of the
Company's then employees on behalf of any other entity competing with the
Company.
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3. PAYMENT FOR SERVICES.
(a) In consideration for the Consulting Services to be performed
hereunder by Consultant, the Company hereby agrees to pay Consultant: (i)
$50,000 as an initial retainer payable as follows: (1) $25,000 upon
execution of this Agreement, and (2) 22,222 shares of common stock (the
"Shares"), which Shares have a market value as of the date hereof of
$25,000 based upon the $1.125 per share closing bid price of the Company's
common stock as quoted on the Nasdaq Small Cap market on the day prior to
the date hereof; and (i) $4,500 per month for six (6) months and $5,000 per
month for (5) months each such payment being paid on the first day of each
month during the term hereof with the first monthly payment being due
May 1, 1997. The Company agrees to reimburse Consultant for its out-of-
pocket expenses incurred hereunder, provided Consultant delivers to the
Company documentation for all such expenses in accordance with the rules
and regulations of the Internal Revenue Service under the Internal Revenue
Code of 1986, as amended (the "CODE") and in accordance with the standard
policies of the Company relating to reimbursement of business expenses,
PROVIDED FURTHER, that the Consultant obtains prior written consent of the
Company for any expense or group of related expenses in excess of $2,500.
The Company shall reimburse Consultant on a monthly basis at the time other
amounts are payable under this Agreement.
(b) The Consultant acknowledges that (i) the Consultant must bear the
economic risk of an investment in the Shares for an indefinite period of
time because the Shares have not been registered under the Securities Act
of 1933, as amended (the "1933 Act") or any applicable state securities
laws and therefore may not be sold, transferred,
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assigned or otherwise disposed of unless such disposition is subsequently
registered under such laws or exemptions from such registrations are
available, and (ii) a legend will be placed on the certificate evidencing
the Shares stating that the Shares have not been registered under the 1933
Act and referencing the restrictions on the transferability of the Shares.
(c) The Consultant acknowledges that it has received copies of all
documents and any other information requested from the Company and has had
an opportunity to ask questions of and receive answers from the management
of the Company and to obtain any additional information desired or has
elected to waive such opportunity. The Consultant confirms that it is
fully informed regarding the financial condition of the Company, the
administration of its business affairs and its prospects for the future,
and that the Company makes no assurance whatsoever concerning the present
and prospective value of the Shares to be acquired. The Consultant
realizes that the Shares, as an investment, are speculative and involve a
high degree of risk. The Consultant believes that an investment in the
Shares is suitable for the Consultant based upon the Consultant's
investment objectives and financial needs, and the Consultant has the
financial means to undertake the risks of an investment in the Shares, to
hold the Shares for an indefinite period of time, and to withstand a
complete loss of the Consultant's investment in the Shares. The Consultant
has such knowledge and experience in financial and business matters that
the Consultant is capable of evaluating the merits and risks of an
investment in the Shares. The Shares are being purchased by the Consultant
for investment purposes in the Consultant's name solely for Consultant's
own beneficial interest and not as
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nominee for, or for the beneficial interest of, or with the intention to
transfer to, any other person, trust or organization. The Consultant is an
"accredited investor" within the meaning of Rule 501 under the 1933 Act.
4. EQUITY COMPENSATION.
(a) In consideration for the services to be performed by the
Consultant during the term of this Agreement, Consultant will receive upon
the execution of this Agreement, options to purchase the Company's common
stock, $0.01 par value (the "Common Stock") in the form attached hereto as
Exhibit B (the "Option Agreement") for 100,000 shares of the Company's
common stock exercisable at an exercise price (i) with respect to 25,000
shares at $1.25, (ii) with respect to 50,000 shares at an exercise price of
$2.00 per share, and (iii) with respect to the remaining 25,000 shares at
$2.50 per share (collectively, the "Options"). Such Options will vest and
have a term according to the Option Agreement attached hereto.
(b) The shares of Common Stock underlying the Options and the Shares
(collectively the "Registrable Securities") will have the registration
rights contained in Exhibit C attached hereto.
(c) As soon as is practicable after the filing of a Registration
Statement in accordance with the terms and conditions of Exhibit C attached
hereto, the Company will use its reasonable best efforts to file any
required notification or an additional listing application with the
National Association of Securities Dealers, Inc. Automated
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Quotation Systems ("Nasdaq") or with any exchange upon which the Company's
Common Stock is traded to list or permit the trading of the Registrable
Securities.
5. OVERDUE PAYMENTS. In the event that any payment due Consultant under
this Agreement shall not be made when due, interest shall accrue on the unpaid
balance of such overdue payments at the rate of twelve (12) percent per annum
until paid in full.
6. CONFLICTS. Consultant shall be an independent contractor and shall
have no right or authority to assume or create any obligation or responsibility,
express or implied, on behalf of or in the name of the Company, unless
specifically authorized in writing by the Company. Except as otherwise provided
herein, no provisions of this Agreement shall be construed to preclude
Consultant, or any officer, director, agent, associate, affiliate or employee of
Consultant from engaging in any activity whatsoever, including without
limitation receiving compensation for managing investments, or acting as an
advisor, broker, or dealer, to any person or entity, participating in any
corporation, partnership, trust or other business entity or from receiving
compensation or profit therefore.
7. INDEMNIFICATION.
(a) The Company and its future subsidiaries, jointly and severally,
agree to indemnify and hold harmless Consultant and its present and future
shareholders as well as its and their officers, directors, employees and
shareholders ("Consultant Indemnified Parties" or "Consultant Indemnified
Party") against any and all loss, liability or damage suffered or incurred
by the Consultant by reason of any breach by the Company of this Agreement.
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(b) Consultant agrees to indemnify and hold harmless the Company as
well as its officers, directors, affiliates, associates, employees,
shareholders, attorneys and agents ("the Company Indemnified Parties" or
"the Company Indemnified Party") against
(1) any and all loss, liability or damage suffered or incurred
by the Company by reason of any untrue representation of, breach of
warranty by, or other breach by the Consultant in this Agreement;
(2) any and all loss, liability or damage to which the Company
or any such Company Indemnified Party may become subject under the
1933 Act or otherwise, insofar as such loss, liability or damages
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact made by Consultant, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made, and will reimburse any legal or other
expenses reasonably incurred by the Company or any such Company
Indemnified Party in connection with investigating or defending any
such action or claim as such expenses are incurred;
(3) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, reasonable legal fees and expenses, incident to any of the
foregoing or incurred in investigating or attempting to avoid the same
or to oppose the imposition thereof,
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or in enforcing the indemnification rights of the Company pursuant to
this Section 7(b).
(c) The parties intend that all indemnification claims be made as
promptly as practicable by the party seeking indemnification (the
"INDEMNIFIED PARTY"). Whenever any claim arises for indemnification
hereunder the Indemnified Party will promptly notify the party from whom
indemnification is sought (the "INDEMNIFYING PARTY") of the claim and, when
known, the facts constituting the basis for such claim. The failure so to
notify the Indemnifying Party will not relieve the Indemnifying Party of
any liability that it may have to the Indemnified Party except to the
extent the Indemnifying Party demonstrates that the defense of such action
is prejudiced thereby.
(d) With respect to claims made by third parties, if the Indemnifying
Party admits to the Indemnified Party and agrees in writing that it will be
liable for the full amount of the claim, the Indemnifying Party will be
entitled to assume control of the defense of such action or claim, at its
sole expense, with counsel reasonably satisfactory to the Indemnified
Party; provided, however, that:
(1) the Indemnified Party will be entitled to participate in the
defense of such claim and to employ counsel at its own expense to
assist in the handling of such claim;
(2) no Indemnifying Party will consent to the entry of any
judgment or enter into any settlement that (A) does not include as an
unconditional term thereof the giving by each claimant or plaintiff to
each Indemnified Party of a
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release from all liability in respect of such claim or (B) would
result in the imposition against the Indemnified Party of injunctive
or other equitable relief; or (C) could materially interfere with the
business, operations or assets of the Indemnified Party; and,
(3) if the Indemnifying Party does not assume control of the
defense of such claim in accordance with the foregoing provisions
within ten (10) business days after receipt of notice of the claim,
the Indemnified Party will have the right to defend such claim in such
manner as it may deem appropriate at the reasonable cost and expense
of the Indemnifying Party, and the Indemnifying Party will promptly
reimburse the Indemnified Party therefor in accordance with this
Section 7; provided that the Indemnifying Party and the Indemnified
Party will not consent to the entry of any judgment or enter into any
settlement without the written consent of the Indemnifying Party,
which consent will not be unreasonably withheld or delayed, and that
(A) does not include as an unconditional term thereof the giving by
each claimant or plaintiff to each Indemnified Party of a release from
all liability in respect of such claim or (B) would result in the
imposition against the Indemnified Party of injunctive or other
equitable relief; or (C) could materially interfere with the business,
operations or assets of the Indemnified Party.
(e) The remedies provided herein are cumulative and will not preclude
assertion by any party of any rights or the seeking of any other remedies
against any other party.
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8. TERMINATION. This Agreement may be terminated under the following
circumstances:
(a) By either party if the other party is in material breach of the
terms of this Agreement; provided, however, that the non-breaching party
has given the breaching party written notice of such breach. The breaching
party will have thirty (30) days in which to cure such breach or the non-
breaching party may terminate this Agreement;
(b) By the Consultant, in the event that an order for relief will be
entered in any Federal bankruptcy proceeding in which the Company is the
debtor; or if bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of debtors, are instituted
by or against the Company and, if instituted against the Company, are
consented to or, if contested by the Company, are not dismissed by the
adverse parties or by an order, decree or judgment within 30 days after
such institution;
(c) By the Company immediately, in the event that the Board of
Directors of the Company determines to commence a public or private
offering of its securities; and
(d) By the Company, for any reason, upon 90 days prior written
notice.
9. ENTIRE AGREEMENT; WAIVERS. This Agreement supersedes any and all
agreements, arrangements and understandings relating to the matters provided for
herein, entered into or reached prior to the date hereof. No amendment, waiver
or discharge of any provisions hereof
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shall be effective unless in writing signed by the parties hereto. This
Agreement may not be assigned by any party hereto without the prior written
consent of the other parties hereto.
10. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered personally or by
facsimile or three days after being sent by registered or certified mail,
postage prepaid, return receipt requested, to the address set forth on the first
page of this Agreement or such other address as any party may notify the others
pursuant hereto.
11. HEADINGS. The headings in this Agreement are for purpose of reference
only and shall not be considered in construing this Agreement.
12. CONSENT TO SERVICE OF PROCESS; JURISDICTION; VENUE. Each of the
parties hereto hereby consents to the personal jurisdiction of the United States
District of Delaware in any action, suit or proceeding arising under this
Agreement, agrees to bring any such action, suit or proceeding only in such
courts and agrees further that service of process or notice in any such action,
suit or proceeding shall be effective if given in the manner set forth in
Section 10 hereof.
13. CONFIDENTIAL INFORMATION.
(a) "Confidential Information," as used in this Section 13, means
information that is not generally known and that is proprietary to the
Company or that the Company is obligated to treat as proprietary. Any
information that Consultant reasonably considers Confidential Information,
or that the Company treats as Confidential Information, will be
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presumed to be Confidential Information (whether Consultant or others
originated it and regardless of how Consultant obtained it).
(b) Except as specifically authorized by an authorized officer of the
Company or by written Company policies, Consultant will not, either during
or after providing Consulting Services under this Agreement, use or
disclose Confidential Information to any person who is not an employee of
the Company. Upon termination of this Agreement, Consultant will promptly
deliver to the Company all records and any compositions, articles, devices,
apparatus and other items that disclose, describe or embody Confidential
Information, including all copies, reproductions and specimens of the
Confidential Information in Consultant's possession, regardless of who
prepared them and will promptly deliver any other property of the Company
in Consultant's possession, whether or not Confidential Information.
(c) Consultant understands that if Consultant fails to fulfill
Consultant's obligations under Sections 2 and 13 of this Agreement, the
damages to the Company would be very difficult to determine. Therefore, in
addition to any rights or remedies available to the Company at law, in
equity, or by statute, Consultant hereby consents to the specific
enforcement of Sections 2 and 13 of this Agreement by the Company through
an injunction or restraining order issued by an appropriate court. The
obligations under this Section 13 survive termination of this Agreement.
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14. GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof or the actual domiciles of the parties
hereto.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf, effective as of the
date first written above.
TIGER FINANCIAL GROUP, LLC NICOLLET PROCESS ENGINEERING, INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Managing Principal Title: President and Chief Executive
Officer
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SCHEDULE A
INVESTOR RELATIONS TIMELINE FOR NICOLLET PROCESS ENGINEERING, INC.
+ Months One and Two
+ Week One
- Announcement to shareholders concerning Tiger
+ Week Two
- Corporate due diligence materials provided by Company
+ Week Three
- Due diligence trip
+ Week Four
- Presentation development
- Corporate profile development
+ Week Five
+ Mailings prepared for
- Analysts
- Brokers
- Portfolio Managers
+ Weeks Six - Eight
- Constant phone solicitation of the investment community begins
+ Months Four - Five
- New York road show
- Local road show
+ Months Six - Eleven
- Second phase mailing begins
- Phone solicitation continues
+ Additional Services
- Management conference calls as needed
- Fielding of investor inquiries
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EXHIBIT B
See Exhibit 4.1.
EXHIBIT C
REGISTRATION RIGHTS
REGISTRATION RIGHTS
1. REQUIRED REGISTRATION. If the Company receives a written request
therefor from any record holder or holders of an aggregate of at least a
majority of the shares of Purchased Stock (as hereinafter defined) not
theretofore registered under the 1933 Act and sold, the Company will prepare and
file a registration statement on Form S-3 under the 1933 Act covering the shares
of Purchased Stock which are the subject of such request and shall use its best
efforts to cause such registration statement to become effective. In addition,
upon the receipt of such request, the Company will promptly give written notice
to all other record holders of shares of Purchased Stock not theretofore
registered under the 1933 Act and sold that such registration is to be effected.
The Company will include in such registration statement such shares of Purchased
Stock for which it has received written requests to register by such other
record holders within 30 days after the delivery of the Company's written notice
to such other record holders. The Company will be obligated to prepare, file
and cause to become effective only one registration statement pursuant to this
Section 1, will be obligated only to register such shares of Purchased Stock on
Form S-3 and to pay all costs and expenses associated with such registration
statement. Notwithstanding the foregoing, the record holder or holders of an
aggregate of at least a majority of the shares of Purchased Stock not
theretofore registered under the 1933 Act and sold may require, pursuant to this
Section 1, the Company to prepare, file and cause to become effective any number
of registration statements but such holder or holders will bear their own costs
and expenses and reimburse the company for its costs and expenses associated
with such registration statements and the Company will not be required to comply
with more than two such requests per year. In the event that the holders of a
majority of the Purchased Stock for which registration has been requested
pursuant to this Section 1 determine for any reason not to proceed with a
registration at any time before a registration statement has been declared
effective by the Securities and Exchange Commission (the "Commission"), and such
registration statement, if theretofore filed with the Commission, is withdrawn
with respect to the Purchased Stock covered thereby, and the holders of such
Purchased Stock agree to bear their own expenses incurred in connection
therewith and to reimburse the Company for the expenses incurred by it
attributable to the registration of such Purchased Stock, then the holders of
such Purchased Stock shall not be deemed to have exercised their right to
require the Company to register Purchased Stock pursuant to this Section 1.
Without the written consent of the holders of a majority of the Purchased
Stock for which registration has been requested pursuant to this Section 1,
neither the Company nor any other holder of securities of the Company may
include securities in such registration if in the good faith judgment of the
managing underwriter, if any, of such public offering the inclusion of such
securities would interfere with the successful marketing of the Purchased Stock
or require the exclusion of any portion of the Purchased Stock to be registered.
The rights granted by this Section 1 may be transferred to and are
exercisable by subsequent transferee of any shares of Purchased Stock, except
with respect to shares of Purchased Stock that have been registered under the
1933 Act and sold.
The holders of the Purchased Stock hereby acknowledge that prior to the
Company proceeding with the actual filing of a registration statement on Form
S-3 for the Purchased Stock, the holders must exercise the Options and tender
the consideration for such exercise to the Company in accordance with the
terms and conditions of the Option Agreement. In addition, the holders of
the Purchased Stock acknowledge that the rights granted hereunder only
obligate the Company to file a Registration Statement on Form S-3, if
available to the Company. The Company is under no obligation to file any
other form of Registration Statement.
2. INCIDENTAL REGISTRATION. Each time the Company determines to proceed
with the actual preparation and filing of a registration statement under the
1933 Act in connection with the proposed offer and sale for cash of any of its
Common Stock by it or any of its security holders (other than a registration
statement on a form that does not permit the inclusion of shares by its security
holders), the Company will give written notice of its determination to all
record holders of Purchased Stock not theretofore registered under the 1933 Act
and sold. Upon the written request of a record holder of any shares of
Purchased Stock given within 30 days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause all such shares of
Purchased Stock, the record holders of which have so requested registration
thereof, to be included in such registration statement, all to the extent
requisite to permit the sale or other disposition by the prospective seller or
sellers of the Purchased Stock to be so registered; provided, however, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration. Notwithstanding the foregoing, nothing shall require
the Company to cause the Purchased Stock to be included in such Registration
Statement, if the Company determines, after consultation with legal counsel,
that including such shares of Purchased Stock in such Registration Statement
would be a violation of other registration rights granted prior to the date
hereof. If any registration pursuant to this Section 2 shall be underwritten in
whole or in part, the Company may require that the Purchased Stock requested for
inclusion pursuant to this Section 2 be included in the underwriting on the same
terms and conditions as the securities otherwise being sold through the
underwriters. If in the good faith judgment of the Company or the managing
underwriter of such public offering the inclusion of all of the Purchased Stock
originally covered by a request for registration would reduce the number of
shares to be offered by the Company or other security holders having
registration rights superior to the holders of the Purchased Stock or interfere
with the successful marketing of the shares of stock offered by the Company, the
number of shares of Purchased Stock otherwise to be included in the underwritten
public offering may be eliminated.
The rights granted by this Section 2 may be transferred to and are
exercisable by subsequent transferee of any shares of Purchased Stock, except
with respect to shares of Purchased Stock that have been registered under the
1933 Act and sold.
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3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 1 or Section 2 hereof to effect the registration of
shares of Purchased Stock under the 1933 Act, the Company will:
(a) prepare and file with the Commission a registration statement
with respect to such securities, and use its best efforts to cause such
registrant statement to become and remain effective for such period as may
be reasonably necessary to effect the sale of such securities, not to
exceed six months;
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such
securities, not to exceed six months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters
may reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue
sky laws of such jurisdictions as such participating holders may reasonably
request in writing within 20 days following the original filing of such
registration statement, except that the Company shall not for any purpose
be required to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any jurisdiction wherein
it is not so qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the Commission for
the amending or supplementing of such registration statement or prospectus
or for additional information;
(g) prepare and file with the Commission, promptly upon the request
of any such holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such holders
(and concurred in by counsel for the Company), is required under the 1933
Act or the rules and regulations thereunder in connection with the
distribution of the Purchased Stock by such holder;
(h) prepare and promptly file with the Commission and promptly notify
such holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time
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when a prospectus relating to such securities is required to be delivered
under the 1933 Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading;
(i) advise such holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued;
(j) not file any amendment or supplement to such registration
statement or prospectus to which a majority in interest of such holders
shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements
of the 1933 Act or the rules and regulations thereunder, after having been
furnished with a copy thereof at least five business days prior to the
filing thereof, unless in the opinion of counsel for the Company the filing
of such amendment or supplement is reasonably necessary to protect the
Company from any liabilities under any applicable federal or state law and
such filing will not violate applicable law; and
(k) at the request of any such holder, furnish (i) an opinion, dated
as of the closing date, of the counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any, and
to the holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request; and (ii) letters
dated as of the effective date of the registration statement and as of the
closing date, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and to the holder or
holders making such request, covering such matters as such underwriters and
holder or holders may reasonably request.
4. EXPENSES. With respect to Section 1 and Section 2 hereof (except as
otherwise provided in Section 1), the Company shall bear the following fees,
costs and expenses: all registration, filing and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if the Company and/or selling security holders are required to bear such fees
and disbursements), all internal Company expenses, all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified, and the premiums and other costs of policies of
insurance against liability (if any) arising out of such public offering. Fees
and disbursements of counsel and accountants for the selling security holders,
underwriting discounts and commissions and transfer taxes relating to the shares
included in the offering by the selling security holders, and any other expenses
incurred by the
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selling security holders not expressly included above, shall be borne pro rata
by the selling security holders.
5. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each holder of
shares of Purchased Stock which are included in a registration statement
pursuant to the provisions of Section 1 or 2 hereof, its directors and
officers, and any underwriter (as defined in the 0000 Xxx) for such holder
and each person, if any, who controls such holder or such underwriter
within the meaning of the 1933 Act, from and against, and will reimburse
such holder and each such underwriter and controlling person with respect
to, any and all loss, damage, liability, cost and expense to which such
holder or any such underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment
or supplement thereto, or arise out of or are based upon the 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; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, damage, liability, cost or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by such holder,
such underwriter or such controlling person in writing specifically for use
in the preparation thereof.
(b) Each holder of shares of Purchased Stock which are included in a
registration pursuant to the provisions of Section 1 or 2 hereof will
indemnify and hold harmless the Company, its directors and officers, any
controlling person and any underwriter from and against, and will reimburse
the Company, its directors and officers, any controlling person and any
underwriter with respect to, any and all loss, damage, liability, cost or
expense to which the Company or any controlling person and/or any
underwriter may become subject under the 1933 Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses are caused by any
untrue or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment
or supplement thereto, or arise out of or are based upon the omission or
the 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by such
holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 5 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified
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party will, if a claim thereof is to be made against the indemnifying party
pursuant to the provisions of said paragraph (a) or (b), promptly notify
the indemnifying party of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than hereunder. In case
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party, provided, however, if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, or if there is a
conflict of interest which would prevent counsel for the indemnifying party
from also representing the indemnified party, the indemnified party or
parties shall have the right to select separate counsel to participate in
the defense of such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party pursuant to the provisions of said
paragraph (a) or (b) for any legal or other expense subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the proviso of the preceding
sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after the notice of the commencement of the
action, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
6. SPECIAL DEFINITION. "Purchased Stock" shall mean the shares of Common
Stock issuable upon exercise of the Option dated as of March 31, 1997 (the
"Option") to purchase One Hundred Thousand (100,000) shares of Common Stock of
the Company and the Shares.
7. AVAILABILITY OF REGISTRATION RIGHTS. The right to registration
pursuant hereto will commence on the date hereof and will terminate on the fifth
anniversary of the date hereof.
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