EXHIBIT 99.D
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated October 21, 1997 between Guardian
International, Inc., a Nevada corporation (the "Company"), and Westar
Capital, Inc., a Kansas corporation (the "Stockholder").
RECITALS
The Company has sold to the Stockholder 2,500,000
shares (the "Common Shares") of the Company's Class A Voting Common
Stock, par value $.001 per share (the "Common Stock") and has agreed to
sell to the stockholders 1,875,000 shares (the "Preferred Shares") of
Series A 9 3/4% Convertible Cumulative Preferred Stock (the "Preferred
Stock"), par value $.001 per share, which is convertible into Common
Stock. In this Agreement, the Common Shares and the Common Stock
issuable by the Company upon conversion of the Preferred Shares,
together with any stock dividends, distributions, or splits or any
shares issued or issuable in connection with any reclassification,
recapitalization, merger or consolidation or reorganization
("Adjustments"), shall be collectively referred to as the "Shares."
AGREEMENT
1. REGISTRATION RIGHTS.
(a) INCIDENTAL RIGHTS. If at any time or from time to time the
Company proposes to file with the Securities and Exchange Commission
(the "Commission") a registration statement (other than a registration
statement on Form S-8 covering solely an employee benefit plan or a
registration statement on Form S-3 covering solely offers pursuant to a
dividend or interest reinvestment plan) for the registration under the
Securities Act of 1933, as amended (the "Securities Act") of any shares
of Common Stock for sale to the public by the Company or on behalf of a
stockholder of the Company for cash (excluding shares of Common Stock
issuable by the Company upon the exercise of employee stock options or
in connection with the merger or consolidation of the Company with one
or more other corporations), the Company shall give the Stockholder and
Xxxxxx Financial, Inc. ("Xxxxxx") so long as Xxxxxx has Xxxxxx
Registration Rights as later defined, at least 30 days' prior written
notice of the filing of the proposed registration statement. The notice
shall include a list of the states and foreign jurisdictions, if any, in
which the Company intends to qualify such shares, the number of shares
so proposed to be registered, the proposed date of filing of such
registration statement, any proposed means of distribution of such
shares, any proposed managing underwriter or underwriters, and a good
faith estimate by the Company or managing underwriter of the maximum
offering price thereof, as such price is proposed to appear on the
facing page of such registration statement. On written request of the
Stockholder (and Xxxxxx, if applicable) received by the Company within
15 days after the date of the Company's delivery of its notice of
intention, the Company shall, subject to the conditions and in
accordance with the procedures set forth in Sections
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1(c) and 1(d), and at its own expense as provided in Section 3, include
in the coverage of such registration statement and qualify for sale
under the blue sky or securities laws of the various states, the
aggregate number of Shares proposed to be registered (the "Registrable
Shares").
Notwithstanding any other provision in this Section 1(a), if in
connection with an underwritten offering the managing underwriter (which
shall be a nationally recognized independent investment banking firm or
such firm as the parties shall mutually agree) for the Company indicates
its reasonable belief in writing that the effect of including all or
part of the Registrable Shares in such underwritten offering will
materially and adversely affect the sale of the Registrable Shares
(which statement of the managing underwriter shall also state the
maximum number of shares (the "Maximum Shares"), if any, which can be
sold without materially adversely affecting the sale of the Registrable
Shares), then the number of Registrable Shares to be included in the
offering shall be reduced to the Maximum Shares and such Maximum Shares
shall be allocated (i) first, to the Company; and (ii) second, between
the Stockholder and Xxxxxx, in proportion, as nearly as practicable, as
such Person's Registrable Shares bears to the aggregate number of
Registrable Shares.
If the managing underwriter has not limited the number of
Shares to be underwritten, the Company and other holders of the
Company's securities, in addition to Xxxxxx, may include securities for
its (or their) own account in such registration if (A) the managing
underwriter so agrees and (B) the number of shares which would otherwise
have been included in such registration and underwriting will not
thereby be limited and (C) such other securities are then registrable on
Form S-3.
No registration statement effected under this Section 1(a)
shall release the Company of its obligations to file registration
statements on behalf of Stockholder under Section 1(b).
Notwithstanding any request for inclusion in any registration
statement under this Section 1(a), the Stockholder may elect to reduce
or withdraw its request for inclusion of its Shares at any time prior to
execution of the underwriting agreement with respect thereto by the
Stockholder.
The Company shall have the right to select all underwriters,
including the managing underwriter, of all public offerings of shares of
Common Stock subject to the provisions of this Section 1(a). The
Stockholder shall enter into (together with the Company) an underwriting
agreement with the underwriter or underwriters, provided that such
underwriting agreement is in a customary form and is reasonably
acceptable to the Stockholder. Nothing in this Section 1(a) shall create
any liability on the part of the Company to the Stockholder if the
Company for any reason decides not to file such a registration
statement.
(b) MANDATORY RIGHTS. Upon written request by the Stockholder,
the Company shall, subject to the conditions, and in accordance with the
procedures, set forth in this Section 1(b) and Sections 1 (c) and 1(d),
file a registration statement, including, without limitation, by means
of a shelf registration pursuant to Rule 415 under the Securities Act (a
"Shelf Registration") if so requested by the Stockholder, (and use its
best efforts to cause such registration statement to become effective)
and use its best efforts to qualify Shares owned by the Stockholder for
sale under the blue
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sky or securities laws of such states as may be reasonably requested by
the Stockholder. The request for registration pursuant to this Section
1(b) shall specify the number of Shares to be registered. The
Stockholder shall have the right to select the underwriters and managers
to administer the offering, subject to approval of the Company, which
approval may not be unreasonably withheld. The Company shall enter into
(together with the Stockholder) an underwriting agreement with the
underwriter or underwriters, provided that such underwriting agreement
is in a customary form and is reasonably acceptable to the Company and
the Stockholder.
The Company shall be permitted to delay the filing of any
registration statement requested pursuant to this Section 1(b) or to
delay its effectiveness for a reasonable period of time (in no event to
exceed 45 days) if, in the good faith and reasonable judgment of the
Board of Directors of the Company, such registration would have a
material adverse effect on pending financing transactions, corporate
reorganizations or other material events involving the Company, or if
the Company, in the good faith judgment of its Board of Directors,
reasonably believes that the filing thereof at the time requested would
require disclosure of material confidential information which would
materially and adversely affect the business or prospects of the
Company. Notwithstanding anything herein to the contrary, the Company
shall not exercise its right to delay the effectiveness of a
registration statement more than twice in any twelve (12) month period.
Once the cause of such delay is eliminated, the Company shall promptly
notify the Stockholder, and as soon as the Stockholder notifies the
Company to proceed, the Company shall file a registration statement and
use its best efforts to cause such sale to be registered under the
Securities Act and qualified under the securities laws of such states as
may be reasonably requested by the Stockholder, all as provided above.
Notwithstanding any other provision in this Section 1(b), if
the managing underwriter indicates its reasonable belief in writing that
the effect of including all or part of the securities requested to be
registered by the Stockholder, together with the number of shares to be
registered on behalf of Xxxxxx or the Company, if any, in the coverage
of such registration statement will materially and adversely affect the
sale of such Registrable Shares (which statement of the managing
underwriter shall also state the number of Maximum Shares, if any), then
the number of Registrable Shares shall be reduced to the Maximum Shares
and such Maximum Shares shall be allocated (i) first, to the Stockholder
and (ii) second, between the Company and Xxxxxx, in proportion, as
nearly as practicable, as such Person's Registrable Shares bears to the
aggregate number of Registrable Shares.
If the managing underwriter has not limited the number of
Shares to be underwritten, the Company and other holders of the
Company's securities, in addition to Xxxxxx, may include securities for
its (or their) own account in such registration if (A) the managing
underwriter so agrees and (B) the number of shares which would otherwise
have been included in such registration and underwriting will not
thereby be limited and (C) such other securities are then registrable on
Form S-3.
The Stockholder shall be entitled to request three
registrations pursuant to this Section 1(b). The Company shall be
obligated to maintain the effectiveness of each such registration
statement until the earlier of (A) the sale of all shares registered
pursuant thereto, or (B) the date that is two years after the date on
which the registration statement is declared effective. The Company
shall not
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be required by this Section 1(b) to effect a registration of Shares
unless (A) Form S-3, or another equivalent short-form registration
statement, is then available to the Company for such registration, and
(B) the aggregate number of the Shares requested to be registered
exceeds 500,000 Shares as adjusted for any Adjustments.
The Stockholder may withdraw a request under this Section 1(b)
in circumstances where the Company is in material breach of its
obligations hereunder and has not cured such breach after notice thereof
and a reasonable opportunity to do so, or the withdrawal occurs in
connection with a delay by the Company or inability of Stockholder to
include all of its Shares requested by Stockholder to be so registered
or the failure of any requested registration to become or remain
effective as provided herein. Any request so withdrawn prior to such
registration statement being declared effective shall not constitute a
request for determining the number of requests to which Stockholder is
entitled.
(c) CERTAIN REGISTRATION CONDITIONS. The Company shall not be
required to effect a registration of any Shares of the Stockholder
pursuant to Section 1(a) or 1(b), or file any post-effective amendment
thereto:
(1) unless the Stockholder agrees (w) that it has a
present intention to sell (other than in connection with a Shelf
Registration) its Shares so requested (x) to sell and distribute a
portion or all of its Shares in accordance with the plan or plans of
distribution adopted by and through underwriters, if any, acting for the
Company with respect to any request under Section 1(a), and (y) to bear
a pro rata share of underwriter's discounts and commissions;
(2) if, in the case of a request for registration
under the provisions of Section 1(b), in the opinion of counsel for the
Company and counsel for the Stockholder, the Shares for which
registration has been requested may be disposed of within a comparable
time frame without registration under the Securities Act and upon such
disposition all legends on certificates representing such Shares which
restrict transfer under the Securities Act and applicable state
securities laws may be removed from such certificates and any such
restriction and legends are so removed;
(3) if, in the case of a request for registration of
an underwritten offering under the provisions of Section 1(b), (x) a
registration statement requested by the Stockholder with respect to an
underwritten offering covering Common Stock became effective in the same
calendar quarter in which such request was made, (y) the Company in good
faith anticipates filing a registration statement for an offering of
Common Stock for the Company's account within thirty (30) days after
such demand date and has not abandoned such proposed offering; or (z)
the Company has received a request for a demand registration from the
holders of other registration rights pursuant to which the Company is
effecting a registration of Common Stock within thirty (30) days of the
date of the Stockholder's request;
(4) unless the Company has received from the
Stockholder all such information the Company reasonably requests from
the Stockholder concerning the Stockholder and its intended method of
distribution of the Shares to enable the Company to include in the
registration statement all material facts required to be disclosed
therein; or
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(5) if the particular Shares for which registration
has been requested have been distributed to the public pursuant to an
offering registered under the Securities Act, sold to the public through
a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule then in force), or repurchased by
the Company or any affiliate thereof.
(d) COVENANTS AND PROCEDURES. If and whenever the Company is
required hereunder to effect the registration of Shares under the
Securities Act, the Company, at its expense as provided in Section 3
hereof and as expeditiously as possible, shall:
(1) In accordance with the Securities Act and all
applicable rules and regulations, promptly, and in any event within
forty-five (45) days of the request, prepare and file with the
Commission a registration statement covering the Shares requested to be
registered and use its best efforts to cause such registration statement
to become and remain effective. The Company will file such post-effective
amendments to such registration statement (and use its best
efforts to cause them to become effective) and such supplements as are
necessary so that current prospectuses are at all times available until
the earlier of the completion of the distribution of all shares under
the registration statement or two (2) years after the effective date of
the registration statement; PROVIDED that before filing a registration
statement or prospectus or any amendments or supplements thereto, the
Company will furnish to counsel selected by the Stockholder, and the
sales or placement agent or agents, if any, for the Shares and the
managing underwriter or underwriters, if any, draft copies of all such
documents proposed to be filed at least seven (7) days prior to such
filing, which documents will be subject to the reasonable review of the
Stockholder, the sales or placement agent or agents, if any, for the
Shares and the managing underwriter or underwriters, if any, and their
respective agents and representatives and (x) the Company will not
include in any registration statement information concerning or relating
to the Stockholder to which the Stockholder shall reasonably object in
writing (unless in the reasonable opinion of outside counsel the
inclusion of such information is required by applicable law or the
regulations of any securities exchange to which the Company may be
subject), and (y), the Company will not file any registration statement
pursuant to Section 1(b) or amendment thereto or any prospectus or any
supplement thereto to which the Stockholder and managing Underwriter
shall reasonably object in writing;
If the offering is to be underwritten, in whole or in
part, enter into a written underwriting agreement in form and substance
reasonably satisfactory to the managing underwriter of the public
offering, the Stockholder and the Company;
If the Shares to be covered by the registration
statement are not to be sold to or through underwriters acting for the
Company, the Company shall: (w) deliver to the Stockholder, the sales or
placement agent or agents, if any, and the managing underwriter or
underwriters, if any, ("Underwriter or Underwriters") as promptly as
practicable as many copies of preliminary prospectuses as the
Stockholder reasonably requests, and the Stockholder shall keep, or
cause to be kept, a written record of the distribution of such
preliminary prospectuses and shall refrain from delivery of such
preliminary prospectuses in any manner or under any circumstances which
would violate the Securities Act or the securities laws of any other
jurisdiction, including the various states of the United States, (x)
deliver to the Stockholder, and the Underwriters as soon as practicable
after the effective date of the registration statement, and from time to
time thereafter as many copies of
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the prospectuses required to be delivered in connection with the sale of
Shares registered under the registration statement as the Stockholder or
Underwriter reasonably request, (y) in case of the happening, after the
effective date of such registration statement, of any event or
occurrence which is required or may be advisable, in the judgment of the
Company, the Stockholder, any Underwriter and their counsel to be set
forth in an amendment of or supplement to such prospectus to make any
statements therein not misleading, give the Stockholder and Underwriter
written notice thereof and prepare and furnish to the Stockholder, and
Underwriters in such quantities as it may reasonably request, copies of
such amended prospectus or of such supplement to be attached to the
prospectus in order that the prospectus, as so amended or supplemented,
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading and to comply with the Securities
Act, and (z) deliver to the Company and the Underwriters upon reasonable
request copies of any documents incorporated into any such registration
statement, prospectus, amendment or supplement.
(2) On or prior to the date on which the registration
statement is declared effective, the Company shall use its best efforts
to register or qualify, and cooperate with the Stockholder, the
Underwriter or Underwriters, if any, and their counsel, in connection
with the registration or qualification of the Shares covered by the
registration statement for offer and sale under the securities or blue
sky laws of each state and other jurisdiction of the United States as
the Stockholder or Underwriter reasonably requests, to use its best
efforts to keep each such registration or qualification effective,
including through new filings, or amendments or renewals, during the
period such registration statement is required to be kept effective and
to do any and all other acts or things necessary or advisable to enable
the disposition in all such jurisdictions of the Shares covered by the
applicable registration statement; provided that the Company will not be
required to qualify generally to do business in any jurisdiction where
it is not then so qualified.
(3) The Company shall use its best efforts to cause
all of the Stockholder's Shares included in such registration statement
to be listed, by the date of the first sale of such Common Stock
pursuant to such registration statement, on each securities exchange on
which the Common Stock of the Company is then listed or proposed to be
listed, if any.
(4) The Company shall make generally available to the
Stockholder and any underwriter participating in the offering conducted
pursuant to the registration statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act no later than
forty-five (45) days after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after the
effective date of the registration statement, which earnings statement
shall cover said 12-month period, which requirement will be deemed to be
satisfied if the Company timely files complete and accurate information
on Forms 10-QSB, 10-KSB, and (if needed) 8-K under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and otherwise
complies with Rule 158 under the Securities Act.
(5) The Company shall cooperate with the Stockholder
and the managing Underwriter or Underwriters, if any, to facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legends) representing the Shares to be sold under the
registration
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statement, and enable such securities to be in such denominations and
registered in such names as the managing Underwriter or Underwriters, if
any, or the Stockholder requests, subject to the obligation to return
any certificates representing securities not sold.
(6) The Company shall use its best efforts to cause
the Stockholder's Shares covered by the registration statement to be
registered with or approved by such other governmental agencies or
authorities within the United States as may be necessary to enable the
Stockholder or the Underwriter or Underwriters, if any, to consummate
the disposition of such Shares.
(7) The Company shall make available for inspection by
the Stockholder and each Underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or
other agent retained by the Stockholder or any such Underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, employees,
and independent public accountants to supply all information reasonably
requested by any such Inspector in connection with such registration
statement, in each case to the extent necessary to enable the
Stockholder and any Underwriter to conduct a "reasonable investigation"
for purposes of Section 11(a) of the Securities Act.
(8) The Company shall obtain a "cold comfort" letter
from the Company's independent public accountants, and an opinion of
counsel for the Company, each in customary form and covering such
matters of the type customarily covered by cold comfort letters and
opinions of counsel in connection with public offerings of securities,
as the Stockholder or Underwriters may reasonably request.
(9) If requested by the Stockholder, the Company shall
promptly incorporate in a prospectus, prospectus supplement or post-effective
amendment such information as the Stockholder reasonably
specifies should be included therein, including, without limitation,
information relating to the planned distribution of Shares, the number
of Shares being sold by the Stockholder, the name and description of the
Stockholder, the offering price of such Shares and any discount,
commission or other compensation payable in respect of the Shares being
sold, the purchase price being paid therefor to the Stockholder and
information with respect to any other terms of the offering of the
Shares to be sold in such offering, except to the extent that the
Company is advised in a written opinion of outside counsel that the
inclusion of such information is reasonably likely to violate applicable
securities laws; and make all required filings of such prospectus,
prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus,
prospectus supplement or post-effective amendment.
(10) If requested by the Stockholder the Company shall
use reasonable efforts to participate in and assist with a "road show"
any other customary marketing efforts in connection with the sale of
Shares pursuant to such registration statement, at such times and in
such manner as the Company and the Stockholder mutually may determine.
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(11) The Company shall promptly notify the Stockholder
and Underwriters, after becoming aware thereof, when the registration
statement or any related prospectus or any amendment or supplement has
been filed, and, with respect to the registration statement or any
post-effective amendment, when the same has become effective, (A) of any
request by the Commission for amendments or supplements to the
registration statement or the related prospectus or for additional
information, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose, (C) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose or (D) of the happening of
any event which makes any statement in the registration statement or any
post-effective amendment thereto, prospectus or any amendment or
supplement thereto, or any document incorporated therein by reference
untrue in any material respect or which requires the making of any
changes in the registration statement or post-effective amendment
thereto or any prospectus or amendment or supplement thereto so that
they will not contain any untrue statement or a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein (in light of the circumstances under which
they were made) not misleading.
(12) In the case of a Block Trade (defined below), the
Company shall: (1) obtain an opinion of counsel addressed to the
Stockholder and the other party to the "block trade" covering matters
that are no more extensive in scope than would be customarily covered in
opinions obtained in secondary underwritten offerings by issuers with
similar market capitalization and reporting and financial histories; (2)
obtain a "cold comfort" letter from the independent public accountants
of the Company and covering matters that are no more extensive in scope
than would be customarily covered in "cold comfort" letters and updates
obtained in secondary underwritten offerings by issuers with similar
market capitalization and reporting and financial histories, provided
that the letter described in this clause (2) shall only be required to
the extent such letters are being issued in respect of non-underwritten
secondary offerings under then prevailing accounting practices; and (3)
deliver a certificate of a senior executive officer of the Company to
cover matters no more extensive in scope than those matters customarily
underwritten offerings by issuers with similar market capitalization and
reporting and financial histories. "Block Trade" shall mean the
disposition, in connection with a Shelf Registration, at a single time
in a single transaction, including through one or more placement agents,
by the Stockholder, of any or all of the Registrable Shares to one or
more Institutional Investors. "Institutional Investor" shall mean any
insurance company, pension fund, mutual fund, investment company,
commercial bank, savings bank, savings and loan association, investment
banking company, trust company or any finance or credit company, or any
portfolio or investment fund managed by any of the foregoing.
(13) If any person becomes a holder of shares that
were included in a Shelf Registration statement subsequent to the time
that the Shelf Registration statement became effective, the Company
shall add such holder to the Shelf Registration statement, on a timely
basis, through a post-effective amendment or a supplement to the
Prospectus, as shall be necessary in accordance with the rules of the
Commission under the Securities Act to include such holder as a selling
stockholder in a distribution under the Shelf Registration statement.
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(e) XXXXXX REGISTRATION RIGHTS. The Stockholder acknowledges
that Xxxxxx has certain incidental registration rights with respect to
equity securities of the Company owned by it pursuant to that certain
Agreement dated August 15, 1996 between Xxxxxx and the Company (the
"Xxxxxx Registration Rights"). Accordingly, the Stockholder acknowledges
that pursuant to the Xxxxxx Registration Rights, Xxxxxx has the right to
participate in any registration effected pursuant to Section 1.
(f) COMPANY COVENANTS.
(1) The Company covenants to and with the Stockholder that to
the extent it shall be required to do so under the Exchange Act, the
Company shall timely file the reports required to be filed by it under
the Exchange Act or the Securities Act (including, but not limited to,
the reports under Sections 13 and 15(d) of the Exchange Act referred to
in subparagraph (c)(1) of Rule 144 adopted by the Commission under the
Securities Act and the rules and regulations adopted by the Commission
thereunder) and shall take such further action as the Stockholder may
reasonably request, all to the extent required from time to time to
enable the Stockholder to sell Shares without registration under the
Securities Act within the limitations of the exemption provided by Rule
144 under the Securities Act, as such rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the
Commission and for the Company to qualify for use of Form S-3. Upon the
request of the Stockholder, the Company shall deliver to the Stockholder
a written statement as to whether it has complied with such
requirements.
(2) If at any time the Company is not subject to Section 13 or
15(d) of the Exchange Act and is exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act, the Company agrees, upon the request
of the Stockholder seeking to transfer Shares in conformity with Rule
144A under the Securities Act, to furnish to the Stockholder or
prospective purchasers of the Shares from the Stockholder the
information required by Rule 144A(d)(4)(i) under the Securities Act in
the manner and at the times contemplated by such Rule.
(3) The Company covenants to make available "adequate current
public information" concerning the Company within the meaning of Rule
144(c) under the Securities Act.
(4) The Company represents and covenants that it will qualify
for use of Form S-3 on November 1, 1998 for transactions involving
secondary offerings and that it will preserve such eligibility for so
long as the Company is obligated to file and maintain the effectiveness
of registration statements hereunder.
(5) The Company will avoid taking any action which would cause
the Common Stock to cease to be eligible for inclusion on the OTC
Bulletin Board Service.
2. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. If Shares are registered
under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Stockholder and each underwriter of such
Shares and their respective officers and directors and each other
person,
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if any, who controls the Stockholder or such underwriter within the
meaning of the Securities Act, against any losses, claims, damages,
actions (actual or threatened), liabilities, costs and expenses
(including legal fees and costs of court), joint or several, to which
the Stockholder or such underwriter, director, officer, or controlling
person may become subject under the Securities Act or otherwise, if and
to the extent that such losses, claims, damages, costs, expenses or
liabilities 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 Shares were registered under the
Securities Act, any preliminary prospectus or final 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 not misleading; and will reimburse the Stockholder, each such
underwriter, and each such controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage or liability; provided, however,
that the Company shall not be liable to the Stockholder or its
underwriters or controlling persons in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, preliminary prospectus or
final prospectus or such amendment or supplement in reliance upon and in
conformity with information furnished to the Company through a written
instrument duly executed by the Stockholder or such underwriter
specifically for use in the preparation thereof.
(b) INDEMNIFICATION BY THE STOCKHOLDER. In connection with any
registration statement in which the Stockholder is participating,
Stockholder shall indemnify and hold harmless (in the same manner and to
the same extent as set forth in Section 2(a)) the Company, each director
of the Company, each officer of the Company who signs such registration
statement and all persons who control the Company within the meaning of
the Securities Act, with respect to any statement or omission from such
registration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, to the
extent, but only to the extent, such statement or omission was made in
reliance upon and in conformity with information furnished to the
Company through a written instrument duly executed by the Stockholder
specifically for use in the preparation of such registration statement,
preliminary prospectus or final prospectus or such amendment or
supplement thereto, and provided that the liability of the Stockholder
shall be limited to the amount of proceeds received by Stockholder in
the offering giving rise to the indemnification claim.
(c) INDEMNIFICATION PROCEDURES. Promptly after receipt by an
indemnified party of notice of the commencement of any action involving
a claim referred to in the preceding paragraphs of this Section 2, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the indemnifying
party of the commencement of such action; but the omission so to notify
the indemnifying party will not relieve it from any liability which it
may have to the indemnified party unless such indemnifying party is
prejudiced by such omission. If any such action is brought against an
indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, 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 will not be liable to
such
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indemnified party for any legal or other expenses incurred by the latter
in connection with the defense thereof unless (i) in the reasonable
opinion of counsel for the indemnification party a conflict of interest
exists between the indemnified party and indemnifying party, (ii) the
indemnified party reasonably objects to such assumption on the basis
that there may be defenses available to it which are different from or
in addition to the defenses available to the indemnifying party, (iii)
the indemnifying party has failed to timely assume the defense of any
such action or proceeding or (iv) the indemnifying party and its counsel
do not actively and vigorously pursue the defense of such action .
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any
settlement made without its consent. No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation. An indemnifying party who elects
not to assume the defense of an action or where a potential conflict of
interest or other defenses may be available, shall not be obligated to
pay the fees and expenses of more than one counsel and local counsel
where appropriate for all parties indemnified by such indemnifying party
with respect to such action, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such action. Cost and expenses incurred by the indemnified party
shall be reimbursed, from time to time, by the Company as and when bills
are received or expenses are incurred.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 2 from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities
or expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities, and expenses referred to above shall be deemed to include
all legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2(d) were determined
by pro rata allocation or by any other method of allocation which does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
3. EXPENSES. All expenses incurred by the Company and the
Stockholder in connection with any registration statement covering
Shares offered by the Stockholder, including, without
11
limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel (including
the reasonable fees and disbursements of one counsel for the
Stockholder) and of the independent certified public accountants, and
the expense of qualifying such Shares under state blue sky laws
(including reasonable fees and disbursements of counsel in connection
with such qualification), messenger, telephone and delivery expenses,
fees and expenses of counsel for the underwriters, costs of preparation,
printing, distribution and reproduction of the registration statement,
each prospectus, and each amendment and supplement thereto, the cost and
charges of any transfer agent and registrar, and the premiums and other
costs of insurance against liability arising out of such offering, if
any, shall be borne by the Company; provided, however, that the
Stockholder shall bear its pro rata share of (A) underwriter's discounts
and commissions and (B) any transfer taxes related to the sale of
Shares. To the extent any such expenses are incurred or paid by the
Stockholder, any sales or placement agent or underwriter, if any,
thereof, the Company shall reimburse such person for the full amount
thereof promptly after a request therefor.
4. DISPOSITIONS DURING REGISTRATION. (a) The Stockholder shall
not effect any public sale or distribution (including sales pursuant to
Rule 144) of equity securities of the Company, or any securities
convertible or exchangeable or exercisable for such securities, during
the fifteen days prior to and the 90-day period beginning on the
effective date of any underwritten demand registration or underwritten
incidental registration (or such longer period as the Stockholder may
agree with the underwriter). The Stockholder agrees to comply with the
foregoing requirements even if its Shares are not being included in such
registration.
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The
Company shall not effect any public or non-public sale or distribution
of any securities similar to those being registered, or any securities
convertible into or exchangeable or exercisable for any such securities
or similar securities, during the fifteen (15) day period prior to, and
during the 90-day period beginning on, the effective date of any
registration statement in which the Stockholder is participating or the
commencement of a public distribution of Shares pursuant to any such
registration statement (except (i) as part of such registration or
pursuant to registrations on Commission Forms S-4 or S-8 or any similar
or successor form, or on any form filed in connection with an exchange
offer or an offering of securities solely to the existing stockholders
or employees of the Company or (ii) for sales or other issuances of
securities pursuant to outstanding options, warrants, rights or similar
obligations).
5. TRANSFER OF RIGHTS. No registration rights and benefits set
forth in this Agreement, including indemnification by the Company, shall
be transferable by the Stockholder in connection with the transfer of
Shares except to an "affiliate" as defined in Regulation D of the
Securities Act, including but not limited to, Protection One., Inc.
following acquisition by Western Resources, Inc., Westar's parent, of
not less than 50% of the outstanding equity of Protection One, Inc., or
to any party pursuant to a Block Trade. In case of any partial
assignment to more than one affiliate or Block Trade party, the
affiliates or Block Trade parties who have the rights and benefits of
the "Stockholder" under this Agreement shall not, as a group, have the
right to any greater number of registrations than provided herein as if
no such assignment occurred.
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6. TERM. The obligations of the Company to register Shares
hereunder shall terminate on the fifth anniversary of the date of this
Agreement with respect to the registration of Shares not otherwise
demanded or effected by such date provided that at the end of such
period all Shares held by the Stockholder or any of its assigns
hereunder, shall be freely and publicly tradable without an effective
registration statement. Section 2 shall survive the termination of this
Agreement.
7. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if hand delivered or sent by first class registered or
certified mail (return receipt requested), postage prepaid, to the
respective addresses of the Company and the Stockholders set forth
below, unless subsequently changed by written notice. Any notice shall
be deemed to be effective when it is received.
To the Stockholder:
Westar Capital, Inc.
000 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxx 00000
Attention: President
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxx X. Xxxxxxxxx, Esq.
000 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
To the Company:
Guardian International, Inc.
0000 Xxxxx 00xx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx, President
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxx, Esq.
Steel Xxxxxx & Xxxxx LLP
13
000 Xxxxx Xxxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
FLORIDA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREUNDER.
9. AMENDMENTS. This Agreement may be amended only by an
instrument in writing executed by all the parties hereto.
10. COUNTERPARTS. This Agreement may be executed in multiple
original counterparts, each of which shall be deemed an original, but
all of which together shall constitute the same instrument.
11. SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect.
Any provision of this Agreement held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not
held invalid or unenforceable. In the event any provision of this
Agreement shall be held invalid, the parties agree to enter into such
further agreements as may be necessary in order to carry out the intent
and purposes of the parties herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
GUARDIAN INTERNATIONAL, INC.
By: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxxx
President and Chief Executive
Officer
WESTAR CAPITAL, INC.
By: /s/ XXXX X. XXXXXX
-------------------------------------
Xxxx X. Xxxxxx
President
ACKNOWLEDGED AND AGREED:
XXXXXX FINANCIAL, INC.
By: /s/ XXXX XXXXXX
-------------------
Xxxx Xxxxxx
Vice President
Date: Oct. 21, 1997
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