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Exhibit 10.46
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated as
of June 28, 1996 is entered into by and between REDDI BRAKE SUPPLY CORPORATION,
a Nevada corporation (the "Company"), and Xxxxx X. Xxxxxxx ("Xxxxxxx") (Xxxxxxx
is sometimes referred to herein as the "Holder").
R E C I T A L S:
A. Pursuant to a Stock Purchase Agreement dated June 28,
1996 between Company and Xxxxxxx (the "Stock Purchase Agreement"), Xxxxxxx is,
simultaneously with the signing of this Agreement, selling all of the common
stock of Express Undercar Parts Warehouse of California Inc. to the Company in
exchange for a total of 606,331 shares of common stock of Company (the
"Shares") (the "Transaction").
B. Company, Xxxxxxx and West Covina Unitrust have
formerly entered a Registration Rights Agreement dated October 31, 1994 (the
"1994 Registration Rights Agreement"). Nothing contained herein is intended to
in any way modify or supplant the registration rights granted under the 1994
Registration Rights Agreement which remains effective.
C. Company, Xxxxxxx and Xxxxx Xxxxxxx have formerly
entered into a Registration Rights Agreement dated May 28, 1996 (the "1996
Registration Rights Agreement"). Nothing contained herein is intended to in
any way modify or supplant the registration rights granted under the 1996
Registration Rights Agreement which remains effective.
D. This Agreement is intended to grant registration
rights in connection with all of the Shares and its supplements and is in
addition to the Agreements referred to above.
NOW, THEREFORE, in consideration of the premises set forth
above and the mutual promises and covenants hereinafter set forth, the parties
agree as follows:
Section 1. Registration Rights.
1.1 Definitions. As used in this Agreement, the
following capitalized terms shall have the following respective meanings:
(a) Common Stock. The issued shares of Common
Stock of the Company with a $.0001 par value.
(b) Exchange Act. The Securities Exchange Act of
1934, as amended, or any similar federal statute then in effect, and a
reference to a particular section thereof shall be deemed
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to include a reference to the comparable section, if any, of any such similar
federal statute.
(c) Holder. The Person described as a "Holder"
in the first paragraph of this Agreement and any and all permitted transferees,
as described in Paragraph 2.1 below.
(d) Person. An individual, partnership, joint
venture, corporation, trust, unincorporated organization or government or any
department or agency thereof.
(e) Registrable Securities. Any Shares, provided
that any particular Shares shall cease to be Registrable Securities when: (i) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement, (ii) they
shall have been distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act, (iii) they shall have been
otherwise transferred, new certificates for them 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
of them under the Securities Act or any similar state law then in force, (iv)
they shall have ceased to be outstanding, (v) they shall have been transferred
to any person or entity other than in a private transaction in which the
transferror's rights under this Agreement may be assigned pursuant to Section
2.1 hereof, or (vi) they have become transferrable without any further holding
or volume limitations pursuant to Rule 144(k) (or any successor provision then
in effect).
(f) Registration Expenses. Any and all expenses
incident to performance of or compliance with this Agreement, including without
limitation: (i) all SEC and stock exchange or National Association of
Securities Dealers registration and filing fees, (ii) all fees and expenses of
complying with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger
and delivery expenses, (iv) the fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of
any special audits and/or "cold comfort" letters required by or incident to
such performance and compliance, and (v) any fees and disbursements of
underwriters customarily paid by issuers or Holders of securities, including
liability insurance if the Company so desires, and the reasonable fees and
expenses of any special experts retained by the Company in connection with the
requested registration, but excluding underwriting discounts and commissions
and transfer taxes, if any.
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(g) Securities Act. The Securities Act of 1933,
as amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
(h) SEC. The Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act or the
Exchange Act.
(i) Shares. The securities which are described
in the first recital to this Agreement.
1.2 Incidental Registration.
(a) Right to Include Registrable Securities.
Subject to the further terms and conditions of the Agreement, if the Company at
any time proposes to register any class of equity security on any form for the
general registration of securities under the Securities Act (other than a
registration form relating to (i) a registration of a stock option, stock
purchase or compensation or incentive plan or of stock issued or issuable
pursuant to any such plan, or a dividend investment plan, or any other
registration on Form S-8 (or any successor form then in effect), (ii) a
registration of securities proposed to be issued in exchange for securities or
assets of, or in connection with a merger or consolidation with, another
corporation, (iii) a registration of securities proposed to be issued in
exchange for other securities of the Company), or (iv) any registration on Form
S-4 (or any successor form then in effect), then the Company will at such time
give prompt written notice to each Holder of its intention to do so and of each
such Holders' rights under this Paragraph 1.2. Upon the written request of any
such Holder or Holders made within fifteen (15) days after the effectiveness 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 commercially reasonable efforts
to cause the Registrable Securities which the Company has been so requested to
register by the Holders thereof to be registered under the Securities Act,
provided that (i) if, at any time after giving written notice of its intention
to register any securities but 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 such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities and, thereupon, shall be relieved of its obligation to
register any Registrable Securities, and (ii) if such registration involves an
underwritten offering, all Holders of Registrable Securities requesting to be
included in such registration must sell their Registrable Securities to the
underwriters of such offering on the same terms and conditions as apply to the
Company or the
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Holder for whose account securities are to be sold, as the case may be. If a
registration requested pursuant to this Paragraph 1.2(a) involves an
underwritten public offering, any Holder of Registrable Securities requesting
to be included in such registration may elect in writing to withdraw its
securities in connection from such registration, but only during the time
period and on terms agreed upon by the underwriters for such offering. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to this Paragraph 1.2; provided,
however, (i) all underwriting discounts and commissions attributable to the
Registrable Securities shall be borne by the selling Holder(s), and (ii) any
other fees or expenses incurred by one of the parties, including fees and
expenses of attorneys and accountants, shall be borne by such party.
(b) Priority in Incidental Registrations. In
connection with any registration pursuant to this Paragraph 1.2 involving any
underwritten offering, if the managing underwriter or underwriters advise the
Company in writing that, in its or their opinion, the number of securities
requested to be included in such registration would have a material adverse
effect on such offering (including, without limitation, a material decrease in
the price at which such securities can be sold), then the amount of the
Registrable Securities included in the offer shall be reduced and the
Registrable Securities and the other shares to be offered shall participate in
such offering as follows: (i) shares to be sold by the Company ("Company Common
Stock") shall have priority over all shares to be offered by stockholders of
the company, including the Holders, and (ii) if shares in the excess of the
Company's Common Stock can, in the good faith judgment of such managing
underwriter or underwriters, successfully be marketed in such offering, the
Registrable Securities and the other shares of Common Stock to be offered by
stockholders of the Company, including the Holders, shall be included in such
offering, subject to reduction pro rata in proportion to the number of shares
of Common Stock proposed to be included in such offering by each Holder or
other stockholder.
1.3 Demand Registration.
(a) Request for Registration. Not sooner than
sixteen (16) months from the date of "Closing" (as defined in the Stock
Purchase Agreement), any Holder may make a written request for the registration
under the securities Act of all or part (provided, however, that such demand
must equal at least 50% of the shares issued to Holder and [Xxxxx X. Xxxxxxx]
in the stock purchase effected pursuant to that Stock Purchase Agreement dated
as of June 28, 1996) of its Registrable Securities (a "Demand Registration")
provided that such Holder provides sixty (60) days prior written notice to the
Company of such Demand Registration, and the Company shall use its commercially
reasonable efforts to effect such Demand Registration. Any request for a
Demand
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Registration shall specify the aggregate number of the Registrable Securities
proposed to be sold. The right to cause a registration of the Registrable
Securities provided for in this Paragraph 1.3(a) shall be limited to one (1)
such registration, and if one of the Holders does not request to be included in
such registration he shall be deemed to have waived all rights to a Demand
Registration. In any registration initiated as a Demand Registration, the
Company shall pay all Registration Expenses in connection therewith; provided,
however, (i) all underwriting discounts and commissions attributable to the
Registrable Securities shall be borne by the selling Holder(s), and (ii) any
other fees or expenses incurred by one of the Holders, including fees and
expenses of attorneys and accountants, shall be borne by such party. A Demand
Registration shall not be counted as a Demand Registration hereunder until such
Demand Registration has been declared effective by the SEC and maintained
continuously effective for a period of at least six (6) months or such shorter
period when all Registrable Securities included therein have been sold in
accordance with such Demand Registration, provided that a Demand Registration
shall be counted as a Demand Registration hereunder if the Company ceases its
efforts in respect of such Demand Registration at the request of the Holder for
a reason other than a material and adverse change in the business, financial
condition or prospects of the Company and its subsidiaries taken as a whole or
in general economic or market conditions. The Company shall be entitled to
include in any registration pursuant to this Paragraph 1.3(a) any other
securities of the Company whether offered by the Company or by and other
holder(s) of its securities.
(b) Priority in Demand Registrations. If in any
Demand Registration the managing underwriter or underwriters advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration is sufficiently large to materially and adversely
affect the success of such offering (including, without limitation, a material
decrease in the proposed offering price), the Company will include in such
registration only a number of Registrable Securities and other securities equal
to the total number which in the opinion of such managing underwriter or
underwriters or Holder(s) can be sold without any such material adverse effect,
as follows: Registrable Securities pro rata in proportion to the number of
shares proposed to be included in such registration by any holder of shares
having rights to have his or her shares registered in such offering, and by the
Company.
(c) Selection of Underwriters. If any Demand
Registration is in the form of an underwritten offering, the Holder(s) of
Registrable Securities to be sold pursuant to such Demand Registration will
select and obtain the investment banker or investment bankers and manager or
managers that will administer the offering.
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1.4 Registration Not Required. Notwithstanding the
provisions of Paragraphs 1.2 and 1.3 of this Agreement:
(a) the Company shall not be required to effect or
cause the registration of Registrable securities pursuant to Paragraph 1.2 or
1.3 hereof if, within twenty-five (25) days after its receipt of a request to
register such Registrable Securities (i) counsel for the Company delivers an
opinion to the Holder requesting registration of such Registrable Securities,
in form and substance satisfactory to counsel to such Holder, that the entire
number of shares of Registrable Securities proposed to be sold by such Holder
may otherwise be sold, in the manner proposed by such Holder, without
registration under the Securities Act, or (ii) the SEC shall have issued a
no-action position, in form and substance satisfactory to counsel for the
Holder requesting registration of such Registrable Securities, that the entire
number of Registrable Securities proposed to be sold by such Holder may be sold
by him, in the manner proposed by such Holder, without registration under the
Securities Act;
(b) The Company shall not be required to prepare and
file a registration statement pursuant to this Section 1.4 within 90 days of
the effective date of any registration statement pertaining to securities of
the Company, other than a registration of securities pertaining to an employee
benefit plan or dividend reinvestment plan; and
(c) The Company shall not be required to file a
registration statement under this Section 1.4 during any period of time when
(i) the Company is in possession of material non-public information which it
reasonably believes would be detrimental to be disclosed at such time, and, in
the opinion of counsel to the Company, such information would have to be
disclosed if a registration statement was filed at that time; or (ii) the
Company determines, in its reasonable judgment, that such registration would
interfere with any financing or acquisition involving the registration of
securities of the Company under the Securities Act.
1.5 Registration Procedures. If and whenever the company
is required to use its commercially reasonable efforts to, effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company will, as expeditiously as possible:
(a) prepare and, in any event within ninety (90)
days after the end of the period within which requests for registration may be
given to the Company (but subject to the provisions of Sections 1.4(b) and
1.4(c) and of the second sentence of Paragraph 1.2(a) hereof), file with the
SEC a registration statement with respect to such Registrable Securities and
use its commercially reasonable efforts to cause such registration statement to
become effective as soon
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thereafter as practicable. The Company will promptly notify each Holder of
such Registrable Securities and confirm such advice in writing, (i) when such
registration statement becomes effective, (ii) when any post-effective
amendment to such registration statement becomes effective and (iii) of any
request by the SEC for any amendment or supplement to such registration
statement or any prospectus relating thereto or for additional information;
(b) prepare and file with the SEC 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 for at least six (6) months (subject to tolling during the effective
period of any lock-up agreement to which the Registrable Securities are
subject, or for such shorter period in which the Holder has sold all of the
Registrable Shares included in such registration statement) and to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holder or Holders of
Registrable Securities set forth in such registration statement. If at any
time the SEC should institute or threaten to institute any proceedings for the
purpose of issuing a stop order suspending the effectiveness of any such
registration statement, the Company will promptly notify each Holder of such
Registrable Securities and will use all commercially reasonable efforts to
prevent the issuance of any such stop order or to obtain the withdrawal thereof
as soon as possible;
(c) furnish to each Holder of such Registrable
Securities such number of copies of such registration statement and of each
such amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and summary prospectus), in conformity
with the requirements of the Securities Act and such other documents as such
Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities by such Holder;
(d) use its commercially reasonable efforts to
register or qualify such Registrable Securities covered by such registration
statement under such securities or blue sky laws of any State of the United
States as the managing underwriter, if any, shall reasonably request, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable each Holder and underwriter, if any, to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder, 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
where, but for the requirements of this Paragraph 1.5(d), it would not be
obligated to be so qualified, to subject itself to taxation in any such
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jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) use its commerically reasonable efforts to
cause such Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
of the United States or any State thereof as the parties may agree that may be
necessary to enable the Holder or Holders thereof to consummate the disposition
of such Registrable Securities;
(f) promptly notify each Holder of any such
Registrable Securities covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act within the appropriate period mentioned in Paragraph 1.5(b), of the Company
becoming aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and at the request of any such Holder promptly prepare and furnish to
such Holder a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable 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 then existing;
(g) otherwise use its commercially reasonable
efforts to comply with all applicable rules and regulations of the SEC, and
make available to its securities holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12) months,
beginning with the first month after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act;
(h) use its commercially reasonable efforts to
list such Registrable Securities on any securities exchange on which the Common
Stock is then listed, if such Registrable Securities are not already so listed
and if such listing is then permitted under the rules of such exchange, and to
provide a transfer agent and registrar for such Registrable Securities covered
by such registration statement not later than the effective date of such
registration statement;
(i) use all commercially reasonable efforts to
obtain a "cold comfort" letter or letters from the Company's independent public
accountants in customary form and covering matters of the type customarily
covered by "cold comfort" letters as the underwriters shall reasonably request;
and
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(j) make available for inspection by any Holder
of such Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such Holder or, any such underwriter, in each case upon receipt of an
appropriate confidentiality agreement, all financial and other records,
corporate documents and properties of the Company and its subsidiaries, and
cause all of the Company's officers, directors and employees to supply all
information, as may be reasonably requested by any such Holder, underwriter,
attorney, accountant or agent in connection with such registration statement.
(k) Each Holder of Registrable Securities as to
which any registration is being effected shall furnish the Company in writing
such information and documents regarding such Holder and the distribution of
such securities as the Company may reasonably request, and Holder shall execute
all Questionnaires, Powers of Attorney, Indemnities, Stand Still Agreements,
Hold-Back Agreements, Underwriting Agreements and other documents required
under the terms of Underwriting Agreements as may be necessary or appropriate
to effect a registration of the Registerable Shares under any other applicable
securities or blue sky laws of the jurisdictions referred to in Paragraph
1.5(d), as reasonably determined by the Company.
(l) 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
Paragraph 1.5(f), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Paragraph 1.5(f), and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in Paragraph 1.5(b) shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Paragraph 1.5(f) to and including the
date when each Holder of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by Paragraph 1.5(f).
(m) If requested by the managing underwriter of any
underwritten offering of securities of the Company, Holder shall agree not to
effect any public sale or distribution of any Shares (except pursuant to the
registration statement), including
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any sale pursuant to Rule 144, during the 10-day period prior to and the 90-day
period following the effectiveness of the registration statement related to
such offering.
1.6 Indemnification.
(a) Indemnification by the Company. In the event
of any registration of any securities of the Company under the Securities Act
pursuant to this Agreement, the Company will, and it hereby does, indemnify and
hold harmless, to the extent permitted by law, the Holder of any Registrable
Securities covered by such registration statement, its directors and officers
or general and limited partners (any directors and officers thereof), each
other Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Holder or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Company's
written consent) to which such Holder, any such director or officer or general
or limited partner or such underwriter or controlling person may become subject
under the Securities Act, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) 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, final or summary prospectus contained therein, or any amendment or
supplement thereto, or (ii) 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 Holder and each
such director, officer, general or limited partner, 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, 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 any
breach by the indemnified person of its obligations under this Agreement,
including, without limitation, those contained in Paragraphs 1.5 (k), (l) or
(m) or any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or amendment or supplement thereto
or in any such preliminary, final or summary prospectus or amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such Holder or
underwriter for use in the preparation thereof; and provided, further, that the
Company will not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Securities, or to any other Person who
controls
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such underwriter, within the meaning of the Securities Act, under the indemnity
agreement in this Paragraph 1.6(a) with respect to any preliminary prospectus
or the final prospectus, or the final prospectus as amended or supplemented, as
the case may be, to the extent that any such loss, claim, damage or liability
of such underwriter or controlling Person results from the fact that such
underwriter sold Registrable Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
final prospectus (including any documents incorporated by reference therein) or
of the final prospectus as then amended or supplemented (including any
documents incorporated by reference therein), whichever is most recent, if the
Company has previously furnished copies thereof to such underwriter and such
final prospectus, as then amended or supplemented, has corrected any such
misstatement or omission. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any such
director, officer, general or limited partner, underwriter or controlling
Person and shall survive the transfer of such securities by such Holder.
(b) Indemnification by the Holders. Each Holder
shall indemnify and hold harmless (in the same manner and to the same extent as
set forth in Paragraph 1.6(a)) the Company, each director of the Company, each
officer of the Company who shall sign the registration statement and its
controlling Persons, if any, and all other prospective Holders and their
respective directors, officers and controlling Persons with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity
with information furnished to the Company in writing by or on behalf of such
Holder for use in the preparation of such registration statement, preliminary,
final or summary prospectus or amendment 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 of the prospective Holders or any of their
respective directors, officers or controlling Persons and shall survive the
transfer of such securities by such Holder.
(c) Notices of Claims, etc. Promptly after
receipt by an indemnified party hereunder of written notice of the commencement
of any action or proceeding with respect to which a claim for indemnification
may be made pursuant to this Paragraph 1.6, 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 Paragraph 1.6, except to the extent that the indemnifying
party is actually
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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 exists in respect of such claim, the indemnifying party will 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 will not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof. No indemnifying party will
be required to 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. Any indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim.
(d) Other Indemnification. Indemnification
similar to that specified in the preceding subdivisions of this Paragraph 1.6
(with appropriate modifications) shall be given by the Company to each Holder
and any underwriter of Registrable Securities with respect to any required
registration or other qualification of securities under any federal or state
law or regulation other than the Securities Act.
(e) Contribution. If the indemnification
provided for in Paragraphs 1.6(a). 1.6(b) or 1.6(d) is unavailable to a party
that would have been an indemnified party under any such section in respect of
any and all losses, claims, damages or liabilities, joint or several (or
actions in respect thereof), referred to therein, then each party that would
have been an indemnifying party thereunder shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and such indemnified party,
on the other, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, joint or several (or actions in
respect thereof). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statements of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity
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to correct or prevent such statement or omission. The Company agrees that it
would not be just and equitable if contribution pursuant to this Paragraph
1.6(e) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Paragraph 1.6(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Paragraph 1.6(e) shall
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim
(which shall be limited as provided in Paragraph 1.6(c) hereof if the
indemnifying party has assumed the defense of any such action in accordance
with the provisions thereof). 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.
1.7 Rule 144. The Company covenants that it will use its
commercially reasonable efforts under the circumstances to file the reports
required to be filed by it under the Exchange Act and the rules and regulations
adopted by the SEC thereunder to the extent required from time to time to
enable the Holders to sell shares of Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any successor rule then in effect. Upon the request
of any Holder of Registrable Securities, the Company will deliver to such
Holder a written statement as to whether it has complied with such
requirements.
1.8 Mergers, Etc. The Company shall not, directly or
indirectly, enter into any merger, consolidation or reorganization in which the
Company shall not be the surviving corporation unless the surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Company under this Agreement, and for that
purpose references hereunder to "Registrable Securities" shall be deemed to
include the securities which the Holders would be entitled to receive in
exchange for Common Stock under any such merger, consolidation or
reorganization, provided that to the extent such securities to be received are
convertible into shares of common stock of the issuer thereof, then any such
shares of common stock as are issued or issuable upon conversion of said
convertible securities shall also be included within the definition of
"Registrable Securities;" provided, however, that, notwithstanding the
foregoing provisions, if the issuance of securities to the Holders in such
merger, consolidation or reorganization is registered under the Securities Act,
this Agreement shall terminate upon the effective date of such registration.
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Section 2. Miscellaneous.
2.1 Transfer of Certain Rights. The rights granted to
the Holders pursuant to this Agreement may not be transferred, except as set
forth in this Paragraph 2.1. Notwithstanding anything contained herein to the
contrary, nothing herein shall prohibit: (i) any Holder which is a trust or
other entity from transferring any of its rights under this Agreement to a
beneficiary of the trust when such beneficiary receives Registrable Securities
in a distribution from the trust or other entity, or (ii) any Holder who is an
individual from transferring any of its rights under this Agreement to such
Holder's spouse, siblings, ancestors or lineal descendants, or to a trust for
the benefit of the Holder, or his or her spouse, siblings, ancestors or lineal
descendants; provided that any such transferee under subparagraphs (i), or (ii)
above must, as a condition to the effectiveness of such transfer, agree in
writing to be bound by the terms and conditions of this Agreement.
2.2 Amendments. Except as otherwise provided in this
Agreement, the terms and provisions of this Agreement may not be modified or
amended except in a writing executed by the Company and the Holders. Waivers
and exceptions to the requirements and limitations of the covenants hereof may
be given, and shall be effective if given, in writing by the Holders. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be or construed as, a further
or continuing waiver of any such term, condition or provision.
2.3 Other Agreements. To the extent that the Company
enters into any agreement which grants any person registration rights with
respect to any securities of the Company having provisions more favorable to
the holders thereof than the provisions contained in this Agreement, the
Company will confer comparable rights on the Holders.
2.4 Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first-class certified or registered mail, return receipt
requested, postage prepaid:
(a) If to the Company, at 0000 Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000, Attention: President, or at such other address or addresses
as may have been furnished in writing by the Company to the Holder, with a copy
to Xxxxx, Xxxxx & Xxxxxx, 0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxx Xxxxx, XX
00000, Attn: Xxxxxxx X. Xxxx, Esq.; or
(b) If to a Holder, at the address set forth
opposite such Holder's name on the signature page hereto or such other address
or addresses as may have been furnished to the Company in writing by such
party.
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All such notices shall be deemed effective when
actually delivered by hand or, if mailed, three (3) days after deposit in the
U.S. mail properly addressed in accordance with this Paragraph 2.4.
2.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
2.6 Headings. The headings of the sections, subsections
and paragraphs of this Agreement have been added for convenience only and shall
not be deemed to be a part of this Agreement.
2.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
2.8 Entire Agreement. All other prior or contemporary
representations, warranties, covenants or agreements, if any, between the
parties hereto, or their representatives, with respect to the subject matter
hereof are superseded by and merged into this Agreement. This Agreement
shall constitute the entire understanding between the parties with respect
hereto.
2.9 Delay of Registration. Neither Holder shall take,
and Holders hereby acknowledge and agree that they shall not have any right to
take, any action to restrain, enjoin or otherwise delay any registration of
securities of the Company as a result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
2.10 Successors and Assigns; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their permitted successors and assigns. Except as otherwise
specifically provided herein, this Agreement does not create, and shall not be
construed as
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creating, any rights enforceable by any Person not a party to this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth on the first page hereof.
REDDI BRAKE SUPPLY CORPORATION
By:
------------------------------------
S. Xxxxxx Xxxxx, President
HOLDER:
---------------------------------------------
Xxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxxxx
---------------------------------------------
(Address)
Xxxxxxxxx, XX 00000
---------------------------------------------
(City/State/Zip)
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