1
Exhibit 10.1(b)
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May __, 1998, among
XXXXX INC., a Delaware corporation (the "Company"), and XX. XXXXX X. XXXXXXX,
Xxxxxx Xxxx and Xxxx Xxxxxxx (collectively, the "Holders").
RECITALS
WHEREAS, the Holders own in the aggregate _________ shares of
Registrable Stock (as defined below); and
WHEREAS, the Company and the Holders have agreed to enter into
this Agreement in order to set out certain rights of the Holders with respect to
the registration of Registrable Stock under the 1933 Act (as defined below);
WHEREAS, the Board of Directors of the Company has authorized
the officers of the Company to execute and deliver this Agreement in the name of
and on behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants,
promises, representations, warranties and conditions set forth in this
Agreement, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions and References. For purposes of this Agreement,
in addition to the definitions set forth above and elsewhere herein, the
following terms shall have the following respective meanings:
"1933 Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Affiliate" of a Holder means a person who controls, is
controlled by or is under common control with such Holder or the spouse
or children (or a trust exclusively for the benefit of a spouse and/or
children) of such Holder or, in the case of a Holder which is a
partnership, its partners.
"Agreement" means this Registration Rights Agreement, dated as
of May __, 1998, among the Company and the Holders, and all amendments
hereto made in accordance with the provisions of Section 19.
2
2
"Commission" means the United States Securities and Exchange
Commission and any successor agency.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Holder" has the meaning specified in the preamble to this
Agreement and includes any permitted transferees under Section 12.
"Murmann Family" means Xxxxx Xxxxxxx, his spouse, Xxxxxxx and
Xxxxxxxx Xxxxxxxx and each of their direct descendants and spouses,
persons inheriting from any of them under estate laws, any company at
least 90% of the beneficial interests and voting rights are owned or
held by the foregoing and any fiduciary acting under any instruments as
to which the foregoing represent 90% or more of the beneficial
interests.
"Register," "registered" and "registration" refers to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the 1933 Act and the declaration
or ordering of effectiveness of such registration statement or
document.
"Registrable Stock" means the aggregate of _________ shares of
Common Stock owned by the Holders as of the date hereof and any shares
of Common Stock issued or issuable with respect to any such shares of
Registrable Stock by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any
particular shares of Registrable Stock that have been issued, such
securities shall cease to be Registrable Stock when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the 1933 Act and such securities shall have been
disposed of under such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144, (c) the Holder of such
shares is able to dispose of all of the shares then held by such Holder
pursuant to Rule 144, (d) they shall have been otherwise transferred or
disposed of, except to permitted transferees pursuant to Section 12 or
(e) they shall have ceased to be outstanding.
"Rule 144" means Rule 144 (or any successor provision) under
the 1933 Act.
3
3
2. Restrictive Legend. Each certificate representing
Registrable Stock shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON
THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE IN
CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT APPLY."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Shearman & Sterling shall be
satisfactory counsel) the securities being sold thereby may be publicly sold
without registration under the 1933 Act.
3. Notice of Proposed Transfer. Prior to any proposed transfer
of any Registrable Stock (other than under the circumstances described in
Sections 4 or 5), the Holder thereof shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company (it being
agreed that Shearman & Sterling shall be satisfactory counsel) to the effect
that the proposed transfer may be effected without registration under the 1933
Act, whereupon the holder of such Registrable Stock shall be entitled to
transfer such Registrable Stock in accordance with the terms of its notice. Each
certificate for Registrable Stock transferred as above provided shall bear the
legend set forth in Section 2, except that such certificate shall not bear such
legend if (i) such transfer is in accordance with the provisions of Rule 144 (or
any other rule permitting public sale without registration under the 0000 Xxx)
or (ii) the opinion of counsel referred to above is to the further effect that
the transferee and any subsequent transferee (other than an Affiliate of the
Company) would be entitled to transfer such securities in a public sale without
registration under the 1933 Act. The restrictions provided for in this Section 3
shall not apply to securities which are not required to bear the legend
prescribed by Section 2 in accordance with the provisions of that Section.
4. Demand Registration. (a) At any time 180 days after the
date of this Agreement, the Holders of at least 25% of the then outstanding
Registrable Stock (the "Requesting Holders") may request in a written notice
that the Company file a registration statement under the 1933 Act (or a similar
document pursuant to any other statute then in effect corresponding to the 0000
Xxx) covering the registration of at least 25% of the Registrable Stock then
outstanding in the manner specified in such notice (a "Demand Registration").
Following receipt of any notice under this Section 4, the Company shall (i)
within twenty (20) days notify
4
4
all other Holders of such request in writing and (ii) use its efforts to cause
to be filed and declared effective as soon as reasonably practicable a
registration statement providing for the offer and sale of all Registrable Stock
that the Requesting Holders and such other Holders have, within ten (10) days
after the Company has given such notice, requested be registered in accordance
with the manner of disposition specified in such notice by the Requesting
Holders.
(b) If the Requesting Holders intend to have the Registrable
Stock distributed by means of an underwritten offering, the Company shall
include such information in the written notice referred to in clause (i) of
Section 4(a) above. In such event, the right of any Holder to include its
Registrable Stock in such registration shall be conditioned upon such Holder's
participation in such underwritten offering and the inclusion of such Holder's
Registrable Stock in the underwritten offering (unless otherwise mutually agreed
by a majority in interest of the Requesting Holders and such Holder) to the
extent provided below. All Holders proposing to distribute Registrable Stock
through such underwritten offering shall enter into an underwriting agreement in
customary form with the underwriter or underwriters. Such underwriter or
underwriters shall be selected by a majority in interest of the Requesting
Holders and shall be approved by the Company, which approval shall not be
unreasonably withheld, provided (i) that all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Holders of Registrable Stock, (ii) that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement shall be conditions precedent to the obligations of such Holders of
Registrable Stock, and (iii) that no Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder, the Registrable Stock of such Holder and such Holder's intended method
of distribution and any other representations required by law or reasonably
required by the underwriter.
(c) Anything in this Agreement to the contrary
notwithstanding, the Company shall be entitled to postpone and delay the filing
of any Demand Registration until the earliest practicable time at which such
Demand Registration can be reasonably effected if (i) the Company is conducting
or about to conduct an underwritten public offering of securities in which the
Holders are entitled to join pursuant to Section 5(a) hereof, (ii) the Company
is subject to an existing contractual obligation not to engage in a public
offering, (iii) the financial statements of the Company for the fiscal period
most recently ended prior to such written request are not yet available, or (iv)
the Company shall determine that any such filing or the offering of Registrable
Stock would (x) in the good faith judgment of the Board of Directors of the
Company, impede, delay or otherwise interfere with any pending or contemplated
financing, acquisition, corporate reorganization or other similar transaction
involving the Company, (y) based upon advice from the Company's investment
banker or financial adviser, adversely affect any pending or contemplated
offering or sale of any class of securities by the Company, or (z) require
disclosure of material nonpublic information which, if disclosed at such time,
would be materially harmful to the interests of the Company and its
shareholders. After the expiration of
5
5
any such postponement or delay and without any further request from a Holder,
the Company shall effect the filing of the relevant Demand Registration and
shall use its best efforts to cause any such Demand Registration to be declared
effective as promptly as practicable unless such Holder shall have, prior to the
effective date of such Demand Registration, withdrawn in writing its initial
request.
(d) Notwithstanding any provision of this Agreement to the
contrary,
(i) the Company shall not be required to effect more than one
Demand Registration in any six-month period;
(ii) a Holder shall not be entitled to request a Demand
Registration until after 180 days after the closing of the initial
public offering of Common Stock, and
(iii) no request for a Demand Registration may be made by a
Holder during the pendency of any lock-up period imposed in connection
with a public offering of securities of the Company, except with the
consent of the underwriters controlling the applicable lock-up
agreement.
(e) The Company shall not be obligated to effect and pay for
more than a total of three (3) registrations pursuant to Section 4; provided
that a registration requested pursuant to Section 4 shall not be deemed to have
been effected for purposes of this Section 4(e) unless (i) it has been declared
effective by the Commission, (ii) it has remained effective for the period set
forth in Section 6(a), (iii) Holders of Registrable Stock included in such
registration have not withdrawn sufficient shares from such registration such
that the remaining Holders requesting registration would not have been able to
request registration under the provisions of Section 4 and (iv) the offering of
Registrable Stock pursuant to such registration is not subject to any stop
order, injunction or other order or requirement of the Commission (other than
any such stop order, injunction, or other requirement of the Commission prompted
by any act or omission of Holders of Registrable Stock).
(f) The Company agrees not to effect any public or private
sale, distribution or purchase of any of its equity securities which are the
same as or similar to, or convertible into or exchangeable or exercisable for,
Common Stock of the Company during the 30-day period prior to, and the 90-day
period beginning on, the effective date of any registration statement filed
pursuant to a Demand Registration. The foregoing sentence shall not apply to:
(x) any shares of Common Stock issued by the Company upon the exercise of an
option or the conversion of a security outstanding on the filing date of any
registration statement, (y) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to employee benefit plans of the Company
and (z) the issue and sale of shares of Common Stock as consideration for the
acquisition of another entity or all or substantially all of the assets of
another entity, provided the
6
6
recipient of such shares has agreed in writing to be bound by the terms of such
restrictions for the remainder of its term.
5. Incidental Registration. (a) Subject to Section 9, if at
any time the Company proposes to file a registration statement under the 1933
Act (other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders) on any form that would also permit the
registration of the Registrable Stock and such filing is to be on the Company's
behalf and/or on behalf of selling holders of its securities for the general
registration of its Common Stock to be sold for cash, the Company shall each
such time promptly give each Holder written notice of such proposal setting
forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than twenty (20) days from the date of
such notice, and advising each Holder of its right to have Registrable Stock
included in such registration. Upon the written request of any Holder received
by the Company no later than ten (10) days after the date of the Company's
notice, the Company shall use its reasonable efforts to cause to be registered
under the 1933 Act all of the Registrable Stock that each such Holder has so
requested to be registered. If, in the written opinion of the managing
underwriter (or, in the case of a non-underwritten offering, in the written
opinion of the Company), the total amount of such Common Stock to be so
registered, including such Registrable Stock, will exceed the maximum amount of
the Company's Common Stock which can be marketed (a) at a price reasonably
related to the then current market value of such Common Stock, or (b) without
otherwise materially and adversely affecting the entire offering, then the
Company shall be entitled to reduce the number of shares of Registrable Stock in
such offering. Such reduction shall be allocated among all such Holders in
proportion (as nearly as practicable) to the amount of Registrable Stock owned
by each Holder at the time of filing the registration statement. If any Holder
of Registrable Stock disapproves of such reduction, such Holder may elect to
withdraw all of its Registrable Stock from such offering by written notice to
the Company.
(b) If, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company may,
at its election, give written notice of such determination to each Holder that
has requested to register Registrable Stock and thereupon the Company shall be
relieved of its obligation to register any Registrable Stock in connection with
such registration (but not from its obligation to pay expenses in connection
therewith to the extent provided in Section 8), without prejudice, however, to
the rights of any one or more Holders to request such registration be effected
as a registration under Section 4.
(c) In connection with any registration of the Company's
securities and upon the written request of the Company or the underwriters
managing any underwritten offering of the Common Stock, each Holder agrees not
to effect any sale, disposition or distribution of the Common Stock (other than
that included in any such registration) or securities exercisable for or
7
7
convertible or exchangeable into Common Stock without the prior written consent
of the Company or such underwriters, as the case may be, during the 30-day
period prior to, and the 90-day period beginning on, the effective date of any
registration statement to which Section 5(a) applies. The foregoing sentence
shall not apply to (x) transfers to family members, trusts or similar
arrangements for bona fide estate planning reasons or charities, provided the
recipient of such shares has agreed in writing to be bound by the terms of such
restrictions for the remainder of its term and (y) transfers of shares bought in
market transactions.
(d) No Holder may participate in any underwritten registration
pursuant to this Section 5 unless such Holder (i) agrees to sell such Holder's
Registrable Stock on the basis provided in any underwritten arrangements
approved by the Company and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
6. Obligations of the Company. Whenever required under Section
4 or Section 5 to use its reasonable efforts to effect the registration of any
Registrable Stock, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Stock and use its reasonable
efforts to cause such registration statement to become and remain
effective for the period of the distribution contemplated thereby
determined as provided hereafter;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions
of the 1933 Act with respect to the disposition of all Registrable
Stock covered by such registration statement;
(c) furnish to the Holders or underwriters such numbers of
copies of the registration statement and the prospectus included
therein (including each preliminary prospectus and any amendments or
supplements thereto in conformity with the requirements of the 0000
Xxx) and such other documents and information as they may reasonably
request;
(d) use its reasonable efforts to register or qualify the
Registrable Stock covered by such registration statement under such
other securities or blue sky laws of such jurisdiction within the
United States and Puerto Rico as shall be reasonably appropriate for
the distribution of the Registrable Stock covered by the registration
statement; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business in or to file a general consent to service of process in any
jurisdiction wherein it would not but for the requirements of this
paragraph (d) be obligated to do so; [and provided, further, that the
Company shall
8
8
not be required to qualify such Registrable Stock in any jurisdiction
in which the securities regulatory authority requires that any Holder
submit any shares of its Registrable Stock to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent
to sell Registrable Stock in such jurisdiction unless such Holder
agrees to do so];
(e) promptly notify each Holder for whom such Registrable
Stock is covered by such registration statement and any underwriter,
(i) when a prospectus or any prospectus supplement or amendment has
been filed, and, with respect to a registration statement or any
post-effective amendment to a registration statement, when the same has
become effective, (ii) of any request by the Commission for amendments
or supplements to a registration statement or related prospectus or for
additional information or any receipt of Commission comments, (iii) of
the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any
proceedings for any such purpose, (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
any of the Registrable Stock for sale in any jurisdiction or the
initiation or threat of any proceedings for such purpose, and (v) at
any time when a prospectus relating thereto is required to be delivered
under the 1933 Act, of the happening of any event as a result of which
the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances under which they were made, and at the request of any
such Holder promptly prepare and furnish to such Holder a reasonable
number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made and
shall otherwise comply in all material respects with applicable law;
(f) use its reasonable best efforts to furnish, at the request
of any Holder requesting registration of Registrable Stock pursuant to
Section 4 or Section 5, if the method of distribution is by means of an
underwriting, on the date that the shares of Registrable Stock are
delivered to the underwriters for sale pursuant to such registration,
or if such Registrable Stock is not being sold through underwriters, on
the date that the registration statement with respect to such shares of
Registrable Stock becomes effective, (i) a signed opinion, dated such
date, of the independent legal counsel representing the Company for the
purpose of such registration, addressed to the underwriters, if any,
and if such Registrable Stock is not being sold through underwriters,
then to the Holders making such request, as to such matters as such
underwriters or the Holders holding a majority of the Registrable Stock
included in such registration, as the case may be, may reasonably
request and as would be customary in such a transaction; and (ii)
letters dated such date
9
9
and the date the offering is completed from the independent certified
public accountants of the Company, addressed to the underwriters, if
any, and if such Registrable Stock is not being sold through
underwriters, then to the Holders making such request and, if such
accountants refuse to deliver such letters to such Holders, then to the
Company (A) stating that they are independent certified public
accountants within the meaning of the 1933 Act and that, in the opinion
of such accountants, the financial statements and other financial data
of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, comply as to form
in all material respects with the applicable accounting requirements of
the 1933 Act and (B) covering such other financial matters (including
information as to the period ending not more than five (5) business
days prior to the date of such letters) with respect to the
registration in respect of which such letter is being given as such
underwriters or the Holders holding a majority of the Registrable Stock
included in such registration, as the case may be, may reasonably
request and as would be customary in such a transaction;
(g) enter into customary agreements (including if the method
of distribution is by means of an underwriting, an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of the Registrable Stock to be so included in the registration
statement;
(h) If requested in connection with a disposition of
Registrable Stock pursuant to a Registration Statement, make available
for inspection by a representative of the Holders of Registrable Stock
being sold, the underwriter participating in any disposition of
Registrable Stock, if any, and any attorney or accountant retained by
such Holders or underwriter, financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries,
and cause the executive officers, directors and employees of the
Company and its subsidiaries, to supply all information reasonably
requested by any such representative, underwriter, attorney or
accountant in connection with such disposition; subject to reasonable
assurances by each such person that such information will only be used
in connection with matters relating to such Registration Statement;
provided, however, that such persons shall first agree in writing with
the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons
and shall be used solely for the purposes of exercising rights under
this Agreement, unless (i) disclosure of such information is required
by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of
any Registration Statement or the use of any prospectus referred to in
this Agreement), (iii) such information becomes generally available to
the public other than as a result of a disclosure or failure to
safeguard by any such person or (iv) such
10
10
information becomes available to any such person from a source other
than the Company and such source is not bound by a confidentiality
agreement.
(i) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, but not
later than eighteen (18) months after the effective date of the
registration statement, an earning statement covering the period of at
least twelve (12) months beginning with the first full month after the
effective date of such registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the 1933
Act; and
(j) use its reasonable efforts to list the Registrable Stock
covered by such registration statement with any securities exchange on
which the Common Stock of the Company is then listed, or if applicable,
on the Nasdaq National Market.
For purposes of Sections 6(a) and 6(b), the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby and 6 months after the effective
date thereof.
7. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the Holders shall furnish to the Company such information regarding
themselves, the Registrable Stock held by them, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
8. Expenses of Registration. All expenses incurred in
connection with each registration pursuant to Section 4 and Section 5 of this
Agreement, excluding underwriters' discounts and commissions, but including
without limitation all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting fees (including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance), fees of the National Association of Securities
Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws and fees and
disbursements of counsel for the Company, shall be paid by the Company;
provided, however, that if a registration request pursuant to Section 4 of this
Agreement is subsequently withdrawn at the request of the Holders of a number of
shares of Registrable Stock such that the remaining Holders requesting
registration would not have been able to request registration under the
provisions of Section of this Agreement, such withdrawing Holders shall bear
such expenses unless such withdrawing Holders shall forfeit their right to one
requested registration pursuant to Section 4 of this Agreement. The Holders
shall bear and pay the underwriting commissions and discounts and any stamp or
transfer tax or duty and the fees
11
11
and disbursements of counsel for such Holder applicable to securities offered
for their account in connection with any registrations, filings and
qualifications made pursuant to this Agreement.
9. Underwriting Requirements. In connection with any
underwritten offering, the Company shall not be required under Section 5 to
include shares of Registrable Stock in such underwritten offering unless the
Holders of such shares of Registrable Stock accept the terms of the underwriting
of such offering that have been reasonably agreed upon between the Company and
the underwriters selected by the Company.
10. Rule 144 Information. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Stock to the public without
registration, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the 1933 Act and the Exchange Act; and
(c) furnish to each Holder of Registrable Stock forthwith upon
request a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 and of the 1933 Act and the
Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed by the
Company as such Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing such Holder to sell any
Registrable Stock without registration.
11. Indemnification. In the event any Registrable Stock is
included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each Holder,
such Holder's directors and officers, each person who participates in
the offering of such Registrable Stock, including underwriters (as
defined in the 1933 Act), and each person, if any, who controls such
Holder or participating person within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint or several,
to which they may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or proceedings
in respect thereof) arise out of or are based on any untrue or alleged
untrue statement of any material fact contained in such registration
statement on the effective date thereof (including any prospectus filed
under Rule 424 under the 1933 Act or any amendments or supplements
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
12
12
or necessary to make the statements therein not misleading, and shall
reimburse each such Holder, such Holder's directors and officers, such
participating person or controlling person for any legal or other
expenses reasonably incurred by them (but not in excess of expenses
incurred in respect of one counsel for all of them unless there is an
actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 11(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld); provided, further,
that the Company shall not be liable to any Holder, such Holder's
directors and officers, participating person or controlling person in
any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus,
final prospectus or amendments or supplements thereto, in reliance upon
and in conformity with written information furnished expressly for use
in connection with such registration by any such Holder, such Holder's
directors and officers, participating person or controlling person.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such Holder, such Holder's
directors and officers, participating person or controlling person, and
shall survive the transfer of such securities by such Holder.
(b) Each Holder requesting or joining in a registration
severally and not jointly shall indemnify and hold harmless the
Company, each of its directors and officers, each person, if any, who
controls the Company within the meaning of the 1933 Act, and each agent
and any underwriter for the Company (within the meaning of the 0000
Xxx) against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement on the effective
date thereof (including any prospectus filed under Rule 424 under the
1933 Act or any amendments or supplements 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, 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 made in such registration
statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written
information furnished by or on behalf of such Holder expressly for use
in connection with such registration; and each such Holder shall
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or
underwriter (but not in excess of expenses incurred in respect of one
counsel for
13
13
all of them unless there is an actual conflict of interest between any
indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
the indemnity agreement contained in this Section 11(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld), and
provided, further, that the liability of each Holder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the net proceeds from the
sale of the shares sold by such Holder under such registration
statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net
proceeds received by such Holder from the sale of Registrable Stock
covered by such registration statement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall
have the right to participate in and assume the defense thereof with
counsel selected by the indemnifying party and reasonably satisfactory
to the indemnified party; provided, however, that an indemnified party
shall have the right to retain its own counsel, with all fees and
expenses thereof to be paid by such indemnified party, and to be
apprised of all progress in any proceeding the defense of which has
been assumed by the indemnifying party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
and to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the
indemnified party under this Section, but the omission so to notify the
indemnifying party will not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, 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 or liabilities in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
party in connection with the actions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, 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 or
liabilities referred to above shall be deemed to include any legal or
other fees
14
14
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 11(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of 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 0000 Xxx)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
12. Transfer of Registration Rights. The registration rights
of any Holder under this Agreement with respect to any Registrable Stock may be
transferred, provided that: (i) such transferee is a member of the Murmann
Family; (ii) the transferring Holder shall give the Company written notice at or
prior to the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being transferred and (iii) such transferee shall agree in
writing, in form and substance reasonably satisfactory to the Company, to be
bound as a Holder by the provisions of this Agreement. Except as provided in
this Section 12, the registration rights of any Holder under this Agreement may
not be transferred.
13. Lockup. Each Holder shall, in connection with any
registration of the Company's securities, upon the request of the Company or the
underwriters managing any underwritten offering of the Company's securities,
agree in writing not to effect any sale, disposition or distribution of any
Registrable Stock (other than that included in the registration) without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time not to exceed one hundred and eighty (180) days from the
effective date of such registration as the Company or the underwriters may
specify. The foregoing sentence shall not apply to (x) transfers to family
members, trusts or similar arrangements for bona fide estate planning reasons or
charities, provided the recipient of such shares has agreed in writing to be
bound by the terms of such restrictions for the remainder of its term and (y)
transfers of shares bought in market transactions.
14. Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties hereto. Except as expressly provided in this Agreement, nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
15
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Titles. The titles of the Sections of this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
18. Notices. Any notice required or permitted under this
Agreement shall be in writing and shall be delivered in person or mailed by
certified or registered mail, return receipt requested, directed to (a) the
Company at the address set forth below its signature hereof or (b) to a Holder
at the address therefor as set forth in the Company's records or, in any such
case, at such other address or addresses as shall have been furnished in writing
by such party to the others. The giving of any notice required hereunder may be
waived in writing by the parties hereto. Every notice or other communication
hereunder shall be deemed to have been duly given or served on the date on which
personally delivered, or on the date actually received, if sent by mail or
telex, with receipt acknowledged.
19. Amendments and Waivers. Any provision of this Agreement
may be amended and the observance of any provision of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
at least a majority of the Registrable Stock then outstanding. Any amendment or
waiver effected in accordance with this Section 20 shall be binding upon each
Holder of any securities subject to this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
Holder and all such securities, and the Company.
20. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provisions were so excluded and shall be enforceable in
accordance with its terms.
21. Entire Agreement. All prior agreements of the parties
concerning the subject matter of this Agreement are expressly superseded by this
Agreement. This Agreement contains the entire Agreement of the parties
concerning the subject matter hereof. Any oral representations or modifications
of this Agreement shall be of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
XXXXX INC.
By _________________________________
16
16
Name:
Title:
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxx, Xxxx 00000
____________________________________
XXXXX X. XXXXXXX
____________________________________
XXXXXX XXXX
____________________________________
XXXX XXXXXXX
