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Exhibit 4.2
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of this 19th day of September, 1997, between GRANT ACQUISITION
CORPORATION, a Delaware corporation (the "Company"), and XXXXXXX ASSOCIATES,
L.P., a Delaware limited partnership (the "Purchaser").
WHEREAS, pursuant to a subscription dated September 19, 1997 (the
"Subscription"), Purchaser has purchased one share of the Company's Common
Stock;
WHEREAS, pursuant to the Plan of Reorganization of Grant Geophysical,
Inc., a Delaware corporation (the "Plan") approved by the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in Case
No. 96-1936 (HSB), Purchaser may purchase certain other shares of Common Stock;
WHEREAS, to induce Purchaser to purchase such shares of Common Stock,
the Company has agreed to provide the registration rights set forth in this
Agreement;
WHEREAS, the execution and delivery of this Agreement is contemplated
by the Plan approved by the Bankruptcy Court;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
"Affiliate" shall mean any Person that directly or indirectly
controls, is controlled by, or is under common control with, such
Person. A Person shall be deemed to control another Person if such
Person owns 5% or more of any equity interest in the "controlled"
Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the "controlled"
Person, whether through ownership of stock or partnership interests, by
contract, agreement or understanding (whether oral or written), or
otherwise.
"Common Stock" shall mean the Common Stock, par value $.001
per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Holders" shall mean Purchaser, any Affiliate of Purchaser
(other than the Company) and any ransferees of Purchaser who are
holders of record of shares of
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any Registrable Shares, and any combination of them, and the term
"Holder" shall mean any such person.
"NASD" shall have the meaning set forth in Section 5(a)(xv)
hereof.
"Other Holders" shall mean Persons who are holders of record
of equity securities of the Company who subsequent to the date hereof
acquire more than 5% of the outstanding shares of Common Stock pursuant
to a transaction with the Company and to whom the Company grants
registration rights pursuant to a written agreement and in accordance
with the terms hereof.
"Person" shall mean any individual, corporation, association,
partnership, group (as defined in Section 13(d)(3) of the Exchange
Act), limited liability company, joint venture, business trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.
"Registrable Shares" shall mean (i) any Common Stock issued to
Purchaser pursuant to the Subscription or the Plan, and (ii) any equity
securities of the Company issued or distributed after the date hereof
in respect of the Common Stock referred to in clause (i) above by way
of any stock dividend, stock split or other distribution,
recapitalization or reclassification, and any equity securities of the
Company acquired by a Holder upon exercise or conversion of any such
securities. As to any particular Registrable Share, such Registrable
Share shall cease to be a Registrable Share when (x) it shall have been
sold, transferred or otherwise disposed of or exchanged pursuant to a
registration statement under the Securities Act or (y) it shall have
been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act.
"Registration Expenses" shall have the meaning set forth in
Section 7(b) hereof.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
2. INCIDENTAL REGISTRATIONS
(a) RIGHT TO INCLUDE REGISTRABLE SHARES. Each time the Company
shall determine to file a registration statement under the Securities Act in
connection with the proposed offer and sale for cash of any equity securities
(other than (i) by a registration on Form X-0, Xxxx X-0, or any successor form
thereto, (ii) pursuant to Section 4 hereof, or (iii) debt securities which are
convertible into equity securities (or an offering of equity securities in an
amount not in excess of 5% of the number of shares of Common Stock outstanding
at such time in connection with the offering of debt securities) either by it or
by any holders of its outstanding equity securities, the Company will give
prompt written notice of its determination to each Holder and of such Holder's
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rights under this Section 2, at least 30 days prior to the anticipated filing
date of such registration statement. Upon the written request of each Holder
made within 21 days after the receipt of any such notice from the Company (which
request shall specify the Registrable Shares intended to be disposed of by such
Holder), the Company will use its best efforts to effect the registration under
the Securities Act of all Registrable Shares which the Company has been so
requested to register by the Holders thereof, to the extent required to permit
the disposition of the Registrable Shares so to be registered; PROVIDED, that
(i) 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 proceed with the proposed registration of the securities to be sold by
it, the Company may, at its election, give written notice of such determination
to each Holder of Registrable Shares and thereupon shall be relieved of its
obligation to register any Registrable Shares in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) if such registration involves an underwritten
offering, all Holders of Registrable Shares requesting to be included in the
Company's registration must sell their Registrable Shares to the underwriters on
the same terms and conditions as apply to the Company, with such differences,
including any with respect to indemnification and liability insurance, as may be
customary or appropriate in combined primary and secondary offerings. If a
registration requested pursuant to this Section 2(a) involves an underwritten
public offering, any Holder of Registrable Shares requesting to be included in
such registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration. No registration
effected under this Section 2 shall relieve the Company of its obligations to
effect registrations upon request under Section 4 hereof.
(b) PRIORITY IN INCIDENTAL REGISTRATION. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter or underwriters in good faith advises the Company in writing that,
in its opinion, the number of securities requested and otherwise proposed to be
included in such registration exceeds the largest number which can be sold in
such offering without having an adverse effect on such offering (including the
price at which such securities can be sold), the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (i) if the registration is a primary registration on
behalf of the Company, (x) first, the securities proposed to be registered by
the Company, (y) second, the Registrable Shares pro rata in accordance with the
numbers of securities requested to be included by all Holders of Registrable
Shares, and (z) third, securities of other Persons requested to be included in
such registration pro rata in accordance with the numbers of other securities
proposed to be registered by the other Persons, and (ii) if the registration is
a secondary registration on behalf of other Persons, the Registrable Shares and
securities of the other Persons included in such registration pro rata in
accordance with the numbers of securities requested to be included by the
holders of Registrable Shares and the numbers of other securities proposed to be
registered by the other Persons. The Company will not grant any registration
rights having priorities that conflict or are otherwise inconsistent with this
Section 2(b).
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3. HOLDBACK AGREEMENTS. (a) If any registration of Registrable
Shares shall be in connection with an underwritten public offering, the Holders
agree not to effect any public sale or distribution (except in connection with
such public offering), of any equity securities of the Company, or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (in each case, other than as part of such underwritten public
offering), during the 90-day period (or such lesser period as the managing
underwriter or underwriters may permit) beginning on the effective date of such
registration, if, and to the extent, the managing underwriter or underwriters of
any such offering determines such action is necessary or desirable to effect
such offering, provided that each Holder has received the written notice
required by Section 2(a) hereof; PROVIDED, FURTHER, that each Holder shall not
be obligated to comply with such restrictions arising as a result of an
underwritten public offering subject to Section 2 hereof more than once in any
twelve-month period.
(b) If any registration of Registrable Shares shall be in
connection with any underwritten public offering, the Company agrees not to
effect any public sale or distribution (except in connection with such public
offering or pursuant to registrations on Form S-8 or any successor form thereto)
of any of its equity securities or of any security convertible into or
exchangeable or exercisable for any of its equity securities (in each case other
than as part of such underwritten public offering) during the 90-day period (or
such lesser period as the managing underwriter or underwriters may permit)
beginning on the effective date of such registration, and the Company also
agrees to use its best efforts to cause each member of the management of the
Corporation who holds any equity security and each other holder of 5% or more of
the outstanding shares of any equity security, or of any security convertible
into or exchangeable or exercisable for any equity security, of the Company
purchased from the Company (at any time other than in a public offering) to
agree not to effect any public sale or distribution of any equity securities of
the Company (except in connection with such offering) or any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten offering), during
the 90-day period (or such lesser period as the managing underwriter or
underwriters may permit) beginning on the effective date of such registration.
4. REGISTRATION ON REQUEST.
(a) REQUEST BY HOLDERS. Upon the written request of the
Holders of at least 25% of the Registrable Shares that the Company effect the
registration under the Securities Act of all or part of such Holders'
Registrable Shares, and specifying the amount (which shall not be less than 10%
of the outstanding Registrable Shares in the aggregate) and intended method of
disposition thereof, the Company will promptly give notice of such requested
registration to all other Holders of Registrable Shares and, as expeditiously as
possible, use its best efforts to effect the registration under the Securities
Act of: (i) the Registrable Shares which the Company has been so requested to
register by Holders of at least 25% of the Registrable Shares; and (ii) all
other Registrable Shares which the Company has been requested to register by any
other Holder thereof by written request received by the Company within 21 days
after the giving of such written notice by the Company (which request shall
specify the intended method of disposition of such
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Registrable Shares); PROVIDED, HOWEVER, that the Company shall not be required
to effect more than three registrations during any twelve-month period pursuant
to this Section 4; PROVIDED, FURTHER, that the Company shall not be obligated to
file a registration statement relating to a registration request under this
Section 4 (other than on Form S-3 or any similar short-form registration
statement) within a period of three months after the effective date of any other
registration statement of the Company other than registration statements on Form
S-3 (or any similar short-form registration statement) or any successor or
similar forms; PROVIDED, FURTHER, that in no event shall the Company be required
to effect more than five registrations pursuant to this Section 4. Promptly
after the expiration of the 21-day period referred to in clause (ii) above, the
Company will notify all the Holders to be included in the registration of the
other Holders and the number of shares of Registrable Shares requested to be
included therein. The Holders initially requesting a registration pursuant to
this Section 4 may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request; PROVIDED, HOWEVER, that, in
the event the Holders shall have made a written request for a demand
registration (i) which is subsequently withdrawn by the Holders after the
Company has filed a registration statement with the SEC in connection therewith
which has been declared effective by the SEC or (ii) which is not declared
effective solely as a result of the failure of Holders to take all actions
reasonably required in order to have the registration and the related
registration statement declared effective by the SEC, then, in any such event,
such demand registration shall be counted as a demand registration for purposes
of this Section 4(a).
(b) REGISTRATION STATEMENT FORM. If any registration requested
pursuant to this Section 4 which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement) shall be in connection with an underwritten
public offering, and if the managing underwriter or underwriters shall advise
the Company in writing that, in its opinion, the use of another form of
registration statement is of material importance to the success of such proposed
offering, then such registration shall be effected on such other form.
(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 4 will not be deemed to have been effected unless it
has become effective under the Securities Act and has remained effective for 270
days or such shorter period as all the Registrable Shares included in such
registration have actually been sold thereunder. In addition, if within 180 days
after it has become effective, the offering of Registrable Shares pursuant to
such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court, such
registration will be deemed not to have been effected for purposes of this
Section 4.
(d) PRIORITY IN REQUESTED REGISTRATIONS. If a requested
registration pursuant to this Section 4 involves an underwritten offering and
the managing underwriter or underwriters in good faith advises the Company in
writing that, in its opinion, the number of securities requested to be included
in such registration (including securities of the Company which are not
Registrable Shares) exceeds the largest number of securities which can be sold
in such offering without having
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an adverse effect on such offering (including the price at which such securities
can be sold), then the Company will include in such registration to the extent
of the number which the Company is so advised can be sold in such offering (i)
first, Registrable Shares requested to be included in such registration by any
Holder pro rata among such Holders on the basis of the number of Registrable
Shares requested to be included by such Holders, and (ii) second, securities of
the Company proposed by the Company to be sold for its own account. If this
Section 4 is applicable in connection with any such registration, no securities
other than Registrable Shares or securities of the Company proposed by the
Company to be sold for its own account shall be covered by such registration.
The Company will not grant any registration rights having priorities that
conflict or are otherwise inconsistent with this Section 4(d).
(e) ADDITIONAL RIGHTS. If the Company at any time grants to
any other holders of equity securities of the Company any rights to request the
Company to effect the registration of any such shares of equity securities on
terms more favorable to such holders than the terms set forth in this Section 4
and in Section 5 hereof, the terms of this Section 4 and of Section 5 hereof
shall be deemed amended or supplemented to the extent necessary to provide the
Holders such more favorable rights and benefits. In no event shall the Company
grant to any Person any registration rights on terms which conflict with or are
otherwise inconsistent with the rights of the Holders as set forth in Section 2
and this Section 4.
5. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required by the provisions
of Sections 2 or 4 hereof to use its best efforts to effect or cause the
registration of Registrable Shares, the Company shall as expeditiously as
possible:
(i) prepare and, in any event within 60 days after the end of
the period within which a request for registration may be given to the
Company, file with the SEC a registration statement with respect to
such Registrable Shares and use its best efforts to cause such
registration statement to become effective; PROVIDED that before filing
such registration statement, the Company will furnish to one counsel
selected by the Holders of a majority of the Registrable Shares covered
by such registration statement copies of the registration statement,
which will be subject to the review and comment of such counsel;
(ii) 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 a period not in excess of 270 days and to
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder with respect to the
disposition of all the securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the Holders thereof set forth in such registration
statement; PROVIDED, that (A) before filing any such amendments or
supplements thereto, the Company will furnish to one counsel selected
by the Holders of a majority of the Registrable Shares covered by such
registration statement copies of all documents proposed
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to be filed, which documents will be subject to the review and comment
of such counsel and, (B) the Company will notify each Holder of
Registrable Shares covered by such registration statement of any stop
order issued or threatened by the SEC, any other order suspending the
use of any preliminary prospectus or of the suspension of the
qualification of the registration statement for offering or sale in any
jurisdiction, and take all reasonable actions required to prevent the
entry of such stop order, other order or suspension or to remove it if
entered;
(iii) furnish to each Holder and each underwriter, if
applicable, of Registrable Shares covered by such registration
statement such number of copies of the registration statement and of
each 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 each Holder of Registrable
Shares covered by such registration statement may reasonably request in
order to facilitate the disposition of the Registrable Shares by such
Holder;
(iv) use its best efforts to register or qualify such
Registrable Shares covered by such resignation statement under the
state securities or blue sky laws of such jurisdictions as each Holder
of Registrable Shares covered by such registration statement and, if
applicable, each underwriter, may reasonably request, and do any and
all other acts and things which may be reasonably necessary to
consummate the disposition in such jurisdictions of the Registrable
Shares owned by such Holder, except that the Company shall not for any
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
clause (iv), it would not be obligated to be so qualified, or to
consent to general service of process in any jurisdiction;
(v) use its best efforts to cause such Registrable Shares
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Holders thereof to consummate the disposition
of such Registrable Shares;
(vi) if, at any time when a prospectus relating to the
Registrable Shares is required to be delivered under the Securities
Act, any event shall have occurred as the result of which any such
prospectus as then in effect would include an 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 not misleading,
immediately give written notice thereof to each Holder and the managing
underwriter or underwriters, if any, of such Registrable Shares and
prepare and furnish to each 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 Shares,
such prospectus shall not include an untrue
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statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(vii) use its best efforts to list such Registrable Shares on
any securities exchange on which similar securities of the Company are
then listed, and enter into customary agreements including a listing
application and indemnification agreement in customary form, provided
that the applicable listing requirements are satisfied, and provide a
transfer agent and registrar for such Registrable Shares covered by
such registration statement not later than the effective date of such
registration statement;
(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions
as each Holder of Registrable Shares being sold or the underwriter or
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares, including
customary indemnification and opinions;
(ix) use its best 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 Holders of at least 25% of the Registrable
Shares being sold or the underwriters retained by such Holders shall
reasonably request;
(x) make available for inspection by representatives of any
Holder of Registrable Shares 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 such Holders or any such underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries' officers, directors and
employees to supply all information and respond to all inquiries
reasonably requested by such Holders or any such representative,
underwriter, attorney, accountant or agent in connection with such
registration statement;
(xi) promptly prior to the filing of any document which is to
be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement),
provide copies of such document to counsel to the Holders of
Registrable Shares covered by such registration statement and to the
managing underwriter or underwriters, if any, make the Company's
representatives available for discussion of such document and make such
changes in such document prior to the filing thereof as counsel for
such Holders or underwriters may reasonably request;
(xii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable after the effective
date of the registration statement, an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;
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(xiii) use its best efforts to provide a CUSIP number for all
Registrable Shares not later than the effective date of the applicable
registration statement, and provide the applicable transfer agents with
printed certificates for the Registrable Shares which are in a form
eligible for deposit with the Depository Trust Company;
(xiv) notify counsel for the Holders of Registrable Shares
included in such registration statement and the managing underwriter or
underwriters, if any, immediately and confirm the notice in writing,
(A) when the registration statement, or any post-effective amendment to
the registration statement, shall have become effective, or any
supplement to the prospectus or any amendment prospectus shall have
been filed, (B) of the receipt of any comments from the SEC and (C) of
any request of the SEC to amend the registration statement or amend or
supplement the prospectus or for additional information; and
(xv) cooperate with each seller of Registrable Shares and each
underwriter, if any, participating in the disposition of such
Registrable Shares and their respective counsel in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(b) Each Holder of Registrable Shares hereby agrees that, upon
receipt of any notice from the Company of the happening of any event of the type
described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Registrable Shares covered by such registration statement or
related prospectus until such Holder's receipt of the copies of the supplemental
or amended prospectus contemplated by Section 5(a)(vi) hereof, 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 Shares at the
time of receipt of such notice. In the event the Company shall give any such
notice, the period mentioned in Section 5(a)(ii) hereof shall be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 5(a)(vi) hereof and including the date when such
Holder shall have received the copies of the supplemental or amended prospectus
contemplated by Section 5(a)(vi) hereof. If for any other reason the
effectiveness of any registration statement filed pursuant to Section 4 hereof
is suspended or interrupted prior to the expiration of the time period regarding
the maintenance of the effectiveness of such Registration Statement required by
Section 5(a)(ii) hereof so that Registrable Shares may not be sold pursuant
thereto, the applicable time period shall be extended by the number of days
equal to the number of days during the period beginning with the date of such
suspension or interruption to and ending with the date when the sale of
Registrable Shares pursuant to such registration statement may be recommenced.
(c) Each Holder hereby agrees to provide the Company, upon
receipt of its request, with such information about such Holder to enable the
Company to comply with the requirements of the Securities Act and to execute
such certificates as the Company may reasonably request in connection with such
information and otherwise to satisfy any requirements of law.
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6. UNDERWRITTEN REGISTRATIONS.
Subject to the provisions of Sections 2, 3 and 4 hereof, any
of the Registrable Shares covered by a registration statement may be sold in an
underwritten offering at the discretion of the Holder thereof. In the case of an
underwritten offering pursuant to Section 2 hereof, the managing underwriter or
underwriters that will administer the offering shall be selected by the Company,
provided, that such managing underwriter or underwriters is reasonably
satisfactory to the Holders of a majority of the Registrable Shares to be
registered. In the case of any underwritten offering pursuant to Section 4
hereof, the managing underwriter or underwriters that will administer the
offering shall be selected by the Holders of a majority of the Registrable
Shares to be registered, provided, that such underwriters are reasonably
satisfactory to the Company.
7. EXPENSES.
(a) The fees, costs and expenses of all registrations in
accordance with Section 2 and Section 4 hereof shall be borne by the Company,
subject to the provisions of Section 7(b) hereof.
(b) The fees, costs and expenses of registration to be borne
as provided in Section 7(a) hereof shall include, without limitation, all
expenses incident to the Company's performance of or compliance with this
Agreement, including without limitation all SEC and stock exchange or NASD
registration and filing fees and expenses, reasonable fees and expenses of any
"qualified independent underwriter" and its counsel as may be required by the
rules of the NASD, fees and expenses of compliance with securities or blue sky
laws (including without limitation reasonable fees and disbursements of counsel
for the underwriters, if any, or for the selling Holders, in connection with
blue sky qualifications of the Registrable Shares), rating agency fees, printing
expenses (including expenses of printing certificates for Registrable Shares and
prospectuses), messenger, telephone and delivery expenses, the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange or national market system on which similar securities
issued by the Company are then listed, fees and disbursements of counsel for the
Company and all independent certified public accountants (including the expenses
of any annual audit, special audit and "cold comfort" letters required by or
incident to such performance and compliance), securities laws liability
insurance (if the Company decides to obtain such insurance), the fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (including, without limitation, expenses relating to "road shows" and
other marketing activities), the reasonable fees of one counsel for the Holders
in connection with each such registration retained by the Holders of a majority
of the Registrable Shares being registered, the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the Company
(but not including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Shares by such Holders)
(collectively, "Registration Expenses").
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8. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Sections 2 or 4 hereof, the Company will, and it hereby does, indemnify and
hold harmless, to the extent permitted by law, each of the Holders of any
Registrable Shares covered by such registration statement, each Affiliate of
such Holder and their respective directors and officers or general and limited
partners (and the directors, officers, general and limited partners, affiliates
and controlling Persons 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 (collectively, the "Indemnified Parties"), 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
consent, which consent shall not be unreasonably withheld) to which any
Indemnified Party may become subject under the Securities Act, state securities
or blue sky laws, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether or
not such Indemnified Party is a party thereto) or expenses 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, (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 or
(iii) any violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company will reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; PROVIDED, that the
Company shall not be liable to any Indemnified Party 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 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 in reliance upon and in conformity with
written information with respect to such Holder furnished to the Company by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer of
such securities by such Holder.
(b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. The
Company may require, as a condition to including any Registrable Shares in any
registration statement filed in accordance with Sections 2 or 4 hereof, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Registrable Shares or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 8(a)
hereof) the Company 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
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omission or alleged omission was made in reliance upon and in conformity with
written information with respect to the Holders of the Registrable Shares being
registered or such underwriter furnished to the Company by such Holders or such
underwriter specifically for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing; PROVIDED,
that no such Holder shall be liable for any indemnity claims in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Shares. 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 Holders, or any
of their respective Affiliates, 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 Section 8, 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 the
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 8, except to the extent
that the indemnifying party is actually materially prejudiced by such failure to
give notice. In case 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 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 other than reasonable costs of
investigation; PROVIDED that the indemnified party shall have the right to
employ counsel to represent the indemnified party and its respective controlling
persons, directors, officers, general or limited partners, employees or agents
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the indemnified party against such indemnifying party
under this Section 8 if (i) the employment of such counsel shall have been
authorized in writing by such indemnifying party in connection with the defense
of such action, (ii) the indemnifying party shall not have promptly employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action or counsel, or (iii) any indemnified party shall have reasonably
concluded that there may be defenses available to such indemnified party or its
respective controlling persons, directors, officers, employees or agents which
are in conflict with or in addition to those available to an indemnifying party;
PROVIDED, HOWEVER, that the indemnifying party shall not be obligated to pay for
more than the expenses of one firm of separate counsel for the indemnified party
(in addition to the reasonable fees and expenses of one firm serving as local
counsel). 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 to such claim or litigation.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 8 shall for any reason be unavailable to any indemnified party under
Section 8(a) or 8(b) hereof or is
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insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claim, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the indemnified party
and indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. Notwithstanding any
other provision of this Section 8(d), no Holder of Registrable Shares shall be
required to contribute an amount greater than the dollar amount of the net
proceeds received by such Holder with respect to the sale of any such
Registrable Shares. 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.
(e) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subdivisions of this Section 8 (with appropriate
modifications) shall be given by the Company and each Holder of Registrable
Shares with respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
(f) NON-EXCLUSIVITY. The obligations of the parties under this
Section 8 shall be in addition to any liability which any party may otherwise
have to any other party.
9. RULE 144. The Company covenants that it will file in a
timely manner the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations promulgated thereunder (or,
if the Company is not required to file such reports, it will, upon the request
of any Holder of Registrable Shares, make publicly available such information),
and it will take such further action as any Holder of Registrable Shares may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Shares, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
10. LIMITED LIABILITY. Notwithstanding any other provision of
this Agreement, neither the general partners, limited partners or managing
directors, or any directors or officers of any general or limited partners, nor
any future general partners, limited partners or managing directors, if any, of
the Holders shall have any personal liability for performance of any obligation
of the Holders under this Agreement.
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11. ASSIGNABILITY. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent Holder of any Registrable Shares. The Company
may not assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the Holders of a majority of the
Registrable Shares. Any purported assignment in violation of this Section 11
shall be void.
12. NOTICES. Any and all notices, designations, consents,
offers, acceptances or any other communications shall be given in writing by
either (a) personal delivery to and receipted for by the addressee or (b)
telecopy or registered or certified mail which shall be addressed, in the case
of the Company, to: Grant Acquisition Corporation, at its principal offices or,
in the case of Holders, to the address or addresses thereof appearing on the
books of the Company or of the transfer agent and registrar for its Common
Stock.
All such notices and communications shall be deemed to have
been duly given and effective: when delivered by hand, if personally delivered;
two business days after being deposited in the mail, postage prepaid, if mailed;
and when receipt acknowledged, if telecopied.
13. NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders in this Agreement.
14. SPECIFIC PERFORMANCE. The Company acknowledges that the
rights granted to the Holders in this Agreement are of a special, unique and
extraordinary character, and that any breach of this Agreement by the Company
could not be compensated for by damages. Accordingly, if the Company breaches
its obligations under this Agreement, the Holders shall be entitled, in addition
to any other remedies that they may have, to enforcement of this Agreement by a
decree of specific performance requiring the Company to fulfill its obligations
under this Agreement. The Company consents to personal jurisdiction in any such
action brought in the United States District Court for the Southern District of
New York or any such other court and to service of process upon it in the manner
set forth in Section 12 hereof.
15. SEVERABILITY. If any provision of this Agreement or any
portion thereof is finally determined to be unlawful or unenforceable, such
provision or portion thereof shall be deemed not to be a part of this Agreement
and any portion of such invalidated provision that is not invalidated by such a
determination, shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
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17. DEFAULTS. A default by any party to this Agreement in such
party's compliance with any of the conditions or covenants hereof or performance
of any of the obligations of such party hereunder shall not constitute a default
by any other party.
18. AMENDMENTS, WAIVERS. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to departures from the
provisions hereof may be given unless consented to in writing by the Company and
the holders of a majority of the Registrable Shares; PROVIDED, HOWEVER, that no
such amendment, supplement, modification or waiver shall deprive any Holder of
any rights under Sections 2 or 4 hereof without the consent of such Holder.
19. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
20. ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
21. ENTIRE AGREEMENT. This Agreement, together with the Stock
Purchase Agreement, contains the entire agreement among the parties hereto with
respect to the transactions contemplated herein and understandings among the
parties relating to the subject matter hereof. Any and all previous agreements
and understandings between or among the parties hereto regarding the subject
matter hereof (other than the Stock Purchase Agreement) are, whether written or
oral, superseded by this Agreement.
22. GOVERNING LAW. This Agreement is made pursuant to and
shall be construed in accordance with the laws of the State of New York, without
regard to that state's conflicts of laws principles. The parties hereto submit
to the non-exclusive jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized officers as of the date
aforesaid.
GRANT ACQUISITION CORPORATION
By /s/ Xxx Xxxxxxx
----------------------------------------------
Name: Xxx Xxxxxxx
Title: President
XXXXXXX ASSOCIATES, L.P.
By /s/ Xxx Xxxxxxx
----------------------------------------------
Name: Xxx Xxxxxxx
Title: Portfolio Manager
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