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EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of May 29,
1996, is between Goran Capital Inc., a Canadian federally chartered corporation
("Goran"), and Xxxxxx International Group, Inc., an Indiana corporation (the
"Company").
WHEREAS, Goran is the owner of all of the Company's issued and
outstanding shares of common stock, no par value ("Common Stock") at the date
hereof, and Goran and the Company have determined to cause the Company to offer
to the public (the "Public Offering") up to an aggregate of 3,450,000 new
shares of the Common Stock, in a primary offering.
WHEREAS, following completion of the Public Offering, Goran will
continue to own approximately 70% of the outstanding shares of Common Stock
(approximately 67% if the over allotment option granted to the underwriters of
the Public Offering is exercised in full).
WHEREAS, the parties hereto desire to enter into this Agreement which
sets forth the terms of certain registration rights applicable to the
Registrable Securities (as defined below) subsequent to the Public Offering.
NOW, THEREFORE, upon the terms and conditions, and the mutual promises
herein contained, and for good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following
initially capitalized terms shall have the following meanings:
(a) "Affiliate" means, with respect to any person, any other person
who, directly or indirectly, is in control of, is controlled by
or is under common control with the former person.
(b) "Holder" means Goran and any "transferee" (as such term is
defined in Section 11 hereof) which is the record holder of
Registrable Securities.
(c) "Registrable Securities" means the Common Stock (as presently
constituted), any stock or other securities into which or for
which such Common Stock may hereafter be changed, converted or
exchanged, and any other securities issued to holders of such
Common Stock (or such shares into which or for which such shares
are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share
dividend, merger, consolidation or similar transactions or
events, provided that any such securities shall cease to be
Registrable Securities (i) if a registration statement with
respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall
have been disposed of in accordance with the plan of
distribution set forth in such registration statement,
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(ii) if such securities shall have been distributed pursuant to Rule 144
or Rule 144A, or (iii) if such securities are held by a Holder other
than Goran, unless such Holder shall furnish the Company an opinion of
counsel, which opinion shall be reasonably satisfactory to the Company,
to the effect that all of such securities are not permitted to be
distributed by such Holder in one transaction pursuant to Rule 144 or
Rule 144A.
(d) "Registration Expenses" means all reasonable expenses in connection with
any registration of securities pursuant to this Agreement including,
without limitation, the following: (i) SEC filing fees, (ii) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Registrable Securities to be
disposed of under the Securities Act, (iii) all expenses in connection
with the preparation, printing and filing of the registration statement,
any preliminary prospectus or final prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to
any Holders, underwriters and dealers and all expenses incidental to
delivery of the Registrable Securities, (iv) the cost of producing blue
sky or legal investment memoranda, (v) all expenses in connection with
the qualification of the Registrable Securities to be disposed of for
offering and sale under state securities laws, including the fees and
disbursements of counsel for the underwriters or Holders in connection
with such qualification and in connection with any blue sky and legal
investments surveys, (vi) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc.
of the terms of the sale of the Registrable Securities to be disposed
of, (vii) transfer agents', depositories' and registrars' fees and the
fees of any other agent appointed in connection with such offering,
(viii) all security engraving and security printing expenses, (ix) all
fees and expenses payable in connection with the listing of the
Registrable Securities on each securities exchange or inter-dealer
quotation system on which a class of common equity securities of the
Company is then listed, (x) courier, overnight, delivery, word
processing and duplication expenses and (xi) any one-time payment for
directors and officers insurance directly related to such offering,
provided the insurer provides a separate statement for such payment.
(e) "Rule 144" means Rule 144 promulgated under the Securities Act, or any
successor rule to similar effect.
(f) "Rule 144A" means Rule 144A promulgated under the Securities Act, or any
successor rule to similar effect.
(g) "SEC" means the United States Securities and Exchange Commission.
(h) "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
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2. Demand Registration.
(a) At any time after the closing date of the Public Offering, upon
written notice from a Holder in the manner set forth in Section
12(h) hereof requesting that the Company effect the registration
under the Securities Act of any or all of the Registrable
Securities held by such Holder, which notice shall specify the
intended method or methods of disposition of such Registrable
Securities, the Company shall use its best efforts to effect, in
the manner set forth in Section 5, the registration under the
Securities Act of such Registrable Securities for disposition in
accordance with the intended method or methods of disposition
stated in such request, provided that:
(i) if, within five business days of receipt of a
registration request pursuant to this Section 2(a), the
Company is advised in writing (with a copy to the Holder
requesting registration) by the managing underwriter of
the proposed offering described below that, in such
firm's good faith opinion, a registration at the time
and on the terms requested would materially and
adversely affect any immediately planned offering of
securities by the Company that had been contemplated by
the Company prior to receipt of notice requesting
registration pursuant to this Section 2(a) (a
"Transaction Blackout"), the Company shall not be
required to effect a registration pursuant to this
Section 2(a) until the earliest of (A) the abandonment
of such offering, (B) the termination of any "hold back"
period obtained by the underwriter(s) of such offering
from any person in connection therewith or (C) one
hundred eighty days after receipt by the Holder
requesting registration of the managing underwriter's
written opinion referred to above in this Subsection
(i));
(ii) if, while a registration request is pending pursuant to
this Section 2(a), the Company has determined in good
faith that (A) the filing of a registration statement
would require the disclosure of material information
that the Company has a bona fide business purpose for
preserving as confidential or (B) the Company then is
unable to comply with SEC requirements applicable to the
requested registration, the Company shall not be
required to effect a registration pursuant to this
Section 2(a) until the earlier of (1) the date upon
which such material information is otherwise disclosed
to the public or ceases to be material or the Company is
able to so comply with applicable SEC requirements, as
the case may be, and (2) forty-five days after the
Company makes such good-faith determination, provided
that the Company shall not be permitted to delay a
requested registration in reliance on this Subsection
(ii) more than once in any twenty-four month period; and
(iii) the Company shall not be obligated to file a
registration statement relating to a registration
request pursuant to this Section 2: (A) within a period
of twelve months after the effective date of any other
registration statement of
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the Company demanded pursuant to this Section 2(a), (B)
if such registration request is for a number of
Registrable Securities less than 10% of the common
equity of the Company then owned in the aggregated by
the Holders, or (C) if Holders in the aggregate own
less than 10% of the common equity of the
Company.
(b) Notwithstanding any other provision of this Agreement to the
contrary:
(i) a registration requested by a Holder pursuant to this
Section 2, shall not be deemed to have been effected
(and, therefore, not requested for purposes of
subsection 2(a)), (A) unless the registration statement
filed in connection therewith has become effective, (B)
if after it has become effective such registration is
interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental
agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as
a result thereof, not less than 90% of the Registrable
Securities requested to be registered cannot be
completely distributed in accordance with the plan of
distribution set forth in the related registration
statement or (C) if the conditions to closing specified
in the purchase agreement or underwriting agreement
entered into in connection with such registration are
not satisfied (other than by reason of some act or
omission by such Holder) or waived by the underwriters;
(ii) a registration requested by a Holder pursuant to this
Section 2 and later withdrawn at the request of such
Holder shall be deemed to have been effected (and,
therefore, requested for purposes of Section 2(a)),
whether withdrawn by the Holder prior to or after the
effectiveness of such requested registration, except
that if such request is withdrawn by a Holder prior to
the filing of a registration statement with the SEC,
such Holder can require the Company to disregard for
purposes of Section 2(a)(iii) one such requested
registration in any twelve month period; and
(iii) nothing herein shall modify Holder's obligation to pay
the Registration Expenses incurred in connection with
any withdrawn registration.
(c) In the event that any registration pursuant to this Section 2
shall involve, in whole or in part, an underwritten offering, a
Holder shall have the right to designate an underwriter
reasonably satisfactory to the Company as the lead managing
underwriter of such underwritten offering and the Company shall
have the right to designate one underwriter reasonably
satisfactory to the Holder as a co-manager of such underwritten
offering.
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(d) The Company shall have the right to cause the registration of
additional securities for sale for the account of any person
(including the Company) in any registration of Registrable
Securities requested by a Holder pursuant to Section 2(a);
provided that the Company shall not have the right to cause the
registration of such additional securities if such Holder is
advised in writing (with a copy to the Company) by the managing
underwriter that, in such firm's good faith opinion,
registration of such additional securities would materially and
adversely affect the offering and sale of the Registrable
Securities then contemplated by such Holder.
3. Piggyback Registration. If the Company at any time proposes to register
any of its Common Stock or any other of its common equity securities
(collectively, "Other Securities") under the Securities Act (other than
a registration on Form S-4 or S-8 or any successor form thereto),
whether or not for sale for its own account, in a manner which would
permit registration of Registrable Securities for sale for cash to the
public under the Securities Act, it will each such time give prompt
written notice to each Holder of its intention to do so at least ten
business days prior to the anticipated filing date of the registration
statement relating to such registration. Such notice shall offer each
such Holder the opportunity to include in such registration statement
such number of Registrable Securities as each such Holder may request.
Upon the receipt of the Company's notice (which request shall specify
the number of Registrable Securities intended to be disposed of and the
intended method of disposition thereof), the Company shall effect, in
the manner set forth in Section 5, in connection with the registration
of the Other Securities, the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to
register, to the extent required to permit the disposition (in
accordance with such intended methods thereof) of the Registrable
Securities so requested to be registered, provided that:
(a) If at any time after giving written notice of its intention to
register any securities and prior to the effective date of such
registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the
Company may, at its election, give written notice of such
determination to the Holder and, thereupon, (i) in the case of a
determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in
connection with such registration and (ii) in the case of a
determination to delay such registration, the Company shall be
permitted to delay registration of any Registrable Securities
requested to be included in such registration for the same
period as the delay in registering such other securities.
(b) (i) If the registration referred to in the first sentence of
this Section 3 is to be an underwritten primary
registration on behalf of the Company, and the managing
underwriter advises the Company in writing that, in such
firm's opinion, such offering would be materially and
adversely affected by the inclusion therein of the
Registrable Securities requested to be included therein,
the Company shall include in such registration: (A)
first, all securities the
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Company proposes to sell for its own account ("Company
Securities"), (B) second, up to the full number of
Registrable Securities held by Goran and requested to be
included in such registration by Goran ("Goran
Securities") in excess of the number or dollar amount of
securities the Company proposes to sell which, in the
good faith opinion of such managing underwriter, can be
so sold without so materially and adversely affecting
such offering, (C) third, up to the full number of
Registrable Securities (other than Goran Securities) in
excess of the number or dollar amount of Company
Securities and Goran Securities, which, in the good
faith opinion of such managing underwriter, can be sold
without materially and adversely affecting such offering
(and, if less than the full number of such Registrable
Securities, allocated pro-rata among the Holders of such
Registrable Securities (other than Goran Securities) on
the basis of the number of securities requested to be
included therein by each such Holder, and (D) fourth, an
amount of Other Securities, if any, requested to be
included therein in excess of the number or dollar
amount of Company Securities, Goran Securities and other
Registrable Securities which, in the opinion of such
underwriter(s), can be sold without materially and
adversely affecting such offering (allocated pro-rata
among the Holders of such other securities in such
proportions as such Holders and the Company may agree).
(ii) if the registration referred to in the first sentence of
this Section 3 is to be an underwritten secondary
registration on behalf of Holders of securities (other
than Registrable Securities) of the Company (the "Other
Holder"), and the managing underwriter advises the
Company in writing that in its good faith opinion such
offering would be materially and adversely affected by
the inclusion therein of the Registrable Securities
requested to be included therein, the Company shall
include in such registration the amount of securities
(including Registrable Securities) that such managing
underwriter advises allocated among the Other Holders
and the Holders on the basis of the number of securities
(including Registrable Securities) requested to be
included therein by each Other Holder and each Holder.
(c) The Company shall not be required to effect any registration of
Registrable Securities under this Section 3 incidental to the
registration of any of its securities in connection with
mergers, acquisitions, exchange offers, subscription offers,
dividend reinvestment plans or stock option or other executive
or employee benefit or compensation plans.
(d) No registration of Registrable Securities effected under this
Section 3 shall relieve the Company of its obligation to effect
a registration of Registrable Securities pursuant to Section 2
hereof.
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4. Expenses. Each Holder, by accepting Registrable Securities, agrees to
pay all Registration Expenses with respect to an offering pursuant to
Section 2 hereof, pro-rata based on each Holder's number of Registrable
Securities included in such offering, except to the extent the Company
causes shares to be registered for itself or another party pursuant to
Section 2(d), in which event the Company or such other party shall pay
the incremental expenses of including such shares in the offering. The
Company agrees to pay all Registration Expenses with respect to an
offering pursuant to Section 3 hereof, except for the incremental
expenses of including a Holder's Registrable Securities in such
offering, which incremental expenses shall be paid by such Holder. All
Registration Expenses to be paid by the Holder shall be paid within
thirty days of the delivery of a statement, such statements to be
delivered not more frequently than once every thirty days.
5. Registration and Qualifications. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2 or 3
hereof, the Company, subject to Section 4 hereof, shall:
(a) Prepare and file a registration statement under the Securities
Act relating to the Registrable Securities to be offered as soon
as practicable, but in no event later than forty-five days
(sixty days if the applicable registration form is other than
Form S-3) after the date notice is given, and use its best
efforts to cause the same to become effective within ninety days
after the date notice is given (one hundred twenty days if the
applicable registration form is other than Form S-3).
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in
connection therewith as may be necessary to keep such
registration statement effective for sixty days (or, in the case
of an underwritten offering, such shorter time period as the
underwriters may require).
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as the Holders or such
underwriter may reasonably request in order to facilitate the
public sale of the Registrable Securities, and a copy of any and
all transmittal letters or other correspondence to, or received
from the SEC or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic
or foreign securities exchange) relating to such offering.
(d) Use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Holders
or any underwriter of such Registrable Securities shall request,
and use its
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best efforts to obtain all appropriate registration, permits and
consents required in connection therewith, and do any and all
other acts and things which may be necessary or advisable to
enable the Holders or any such underwriter to consummate the
disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; provided that the
Company shall not for any such purpose be required to register
or qualify generally to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction.
(e) (i) Use its best efforts to furnish an opinion of counsel for
the Company addressed to the underwriters and each Holder of
Registrable Securities included in such registration (each a
"Selling Holder") and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration
statement), and (ii) use its best efforts to furnish a "cold
comfort" letter addressed to each Selling Holder, if permissible
under applicable accounting practices, and signed by the
independent public accountants who have audited the Company's
financial statements included in such registration statement, in
each such case covering substantially the same matters with
respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and
such other matters as the Selling Holders may reasonably request
and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements;
(f) immediately notify the Selling Holders in writing (i) at any
time when a prospectus relating to a registration pursuant to
Section 2 or 3 hereof is required to be delivered under the
Securities 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 any material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading,
and (ii) of any request by the SEC or any other regulatory body
or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document
relating to such offering, and in either such case (i) or (ii)
at the request of the Selling Holders, subject to Section 4
hereof, prepare and furnish to the Selling Holders a reasonable
number of copies of a supplement to or an amndement of such
prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated
there in or necessary to make the statements therein, in light
of the circumstances under which they are made, not misleading.
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(g) Use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and
inter-dealer quotation system on which a class of common equity
securities of the Company is then listed, with expenses in
connection therewith (not including any future periodic
assessments or fees for such additional listing) to be paid in
accordance with Section 4 hereof.
(h) Furnish unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall
be requested by the Selling Holders or the underwriters with
expenses therewith to be paid in accordance with Section 4
hereof.
6. Conversion Of Other Securities, Etc. If Goran offers any options,
rights, warrants or other securities issued by it or any other person
that are offered with, convertible into or exercisable or exchangeable
for any Registrable Securities, the Registrable Securities underlying
such Option, rights, warrants or other securities shall be eligible for
registration pursuant to Section 2 and Section 3 of this Agreement.
7. Underwriting: Due Diligence.
(a) If requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to a registration requested
under this Agreement, the Company shall enter into an
underwriting agreement with such underwriters for such offering,
such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to
secondary distribution, including, without limitation,
indemnities and contribution substantially to the effect and to
the extent provided in Section 8 hereof and the provision of
opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 5(e) hereof. The Selling
Holders on whose behalf the Registrable Securities are to be
distributed by such underwriters shall be parties to any such
underwriting agreement and 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 Selling Holders. Such underwriting
agreement shall also contain such representations and warranties
by the Selling Holders on whose behalf the Registrable
Securities are to be distributed as are customarily contained in
underwriting agreements with respect to secondary distributions.
Selling Holders may require that any additional securities
included in an offering proposed by a Holder be included on the
same terms and conditions as the Registrable Securities that are
included therein.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the
Company may require the Registrable Securities requested to be
registered pursuant to Section 3 to be included in such
underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through
underwriters under such registration. If requested by the
underwriters
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for such underwritten offering, the Selling Holders on whose
behalf the Registrable Securities are to be distributed shall
enter into an underwriting agreement with such underwriters,
such agreement to contain such representations and warranties by
the Selling Holders and such other terms and provisions as are
customarily contained in underwriting agreement with respect to
secondary distributions, including without limitation,
indemnities and contribution substantially to the effect and to
the extent provided in Section 8 hereof Such underwriting
agreement shall also contain such representations and warranties
by the Company and such other person or entity for whose account
securities are being sold in such offering as are customarily
contained in underwriting agreements with respect to secondary
distributions.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under
the Securities Act, the Company shall give the Holders of such
Registrable Securities and the underwriters, if any, and their
respective counsel and accountants, such reasonable and
customary access to its books and records and such opportunities
to discuss the business of the Company with its officers and the
independent public accountants who have certified the Company's
financial statements as shall be necessary, in the opinion of
such Holder and such underwriters or their respective counsel,
to conduct a reasonable investigation within the meaning of the
Securities Act.
8. Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities made
pursuant to this Agreement, the Company agrees to indemnify and
hold harmless each Holder, its officers and directors, each
underwriter or Registrable Securities so offered and each
person, if any, who controls any of the foregoing persons within
the meaning of the Securities Act, from and against any and all
claims, liabilities, losses, damages, expenses and judgments,
joint or several, to which they or any of them may become
subject, under the Securities Act or otherwise, including any
amount paid in settlement of any litigation commenced or
threatened, and shall promptly reimburse them, as and when
incurred, for any reasonable legal or other expenses incurred by
them in connection with investigating any claims and defending
any actions, insofar as such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a
material fact contained in the registration statement (or in any
preliminary or final prospectus included therein, or any
amendment thereto or supplement thereto, or in any document
incorporated by reference therein, or 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; provided, however, that the Company shall not be
liable to a particular Holder in any such case to the extent
that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement, or any omission, if such statement or omission shall
have
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been made in reliance upon and in conformity with information
relating to such Holder furnished to the Company in writing by
or on behalf of such Holder specifically for use in the
preparation of the registration statement (or in any preliminary
or final prospectus included therein) or any amendment thereof
or supplement thereto. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf
of a Holder and shall survive the transfer of such securities.
The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to each Holder,
its officers and directors, underwriters of the Registrable
Securities or any controlling person of the foregoing; provided,
further, that, as to any underwriter or any person controlling
any underwriter, this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon
any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an
underwriter to such person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of
the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been
corrected in such prospectus.
(b) In the case of each offering made pursuant to this Agreement,
each Holder of Registrable Securities, included in such
offering, by exercising its registration rights hereunder,
agrees to indemnify and hold harmless the Company, its officers
and directors and each person, if any, who controls any of the
foregoing within the meaning of the Securities Act, from and
against any and all claims, liability, losses, damages, expenses
and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise,
including any amount pale in settlement of any litigation
commenced, or threatened, and shall promptly reimburse them, as
and when incurred, for any legal or other expenses incurred by
them in connection with investigating any claims and defending
any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a
material fact contained in the registration statement (or in any
preliminary original prospectus included therein) or any
amendment thereof or supplement thereto, or 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, but in each case only to the extent that such
untrue statement of a material fact is contained in, or such
material fact is omitted from, information relating to such
Holder furnished in writing to the Company by or on behalf of
such Holder specifically for use in the preparation of such
registration statement (or in any preliminary or final
prospectus included therein). The foregoing indemnity is in
addition to any liability which such Holder may otherwise have
to the Company, or any of its directors, officers or controlling
persons; provided, however, that, as to any underwriter or any
person controlling any underwriter, this indemnity does not
apply to any loss, liability, claim, damage or expense arising
out of or based upon any untrue statement or alleged untrue
statement or omission or
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alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an
underwriter to such person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of
the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been
corrected in such prospectus.
(c) Procedure for Indemnification. Each party indemnified under
Paragraph (a) or (b) of this Section 8 shall, promptly after
receipt of notice of any claim or the commencement of any action
against such indemnified party in respect of which indemnity may
be sought, notify the indemnifying party in writing of the claim
or the commencement thereof, provided that the failure to notify
the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party on account of the
indemnity agreement contained in paragraph (a) or (b) of this
Section 8, except to the extent the indemnifying party was
prejudiced by such failure, and in no event shall relieve the
indemnifying party from any other liability which it may have to
such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified indemnifying
party to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided that each
indemnified party, its officers and directors, if any, and each
person, if any, who controls such indemnified lead party within
the meaning of the Securities Act, shall have the right to
employ separate counsel reasonably approved by the indemnifying
party to represent them if the named parties to any action
(including any impleaded parties) include both such indemnified
party and an indemnifying party or an affiliate of an
indemnifying part, and such indemnified party shall have been
advised by counsel either (i) that there may be one or more
legal defenses available to such indemnified party that are
different from or additional to those available to such
indemnifying party or such affiliate or (ii) a conflict may
exist between such indemnified party and such indemnifying party
or such affiliate, and in that event the fees and expenses of
one such separate counsel for a such indemnified parties shall
be paid by the indemnifying party. As indemnified party will not
enter into any settlement agreement which is not approved by the
indemnifying party, such approval not to be unreasonably
withheld. The indemnifying party may not agree to any settlement
of any such claim or action which provides for any remedy or
relief other than monetary damages for which the indemnifying
party shall be responsible hereunder, without the prior written
consent of the indemnified party, which shall not be
unreasonably withheld. In any action hereunder as to which the
indemnifying party
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has assumed the defense thereof with counsel reasonably
satisfactory to the indemnified party, the indemnified party
shall continue to be entitled to participate in the defense
thereof, with counsel of its own choice, but, except as set
forth above, the indemnifying party shall not be obligated
hereunder to reimburse the indemnified part; for the costs
thereof. In all instances, the indemnified party shall
cooperate fully with the indemnifying party or its counsel in
the defense of each claim or action.
If the indemnification provided for in this Section 8 shall for
any reason be unavailable to an indemnified party in respect
of any loss, claim, damage or liability, or any action in
respect thereof, referred to herein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
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, in such proportion as shall be
appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other
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. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a
material fact relates to information supplied by the
indemnifying party on the one hand or the indemnified party on
the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission, but not by reference to
any indemnified party's stock ownership in the Company. In no
event, however, shall a Holder be required to contribute in
excess of the amount of the net proceeds received by such Holder
in connection with the sale of Registrable Securities in the
offering which is the subject of such loss, claim, damage or
liability. The amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action
in respect thereof, referred to above in this Paragraph
shall be deemed to include, for purposes of this Paragraph,
any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or
defending any such action or claim. 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.
9. Rule 144. The Company shall take such measures and file such
information, documents and reports as shall be required by the SEC as
a condition to the availability of Rule 144 (or any successor
provision).
10. Holdback.
(a) Each Holder agrees by acquisition of Registrable Securities, if
so required by the managing underwriter, not to sell, make any
short sale of, loan, grant any Option for the purchase of,
effect any public sale or distribution of or otherwise
dispose of any
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securities of the Company, during the thirty days prior to and the
ninety days after any underwritten registration pursuant to Section 2
or 3 hereof has become effective (or such shorter period as may be
required by the underwriter), except as part of such underwritten
registration. Notwithstanding the foregoing sentence, each Holder
subject to the foregoing sentence shall be entitled to sell during the
foregoing period securities in a private sale. The Company may legend
and may impose stop transfer instructions on any certificate
evidencing Registrable Securities relating to the restrictions
provided for in this Section 10.
(b) The Company agrees, if so required by the managing underwriter, not to
sell, make any short sale of, loan, grant any option for the purchase
of (other than pursuant to employee benefit plans) effect any public
sale or distribution of or otherwise dispose of its equity securities
or securities convertible into or exchangeable or exercisable for any
such securities during the thirty days prior to and the ninety days
after any underwritten registration pursuant to Section 2 or 3 hereof
has become effective, except as part of such underwritten registration
and except pursuant to registrations on Form X-0, X-0 or any successor
or similar forms thereto.
11. TRANSFER OF REGISTRATION RIGHTS.
(a) Goran may transfer all or any portion of its rights under this
Agreement to any transferee of the lesser of (i) at least 20% of
Goran's initial holdings of Registrable Securities and (ii) all of
Goran's remaining Registrable Securities (each, a "transferee"). No
transfer of registration rights pursuant to this Section shall be
effective unless the Company has received written notice from Goran of
an intention to transfer at least thirty days prior to Goran entering
into a binding agreement to transfer Registrable Securities ten
business days in the event of an unsolicited offer. Such notice need
not contain proposed terms or name a proposed transferee. On or before
the time of the transfer, the Company shall receive a written notice
stating the name and address of any transferee and identifying the
amount of Registrable Securities with respect to which the rights
under this Agreement are being transferred and the nature of the
rights so transferred. In connection with any such transfer, the term
"Goran" as used in this Agreement (other than in this Section 11,
Section 3(a)(1)(2) and Section (1)(c)(iii) hereof shall, where
appropriate to assign the rights and obligations of Goran hereunder to
such direct transferee, be deemed to refer to the transferee holder of
such Registrable Securities. Goran and such transferees may exercise
the registration rights hereunder in such proportion and upon the
demand of such Holder as they shall agree among themselves, provided
that in no event shall the Company be required to effect more Than one
registration pursuant to Section 2 of this Agreement in any twelve
month period and that each such registration shall be at the request
of not more than one Holder.
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(b) After any such transfer, Goran shall retain its rights under
this Agreement with respect to all other Registrable Securities
owned by Goran.
(c) Upon the request of Goran, the Company shall execute a
Registration Rights Agreement with such transferee or a proposed
transferee substantially similar to this Agreement, and any
demand registrations granted to such transferee shall limit the
demand registrations to which Goran is entitled under Section
2(a) hereof.
12. Miscellaneous.
(a) Injunctions. Each party acknowledges and agrees that
irreparable damage would occur in the event that any of the
provisions of this Agreement was not performed in accordance
with its specific terms or was otherwise breached. Therefore,
each party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any
court having jurisdiction, such remedy being in addition to any
other remedy to which such party may be entitled at law or in
equity.
(b) Severability. If any term or provision of this Agreement held
by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms and provisions set
forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and each of the
parties shall use its best efforts to find and employ an
alternative means to achieve the same or substantially the same
result as that contemplated by such term or provision.
(c) Further Assurances. Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute,
acknowledge and deliver such other instruments and documents,
and take all such other actions, as may be reasonably required
in order to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby.
(d) Waivers, etc. No failure or delay on the part of either party
(or the intended third party beneficiaries referred to herein)
in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or
power. No modification or waiver of any provision of this
Agreement nor consent to any departure therefrom shall in any
event be effective unless the same shall be in writing and
signed by an authorized officer of each of the parties, and then
such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
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(e) Entire Agreement. This Agreement contains the final and complete
understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the
parties, whether written or oral, with respect to the subject matter
hereof. The paragraph headings contained in this Agreement are for
reference purposes only, and shall not affect in any manner the meaning
or interpretation of this Agreement.
(f) Counterparts. For the convenience of the parties, this Agreement may be
executed in any number of counterparts, each of which shall be deemed to
be an original but all of which together shall be one and the same
instrument.
(g) Amendment. This Agreement may be amended only by a written instrument
duly executed by an authorized officer of each of the parties.
(h) Notices. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall
be in writing and shall be deemed to be duly given (i) when personally
delivered, or (ii) if mailed registered or certified mail, postage
prepaid, return receipt requested, on the date the return receipt is
executed or the letter is refused by the addressee or its agent, or
(iii) if sent by overnight courier which delivers only upon the signed
receipt of the addressee, on the date the receipt acknowledgment is
executed or refused by the addressee or its agent.
(i) if to Goran, to:
Xxxx X. Xxxxxx
President and CEO
Goran Capital Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
(ii) if to the Company, to:
Xxxxx X. Xxxxx
Vice President, General Counsel and Secretary
Xxxxxx International Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
and
(iii) if to a Holder of Registrable Securities, to the name and
address as the same appear in the security transfer books of the
Company,
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or to such other address as the party (or Holder of
Registrable Securities) to whom notice is to be given
may have previously furnished to the other party (or, in
the case of a Holder of Registrable Securities, to the
Company) in writing in the manner set forth above.
(i) Governing Law. This agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and
be governed by the internal laws of the state of Indiana.
(j) Assignment. Except as provided herein, the parties may not
assign their rights under this Agreement. The Company may not
delegate its obligations under this Agreement.
IN WITNESS WHEREOF, Goran Capital Inc. and Xxxxxx International Group,
Inc. have caused this Agreement to be duly executed by their authorized
representative as of the date first above written.
GORAN CAPITAL INC.
By: /s/ Xxxx X. Xxxxxx
--------------------
XXXX X. XXXXXX
XXXXXX INTERNATIONAL GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------
XXXX X. XXXXXX
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