EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of October 8, 1996, by and among ELCOM TECHNOLOGIES CORPORATION, a
Pennsylvania corporation (the "Company"), and each of the shareholders that
entered into a Subscription Agreement (each a "Subscription Agreement") with the
Company to purchase shares of Common Stock privately placed by the Company
between May 21, 1996 and August 22, 1996 (the "Private Placement") (being herein
referred to collectively as the "Shareholders" and individually as the
"Shareholder"). In order to induce the Shareholders to purchase the Shares, the
Company agreed to provide registration rights with respect to its Common Stock
as set forth in this Agreement.
The parties hereby agree as follows:
1. Securities Subject to this Agreement.
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(a) Definitions.
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(i) The term "Shares" means the Common Stock issued by the Company in
the Private Placement.
(ii) The terms "Registrable Securities" and "Restricted Securities"
mean the Shares and any other securities issued in exchange for or as dividends
or other distribution on, or by way of a split of, the Shares.
(b) Restricted Securities. For the purposes of this Agreement,
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Restricted Securities will cease to be Restricted Securities when (i) a
registration statement filed pursuant to the Securities Act of 1933, as amended
(the "Act"), covering such Restricted Securities has been declared effective and
they have been disposed of pursuant to such effective registration statement,
(ii) they are distributed to the public pursuant to Rule 144 (or any similar
provision then in force) under the Act, (iii) they are eligible to be sold
pursuant to Rule 144(k) under the Act without limitation as to the amount of
securities to be sold or as to the manner of sale, or (iv) they have been
otherwise transferred and the Company has delivered new certificates or other
evidences of ownership for them not subject to any legal or other restriction on
transfer.
(c) Registrable Securities. As to any particular Registrable
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Securities, such Securities will cease to be Registrable Securities when they
cease to be Restricted Securities.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Subscription Agreement.
2. Demand Registration.
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(a) Request for Registration. At any time after twelve months
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after the Company's Common Stock becomes registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Shareholders holding at least a majority of the outstanding Registrable
Securities (the "Demand Shareholders") may make a written request for
registration under the Act of all or part of their Registrable Securities (the
"Demand Registration"); provided, however that, except as hereinafter provided,
the Company shall not be required to effect more than one Demand Registration.
In case the Company shall receive from the Demand Shareholders a written request
that the Company effect a registration under the Act pursuant to this Section
2(a), the Company will promptly give written notice of the proposed registration
to all other Shareholders, which holders will have ten days from the receipt of
such notice to advise the Company in writing of their election to include
Registrable Securities in such offering. In connection therewith, the Company
shall be obligated to proceed expeditiously to prepare and file with the
Securities and Exchange Commission (the "Commission") such registration
statement (but in no event more than 60 days after the receipt of any such
initial notice, except as permitted under subsection 2(b) below) and shall be
further obligated to use its reasonable best efforts, including the filing of
any amendments or supplements thereto, to have any such registration statement
declared effective under the Act and the rules and regulations promulgated
thereunder as soon as practical after the filing date thereof. If the number of
shares of Registrable Securities to be offered hereunder is restricted, the
number of shares to be included in the offering shall be determined pursuant to
the provisions of subsection 2(d) hereof.
(b) Limitations on Demand. Notwithstanding the foregoing, the
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Company shall not be obligated to file a registration statement relating to the
Demand Registration under subsection 2(a) hereof if counsel to the Company
renders an opinion to the effect that registration is not required for the
proposed transfer of Registrable Securities. In addition, the Company may delay
in filing a registration statement relating to the Demand Registration for not
more than 90 days if (i) the Company has filed, or is about to file, a
registration statement relating to the offering of any of the Company's
securities (the "Company's Securities"), and the managing underwriter of such
offering is of the opinion that the filing of a registration statement with
respect to the Demand Registration would adversely affect the offering by the
Company of the Company's Securities, or (ii) the Company's ability to pursue a
pending significant
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business opportunity (representing in excess of 10% of the Company's
consolidated revenues or total assets) might be materially adversely affected by
the filing of a registration statement with respect to the Demand registration,
whether due to the requirement that the Company disclose material non-public
information about the Company in connection with such registration or for other
reasons. The Company shall not exercise its rights to defer the filing of a
Demand Registration pursuant to the terms of this subsection 2(b) more than
twice in any 12-month period.
(c) Effective Registration and Expenses. A registration will not count as
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the Demand Registration under subsection 2(a) hereof until it has become
effective; provided, however, that if the Demand Shareholders shall cause or
request the Company to withdraw any such registration statement, such
Shareholders may thereafter request the Company to reinstate such registration
statement, if permitted under the Act, or to file another Demand Registration,
in accordance with the procedures set forth herein, only upon agreeing in
writing to reimburse the Company for all Registration Expenses (as defined in
Section 6 hereof) over and above those Registration Expenses which the Company
would have incurred had such Demand Registration not been withdrawn. The Company
shall use its best efforts to cause the registration statement relating to any
Demand Registration to remain effective for the lesser of one year or the time
until all Registrable Securities involved therein have been sold. Except as
provided above and except for all underwriting discounts and selling commissions
and non-accountable expense allowances applicable to the Registrable Securities,
the Company will pay all Registration Expenses in connection therewith, whether
or not it becomes effective. The Company shall not be required to undergo or pay
for any special audit to effect any registration statement under this Section 2,
and if such a special audit would be required in order to file or effect a
registration statement hereunder, the Company shall be entitled to delay the
filing or effectiveness of such registration statement until a reasonable period
of time following the completion of such audit in the ordinary course of the
Company's activities; provided, however, that the Company shall not be entitled
to delay the filing or effectiveness of such registration statement if the
Demand Shareholders agree to pay for the cost of any such special audit.
(d) Priority on Demand Registrations. If the Demand Shareholders so elect,
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the offering of Registrable Securities pursuant to the Demand Registration shall
be in the form of an underwritten offering. In such event, if the managing
underwriter or underwriters of such offering advise the Company and the Demand
Shareholders in writing that in its or their opinion the aggregate amount of
Registrable Securities requested to be included in such offering exceeds the
amount of Registrable Securities that can be sold in such offering such that it
would
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materially and adversely affect the success of such offering or the price of the
Registrable Securities to be offered, then there shall be included in such
underwritten offering the amount of Registrable Securities which in the opinion
of such underwriters can be sold, and such amount shall be allocated pro rata
among the holders of such Registrable Securities requested to be included in
such registration based upon the number of Registrable Securities requested to
be included in such registration. If all the Registrable Securities requested to
be included in the Demand Registration have been included, the Company shall be
entitled to include that number of shares of its unissued Common Stock or any
other securities, including securities to be registered by the exercise of
"piggyback" registration rights, as are consented to by the managing
underwriter. In the event that not all of the Registrable Securities requested
to be included by the Demand Shareholders in the Demand Registration are
included, those Shareholders holding shares that are not so included (the
"Rejected Shares") shall be entitled to a second Demand Registration in the
manner described in this Section 2 with respect to the Rejected Shares.
(e) Selection of Underwriters. If the Demand Registration is in the form of
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an underwritten offering, the Demand Shareholders shall select and obtain the
investment banker or investment bankers and manager or managers that will
administer the offering; provided that such investment bankers and managers and
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the underwriting arrangements and terms of any underwriting agreement and any
other agreement between the investment bankers and managers and the Company must
be reasonably satisfactory to the Company.
3. Piggyback Registration
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If the Company proposes to file a registration statement under the Act
with respect to an offering by the Company for its own account of its Common
Stock (other than a registration statement on Form S-4 or S-8 (or any form
substituting therefor) or filed in connection with an exchange offer or an
offering of securities solely to the Company's existing stockholders or
employees) at any time after twelve months after the Company's Common Stock
becomes registered pursuant to Section 12 of the Exchange Act, the Company shall
in each case promptly give written notice of such proposed filing to each of the
Shareholders and such notice shall offer each of the Shareholders the
opportunity to register such number of Registrable Securities as each such
Shareholder may request in writing within twenty days or such longer period as
shall be set forth in such written notice after receipt of such notice. The
Company shall use reasonable efforts to cause the managing underwriter or
underwriters of a proposed underwritten offering to permit the Shareholders to
include such securities in such offering on the same terms and conditions as any
similar
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securities of the Company included therein. Notwithstanding the foregoing, if
the managing underwriter or underwriters of such offering deliver a written
opinion to the Shareholders to the effect that the total amount of securities
which the Shareholders, the Company and any other persons or entities intend to
include in such offering would materially and adversely affect the success of
such offering, then the amount of securities to be offered for the account of
the Shareholders shall be reduced to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount recommended
by such managing underwriter; provided that if securities are being offered for
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the account of other persons or entities as well as the Company, such reduction
shall not represent a greater fraction of the number of securities requested to
be registered by the Shareholders than the fraction of similar reductions
imposed on such other persons or entities over the amount of securities
requested to be registered by such holders. In connection with a piggyback
registration, the Company will bear all Registration Expenses which shall not
include underwriting discounts, selling commissions and non-accountable expense
allowances relating to the Registrable Securities.
4. Holdback Agreements
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To the extent not inconsistent with applicable law, each Shareholder
agrees not to effect any public sale or distribution of the issue being
registered or a similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 under the Act, during the 14 days prior to, and during the
90-day period beginning on, the effective date of the registration statement
referred to in Sections 2 or 3 hereof in which such Shareholder participates as
a selling stockholder (except as part of the registration), provided that (a)
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all other shareholders of the Company who also have shares included in the
registration statement referred to in Section 2 hereof and who own Common Stock
in amounts equal to or in excess of that owned by such Shareholders will also
defer their sales (except as part of the registration) for a similar period and
(b) the Company shall use its reasonable best efforts to obtain from all other
shareholders of the Company who also have shares included in the registration
statement referred to in Section 3 hereof and who own Common Stock in amounts
equal to or in excess of that owned by such Shareholders their agreement that
they will also defer their shares (except as part of the registration) for a
similar period.
5. Registration Procedures
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(a) Whenever a Shareholder (each a "Selling Shareholder") has requested
that any Registrable Securities be registered pursuant to Sections 2 or 3
hereof, the Company will use its best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as reasonably practicable, and in connection
with any such request, the Company will as expeditiously as possible:
(i) furnish to each Selling Shareholder, and if requested, to
the Selling Shareholder's investment adviser, prior to filing a registration
statement, copies of such registration statement as proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as the Selling Shareholder may reasonably
request in order to facilitate the disposition of such Registrable Securities
owned by such Selling Shareholder;
(ii) use its reasonable best efforts to register or qualify such
Registrable Securities under the state securities or blue sky laws of such
jurisdictions, not to exceed ten in number, as the Selling Shareholders
reasonably request, or, in the event to a firm commitment underwritten offering,
such larger number of jurisdictions as the managing underwriter or underwriters
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Selling Shareholders to
consummate the disposition in such jurisdictions of such Registrable Securities
owned by such Selling Shareholders; provided that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (ii), (B)
subject itself to taxation in any such jurisdiction, or (C) consent to general
service of process in any such jurisdiction;
(iii) use reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the Selling
Shareholders to consummate the disposition of such Registrable Securities;
(iv) notify the Selling Shareholders, at any time when a
prospectus relating thereto is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or
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necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, and the Company will prepare a
supplement or amendment to such prospectus as soon as reasonably practicable
thereafter (except that the Company may avoid supplementing or amending such
prospectus for up to 45 days when such non-disclosure is in the interests of the
Company) so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain 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;
(v) enter into and perform customary agreements
(including, without limitation, an underwriting agreement containing customary
representations, underwriters' compensation and indemnity and other customary
terms and conditions) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;
(vi) make available for inspection by the Selling
Shareholders, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
the Selling Shareholders or any such underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent corporate
documents and properties and other pertinent information of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all pertinent information reasonably requested
by any such Inspector in connection with such registration statement. Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (A) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the registration statement, (B) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (C) the information in such Records has been
made generally available to the public. The seller of Registrable Securities
agrees that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(vii) in the event such sale is pursuant to an underwritten
offering, use reasonable best efforts to obtain a "cold comfort" letter from the
Company's independent certified public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as the
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Selling Shareholders or the managing underwriter reasonably request;
(viii) use reasonable best efforts to obtain an opinion
or opinions from counsel for the Company in customary form addressed to the
managing underwriter or underwriters, if any;
(ix) otherwise use reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the end
of the fiscal quarter in which the registration statement becomes effective,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Act; and
(x) use reasonable best efforts to cause all such Registrable
Securities to be listed on Nasdaq and each securities exchange, if any, on which
similar securities issued by the Company are then listed, provided that the
applicable listing requirements are satisfied.
(b) The Company may require each Selling Shareholder to furnish to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request.
(c) Each Selling Shareholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(a)(iv) hereof, the Selling Shareholders will forthwith discontinue disposition
of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Shareholder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 5(a) (iv) hereof,
and, if so directed by the Company, each Selling Shareholder will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such Selling Shareholder's possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice. In
the event the Company shall give any such notice, the Company shall extend the
period during which such registration statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
excluding the date of the giving of such notice pursuant to Section 5(a) (iv)
hereof to and including the date when the Selling Shareholder shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 5(a) (iv) hereof.
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6. Registration Expenses
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Except as set forth in Section 2(c) hereof or in the last sentence
of Section 3 and this Section 6, all expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing of the securities
to be registered on each securities exchange on which such securities are
required to be listed, and fees and disbursements of counsel for the Company and
its independent certified public accountants (including the expenses of any
special audit conducted at the Company's option or "cold comfort" letters
required by or incident to such performance), securities acts liability
insurance (if the Company elects to obtain such insurance), 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 (all such expenses being herein called "Registration Expenses") will be
borne by the Company; provided, however, that, in connection with the
registration or qualification of the Registrable Securities under state
securities laws, nothing herein shall be deemed to require the Company to make
any payments to third parties in order to obtain "lock-up," escrow or other
extraordinary agreements. Each Selling Shareholder shall pay the fees and
expenses of its counsel, underwriting discounts, commissions and non-accountable
expense allowances attributable to the sale of its Registrable Securities, and
its other out-of-pocket expenses.
7. Indemnification; Contribution
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(a) Indemnification by the Company. The Company shall agree to
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indemnify, to the full extent permitted by law, each Shareholder, its officers,
directors and agents and each person who controls such Shareholder (within the
meaning of the Act), and any investment adviser thereof or agent therefor,
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees) caused by any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein (in the case of a prospectus, in the light of the circumstances
under which they were made) not misleading, except insofar as the same are
caused by or contained in any information
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with respect to such Shareholder furnished in writing to the Company by such
Shareholder for use therein or caused by such Shareholder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto in accordance with the requirements of the Act after the
Company has furnished such Shareholder with a copy of the same. The Company will
also indemnify any underwriters of the Registrable Securities, their officers
and directors and each person who controls such underwriters (within the
meaning of the Act) to the same extent as provided above with respect to the
indemnification of the Shareholders.
(b) Indemnification by the Shareholders. In connection with any
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registration statement in which a Selling Shareholder is participating, the
Selling Shareholder will furnish to the Company in writing such information and
affidavits with respect to such Shareholder as the Company reasonably requests
for use in connection with any such registration statement or prospectus and
shall indemnify, to the full extent permitted by law, the Company, its
directors, each of its officers who have signed the registration statement and
each person who controls the Company (within the meaning of the Act) against any
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees) resulting from any untrue or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or any amendment thereof
or supplement thereto, or necessary to make the statements therein (in the case
of a prospectus, in the light of the circumstances under which they were made)
not misleading, to the extent, but only to the extent, that such untrue
statement or omission is caused by or contained in any information or affidavit
with respect to such Shareholder or the shares or its investment therein
furnished in writing by such Shareholder, or caused by such Shareholder's
failure to deliver a copy of the prospectus or any amendments or supplements
thereto in accordance with the requirements of the Act after the Company has
furnished such Shareholder with a copy of the same.
(c) Conduct of Indemnification Proceedings. Any person entitled to
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indemnification hereunder shall give prompt written notice to the indemnifying
party after the receipt by such person of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which such person may claim indemnification or contribution pursuant
to this Agreement and, unless in the reasonable judgment of such indemnified
party a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to such
indemnified party. If the indemnifying party is not entitled to, or elects not
to,
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assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
reasonable judgment of counsel for such indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels. The indemnifying party will not be subject to any liability
for-any settlement made without its consent.
(d) Contributions. If the indemnification provided for in this
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Section 7 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or related to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as result of the losses, claims, damages,
liabilities an expenses referred to above shall be deemed to include, subject to
the limitations set forth in Section 7(c) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by an other method of allocation which does not take account of
the equitable consideration referred to in the immediately preceding paragraph.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 7(a) and (b) hereof or indemnified party or any other
equitable consideration provided for in this Section 7(d).
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8. Participation in Underwritten Registrations
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A Selling Shareholder may not participate in any underwritten
registration hereunder unless such Shareholder (a) agrees to sell its securities
on the basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements, and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
9. Reporting Requirements
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The Company covenants that, after it becomes subject to the reporting
requirements of the Exchange Act, it will file the reports required to be filed
by it under the Act and the Exchange Act; and it will use reasonable efforts to
take such further action as any Shareholder may reasonably request to the extent
required to enable such Shareholder to sell Registrable Securities without
registration under the Act within the limitation of the exemptions provided by
Rule 144 under the Act, as such Rule may be amended or any similar rules or
regulations hereafter adopted.
10. Miscellaneous
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(a) No Inconsistent Agreements. The Company will not hereafter enter
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into any agreement with respect to its securities which is inconsistent with the
rights granted to the Shareholders in this Agreement.
(b) Amendments and Waivers. Except as otherwise provided herein, the
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provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
without the written consent of the Company and Shareholders holding in the
aggregate at least 50% of the Shares that would otherwise qualify as Registrable
Securities hereunder.
(c) Notices. Any notice or other communications required or
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permitted hereunder shall be deemed validly given, made or served, when
delivered personally or by telecopier (except for legal process), or upon
receipt by the party entitled to receive the notice when sent by registered or
certified mail, postage prepaid, or by a recognized overnight delivery service,
addressed to the Company at 00 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx
00000, and to each Shareholder at his, her or its address set forth in his, her
or its Subscription Agreement or to such other address or addresses or
telecopier number as may hereafter be furnished to the Company in writing by
notice similarly given. Notice given by telecopier shall be deemed delivered on
the day the sender receives telecopier confirmation
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that such notice was received at the telecopier number of the addressee. Notice
given by mail as set out above shall be deemed received three days after the
date the same is postmarked.
(d) Successors and Assigns. This Agreement shall be binding upon the
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successors and assigns of each of the parties hereto and shall inure to the
benefit of their respective successors and permitted assigns. The rights
granted to a Shareholder hereunder may be transferred by such Shareholder to any
person to whom such Shareholder sells or transfers Registrable Securities in
accordance with the terms of this Agreement, provided that (i) the Company is
given written notice by the transferee at the time of such transfer stating the
name of the transferee and identifying the securities with respect to which such
rights are being assigned and (ii) such transferee, as a condition to such
transfer, shall deliver to the Company a written instrument by which it agrees
to be bound by the obligations imposed upon the Shareholders under this
Agreement. The Agreement shall not be assigned by the Company, by operation of
law or otherwise, without the prior written consent of the Shareholders holding
in the aggregate at least 50% of the Shares that would otherwise qualify as
Registrable Securities hereunder.
(e) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(f) Severability. In the event that any one or more of the
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provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Shareholders shall be enforceable to the fullest extent permitted by law.
(g) Entire Agreement. With respect to the Company and each
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Shareholder individually, this Agreement, together with the Subscription
Agreements, including all Exhibits and Schedules referred to therein, is
intended to be a complete and exclusive statement of the agreement and
understanding of such parties in respect of the subject matter contained herein
and therein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement
and the Subscription Agreements supersede all prior agreements and
understandings between the parties with respect to such subject matter.
(h) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which will be deemed to be an
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original copy of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.
(i) Governing Law. This Agreement shall be governed by and construed
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in accordance with the internal laws of the Commonwealth of Pennsylvania
applicable to contracts made and to be performed wholly therein without regard
to principles of conflict of laws.
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