EXHIBIT 10.10
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") dated March 29TH, 2004
between the individuals set forth on the signature page to this Agreement (each,
a "Seller" and collectively, the "Sellers"), and Natural Health Trends Corp., a
Florida corporation (the "Buyer" or the "Company").
WHEREAS, each Seller desires to sell, and the Buyer desires to purchase,
an aggregate of 4,900 shares of common stock, no par value per share (the
"Shares") of Lexxus International, Inc., a Delaware corporation ("Lexxus")
representing 49% of the total number of shares of common stock of Lexxus
outstanding, on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE OF SHARES; CLOSING.
(a) PURCHASE AND SALE. Upon the terms and subject to the conditions
set forth herein, the Buyer agrees to purchase from Sellers, and Sellers agree
to sell, transfer, assign and deliver to the Buyer, all of the Shares free and
clear of all Liens (as hereinafter defined). The aggregate purchase price for
the Shares is one hundred thousand (100,000) shares of the Company's restricted
common stock (the "NHTG Shares").
(b) CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Israels LLP, counsel to Buyer, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ on the date hereof (the "Closing Date"). At the Closing, (i)
Sellers shall deliver to the Buyer certificates representing the Shares, along
with a stock power duly executed by each of the Sellers in blank, and (ii) the
Buyer shall deliver one third (1/3) of the NHTC Shares to each Seller.
2. FOUNDERS COMPENSATION AGREEMENTS. Each of the Founder Compensation
Agreements dated as of March 27, 2001 between each Seller and the Company, as
amended, shall remain in full force and effect and nothing in this Agreement
shall in any way amend, modify or alter the terms thereof.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to Seller that:
(a) Buyer (i) is duly organized and validly existing under the laws
of its jurisdiction of organization or incorporation, (ii) is in good standing
under such laws, and (iii) has full power and authority to execute, deliver, and
perform its obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement by
Buyer (including Buyer's purchase of the Shares) have been duly authorized by
all necessary corporate action on the part of the Buyer.
(c) Buyer's execution, delivery, and performance of this Agreement
has not resulted, and, will not result, in a breach of any provision of (i)
Buyer's organizational documents, (ii) any statute, law, writ, order, rule, or
regulation of any governmental authority applicable to Buyer, (iii) any
judgment, injunction, decree or determination applicable to Buyer, or (iv) any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
by which Buyer may be bound or to which any of the assets of Buyer are subject,
in each case as in effect as of the Closing Date.
(d) This Agreement (i) has been duly and validly authorized,
executed, and delivered by Buyer and (ii) is the legal, valid, and binding
obligations of Buyer, enforceable against Buyer in accordance with its terms,
except that such enforceability against Buyer may be limited by bankruptcy,
insolvency, or other similar laws of general applicability affecting the
enforcement of creditors' rights generally and by the court's discretion in
relation to equitable remedies.
(e) No notice to, registration with, consent or approval of, or any
other action by, any relevant governmental authority or other entity is or will
be required for Buyer to execute, deliver, and perform its obligations under
this Agreement.
(f) Except for the foregoing express warranties, Buyer makes no
representations or warranties, whether express, implied or otherwise, and hereby
expressly disclaims the existence of any such representations or warranties.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Each of the Sellers
represents and warrants to the Buyer as to himself that:
(a) Each Seller has full power and authority to execute, deliver,
and perform its obligations under this Agreement.
(b) Each Seller's execution delivery, and performance of this
Agreement has not resulted, and, will not result, in a breach of any (i)
statute, law, writ, order, rule, or regulation of any governmental authority
applicable to such Seller, (ii) any judgment, injunction, decree or
determination applicable to such Seller, or (iii) any contract, indenture,
mortgage, loan agreement, note, lease or other instrument by which such Seller
may be bound or to which any of the assets of such Seller are subject.
(c) This Agreement (i) has been duly and validly authorized,
executed, and delivered by each Seller and (ii) is the legal, valid, and binding
obligations of each Seller, enforceable against each Seller in accordance with
its terms, except that such enforceability against each Seller may be limited by
bankruptcy, insolvency, or other similar laws of general applicability affecting
the enforcement of creditors' rights generally and by the court's discretion in
relation to equitable remedies.
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(d) Each Seller is the sole legal and beneficial owner of, and has
good title to, the Shares, tree and clear of any mortgages, claims, liens,
rights of first refusal or similar rights, security interests, options, pledges
or encumbrances of any kind whatsoever (collectively, "Liens") and the Shares
are not subject to any prior sale, transfer, assignment, voting agreement, proxy
or other voting arrangement.
(d) Each Seller (i) is a sophisticated investor with respect to the
sale of the Shares, (ii) has adequate information concerning each of Buyer's and
Lexxus' businesses and financial conditions to make an informed decision
regarding the transactions contemplated by this Agreement, and (iii) has
independently and without reliance upon Buyer, and based on such information as
such Seller and his legal and other advisors have deemed appropriate, made his
own analysis and decision to enter into this Agreement. Each Seller acknowledges
that Buyer has not given any Seller any investment advice, credit information,
or opinion on whether the sale of the Shares is prudent.
(e) Each Seller acknowledges that (i) the Company currently may
have, and later may come into possession of, information with respect to the
Company and/or Lexxus, their respective businesses, conditions and/or prospects
that is not known to such Seller and that may be material to a decision to sell
the Shares under the terms and conditions set forth in this Agreement
(collectively, the "Seller Excluded Information"), (ii) each Seller has
determined to sell the Shares, notwithstanding his lack of knowledge of the
Seller Excluded Information, and (iii) the Company shall have no liability to
the Sellers, and each Seller waives and releases any claims that he might have
against the Company whether under applicable securities laws or otherwise, with
respect to the nondisclosure of the Seller Excluded Information in connection
with the transactions contemplated by this Agreement.
5. RELIANCE ON AND SURVIVAL OF REPRESENTATIONS. All agreements,
representations and warranties of each party hereto shall survive the execution
and delivery of this Agreement for a period of one (1) year following the
Closing Date.
6. PIGGYBACK REGISTRATION RIGHTS. The Company agrees to provide certain
piggyback registration rights to each of the Sellers as set forth in Annex A
attached hereto, subject to the terms and conditions set forth therein.
7. INDEMNIFICATION. Each of the Company on one hand and the Sellers on the
other agrees to defend, indemnify and hold harmless the other party (the
"Indemnified Party") from and against, and to reimburse the Indemnified Party
with respect to, all liabilities, losses, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, asserted against or
incurred by such Indemnified Party by reason of, arising out of, or in
connection with any material breach of any representation or warranty contained
in this Agreement or in connection with the transactions contemplated hereby. An
Indemnified Party shall give prompt notice to the other party of any claim for
indemnification arising under this Section 7. The indemnifying party shall have
the right to assume and to control the defense of any such claim with counsel
reasonably acceptable to the Indemnified Party, at the indemnifying party's own
cost and expense, including the cost and expense of reasonable attorneys' fees
and disbursements in connection with such defense.
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8. NOTICES. All notices and other communications required or permitted to
be given hereunder shall be in writing, and delivered personally or by
commercial messenger service; sent by registered or certified first class
postage prepaid mail, return receipt requested; by telegram; by
telecopy/facsimile (confirmed by first class postage prepaid mail); or by a
nationally recognized overnight air carrier, in each case addressed as follows:
If to a Seller:
To the address on the
signature page of this Agreement
If to the Buyer:
Natural Health Trends Corp.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Berlack Israels LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇)▇▇▇-▇▇▇▇
or to such other address or telecopier number as the party to whom notice is to
be given may have furnished to the other party in writing in accordance
herewith. Any notice, request or communication hereunder shall be deemed to have
been given (a) on the day on which it is delivered personally or by commercial
messenger service to such party at its address specified above, (b) if sent by
mail, on the third business day after the day it is deposited in the mail,
postage prepaid, (c) if sent by telegram, when it is delivered to the telegraph
company, addressed as aforesaid, (d) if telecopied to such party at the
telecopier number (and confirmed) as specified above, on the day it is
transmitted, or (e) if sent by overnight carrier, on the business day next
following its dispatch.
9. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
10. LEGEND. Certificates for the NHTC Shares issued to the Sellers shall
be marked conspicuously with the following legend:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THE
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SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, TRANSFERRED, MADE
SUBJECT TO A SECURITY INTEREST, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT, OR AN OPINION OF
COUNSEL FOR THE COMPANY IS RECEIVED THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. RELEASE. Except for those obligations arising out of this Agreement
and the Founder Compensation Agreements, each of the Sellers hereby covenants
not to ▇▇▇ or assert any claim, and fully releases, acquits and forever
discharges the Company and its past and present officers, directors,
stockholders, agents, representatives, employees, subsidiaries, affiliates,
successors and assigns, and each of their respective past and present officers,
directors, agents, representatives, employees, successors and assigns, jointly
and individually, from any and all actions, causes of action, obligations,
liabilities, judgments, suits, debts, damages, claims and demands whatsoever, in
law or equity, whether liquidated or unliquidated, contingent or otherwise,
whether specifically mentioned or not, which each Seller ever had, now has or
hereafter can, shall or may have, for upon or by reason of any matter, cause or
thing arising from his ownership of the Shares from the beginning of the world
to the date of execution of this Agreement.
12. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations, agreements or understandings between the
parties with respect thereto. This Agreement may not be changed, modified,
amended or altered except by an agreement in writing referring expressly to this
Agreement and signed by each of the parties hereto.
13. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. BINDING EFFECT. This Agreement shall bind and be enforceable by and
against each of the parties in accordance with the terms hereof. This Agreement
shall inure to the benefit of and be enforceable by and against their respective
heirs and personal representatives, successors and assigns.
15. GOVERNING LAW. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of Texas, without giving
effect to the provisions, policies or principles thereof relating to choice or
conflicts of law.
16. COUNTERPARTS; FACSIMILES.
(a) This Agreement may be signed in any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
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(b) A duplicate or facsimile copy of this Agreement shall have the
same full force and effect as an originally executed counterpart of this
Agreement.
13. REPRESENTATION BY COUNSEL. Each of the parties to this Agreement has
consulted with, and received advice from, its own legal counsel regarding the
terms and conditions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
NATURAL HEALTH TRENDS CORP.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ -----------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Title: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as tenants by the entirety
Address:
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇,as tenants by the entirety
Address:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Address: 4618 5FK # ▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇▇▇▇
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ANNEX A
REGISTRATION RIGHTS
1. Definitions.
Capitalized terms used herein without definition shall have the respective
meanings given such terms as set forth in the Stock Purchase Agreement dated as
of March___________, 2004 among Natural Health Trends Corp. (the "Company") and
the individuals signatory thereto (the "Purchase Agreement"). As used herein,
the following terms shall have the following meanings:
Business Day: Any day other than a day on which banks are authorized
or required to be closed in the State of New York.
Commission: The Securities and Exchange Commission.
Common Stock: The common stock, par value $0.001 per share, of the
Company.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
Holder or Holders: Any Seller.
Objecting Notice: See Section 3(a).
Objecting Party: See Section 3(a).
Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization
or government or other agency or political subdivision thereof.
Piggyback Registration Rights: See Section 2(a).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 43OA
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to
the prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such prospectus.
Records: See Section 3(m).
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Registrable Securities: The Shares and (ii) any shares of Common
Stock issued in respect of such Shares until such time as (i) a
Registration Statement covering such Registrable Securities has been
declared effective by the Commission and such Registrable Securities
have been disposed of pursuant to such effective Registration
Statement or (ii) such Registrable Securities are held by one or
more Persons who could sell all Registrable Securities held by each
such Person in a single sale pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act, whichever is
earlier.
Registration Expenses: See Section 4.
Registration Statement: Any registration statement of the Company
that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments
and supplements to such registration statements, including
posteffective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder
Selling Holders: See Section 3(a).
Shelf Registration: See Section 2.
2. (a) Piggyback Registration. The Company proposes to register any of
its securities under the Securities Act for sale to the public for
its own account or for the account of other security holders (except
with respect to registration statements on Forms S-4 or S-8 or
another form not available for registering the Registrable
Securities for sale to the public), each such time it will give
written notice thereof to Holders of its intention so to do (such
notice to be given at least fifteen (15) days prior to the filing
thereof). Upon the written request of any such Holder (which request
shall specify the number of Registrable Securities intended to be
disposed of by such Holder and the intended method of disposition
thereof, received by the Company within ten (10) days after giving
of any such, notice by the Company, to register any of such Holder's
Registrable Securities, the Company will use its reasonable efforts,
subject to Section 2(b) below, to cause the Registrable Securities
as to which registration shall have been so requested to be included
in the securities to be covered by the Registration Statement
proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the Holder (in accordance
with its written request) of such Registrable Securities so
registered ("Piggyback Registration Rights"); provided, that (i) if
such registration involves an underwritten offering, all Holders
requesting to be included in the Company's registration must sell
their Registrable Securities to the underwriters selected by the
Company on the same terms and
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conditions as apply to the Company; and (ii) if, at any time after
giving written notice of its intention to register any securities
pursuant to this Section 2(a) and prior to the effective date of the
Registration Statement filed in connection with such registration,
the Company shall determine for any reason not to register such
securities, the Company shall give written notice to all Holders
and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration. If a
registration pursuant to this Section 2 (a) involves an underwritten
public offering, any Holder 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. The foregoing provisions notwithstanding, (i) the
Company may withdraw any registration statement referred to in this
Section 2(a) without thereby incurring any liability to the Holders,
and (ii) the inclusion of shares of Registrable Securities under
such Piggyback Registration Rights is subject to the cut-back
provisions of Section 2(b) below.
(b) Priority in Piggyback Registration. If a registration pursuant
to Section 2(a) hereof involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its
opinion, the number of equity securities (including all Registrable
Securities) which the Company, the Holders and any other persons
intended to be included in such registration exceeds the largest
number of securities which can be sold 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 (i) first, all the securities the Company proposes to
sell for its own account, and (ii) second, to the extent that the
number of securities which the Company proposes to sell for its own
account pursuant to Section 2(a) hereof is less than the number of
securities which the Company has been advised can be sold in such
offering without having the adverse effect referred to above, the
number of securities requested to be included in such registration
by security holders as a result of their exercise of "demand"
registration rights by such other holders. Any such reductions shall
be pro rata in relation to the number of shares of Common Stock to
be registered by each person participating in the offering.
(c) Holdback Agreements. If any registration of Registrable
Securities shall be in connection with an underwritten public
offering, each Holder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, and not to effect any
such public sale or distribution of any other equity security 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
thirty (30) days prior to, and during the ninety (90) day period
beginning on, the effective date of such Registration Statement
(except as part of such registration).
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(d) Exceptions. Notwithstanding the foregoing, the Company may delay
the registration of Registrable Securities following a written
request pursuant to Section 2(a) hereof for the time periods
described in Section 2(e) hereof upon the occurrence of any of the
following:
(i) The Company shall have previously entered into an
agreement or letter of intent contemplating an underwritten
public offering, on a firm commitment basis of Common Stock or
securities convertible into or exchangeable for Common Stock
and the managing underwriter of such proposed public offering
advises the Company in writing that in its opinion such
proposed underwritten offering would be materially and
adversely affected by a concurrent registered offering of
Registrable Securities (such opinion to state the reasons
therefor);
(ii) During the two (2) month period immediately preceding
such request, the Company shall have entered into an agreement
or letter of intent, which has not expired or otherwise
terminated, contemplating a material business acquisition by
the Company or its subsidiaries whether by way of merger,
consolidation, acquisition of assets, acquisition of
securities or otherwise;
(iii) The Company is in possession of material nonpublic
information that the Company would be required to disclose in
the Registration Statement and that is not, but for the
registration, otherwise required to be disclosed at the time
of such registration, the disclosure of which, in its good
faith judgment, would have a material adverse effect on the
business, operations, prospects or competitive position of the
Company;
(iv) The Company shall receive the written opinion of the
managing underwriter of the underwritten public offering
pursuant to which Common Stock has been registered within the
three (3) month period prior to the receipt of a registration
request that the registration of additional Common Stock will
materially and adversely affect the market for the Common
Stock (such opinion to state the reasons therefor); or
(v) At the time of receipt of a registration request, the
Company is engaged, or its board of directors has adopted by
resolution a plan to engage, in any program for the purchase
of shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock and, in the opinion of
counsel, reasonably satisfactory to the requesting Holders,
the distribution of the Common Stock to be registered would
cause such purchase of shares to be in violation of Regulation
M promulgated under the Exchange Act.
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(e) Period of Delay. If an event described in clauses (i) through
(iv) of Section 2(d) shall occur, the Company may, by written notice
to the Holders, delay the filing of a Registration Statement with
respect to the Registrable Securities to be covered thereby for a
period of time not exceeding ninety (90) days.
If an event described in clause (v) of Section 2(d) shall
occur, the filing of a Registration Statement with respect to the
Registrable Securities to be covered thereby shall be delayed until
the first date that the Registrable Securities to be covered thereby
can be sold without violation of Regulation M of the Exchange Act.
3. Registration Procedures.
In connection with the registration obligations of the Company pursuant to
the terms and conditions of this Agreement, the Company shall:
(a) prior to filing a Registration Statement or Prospectus or any
amendments or supplements thereto, including documents incorporated
by reference after the initial filing of the Registration Statement,
the Company will furnish to the Holders covered by such Registration
Statement (the "Selling Holders"), Holders' Counsel and the
underwriters, if any, draft copies of all such documents proposed to
be filed at least three (3) Business Days prior thereto, which
documents will be subject to the review of such Holders' Counsel and
the underwriters, if any, and the Company will not, unless required
by law, file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (including such documents
incorporated by reference) to which Selling Holders of at least a
majority of the Registrable Securities (the "Objecting Party") shall
object, pursuant to notice given to the Company prior to the filing
of such amendment or supplement (the "Objection Notice"). The
Objection Notice shall set forth the objections and the specific
areas in the draft documents where such objections arise. The
Company shall have five (5) Business Days after receipt of the
Objection Notice to correct such deficiencies to the satisfaction of
the Objecting Party, and will notify each Selling Holder of any stop
order issued or threatened by the Commission in connection therewith
and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;
(b) as promptly as practicable prepare and file with the Commission
such amendments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration Statement
effective for the period required pursuant to Section 2; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the
applicable period in accordance with
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the Intended methods of disposition by the Selling Holders set forth
in such Registration Statement or supplement to the Prospectus;
(c) as promptly as practicable furnish to any Selling Holder and the
underwriters, if any, without charge, such number or conformed
copies of such Registration Statement and any post-effective
amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference
therein, as such Selling Holder or underwriter may reasonably
request in order to facilitate the disposition of the Registrable
Securities being sold by such Selling Holder (it being understood
that the Company consents to the use of the Prospectus and any
amendment or supplement thereto by each Selling Holder and the
underwriters, if any, in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto); provided, that before filing a
Registration Statement or Prospectus relating to the Registrable
Securities or any amendments or supplements thereto, the Company
will furnish to Holders' Counsel copies of all documents proposed to
be filed at least three (3) Business Days prior to the filing
thereof, which documents will be subject to the review of such
counsel;
(d) on or prior to the date on which the Registration Statement is
declared effective, register or qualify such Registrable Securities
under such other securities or "blue sky" laws of such jurisdictions
as any Selling Holder, Holders' Counsel or underwriter reasonably
requests and do any and all other acts and things which may be
necessary or advisable to enable such Selling Holder to consummate
the disposition in such jurisdictions of such Registrable Securities
owned by such Selling Holder; keep each such registration or
qualification (or exemption therefrom) effective during the period
which the Registration Statement is required to be kept effective;
and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the applicable Registration
Statement; provided that the Company shall not be required to (i)
qualify to do business as a foreign corporation or as a
broker-dealer in any jurisdiction where it is not then so qualified
or (ii) take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not then so
subject;
(e) 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
Holders to consummate the disposition of such Registrable
Securities;
(f) as promptly as practicable notify each Selling Holder, Holders'
Counsel and any underwriter and (if requested by any such Person)
confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective
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amendment has been filed and, with respect to a Registration
Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the Commission or any other
federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information to be included in any Registration Statement
or Prospectus or otherwise, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for
that purpose, (iv) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the
Registrable Securities under state securities or "blue sky" laws or
the initiation of any proceedings for that purpose and (v) of the
happening of any event which makes any statement made in a
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated by reference therein
untrue or which requires the making of any changes in such
Registration Statement, Prospectus or documents so that they will
not contain any 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; and, as promptly as
practicable thereafter, prepare and file with the Commission and
furnish a supplement or amendment to such Prospectus so that, as
thereafter deliverable to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading;
(g) make generally available to the Holders an earnings statement
satisfying the provisions of Section II (a) of the Securities Act no
later than thirty (30) days after the end of the 12-month period
beginning with the first day of the Company's first fiscal quarter
commencing after the effective date of a Registration Statement;
(h) use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement, and, if
one is issued, to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible
moment;
(i) as promptly as practicable after filing with the Commission of
any document which is incorporated by reference into a Registration
Statement, deliver a copy of such document to Holders' Counsel;
(j) cooperate with the Selling Holders and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (which shall not bear any restrictive
legends and shall be in a form eligible for deposit with the
Depository Trust Company) representing securities sold under such
Registration Statement, and enable such securities to be in such
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denominations and registered in such names as the managing
underwriter or underwriters, if any, or such Selling Holders may
request and make available prior to the effectiveness of such
Registration Statement a supply of such certificates;
(k) if applicable, enter into such customary agreements (including
an underwriting agreement in customary form) and take such other
actions as the Selling Holders of at least a majority of the
aggregate number of the Registrable Securities being sold or the
underwriters retained by the Selling Holders participating in an
underwritten public offering, if any, may request in order to
expedite or facilitate the disposition of such Registrable
Securities;
(1) if requested by Selling Holders of at least a majority of the
aggregate amount of the Registrable Securities being sold to cause
the Registrable Securities included in such Registration Statement
to be (i) listed or admitted for trading or otherwise included on
each securities exchange, if any, (including, without limitation,
the Nasdaq Stock Market) on which similar securities issued by the
Company are then listed or (ii) authorized to be quoted on the
National Association of Securities Dealers, Inc. Automated Quotation
if the Registrable Securities so qualify;
(m) cooperate with each Selling Holder and each underwriter
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.
("NASD"); and
(n) during the period when the Prospectus is required to be
delivered under the Securities Act, ,rapidly file all documents
required to be filed with the Commission pursuant to Sections 13
(a), 13(c), 14 or 15(d) of the Exchange Act.
Each Selling Holder, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (f) of this
Section 3, shall forthwith discontinue disposition of the Registrable
Securities until such Selling Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by subsection (f) of this
Section 3 or until it is advised in writing (the "Advice") by the Company
that the use of the Prospectus may be resumed, and has received copies of
any additional or supplemental filings which are incorporated by reference
in the Prospectus, and, if so directed by the Company, such Selling Holder
will, or will request the managing underwriter or underwriters, if any,
to, deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Selling Holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event that the Company shall give any such
notice, the time periods for which a Registration Statement is required to
be kept effective pursuant to Section 2 hereof shall be extended by the
number of days during the period from and including the date of the giving
of such notice to and including the date when each
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Selling Holder shall have received (i) the copies of the supplemented or
amended Prospectus contemplated by Section 3(f) or (ii) the Advice.
4. Registration Expenses.
All expenses incident to the Company's performance of, or compliance with,
the provisions hereof, including without limitation, all Commission and
securities exchange or NASD registration and filing fees, fees and expenses of
compliance with securities or "blue sky" laws (including fees and disbursements
of counsel in connection with "blue sky" qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), fees
and expenses incurred in connection with the listing of the securities to be
registered, if any, on each securities exchange on which similar securities
issued by the Company are then listed, fees and disbursements of counsel for the
Company and its independent certified public accountants (including the expense
of any special audit or "cold comfort" letters required by, or incident to, such
performance), Securities Act liability insurance (if the Company elects to
obtain such insurance), reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, fees and expenses
of other Persons retained by the Company in connection with each registration
hereunder (but not including the fees and expense of legal counsel retained by a
Holder or Holders, or any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities) are herein called
"Registration Expenses."
The Company will pay all Registration Expenses in connection with each
Registration Statement filed pursuant to Section 2 or Section 3 except as
otherwise set forth therein. All expenses to be borne by the Holders in
connection with any Registration Statement filed pursuant to Section 2
(including, without limitation, all underwriting fees, discounts or commissions
attributable to such sale of Registrable Securities) shall be borne by the
participating Holders pro rata in relation to the number of shares of
Registrable Securities to be registered by each Holder.
5. Indemnification - Contribution.
(a) Indemnification by the Company. The Company agrees to indemnity
and hold harmless, to the full extent permitted by law, each Holder,
its officers, directors and each Person who controls such Holder
(within the meaning of the Securities Act), and any agent or
investment adviser thereof, against all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and
costs of investigation) arising out of or based upon any untrue or
alleged untrue statement of material fact contained in any
Registration Statement, any amendment or supplement thereto, any
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 therein not misleading,
except insofar as the same arise out of or are based upon any such
untrue statement or omission based upon information with respect to
such Holder furnished in writing to the Company by or on behalf of
such Holder expressly for use therein; provided
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that, in the event that the Prospectus shall have been amended or
supplemented and copies thereof as so amended or supplemented, shall
have been furnished to a Holder prior to the confirmation of any
sales of Registrable Securities, such indemnity with respect to the
Prospectus shall not inure to the benefit of such Holder if the
Person asserting such loss, claim, damage or liability and who
purchased the Registrable Securities from such holder did not, at or
prior to the confirmation of the sale of the Registrable Securities
to such Person, receive a copy of the Prospectus as so amended or
supplemented and the untrue statement or omission of a material fact
contained in the Prospectus was corrected in the Prospectus as so
amended or supplemented.
(b) Indemnification by Holders of Registrable Securities. In
connection with any Registration Statement in which a Holder is
participating, each such Holder will furnish to the Company in
writing such information with respect to the name and address of
such Holder and such other information as may be reasonably required
for use in connection with any such Registration Statement or
Prospectus and agrees to indemnity, to the full extent permitted by
law, the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses
resulting from any untrue statement of a material fact or any
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 not
misleading, to the extent, but only to the extent, that such untrue
or alleged untrue statement is contained in or such omission or
alleged omission relates to any information with respect to such
Holder so furnished in writing by such Holder specifically for
inclusion in any Prospectus or Registration Statement; provided,
however, that such Holder shall not be liable in any such case to
the extent that prior to the filing of any such Registration
Statement or Prospectus or amendment thereof or supplement thereto,
such Holder has furnished in writing to the Company information
expressly for use in such Registration Statement or Prospectus or
any amendment thereof or supplement thereto which corrected or made
not misleading information previously furnished to the Company. In
no event shall the liability of any Selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by
such Selling Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder agrees to 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 will claim indemnification or contribution pursuant to the
provisions hereof and, unless in the judgment of counsel 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
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party to assume the defense of such claim. Whether or not such
defense is assumed by the indemnifying party, the indemnifying
party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably
withheld). 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
of such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than one
counsel (plus such local counsel, if any, as may be reasonably
required in other jurisdictions) with respect to such claim, unless
in the judgment of any 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 fees and expenses
of such additional counsel or counsels. For the purposes of this
Section 5(c), the term "conflict of interest" shall mean that there
are one or more legal defenses available to the indemnified party
that are different from or additional to those available to the
indemnifying party or such other indemnified parties, as applicable,
which different or additional defenses make joint representation
inappropriate.
(d) Contribution. If the indemnification from the indemnifying party
provided for in this Section 5 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 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, has been made by, or
relates to information supplied by, such indemnifying party or
indemnified parties, and the parties intent, knowledge, access to
information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in Section 5(c),
any reasonable 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 5(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no underwriter
shall be
A-11
required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities underwritten by
it and distributed to the public were offered to the public exceeds
the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission, and no Selling Holder shall be
required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities of such Selling
Holder were offered to the public exceeds the amount of any damages
which such Selling Holder has otherwise been required to pay by
reason of such untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section I l(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) If indemnification is available under this Section 5, the
indemnifying parties shall indemnity each indemnified party to the
full extent provided in Sections 5(a) and (b) without regard to the
relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 5(d).
6. Participation in Underwritten Registrations.
No Holder may participate in any underwritten registration hereunder
unless such Holder (a) agrees to sell its Registrable 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.
7. Transfer or as an Imminent Right,.
The rights to cause the Company to register Registrable Securities granted
pursuant to the provisions hereof may be transferred or assigned by any Holder
to a transferee or assignee; provided; however, that the transferee or assignee
of such rights assumes the obligations of such transferor or assignor, as the
case may be, hereunder.
8. Amendment
Except as otherwise provided herein, the provisions hereof may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of at least a majority of the aggregate number of the
Registrable Securities then outstanding.
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