Exhibit (d)(1)(I)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of _____________, 2000 between The Xxxxxx Biomechanics Group ,
Inc., a corporation organized under the laws of the State of New York (the
"Company"), and Kanders & Company, Inc., a corporation organized under the laws
of the State of New York (the "Holder").
RECITALS
This Agreement is made in connection with the Tender Offer
Agreement, dated as of the date hereof, among [the Holder,] the Company, and
_________ (the "Tender Offer Agreement") pursuant to which the Holder will
purchase _____ shares of Common Stock and the Option Agreement, dated as of the
date hereof between the Company and the Holder (the "Option Agreement"),
pursuant to which the Holder is acquiring options to purchase up to 100,000
shares of the Common Stock of the Company.
Unless otherwise defined herein, capitalized terms so used herein
and not defined shall have the same meaning as provided in the Option Agreement.
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Business Day" means any day, other than a Saturday, Sunday or legal
holiday, on which banks in the State of New York are open for business.
"Common Stock" means the Common Stock, par value $.02 per share, of
the Company, as constituted on the date hereof, any shares into which such
Common Stock shall have been changed, or any shares resulting from any
reclassification of such Common Stock.
"Covenanted Registration" has the meaning specified in Section 2(a)
of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute thereto, and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.
"Holder" means the Holder referred to in the Preamble, its
successors and any other person holding Registrable Securities to whom these
registration rights have been assigned pursuant
to Section 9(f) of this Agreement.
"Incidental Registration" has the meaning specified in Section 2(c)
of this Agreement.
"Person" shall mean an individual, partnership, corporation,
association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision thereof.
"Registrable Securities" means (i) the Common Stock acquired by the
Holder pursuant to the Tender Offer Agreement, (ii) the Common Stock acquired by
the Holder pursuant to the exercise of the Option Agreement; (iii) any Common
Stock or other securities issued or issuable with respect to Common Stock
acquired by the Holder pursuant to the Tender Offer Agreement or pursuant to the
exercise of the Option Agreement, upon any stock split, stock dividend,
recapitalization, or similar event and (iii) any securities issued in
replacement or exchange of any of the securities issued in clauses (i) through
(iii) above.
"Registration" means an Incidental Registration, a Requested
Registration and a Covenanted Registration.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration, filing, listing and National Association of Securities
Dealers, Inc. ("NASD") fees, all fees and expenses of complying with securities
or blue sky laws of the United States, including without limitation the
Securities Laws, all word processing, duplicating and printing expenses, all
messenger and delivery expenses, any stock exchange fees, any transfer taxes,
the fees and expenses of the Company's legal counsel and independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, reasonable
fees and disbursements of one counsel for the Holder, and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; provided, however, that Registration Expenses shall not include
underwriting discounts and commissions.
"Registration Statement" has the meaning specified in Section 3(a)
of this Agreement.
"Requested Registration" has the meaning specified in Section 2(b)
of this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute thereto, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect at the time.
2
"Securities Laws" means the Securities Act and the Exchange Act.
"Underwriter's Maximum Number" means in connection with an
underwritten registration or offering of Registrable Securities or any shares of
the capital stock or other securities of the Company, a specified maximum number
of securities that, in the written opinion of the managing underwriters, may
successfully be included in such registration or offering due to the dictates of
market conditions.
2. Registration
(a) Covenant to Register. The Company shall file a registration statement
with the SEC to register all the Registrable Securities held by the Holder for
an offering to be made on a continuous or delayed basis pursuant to Rule 415
under the Securities Act. Such registration statement shall be on Form S-3 under
the Securities Act, if such Form is then available for use by the Company, or
another appropriate form that is available to the Company permitting
registration of the Registrable Securities for resale by the Holder in the
manner or manners reasonably designated by them (including, without limitation,
one or more underwritten offerings). The Company shall use its best efforts to
prosecute the registration required by this Section 2(a) (the "Covenanted
Registration") of the Registrable Securities pursuant to the Securities Act. The
Company shall use its best efforts to cause the Registrable Securities to be
registered as soon as practicable after the filing of the registration statement
relating to such Registrable Securities, but in no event later than 180 days
after the filing of such registration statement. The Holder shall cooperate with
the Company to provide all such necessary information as shall be required by
the Company to file the registration statement relating to the Covenanted
Registration. The Company shall maintain the prospectus relating to the
Registrable Securities effective for so long as the Holder desires to dispose of
the Registrable Securities, not to exceed a period of five years from the date
that the registration statement was declared effective by the Commission. The
Company shall not have the right to include any securities for sale on behalf of
the Company in any such Covenanted Registration.
(b) Requested Registration. At any time after the date hereof, upon
written request by the Holder to the Company that the Company effect the
registration under the Securities Act of all or part of the Registrable
Securities owned by the Holder (a "Requested Registration"), the Company will
use its best efforts to effect the registration under the Securities Act of the
Registrable Securities which the Company has been so requested to register by
the Holder within one hundred twenty (120) days after receipt of such request or
within sixty (60) days after receipt of such request with respect to a Requested
Registration, if the Company is qualified to file a registration statement on
SEC Form S-3 or any successor or similar short-form registration statement
(collectively, "SEC Form S- 3"); provided, however, that the Company shall not
be obligated to effect a Requested Registration pursuant to this subdivision
(b), (A) unless with respect to a Requested Registration, the shares to be
registered represent at least two percent (2%) of the Common Stock then
outstanding and the anticipated aggregate offering price of the Registrable
Securities to be sold is at least $1,000,000, in the case of registration on XXX
Xxxx X-0, or at least $2,000,000 in the case of other registrations,
3
or (B) during the 180 day period immediately following the consummation of any
previous Requested Registration pursuant to this Section. Subject to all
limitations in the preceding sentence, the Company must effect an unlimited
number of Requested Registrations pursuant to this subdivision (b) to the extent
such Requested Registrations may be effected on SEC Form S-3, but the Company
shall not be obligated to effect more than three Requested Registrations
hereunder other than on SEC Form S-3. Subject to subdivision (g), the Company
may include in such Requested Registration other securities of the Company for
sale, for the Company's account or for the account of any other person, if there
is no underwriter and, if there is an underwriter, if and to the extent that the
managing underwriter determines that the inclusion of such additional shares
will not interfere with the orderly sale of the underwritten securities at a
price range acceptable to the requesting Holder. Upon receipt of a written
request pursuant to this subdivision (b), the Company shall promptly give
written notice of such request to all holders of its Common Stock, and all such
holders shall be afforded the opportunity to join in such request. The Company
will include in the Requested Registration such number of securities of the
holders joining in such request as are specified in a written request by the
holders received by the Company within 20 days after receipt of such written
notice from the Company.
(c) Incidental Registration. If the Company for itself or any of its
security holders shall at any time or times after the date hereof determine to
register under the Securities Act any shares of its capital stock or other
securities (an "Incidental Registration"), other than: (i) the registration of
an offer, sale or other disposition of securities solely to employees of, or
other persons providing services to, the Company, or any subsidiary pursuant to
an employee or similar benefit plan; or (ii) relating to a merger, acquisition
or other transaction of the type described in Rule 145 under the Securities Act
or a comparable or successor rule, registered on XXX Xxxx X-0 or similar or
successor forms, the Company will notify the Holder of such determination at
least thirty (30) days prior to the filing of such registration statement or
prospectus, and upon the written request of the Holder given in writing to the
Company within twenty (20) days after the receipt of such notice, the Company
will use its best efforts as soon as practicable thereafter to cause all of the
Holder's Registrable Securities specified in the Holder's request to be included
in such registration statement or prospectus to the extent such registration is
permissible under the applicable Securities Laws and subject to the conditions
of such applicable Securities Laws.
(d) Registration Statement Form. The Company shall, if permitted by law,
effect any Registration requested under this Section 2 by the filing of a
registration statement on SEC Form S-3 to permit resales as requested by Holder.
(e) Expenses. The Company shall pay all Registration Expenses incurred in
connection with any Covenanted Registration, any Incidental Registration and any
Requested Registration.
(f) Effective Registration Statement. A Covenanted Registration, a
Requested Registration or an Incidental Registration requested pursuant to
Section 2 (a), Section (b) or Section 2(c), respectively, shall not be deemed to
have been effected unless the Registration Statement
4
relating thereto has become effective with the SEC. Notwithstanding the
foregoing, a Covenanted Registration, a Requested Registration or an Incidental
Registration will not be deemed to have been effected if (i) within sixty (60)
days after it has become effective with the SEC, such Covenanted Registration,
Requested Registration or Incidental Registration is interfered with by any stop
order, cease trade order, injunction, or other order or requirement of the SEC
or any other governmental agency or any court proceeding for any reason other
than a misrepresentation or omission by the Holder; or (ii) the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than solely
by reason of some act or omission by the Holder.
(g) Priority in Registration.
(i) If (A) a Requested Registration or a Covenanted Registration is
an underwritten registration, (B) the Company proposes to include other
securities of the Company for sale, for the Company's account or the
account of others ("Additional Registrable Securities"), and (C) the
managing underwriters shall give written advice to the Company of an
Underwriter's Maximum Number with respect to such Requested Registration
or Covenanted Registration, which is less than the aggregate number (the
"Proposed Included Securities") of the Registrable Securities requested
for inclusion by the Holder and such Additional Registrable Securities,
then no shares of Additional Registrable Securities shall be included in
such Requested Registration or Covenanted Registration unless 100% of the
Registrable Securities requested for inclusion by the Holder have been
included in such Requested Registration or Covenanted Registration.
(ii) If an Incidental Registration is an underwritten registration
initiated by the Company, and the managing underwriters shall give written
advice to the Company of an Underwriter's Maximum Number with respect to
such Incidental Registration, then: (A) the Company shall be entitled to
include in such registration that number of securities which the Company
proposes to offer and sell for its own account in such registration which
does not exceed the Underwriter's Maximum Number; and (B) the Company will
be obligated and required to include in such registration that number of
shares of Registrable Securities which shall have been requested by the
Holder and for the account of others ("Additional Registrants") having
registration rights parri passu with those of the Holder ("Additional
Registrable Securities") and which does not exceed the difference between
the Underwriter's Maximum Number and that number of securities which the
Company is entitled to include therein pursuant to clause (A) above and
such number of shares shall be allocated pro rata between the Holder and
the Additional Registrants on the basis of the number of shares requested
to be included therein by the Holder and the Additional Registrants to the
full extent of the remaining portion of the Underwriter's Maximum Number.
5
(h) Notwithstanding anything in paragraph (b) of this Section 2, the
Company shall have the right to delay any registration of Registrable Securities
requested pursuant to paragraph (b) of this Section 2 for up to ninety (90) days
if such registration would, in the reasonable judgment of the Company's Board of
Directors, substantially interfere with any material transaction being
considered at the time of receipt of the request from the Holder. If the
material transaction being considered by the Company is a public offering of its
securities, the Company shall be permitted to delay the requested registration
only if it is actively engaged in seeking to complete such offering.
4. Registration and Qualification Procedures.
(a) If and whenever the Company is required to effect the registration of
any Registrable Securities under the Securities Laws as provided in Section 2,
the Company, as expeditiously as possible and subject to the terms and
conditions of Section 2, will:
(i) prepare and file in any event within forty-five (45) days after
a request for registration has been delivered to the Company or, if the
Company is then eligible to use XXX Xxxx X-0, within thirty (30) days
after such request has been so delivered, with the SEC the requisite
registration statement and prospectus related thereto to effect such
Registration (a "Registration Statement") and use its best efforts to
cause such Registration Statement to become and remain effective;
(ii) permit the Holder, if in the reasonable judgment of the Holder,
the Holder might be deemed to be an underwriter, promoter or a controlling
person of the Company, to participate in the preparation of a Registration
Statement and to require the insertion therein of material, furnished to
the Company in writing, which in the reasonable judgment of the Holder and
its counsel should be included;
(iii) prepare and file with the SEC such amendments and supplements
to such Registration Statement pursuant to the Securities Laws as may be
necessary to keep such Registration Statement effective and to comply with
the provisions of the Securities Laws with respect to the disposition of
all securities covered by such Registration Statement until the earlier of
such time as all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof
set forth in such Registration Statement or the expiration of one year
after such Registration Statement becomes effective;
(iv) furnish to the Holder (A) such number of conformed copies of
such Registration Statement, each preliminary prospectus and summary
prospectus and each amendment and supplement thereto (in each case
including all exhibits) and any prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act,
and (B) such other documents, as the Holder of Registrable Securities to
be sold under such Registration Statement may reasonably
6
request;
(v) use its best efforts to register or qualify all Registrable
Securities under such other United States state securities or blue sky
laws of such jurisdictions as the Holder shall reasonably request, to keep
such registration or qualification in effect, and take any other action
which may be reasonably necessary or advisable to enable the Holder to
consummate the disposition of such Registrable Securities in such
jurisdictions, except that the Company shall not for any such purpose be
required to (A) qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of this
subdivision (v) be obligated to be so qualified, or (B) subject itself to
taxation in any such jurisdiction;
(vi) use its best efforts to cause all Registrable Securities
covered by a Registration Statement to be registered with or approved by
such other United States and/or state agencies or authorities as may be
necessary to enable the Holder to consummate the intended disposition of
such Registrable Securities;
(vii) in the event of the issuance of any stop, cease trade or other
order suspending the effectiveness of the Registration Statement, or of
any order suspending or preventing the use of any related prospectus or
suspending the registration of any Registrable Securities included in such
Registration Statement for sale in any jurisdiction, the Company shall use
its best efforts promptly to obtain the withdrawal of such order;
(viii) use its best efforts to furnish to the Holder (A) an opinion,
reasonably acceptable in form and substance to the Holder, dated the
effective date of the Registration Statement, of the independent counsel
representing the Company for the purposes of such registration, addressed
to the underwriters, if any, and to the Holder stating that such
Registration Statement has become effective under applicable Securities
Laws and that (1) to the best knowledge of such counsel, no stop, cease
trade or other order suspending the effectiveness thereof has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under applicable Securities Laws; (2) the Registration
Statement, each preliminary or supplementary prospectus with respect
thereto, and each amendment or supplement thereto, comply as to form in
all material respects with the requirements of applicable Securities Laws
(except that such counsel need express no opinion as to financial
statements contained therein); (3) such counsel has no reason to believe
that either the Registration Statement, each preliminary or supplementary
prospectus with respect thereto, or any amendment or supplement thereto,
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; (4) the descriptions in the
effective Registration Statement, each supplementary
7
prospectus with respect thereto, or any amendment or supplement thereto,
of all legal and governmental matters and contracts and other legal
documents or instruments are accurate and fairly present the information
required to be shown; and (5) such counsel does not know of any legal or
governmental proceedings, pending or contemplated, required to be
described in the effective Registration Statement, each supplementary
prospectus with respect thereto, or any amendment or supplement thereto,
which are not described as required nor of any contracts or documents or
instruments of a character required to be described in the effective
Registration Statement, each supplementary prospectus with respect
thereto, or any amendment or supplement thereto or to be filed as exhibits
to the effective Registration Statement which are not described and filed
as required; and (B) a letter, dated the effective date of the
Registration Statement, from the independent certified public accountants
of the Company, addressed to the underwriters, if any, and to the Holder
making such request, stating that they are independent certified public
accountants within the meaning of the Securities Act and that in the
opinion of such accountants, the financial statements and other financial
data of the Company included in the effective Registration Statement, each
supplementary prospectus with respect thereto, or any amendment or
supplement thereto, comply as to form in all material respects with the
applicable accounting requirements of applicable Securities Laws . Such
opinion of counsel shall additionally cover such legal matters with
respect to the registration or qualification in respect of which such
opinion is being given as the Holders may reasonably request. Such letter
from the independent certified public accountants shall additionally cover
such other financial matters (including information as to the period
ending not more than five business days prior to the date of such letter )
with respect to the registration or qualification in respect of which such
letter is being given as the Holders may reasonably request;
(ix) immediately notify the Holder of Registrable Securities
included in such Registration Statement at any time when a prospectus
relating thereto is required to be delivered under applicable Securities
Laws, 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 material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made, and at the request of the Holder promptly prepare and furnish to the
Holder a reasonable number of copies of a supplement to or an amendment
thereof as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(x) otherwise use its best efforts to comply with all applicable
rules and
8
regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of
at least twelve months, but not more than eighteen months, beginning with
the first full calendar month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, and not file
any amendment or supplement to such Registration Statement or prospectus
related thereto to which the Holder shall have reasonably objected in
writing on the grounds that such amendment or supplement does not comply
in all material respects with the requirements of the Securities Act or of
the rules or regulations thereunder, having been furnished with a copy
thereof at least five business days prior to the filing thereof;
(xi) provide a transfer agent for all Registrable Securities covered
by such Registration Statement not later than the effective date of such
Registration Statement; and
(xii) use its best efforts to list all Registrable Securities
covered by such Registration Statement on any securities exchange on which
any of the shares of the capital stock of the Company are then listed.
(b) If Registrable Securities of the Holder are to be sold under a
Registration Statement, the Company may require the Holder, at the Company's
expense, to furnish the Company with such information and undertakings as it may
reasonably request regarding the Holder and the distribution of such securities
as the Company may from time to time reasonably request in writing.
(c) The Holder, by execution of this Agreement, agrees (A) that upon
receipt of any notice of the Company of the happening of any event of the kind
described in subdivision (a)(ix) of this Section 3, the Holder will forthwith
discontinue its disposition of Registrable Securities pursuant to the
Registration Statement relating thereto until the expiration of any time limits
imposed by applicable Securities Laws and until the receipt by the Holder of
copies of the supplemented or amended prospectus contemplated by subdivision
(a)(ix) of this Section 3 and, if so directed by the Company, will deliver to
the Company all copies other than permanent file copies, then in possession of
the Holder of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice and (B) that Holder will immediately notify
the Company, at any time when a prospectus relating to the registration or
qualification of such Registrable Securities is required to be delivered under
applicable Securities Laws, of the happening of any event as a result of which
information previously furnished by Holder to the Company for inclusion in such
prospectus contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made. In the event the Company or the Holder shall give any such notice, the
period referred to in subdivision (a)(iii) of this Section 3 shall be extended
by a number of days equal to the number of days during the period from and
including the giving of notice pursuant to
9
subdivision (a)(ix) of this Section 3 to and including the date when the Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3.
5. Underwritten Offerings.
(a) Underwritten Offerings. In connection with any underwritten offering
pursuant to a Registration under Section 2(a) or 2(b), the Company and the
Holder will enter into an underwriting agreement with the underwriters for such
offering, such agreement to be in form and substance reasonably satisfactory to
the Holder and the Holder's underwriter in their reasonable judgment and to
contain representations and warranties by the Company and such other terms as
are customarily contained in agreements of that type, including, without
limitation, indemnities to the effect and to the extent provided in Section 6.
The Holder shall be a party to such underwriting agreement and may, at his
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Holder and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
the Holder. The Holder shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding the Holder and its intended
method of distribution.
(b) Selection of Underwriters. If a Covenanted Registration pursuant to
2(a) or a Requested Registration pursuant to Section 2(b) involves an
underwritten offering, then the Company shall select the underwriter from
underwriting firms of national reputation, subject to the approval of the
Holder.
(c) Holdback Agreements. The Holder agrees, if so reasonably required by
the managing underwriter of any firm commitment registered offering pursuant to
Section 2 or by the managing underwriter of any firm commitment registered
offering by the Company of its securities, not to effect any public sale or
distribution of Registrable Securities or sales of Registrable Securities
pursuant to Rule 144 or Rule 144A under the Securities Act during the seven (7)
days prior to and the 180 days after the effective date of the related
Registration Statement if necessary in order to complete the orderly sale and
distribution of the securities distributed in such offering, except as part of
such underwritten registration or offering, whether or not the Holder
participates in such registration or offering.
6. Preparation, Reasonable Investigation.
In connection with the preparation and filing of each Registration
Statement under applicable Securities Laws, the Company will give the Holder, if
the Holder has requested that any of its Registrable Securities be included in
such registration, the underwriters, if any, and their respective counsel and
accountants, drafts and final copies of such Registration Statement, each
preliminary
10
or summary prospectus with respect thereto and each amendment thereof or
supplement thereto, at least 1 business day prior to the filing thereof with the
SEC, and will give each of them such 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 its financial statements as
shall be necessary, in the opinion of the Holder and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
7. Indemnification and Contribution.
(a) Indemnification by the Company. In the event of any registration under
applicable Securities Laws pursuant to Section 2 of any of Holder's Registrable
Securities, the Company will, and hereby does, indemnify and hold harmless the
Holder (including its officers, directors, employees, agents, partners, and any
other person acting on its behalf) and Holder's legal counsel, each other person
who participates as an underwriter in the offering or sale of such securities
(if so required by such underwriter as a condition to including the Registrable
Securities of the Holder in such registration or qualification), such
underwriters' counsel, and each other person, if any, who controls the Holder or
any such underwriter within the meaning of the Securities Act (collectively, the
"Indemnified Parties"), against any losses, claims, damages or liabilities,
joint or several, to which such Indemnified Party may become subject under
applicable Securities Laws or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which Holder's Registrable Securities were registered or qualified under
applicable Securities Laws, any preliminary prospectus, final prospectus or
summary prospectus contained therein or any document incorporated therein by
reference, or any amendment 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, or arise out of any
violation by the Company of any Securities Law, any state, securities or "blue
sky" laws or any rule or regulation promulgated thereunder and relating to
action or inaction required of the Company in connection with any such loss,
claim, liability, action required of the Company in connection with any such
registration or qualification, and the Company will reimburse the Indemnified
Parties for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be liable to
any Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Indemnified Party, except the Company shall be liable if
such untrue statement or omission was corrected in such Registration Statement,
preliminary prospectus, final prospectus, amendment or supplement and the
Company failed to deliver such corrected document under circumstances in which
the obligation to deliver such corrected document was the responsibility of the
Company.
11
(b) Indemnification by the Holder. The Company may require, as a condition
to including any securities of the Company held by any person or entity in any
Registration Statement filed pursuant to Section 2, that the Company shall have
received an undertaking reasonably satisfactory to it from such person or entity
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 6) the Company, each director of the
Company, each officer of the Company, counsel to the Company, each other person,
if any, who controls the Company within the meaning of applicable Securities
Laws, and each underwriter or agent thereof, with respect to any statement or
alleged statement in or omission or alleged omission from such Registration
Statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if, and only if, such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with information furnished in writing to the
Company directly by such person or entity specifically for use therein;
provided, however, that the obligation of the Holder hereunder shall be limited
to an amount equal to the net proceeds received by the Holder upon the sale of
Registrable Securities sold in the offering covered by such registration.
(c) Notices of Claims, etc. Promptly after receipt by an Indemnified Party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 6, such Indemnified
Party will, if a claim in respect thereof is to be made against a party required
to provide indemnification (an "Indemnifying Party"), give written notice to the
latter of the commencement of such action, provided, however, that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligation under the preceding subdivisions of this
Section 6, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, unless in such Indemnified Party's reasonable
judgment a conflict of interest between such Indemnified and Indemnifying
Parties may exist in respect of such claim, the Indemnifying Party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other Indemnifying Party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Indemnifying Party to such Indemnified Party of its election so to assume
the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 6 (with appropriate modifications)
shall be given by the Company and the Holder, if any of Holder's Registrable
Securities are included in any Registration Statement with respect to any
required registration or other qualification of securities under any Federal or
state law or regulation of any governmental authority, other than the Securities
Act.
12
(e) Indemnification Payment. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(f) Survival of Obligations. The obligations of the Company and the Holder
under this Section 6 shall survive the completion of any offering of Registrable
Securities under this Agreement.
(g) Contribution. If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified Party on the other and the parties' relative, intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(g) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim which is the subject of this Section 6. 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.
8. Covenants Relating to Rule 144 and Multi-Jurisdictional Registrations.
With a view to making available the benefits of certain rules and
regulations of the SEC which permit the sale of securities of the Company to the
public at any time without registration, the Company agrees:
(a) to make and at all times keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
(b) to use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act.;
(c) so long as a Holder owns any Registrable Securities, to furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144, and of the
Securities Act and the Exchange Act a copy of the most
13
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the SEC allowing a Holder to sell any such
securities without resignation.
9. Other Registration Rights.
The Company represents and warrants that it has not granted any
registration rights to any Person. The Company shall not grant to any Person any
registration rights entitling such Person to a priority in registration superior
to that of the Holder.
10. Miscellaneous.
(a) Specified Performance. The parties hereto acknowledge that there may
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement.
(b) Notices. All demands, notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be personally delivered or sent by facsimile machine (with a
confirmation copy sent by one of the other methods authorized in this Section),
commercial (including UPS), U.S. Postal Service overnight delivery service, or,
deposited with the U.S. Postal Service mailed first class, registered or
certified mail, postage prepaid, as set forth below:
If to the Company, addressed to:
The Xxxxxx Biomechanics Group, Inc.
000 Xxxxxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attn: President
with a copy to:
Xxxxxxx Xxxxxxxx, LLC
Xxxxx 000
00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
14
If to a Holder, addressed as follows:
Kanders & Company, Inc.
0 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
with a copy to:
Xxxx Xxxxxxx, P.C.
1350 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Notices shall be deemed given upon the earlier to occur of (i) receipt by the
party to whom such notice is directed; (ii) if sent by facsimile machine, on the
day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after
5:00 p.m. Eastern Time, on the day (other than a Saturday, Sunday or legal
holiday in the jurisdiction to which such notice is directed) after which such
notice is sent; (iii) on the first business day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
the day the same is deposited with the commercial carrier if sent by commercial
overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice
duly given in accordance therewith may specify a different address for the
giving of any notice hereunder.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts of law principles thereof. Each party submits to the Federal and New
York State courts located in the County of New York, State of New York for the
purpose of resolving any disputes under this Agreement.
(d) Headings. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) Entire Agreement; Amendments. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly
15
executed by the Company and the Holder.
(f) Assignability. This Agreement and all of the provisions hereof will be
assigned, without the consent of the Company, by the Holder to, and shall inure
to the benefit of, any purchaser, transferee or assignee of any Registrable
Security, unless the Holder specifies otherwise in connection with particular
transfers of Registrable Securities. However, the Company shall not be required
to recognize any such purchaser, transferee or assignee as a Holder under this
Agreement unless and until either (i) such person becomes the holder of record
of Registrable Securities or (ii) the Company receives written notice of such
purchase, transfer or assignment.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THE XXXXXX BIOMECHANICS GROUP, INC.
By:
---------------------------------
Name:
Title:
KANDERS & COMPANY, INC.
By:
---------------------------------
Name:
Title:
16
