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EXHIBIT 10.26
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REGISTRATION AND INVESTOR'S RIGHTS AGREEMENT
DATED AS OF FEBRUARY 2, 2001
BY AND BETWEEN
PROBEX CORP.
AND
UNITED INFRASTRUCTURE COMPANY, LLC
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TABLE OF CONTENTS
1. DEFINITIONS ......................................................... 1
2. REGISTRATION ........................................................ 2
3. OBLIGATIONS OF THE COMPANY .......................................... 4
4. OBLIGATIONS OF THE INVESTOR ......................................... 8
5. EXPENSES OF REGISTRATION ............................................ 9
6. INDEMNIFICATION ..................................................... 9
7. CONTRIBUTION ........................................................ 11
8. REPORTS UNDER THE EXCHANGE ACT ...................................... 12
9. INFORMATION RIGHTS .................................................. 12
10. INSPECTION RIGHTS ................................................... 12
11. REPRESENTATION RIGHTS ............................................... 13
12. ASSIGNMENT OF REGISTRATION RIGHTS ................................... 13
13. AMENDMENT OF REGISTRATION RIGHTS .................................... 13
14. TERMINATION OF REGISTRATION RIGHTS .................................. 14
15. GENERAL PROVISIONS .................................................. 14
EXHIBIT A ............................................................... a
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REGISTRATION AND INVESTOR'S RIGHTS AGREEMENT
THIS REGISTRATION AND INVESTOR'S RIGHTS AGREEMENT (this "Agreement"),
is made as of February 2, 2001, by and between Probex Corp., a Delaware
corporation, with its headquarters located at 00000 Xxxx Xxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000 (the "Company"), and United Infrastructure Company, LLC, a
Delaware limited liability company (together with its respective affiliates, any
assignee or transferee of its respective rights hereunder, the "Investor").
WHEREAS, in connection with that certain Stock Purchase Agreement by
and between the parties hereto of even date herewith (the "Stock Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Investor certain shares
of its common stock, par value $.001 per share (the "Common Stock").
WHEREAS, to induce the Investor to execute and deliver the Stock
Purchase Agreement, the Company has agreed to provide (a) certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws; and (b) certain other
rights as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have
the following meanings:
(i) "Investor" means the Investor and any transferee
or assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 12 hereof and who executes a form of Joinder Agreement,
attached hereto as Exhibit A.
(ii) "register," "registered," and "registration"
refer to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for offering
securities on a continuous basis ("Rule 415"), and the declaration or ordering
of effectiveness of such Registration Statement by the United States of America
Securities and Exchange Commission (the "SEC").
(iii) "Registrable Securities" means the shares of
Common Stock issued to Investor in connection with the First Tranche Investment,
the Second Tranche Investment and the Third Tranche Investment, all other shares
of Common Stock beneficially owned by the Investor, any shares of Common Stock
issuable upon exercise of the Warrant, and any shares of capital stock issued or
issuable as a dividend on or in exchange for or otherwise with respect to any of
the foregoing.
(iv) "Registration Statement" means one or more
registration statements of the Company filed with the SEC under the Securities
Act pursuant to this Agreement.
(v) "Warrant" has the meaning specified in Section
2(b)(i) below.
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(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Stock Purchase
Agreement.
2. REGISTRATION.
(a) Mandatory Registration. The Company shall prepare, and, as
soon as practicable after the date of this Agreement but not later than March
31, 2001 unless the Investor provides a written waiver of this requirement, file
with the SEC a Registration Statement on Form S-1 or Form SB-2 (or, if
available, on Form S-3, or if Form S-3 is not available, on such form of
Registration Statement as is then available to effect a registration of the
Registrable Securities), covering the resale of the Registrable Securities to
enable the resale by the Investor from time to time on the American Stock
Exchange (the "AMEX") or in privately-negotiated transactions or otherwise. The
Company shall register all of the Registrable Securities on the Registration
Statement; provided, however, that if the Company determines that not all of the
Registrable Securities can be registered on one Registration Statement, then the
Company will file a Registration Statement as soon as practicable following the
issuance of any Registrable Securities not registered prior to issuance.
(b) Additional Issuances of Common Stock. Subject to the last
sentence of this Section 2(b), the Company shall use its commercially reasonable
efforts to obtain effectiveness of the Registration Statement as soon as
practicable. However, in the circumstances described in this Section 2(b), the
Company shall be required to issue a Warrant for the purchase of additional
shares of Common Stock to the Investor in such amounts and as soon as
practicable if not otherwise specified and in the manner set forth below, as
partial relief for the damages to the Investor by reason of any such delay in or
reduction of their ability to sell the Registrable Securities (which remedy
shall be exclusive of any other remedies available at law or in equity).
Investor hereby agrees to waive its rights to receive additional shares of
Common Stock upon failure of the Registration Statement to be declared effective
as specified in the Term Sheet for Purchase of Common Stock, Revision 1 between
the Company and the Investor dated October 11, 2000. In consideration thereof,
the Company will promptly issue the Investor a warrant (the "Warrant") to
purchase up to 250,000 shares of Common Stock at a price of $1.40 per share
exercisable at any time from and after the Second Tranche Closing Date, to and
including January 31, 2007.
(c) Piggy-Back Registrations. Subject to the last sentence of
this Section 2(c), if at any time prior to the expiration of the Registration
Period (as hereinafter defined) the Company shall file with the SEC a
Registration Statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities
(other than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans), the Company shall send to the Investor written
notice of such determination and, if within fifteen (15) days after the
effective date of such notice, the Investor shall so request in writing, the
Company shall include in such Registration Statement all or any part of the
Registrable Securities the Investor requests to be registered, except that if,
in connection with any underwritten public offering for the account of the
Company the managing underwriter(s) thereof shall impose a limitation on the
number of shares of Common Stock which may be included in the Registration
Statement because, in such underwriter's judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the
Company shall be obligated to include in such Registration Statement only such
limited portion of the Registrable Securities with respect to which the Investor
has requested inclusion hereunder as the underwriter shall permit; provided,
however,
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that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not
entitled to inclusion of such securities in such Registration Statement or are
not entitled to pro rata inclusion with the Registrable Securities; and
provided, further, however, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be made pro
rata with holders of other securities having the right to include such
securities in the Registration Statement other than holders of securities
entitled to inclusion of their securities in such Registration Statement by
reason of priority registration rights. No right to registration of Registrable
Securities under this Section 2(c) shall be construed to limit any registration
required under Section 2(a) hereof. If an offering in which the Investor is
entitled to registration under this Section 2(c) is an underwritten offering,
then the Investor whose Registrable Securities are included in such Registration
Statement shall, unless otherwise agreed by the Company, offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and conditions as other shares of Common Stock included in such underwritten
offering. The Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to this Section 2(c), after the Company has
effected three (3) registrations pursuant to this Section 2(c), and such
registrations have been declared effective by the SEC.
(d) Demand Registration.
(i) If the Company shall receive at any time after
June 30, 2001, a written request from the Investor that the Company file a
Registration Statement under the Securities Act covering the registration of the
Registrable Securities then outstanding, then the Company shall, subject to the
limitations of subsection (d)(ii) below, use commercially reasonable efforts to
effect as soon as practicable, and in any event within sixty (60) days of the
receipt of such request, the registration under the Securities Act of all
Registrable Securities which the Investor requests to be registered.
(ii) If the Investor intends to distribute the
Registrable Securities covered by its request by means of an underwriting, the
Investor shall so advise the Company as a part of its request made pursuant to
this Section 2(d). The underwriter will be selected by the Investor and shall be
reasonably acceptable to the Company. If the Investor proposes to distribute its
securities through such an underwriting, then it shall (together with the
Company as provided in subsection 3(i)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 2(d), if the
underwriter advises the Investor and the Company in writing that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company shall so advise the Investor, and the number of shares of
Registrable Securities that may be included in the underwriting shall be reduced
as required by the underwriter, and the Company shall include in such
registration, the maximum number of Registrable Securities requested to be
included therein. Any Registrable Securities excluded and withdrawn from such
underwriting shall be withdrawn from the registration.
(iii) Notwithstanding the foregoing, if the Company
shall furnish the Investor a Registration Statement pursuant to this Section
2(d), a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Registration
Statement to be filed and it is therefore essential to defer the filing of such
Registration Statement, the Company shall have the right to defer such filing
for a period of not more than one hundred twenty (120) days after receipt by the
Company of the request for
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registration from the Investor; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.
(iv) In addition, the Company shall not be obligated
to effect, or to take any action to effect, any registration pursuant to this
Section 2(d) after the Company has effected two (2) registrations pursuant to
this Section 2(d) and each such registration has been declared or ordered
effective by the SEC.
(e) Form S-3 Registration. In the event that the Company shall
receive from the Investor a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by the Investor,
the Company will as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of the Investor's
Registrable Securities as are specified in such request. The Company shall not
be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 2(e): (w) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Investor pursuant to this Section 2(e); (x) if
Form S-3 is not available for such offering by the Investor; (y) if the Investor
proposes to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public (net of any underwriters' discounts or
commissions) of less than Five Hundred Thousand Dollars ($500,000.00); or (z) if
the Company shall furnish to the Investor a certificate signed by the President
of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
Registration Statement for a period of not more than one hundred twenty (120)
days after receipt of the request of the Investor under this Section 2(e);
provided, however, that the Company shall not utilize this right more than once
in any twelve-month period.
(f) Notwithstanding anything to the contrary set forth herein,
the registration rights of the Investor pursuant to Sections 2(c), (d) and (e)
above shall only be available in the event the Company fails to timely file,
obtain effectiveness or maintain effectiveness of the Registration Statement to
be filed pursuant to Section 2(a) in accordance with the terms of this
Agreement.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
(a) The Company shall prepare promptly and file a Registration
Statement with the SEC in accordance with Section 2(a) hereof, and thereafter
use its best efforts to cause such Registration Statement to become effective as
soon as possible after such filing, and keep the Registration Statement
effective pursuant to Rule 415 at all times until such date as is the earlier of
(i) the date on which all of the Registrable Securities have been sold, or (ii)
the date on which the Registrable Securities (in the opinion of counsel to the
Investor) may be immediately sold without restriction (including without
limitation as to volume by each holder thereof) without registration under the
Securities Act (the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any 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.
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(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the Registration
Statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement.
(c) The Company shall furnish to the Investor whose
Registrable Securities are included in the Registration Statement and to its
legal counsel (i) promptly after the same is prepared and publicly distributed,
filed with the SEC, or received by the Company, one copy of the Registration
Statement and any amendment thereto, each preliminary prospectus and prospectus
and each amendment or supplement thereto, and, in the case of the Registration
Statement referred to in Section 2(a), each letter written by or on behalf of
the Company to the SEC or the staff of the SEC, and each item of correspondence
from the SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion of any thereof which contains information for
which the Company has sought confidential treatment), and (ii) such number of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by the Investor. The Company will promptly notify the Investor by
facsimile of the effectiveness of the Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing any Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall promptly file an acceleration request as soon as
practicable following the resolution or clearance of all SEC comments or, if
applicable, following notification by the SEC that the Registration Statement or
any amendment thereto will not be subject to review.
(d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investor, holding Registrable Securities being offered, may
reasonably request, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (a) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (b) subject itself to general taxation in any such jurisdiction,
(c) file a general consent to service of process in any such jurisdiction, (d)
provide any undertakings that cause the Company undue expense or burden, or (e)
make any change in its charter or bylaws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of the
Company and its stockholders.
(e) As promptly as practicable after becoming aware of such
event, the Company shall notify the Investor of the happening of any event of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
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efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to the Investor as it may reasonably
request.
(f) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement and, if such an order is issued, to obtain the withdrawal
of such order at the earliest possible moment and to notify the Investor, holder
of Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters), of the issuance of such order and the
resolution thereof.
(g) The Company shall permit counsel to the Investor, as
holder of the Registrable Securities, to review the Registration Statement and
all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof) a reasonable period of time prior to their filing with
the SEC, and the Company will not file any document in a form to which such
counsel reasonably objects and the Company will not request acceleration of the
Registration Statement without prior notice to such counsel. In the event of a
disagreement between the Investor and the Company regarding any action taken by
the Company to which counsel to the Investor objects (the "Dispute"), the
Investor shall give written notice (the "Dispute Notice") of the Dispute to the
Company, delivered in accordance with Section 15(b) of this Agreement. The
Dispute Notice shall set forth in reasonable detail the Dispute of the Investor.
Upon receipt of the Dispute Notice, the dates upon which the Company incurs
damage payments to the Investor ("Damages Dates"), set forth in Section 2(b) of
this Agreement, including subsections thereof, shall be extended by the number
of elapsed day(s) of the Dispute (the "Dispute Delay"). Upon written notice to
the Company by the Investor of a resolution (the "Resolution Notice") of the
Dispute to the reasonable satisfaction of the Investor, the Damage Dates shall
be adjusted by the Dispute Delay upon receipt by the Company of the Resolution
Notice delivered in accordance with Section 15(b) of this Agreement. The
sections of the Registration Statement covering information with respect to the
Investor, Investor's beneficial ownership of securities of the Company, or the
Investor's intended method of disposition of Registrable Securities shall
conform to the information provided to the Company by the Investor.
(h) At the request of the Investor, the Company shall furnish,
on the date that Registrable Securities are delivered to an underwriter, if any,
for sale in connection with the Registration Statement or, if such securities
are not being sold by an underwriter, on the date of effectiveness thereof (i)
an opinion, dated as of such date, from counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters, if any, and the Investor, and (ii) a letter, dated such date, from
the Company's independent certified public accountants, in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
the Investor.
(i) In the event of any underwritten public offering, the
Company shall enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering. The Investor, participating in such an underwriting, shall also enter
into and perform its obligations under such an agreement.
(j) The Company shall make available for inspection by (i) the
Investor, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investor, and (iv) one
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firm of attorneys retained by all such underwriters (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided, however, that
each Inspector shall hold in confidence and shall not make any disclosure
(except to the Investor) of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (b) the release of such Records is ordered pursuant to a subpoena or
other order from a court or government body of competent jurisdiction, or (c)
the information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this Section
3(j). The Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and the Investor) shall be deemed to limit the Investor's ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
(k) The Company shall hold in confidence and not make any
disclosure of information concerning the Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning the
Investor is required under clause (i) or clause (ii) above, or is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Investor prior to making such disclosure, and
allow the Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(l) The Company shall (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, including, without limitation, the AMEX, if any, if the listing
of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) secure the designation and quotation, of all the Registrable
Securities covered by the Registration Statement on the Nasdaq or, if not
eligible for the Nasdaq on the Nasdaq SmallCap and, without limiting the
generality of the foregoing, to arrange for at least two (2) market makers to
register with the National Association of Securities Dealers, Inc. (the "NASD")
as such with respect to such Registrable Securities.
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(m) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(n) The Company shall cooperate with the Investor, as holder
of Registrable Securities being offered, and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investor may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investor may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investor, whose Registrable
Securities are included in such Registration Statement) an instruction in
customary form and substance and an opinion of such counsel in customary form
and substance.
(o) At the request of the Investor, as holder of the
Registrable Securities, the Company shall prepare and file with the SEC, such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
(p) In the event that the Investor transfers or assigns any
Registrable Securities in accordance with Section 12 hereof, the Company will
supplement or amend the Registration Statement to allow for the transferee or
assignee to effect sales of Registrable Securities pursuant to the Registration
Statement.
(q) The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTOR.
In connection with the registration of the Registrable Securities, the
Investor shall have the following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement that the
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least three (3) business days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify the Investor of the information
the Company requires from it.
(b) By the Investor's acceptance of the Registrable
Securities, the Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless the Investor has
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notified the Company in writing of its election to exclude all of its
Registrable Securities from the Registration Statement.
(c) The Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(e)
or Section 3(f) hereof, the Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or Section 3(f)
hereof and, if so directed by the Company, the Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
(d) The Investor may participate in any underwritten
registration hereunder unless the Investor (i) agrees to sell its Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 5 hereof.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3 hereof, including without limitation
all registration, listing and qualification fees, printers and accounting fees,
the fees and disbursements of counsel for the Company, and the reasonable fees
and disbursements of one counsel selected by the Investor pursuant to Section
3(g) hereof, shall be borne by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify, hold harmless and defend (i) the Investor, as holder of such
Registrable Securities, (ii) the directors, officers, partners, employees,
agents and each person who controls the Investor within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), if any, (iii) any underwriter (as defined in the Securities Act) for the
Investor, and (iv) the directors, officers, partners, employees and each person
who controls any such underwriter within the meaning of the Securities Act or
the Exchange Act, if any (each, an "Indemnified Person"), against any joint or
several losses, claims, damages, liabilities or expenses (collectively, together
with actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, "Claims") to
which any of them may become subject insofar as such Claims arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such
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Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any other law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to the restrictions
set forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse the Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person or underwriter for such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld; and (iii) with respect to any
preliminary prospectus, shall not inure to the benefit of any Indemnified Person
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, such corrected prospectus was timely made
available by the Company pursuant to Section 3(c) hereof, and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus prior
to the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investor, pursuant to Section 12.
(b) In connection with any Registration Statement in which the
Investor is participating, the Investor agrees severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act, any
underwriter and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such stockholder or underwriter within the meaning of the Securities
Act or the Exchange Act (collectively and together with an Indemnified Person,
an "Indemnified Party"), against any Claim to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim arises out of or is based upon any Violation by the Investor, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information about the Investor
furnished to the Company by the Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c), the Investor will
reimburse any legal or other expenses (promptly as such expenses are incurred
and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under this
Agreement (including this Section 6(b) and Section 7) for only that amount as
does not exceed the net proceeds to the
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Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investor,
pursuant to Section 12. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The indemnifying party shall pay for only one
separate legal counsel for the Indemnified Persons or the Indemnified Parties,
as applicable, and such legal counsel shall be selected by the Investor, as
holder of the Registrable Securities included in the Registration Statement to
which the Claim relates (with the approval of the Investor), if the Investor is
entitled to indemnification hereunder, or the Company, if the Company is
entitled to indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. 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 such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 hereof to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (ii) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation, and (iii)
contribution (together with any indemnification or other obligations under this
Agreement) by any seller of Registrable Securities shall be limited in amount to
the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
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14
8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investor the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the SEC that may at any time permit the investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) 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
so long as the Company remains subject to such requirements (it being understood
that nothing herein shall limit the Company's obligations under the Stock
Purchase Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and
(c) furnish to the Investor, so long as it or its affiliates
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
to permit the Investor to sell such securities pursuant to Rule 144 without
registration.
9. INFORMATION RIGHTS.
The Company covenants and agrees that, commencing on the date upon
which the Company ceases to file periodic reports under the Exchange Act, for so
long as the Investor or any of its affiliates holds any of the Shares, the
Company will:
(a) Annual Reports. Deliver to the Investor, as soon as
practicable and in any event within ninety (90) days after the end of each
fiscal year of the Company, audited financial statements for the Company and its
Subsidiaries for such year, setting forth in comparative form, the figures from
the Company's previous fiscal year, prepared in accordance with generally
accepted accounting principles and practices; and
(b) Quarterly Reports. Deliver to the Investor, as soon as
practicable and in any event within forty-five (45) days after the end of each
fiscal quarter of the Company (except the last quarter of the Company's fiscal
year), quarterly unaudited financial statements on a consolidated basis,
including a balance sheet, a statement of income and a statement of cash flows.
10. INSPECTION RIGHTS
The Company shall permit the Investor, at the Investor's expense, to
visit and inspect the Company's and its Subsidiaries' properties, to examine the
books of account and records of the Company and its Subsidiaries and to discuss
the affairs, finances and accounts of the Company and its Subsidiaries with the
officers of the Company and its Subsidiaries, all at such reasonable times as
may be requested by the Investor; provided, however, that the Company and its
Subsidiaries shall not be obligated pursuant to this Section 10 to provide the
Investor access to any information which they reasonably consider to be a trade
secret or similar confidential information.
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11. REPRESENTATION RIGHTS
The Company covenants and agrees that, for so long as the Investor or
any of its affiliates holds any of the Shares:
(a) Observer and Advisory Rights. Commencing on October 12,
2000, the Investor shall, at its option, appoint a representative, chosen by the
Investor, to attend all meetings of the Company's Board of Directors in a
nonvoting observer and advisory capacity. The Company shall give such
representative copies of all notices, minutes, consents, and other materials
that is provides to its directors; provided, however, that (i) such
representative shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and (ii) the
Company reserves the right to withhold any information and to exclude such
representative from any meeting or portion thereof if (aa) access to such
information or attendance at such meeting could adversely affect the
attorney-client privilege between the Company and its counsel, or (bb) if the
Investor or its representative is a direct competitor of the Company .
(b) Board of Directors. From and after the Third Tranche
Closing Date, and conditioned upon the Investor or its affiliates holding not
less than five percent (5%) of the Common Stock then outstanding, the Company
shall appoint and shall use commercially reasonable efforts to maintain the
election to the Board of Directors, a representative of the Investor, having
full voting rights. If the Investor holds less than five percent (5%) of the
Common Stock then outstanding, the Investor's representative shall nonetheless
be considered for appointment to the Company's Board of Directors, subject to
the Board's requirements and procedures. So long as a representative of the
Investor is appointed to serve as a director pursuant to this Section 11(b),
then the Investor shall cease to have the observer and advisory rights described
in Section 11(a) hereof.
12. ASSIGNMENT OF REGISTRATION RIGHTS.
The registration rights under this Agreement (but not the additional
rights set forth in Section 11 above, which rights are expressly not assignable
by the Investor) shall be automatically assignable by the Investor to any
transferee of all or any portion of Registrable Securities if: (i) the
transferee agrees to execute a form of Joinder Agreement in the form of Exhibit
A attached hereto, and a copy of such Joinder Agreement is furnished to the
Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (iv)
such transfer shall have been made in accordance with the applicable
requirements of the Stock Purchase Agreement, and (v) such transferee shall be
an "accredited investor" as that term defined in Rule 501 of Regulation D
promulgated under the Securities Act.
13. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and
the Investor (to the extent the Investor or any of its
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affiliates still owns Registrable Securities). Any amendment or waiver effected
in accordance with this Section 13 shall be binding upon the Investor and the
Company.
14. TERMINATION OF REGISTRATION RIGHTS.
The Investor shall not be entitled to exercise any right provided for
in Section 2 of this Agreement after the earlier of (i) two years following the
consummation of the sale of securities pursuant to a Registration Statement
filed by the Company under the Securities Act in connection with the initial
firm commitment underwritten offering of its securities to the public, or (ii)
such time as Rule 144 or another similar exemption under the Securities Act is
available for the sale of all of the Investor's shares during a three-month
period without registration.
15. GENERAL PROVISIONS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Any notices required or permitted to be given under the
terms hereof shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company:
Probex Corp.
One Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to:
Jenkens & Xxxxxxxxx, A Professional Corporation
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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If to the Investor:
United Infrastructure Company, LLC
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Operating Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Enterprises Holdings, Inc.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Counsel
Facsimile: (000) 000-0000
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of Texas applicable to
agreements made and to be performed entirely within such State. In the event
that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof. The parties hereto hereby
submit to the exclusive jurisdiction of the United States federal courts located
in Dallas, Texas with respect to any dispute arising under this Agreement or the
transactions contemplated hereby.
(e) This Agreement, the Stock Purchase Agreement and the
Additional Right to Purchase Agreement (including all schedules and exhibits
thereto) constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Stock Purchase Agreement and the Additional Right
to Purchase Agreement supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof,
including without limitation that certain Term Sheet for Purchase of Probex
Common Stock Revision No. 1, dated as of October 11, 2000.
(f) Subject to the requirements of Section 12 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
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(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Company and the Investor have caused this
Agreement to be duly executed as of the date first above written.
PROBEX CORP.,
a Delaware corporation
By: /s/ XXXX X. XXXXXXXX
---------------------
Xxxx X. Xxxxxxxx
Corporate Controller
UNITED INFRASTRUCTURE COMPANY, LLC,
a Delaware limited liability company
By: /s/ XXXX X. XXXX
---------------------
Xxxx X. Xxxx
Authorized Person
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EXHIBIT A
Form of Registration and Investor's Rights Joinder Agreement
Probex Corp.
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Secretary
Ladies & Gentlemen:
In consideration of the transfer to the undersigned of ____________
shares of the common stock of Probex Corp., a corporation organized under the
laws of the State of Delaware (the "Company"), the undersigned represents that
[he][she][it] is a permitted transferee of [insert name of transferor] and
agrees that, as of the date written below, [he][she][it] shall become a party
to, and an Investor as defined in that certain Registration and Investor's
Rights Agreement, dated as of February 2, 2001, as such agreement may have been
amended from time to time (the "Agreement"), between the Company and United
Infrastructure Company, LLC, a Delaware limited liability company, and shall be
fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement, as though a party thereto.
Executed as of the ____ day of __________, ______ .
SIGNATORY:
-------------------------
Address:
---------------------------
---------------------------
ACKNOWLEDGED AND ACCEPTED:
PROBEX CORP.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
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