Exhibit 99.3
Exhibit J
Registration Rights Provisions
These Registration Rights Provisions constitute an integral part of the
Agreement and Plan of Reorganization by and among Xxxxxxxx Consulting Group,
Inc., a Delaware corporation, Plaza Acquisition Corp., a Puerto Rico corporation
and wholly-owned subsidiary of LCG, Plaza Consulting Group, a Puerto Rico
corporation, and Xxxxxxxxx Plaza.
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such Person. For purposes of this definition,
"control" means the ability of one Person to direct the management and policies
of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall mean the common stock, par value $.001 of the
Company.
"Company" shall mean Xxxxxxxx Consulting Group, Inc., a Delaware
corporation.
"Exchange" means the principal stock exchange or market on which the
Company's Common Stock is traded, if any.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
"Excusable Reason" means the occurrence of negotiations with respect to a
material agreement prior to either the announcement of the execution of the
agreement or the termination of the negotiations with respect to such proposed
agreement and other similar material corporate events to which LCG is a party or
expects to be a party if, in the reasonable judgment of LCG, disclosure of the
negotiations or other event would be adverse to the best interests of LCG
provided that LCG is continuing to treat such negotiations as confidential and
provided further that the period during which LCG is precluded from filing the
registration statement (or suspended the use of an effective registration
statement) as a result thereof has not exceeded ninety (90) days and provided
further that LCG shall not be permitted to avoid filing a registration statement
(or to suspend the use of an effective registration statement) for an Excusable
Reason more than twice in any one-year period.
"Expenses" means all expenses incident to the Company's performance of or
compliance with its obligations under these Registration Rights Provisions,
including, without limitation, all registration, filing, listing, stock exchange
and NASD fees, all fees and expenses of complying with state securities or blue
sky laws (including fees, disbursements and other charges of counsel for the
underwriters only in connection with blue sky filings), all word processing,
duplicating and printing
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expenses, messenger and delivery expenses, the fees, disbursements and other
charges of counsel for the Company and of its independent public accountants,
including the expenses incurred in connection with "cold comfort" letters
required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by the issuer of securities, but
excluding from the definition of Expenses underwriting discounts and commissions
and applicable transfer taxes, if any, or legal and other expenses incurred by
any sellers, which discounts, commissions, transfer taxes and legal and other
expenses shall be borne by the seller or sellers of Registrable Common Stock in
all cases.
"Holder" shall mean Stockholder, San Xxxx Holdings and any Transferee who
has rights pursuant to this Agreement pursuant to Section 12 of these
Registration Rights Provisions.
"NASD" means the National Association of Securities Dealers, Inc. and NASD
Regulation, Inc.
"Nasdaq" means the Nasdaq Stock Market and includes The Nasdaq National
Market and The Nasdaq SmallCap Market.
"Person" means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental or regulatory body or subdivision
thereof or other entity.
"Public Offering" means a public offering and sale of Registrable Common
Stock pursuant to an effective registration statement under the Securities Act.
"Registrable Common Stock" means any shares of Common Stock issued to
Stockholder or San Xxxx Holdings pursuant to the Agreement and shares of Common
Stock issuable upon exercise of warrants issuable to San Xxxx Holdings pursuant
to the Agreement but only for so long as registration pursuant to the Securities
Act is required for public sale without regard to volume limitations pursuant to
Rule 144(k), and as adjusted to reflect any merger, consolidation,
recapitalization, reclassification, split-up, stock dividend, rights offering or
reverse stock split made, declared or effected with respect to the Registrable
Common Stock.
"Requesting Holders" has the meaning set forth in Section 3 of these
Registration Rights Provisions.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Selling Holders" means the Holders of Registrable Common Stock requested
to be registered pursuant to Section 2(a) of these Registration Rights
Provisions.
"Shelf Registration" means a shelf registration statement pursuant to Rule
415 promulgated under the Securities Act.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation or
other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
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Any terms which are defined in the Agreement and not separately defined in
these Registration Rights Provisions shall have the same meanings in these
Registration Rights Provisions as in the Agreement.
All references to laws, rules and forms shall relate to the laws, rules
and forms as in effect on the date of the Agreement and shall include any
amendments thereto and any subsequent successor laws, rules and forms.
2. Securities Act Registration on Request.
(a) If the Company shall not have provided the holders of Registrable
Securities with the right to have their Registrable Securities included in a
registration statement during the six months following the effective date of the
registration statement relating to the public offering of shares of Common Stock
issued upon conversion of the Series A Preferred Stock, at any time after the
expiration of such six month period, or earlier with the consent of the Company,
any Holder or Holders holding at least thirty percent (30%) of the Registrable
Common Stock (with shares issuable upon exercise of warrants being deemed
outstanding for purpose of determining such thirty percent (30%), may make a
written request (the "Initiating Request") to the Company for the registration
with the Commission under the Securities Act of all or part of such Holder's
Registrable Common Stock; provided, however, that if such Initiating Request is
not for all of the total number of Registrable Common Stock which could be
registered by the Initiating Holder, then the Initiating Request shall cover not
less than thirty percent (30%) of the total number of Registrable Common Stock.
Upon the receipt of any Initiating Request for registration pursuant to this
Section 2(a), the Company promptly shall notify in writing all other Holders of
the Registrable Common Stock of the receipt of such request and will use its
commercially reasonable efforts to effect, at the earliest possible date, such
registration under the Securities Act, including a Shelf Registration (if then
eligible), of
(i) the Registrable Common Stock which the Company has been so requested
to register by such Initiating Holder, and
(ii) all other Registrable Common Stock which the Company has been
requested to register by any other Holders by written request given to the
Company within 30 days after the giving of written notice by the Company to such
other Holders of the Initiating Request,
all to the extent necessary to permit the disposition (in accordance with
Section 2(b) of these Registration Rights Provisions) of the Registrable Common
Stock so to be registered; provided, that any Holder whose Registrable Common
Stock was to be included in any such registration, by written notice to the
Company, may withdraw such request, and the Company shall not be required to
effect any registration pursuant to this Section 2(a) if either (x) the
Initiating Holder or (y) the Holders of more than 40% of the shares of
Registrable Common Stock withdraw the request for inclusion. The sale of
Registrable Common Stock pursuant to this Section 2(a) shall not be pursuant to
an unwritten public offering without the prior written consent of the Company.
The Holders shall have three registration right pursuant to this Section 2.
(b) Registration under Section 2(a) of these Registration Rights
Provisions shall be on such appropriate registration form prescribed by the
Commission under the Securities Act as shall be selected by the Company and as
shall permit the disposition of the Registrable Common Stock pursuant to the
method of disposition determined by the Selling Holders; provided, however, that
if the Company is eligible to use a registration statement on Form S-3, the
Company shall use such form.
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(c) The Holders of Registrable Common Stock to be included in a
registration statement may, at any time on written notice to the Company,
terminate a request for registration made pursuant to this Section 2.
(d) The Company shall use its commercially reasonable efforts to keep any
Shelf Registration effective for nine (9) months from the effective date of the
registration statement or until such earlier date as all of the Registrable
Common Stock covered by the registration statement shall have been sold.
(e) No registration effected under this Section 2 shall relieve the
Company of its obligation to permit the registration of Registrable Common Stock
pursuant to Section 3 of these Registration Rights Provisions.
(f) As a condition to the inclusion of a Holder's Registrable Common Stock
in a registration statement pursuant to Sections 2(a) and 3 of these
Registration Rights Provisions, each Holder shall:
(i) furnish the information and indemnification as set forth in these
Registration Rights Provisions and update such information immediately upon the
occurrence of any events or condition which make the information concerning the
Holder inaccurate in any material respect;
(ii) not sell any Registrable Common Stock pursuant to the registration
statement except in the manner set forth in the registration statement;
(iii) comply with the prospectus delivery requirements and the provisions
of Regulation M of the Commission pursuant to the Securities Act;
(iv) not sell or otherwise transfer or distribute any Registrable Common
Stock shares if the Holder possesses any material nonpublic information
concerning the Company; and
(v) not sell or otherwise transfer any Registrable Common Stock pursuant
to a registration statement upon receipt of advice from the Company that the
registration statement is no longer current until the Holder is advised that the
Registrable Common Stock may be sold pursuant to the registration statement; and
(vi) provide any other information requested by the Commission, the NASD,
any stock exchange or market on which the Common Stock is traded and any state
securities commission.
3. Piggyback Registration.
(a) If at any time after the expiration of six months from the effective
date of the registration statement relating to the public offering of shares of
Common Stock issued upon conversion of the Series A Preferred Stock, or earlier
with the consent of the Company, the Company proposes to register any of its
securities under the Securities Act by registration on any forms other than Form
S-4 or
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X-0, whether or not pursuant to registration rights granted to other holders of
its securities and whether or not for sale for its own account, it shall give
prompt written notice to all of the Holders of its intention to do so and of
such Holders' rights (if any) under this Section 3, which notice, in any event,
shall be given at least fifteen (15) days prior to such proposed registration.
Upon the written request of any Holder receiving notice of such proposed
registration that is a Holder of Registrable Common Stock (a "Requesting
Holder") made within ten (10) days after the receipt of any such notice, the
Company shall, subject to Section 6(b) of these Registration Rights Provisions,
effect the registration under the Securities Act of all Registrable Common Stock
which the Company has been so requested to register by the Requesting Holders
thereof.
(b) If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Requesting Holder and (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Common Stock in connection with such registration (but not from any obligation
of the Company to pay the Expenses in connection therewith), without prejudice,
however, to the rights of any Holder to include Registrable Common Stock in any
future registration (or registrations) pursuant to this Section 3 or to cause
such registration to be effected as a registration under Section 2(a) of these
Registration Rights Provisions, as the case may be, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Common Stock, for the same period as the delay in registering such
other securities.
(c) If such registration involves an underwritten offering, the provision
of Section 6 of these Registration Rights Provisions shall apply.
(d) No registration effected under this Section 3 shall relieve the
Company of its obligation to effect any registration upon request under Section
2(a) of these Registration Rights Provisions.
4. Expenses. the Company shall pay all Expenses in connection with any
registration initiated pursuant to Section 2(a) or 3 of these Registration
Rights Provisions, whether or not such registration shall become effective and
whether or not all or any portion of the Registrable Common Stock originally
requested to be included in such registration is ultimately included in such
registration. The Holders shall pay any expenses incurred by the Holder.
5. Registration Procedures.
(a) If and whenever the Company is required to effect any registration
under the Securities Act as provided in Sections 2(a) and 3 of these
Registration Rights Provisions, the Company shall, as expeditiously as possible:
(i) Subject to Section 5(b) of these Registration Rights Provisions,
prepare and file with the Commission (promptly and, in the case of any
registration pursuant to Section 2(a), in any event within ninety (90) days
unless the Initiating Request is made subsequent to 15th day of the eleventh
month of any fiscal year and prior to the first day of the second month of the
following year, in which event the registration statement shall be filed within
thirty (30) days after the date a Form 10-K or 10-KSB is required to be filed)
the requisite registration statement to effect such registration and
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thereafter use its commercially reasonable efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities that are not shares of
Registrable Common Stock (and, under the circumstances specified in Section 3 of
these Registration Rights Provisions, its securities that are shares of
Registrable Common Stock) at any time prior to the effective date of the
registration statement relating thereto.
(ii) Notify each seller of Registrable Common Stock and other securities
covered by such registration statement at any time after an Initiating Request
when an Excusable Reason shall have occurred.
(iii) Notify each Selling Holder at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon 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 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, and subject to Section
5(a)(iv) of these Registration Rights Provisions and except during the time the
Company may delay a registration for an Excusable Reason, prepare and file with
the Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Common Stock covered by such registration statement until such time
as all of such Registrable Common Stock has been disposed of in accordance with
the method of disposition set forth in such registration statement, subject to
Section 2(e) of these Registration Rights Provisions.
(iv) If requested by the holders of a majority of the Registrable Common
Stock included or to be included in the registration statement being filed
pursuant to Section 2(a) or 3 of these Registration Rights Provisions, before
filing any registration statement or prospectus or any amendments or supplements
thereto, furnish to and afford the Holders of the Registrable Common Stock, one
firm of counsel for the Holders designated by the Holders of a majority of the
Registrable Common Stock included or to be included in the registration
statement (the "Holders Counsel"), a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (at least ten
(10) Business Days prior to such filing). The Company shall not file any
registration statement or prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document, if the Holders of a majority of the shares of
Registrable Common Stock covered by such registration statement, the Holders
Counsel, or the managing underwriters, if any, shall reasonably object. Any
registration statement, when declared effective by the Commission or when
subsequently amended (by an amendment which is declared effective by the
Commission) or any prospectus in the form included in the registration statement
as declared effective by the Commission or when subsequently supplemented will
not contain 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,
in light of the circumstances under which they were made, not misleading;
(v) Use its commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness of a registration
statement, and in any event shall, within thirty (30) days of such cessation of
effectiveness, use its commercially reasonable efforts to amend the registration
statement in a manner reasonably expected to obtain the withdrawal of the order
suspending the effectiveness thereof,
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(vi) Furnish to each seller of Registrable Common Stock covered by such
registration statement such reasonable number of copies of such drafts and final
conformed versions of such registration statement and of each such amendment and
supplement thereto (in each case including, if requested, one copy of all
exhibits and any documents incorporated by reference), such number of copies of
such drafts and final versions of the prospectus contained in such registration
statement (including each preliminary prospectus and any summary prospectus) and
any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in writing.
(vii) Use its commercially reasonable efforts to register or qualify all
Registrable Common Stock under such other securities or blue sky laws of such
states or other jurisdictions of the United States of America as the sellers of
Registrable Common Stock covered by such registration statement shall reasonably
request in writing, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this Section
5(a)(vii) be obligated to be so qualified, to subject itself to taxation in such
jurisdiction or to consent to general service of process in any such
jurisdiction.
(viii) Make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder, and furnish to each seller
of Registrable Common Stock at least ten days prior to the filing thereof a copy
of any amendment or supplement to such registration statement or prospectus.
(ix) Cause all such Registrable Common Stock covered by such registration
statement to be listed on the Exchange, if any.
(b) Each seller of Registrable Common Stock as to which any registration
is being effected shall furnish the Company and the underwriters, if any, such
information regarding such seller and the distribution of the securities covered
by such registration statement as the Company may from time to time reasonably
request in writing and as is required by applicable laws and regulations.
(c) Each Holder agrees that as of the date that a final prospectus is made
available to it for distribution to prospective purchasers of Registrable Common
Stock it shall cease to distribute copies of any preliminary prospectus prepared
in connection with the offer and sale of such Registrable Common Stock. Each
Holder further agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Sections 5(a)(ii) and (iii) of
these Registration Rights Provisions, such Holder shall forthwith discontinue
such Holder's disposition of Registrable Common Stock pursuant to the
registration statement relating to such Registrable Common Stock until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by said Sections 5(a)(ii) and (iii), and, if so directed by the
Company, shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Holder's possession of the
prospectus relating to such Registrable Common Stock current at the time of
receipt of such notice.
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6. Underwritten Offerings.
(a) If the Company proposes to register any of its securities under the
Securities Act as contemplated by Section 3 of these Registration Rights
Provisions and such securities are to be distributed by or through one or more
underwriters, the Company shall, if requested by any Requesting Holders, request
that such underwriters include all of the Registrable Common Stock to be offered
and sold by such Requesting Holders among the securities of the Company to be
distributed by such underwriters; provided, that, if the managing underwriter of
such underwritten offering shall advise the Company in writing (with a copy to
the Requesting Holders) that if all the Registrable Common Stock requested to be
included in such registration (together with all other shares of Common Stock of
other stockholders of the Company requested to be so included pursuant to
"piggyback" rights granted to such stockholders) were so included, in its
opinion, the number and type of securities proposed to be included in such
registration would exceed the number and type of securities which could be sold
in such offering within a price range acceptable to the Company, then the
Company shall include in such registration, to the extent of the number and type
of securities which the Company is advised by the managing underwriter can be
sold in such offering, (i) first, securities that the Company proposes to issue
and sell for its own account and (ii) second, securities held by any person
exercising demand registration rights, and (iii) third, Registrable Common Stock
requested to be registered by Requesting Holders pursuant to Section 3 of these
Registration Rights Provisions and Common Stock of any other stockholders of the
Company having such registration rights who request registration as aforesaid
(other than stockholders referred to in clause (ii) of this Section 6(a)), pro
rata, among such holders on the basis of the number of shares of Common Stock
requested to be registered by all such holders.
(b) Any Requesting Holder may withdraw its request to have all or any
portion of its Registrable Common Stock included in any such offering by notice
to the Company within ten (10) Business Days after receipt of a copy of a notice
from the managing underwriter pursuant to Section 6(a) of these Registration
Rights Provisions.
(c) The Holders of Registrable Common Stock to be distributed by
underwriters in an underwritten offering contemplated by Section 6(a) of these
Registration Rights Provisions, shall be parties to the underwriting agreement
between the Company and such underwriters and any such Holder, at its option,
may require 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 such Holders. No such Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters except that each such Holder shall be required to make
representations, warranties and agreements regarding such Holder, such Holder's
Registrable Common Stock and such Holder's intended method of distribution. The
Holders whose Registrable Common Stock is being sold to the underwriters shall
appoint an attorney-in-fact who shall be authorized to negotiate with the
underwriter on behalf of such Holders and to execute the underwriting agreement
and related documentation on their behalf.
(d) In connection with any underwritten public offering, regardless of
whether the Holder is selling Registrable Common Stock pursuant to the
registration statement, the Holder shall agree to such lock-up as may be
requested by the managing underwriter provided that such lock-up is not for a
period longer than the lock-up required of the Company's principal stockholders,
officers and directors.
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7. Preparation; Reasonable Investigation.
(a) In connection with the preparation and filing of each registration
statement under the Securities Act pursuant to these Registration Rights
Provisions, the Company shall give each Holder of Registrable Common Stock
registered under such registration statement, the underwriter, if any, and its
respective counsel and accountants the reasonable opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and shall give each of them such reasonable access to its books and records and
such reasonable 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 reasonable opinion of any such Holders'
and such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
(b) Each Holder of Registrable Common Stock shall maintain the
confidentiality of any confidential information received from or otherwise made
available by the Company to such Holder of Registrable Common Stock and
identified in writing by the Company as confidential and shall not make any
sales or purchases of the Company's securities while in possession of
confidential information; provided, however, that any information relating to an
Excusable Reason shall be deemed to be confidential information regardless of
whether it is expressly marked as confidential. Information that (i) is or
becomes available to a Holder of Registrable Common Stock from a public source,
(ii) is disclosed to a Holder of Registrable Common Stock by a third-party
source who has the right to disclose such information shall not be deemed to be
confidential information for purposes of these Registration Rights Provisions.
Each Holder shall indemnify and hold harmless the Company, its officer,
directors and counsel from and against any loss, liability, damage or expense
which they may incur as a result of any breach of the provisions of this Section
7(b).
8. Indemnification.
(a) In connection with any registration statement filed by the Company
pursuant to Section 2(a) or 3 of these Registration Rights Provisions, the
Company shall, and hereby agrees to, indemnify and hold harmless, each Holder
and seller of any Registrable Common Stock covered by such registration
statement and each other Person, if any, who controls such Holder or seller, and
their respective directors, officers, partners, agents and Affiliates from and
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act, or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof), which are collectively referred to as "Losses,"
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact made by the Company contained in the Registration
Statement, or any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or any amendment thereof or supplement thereto, or in any blue sky
application or other document executed by the Company specifically for that
purpose (or based upon written information furnished by the Company) filed in
any state or other jurisdiction in order to qualify any of the Securities or
other Securities under the securities laws thereof (any such application,
document or information being referred to as a "Blue Sky Application"); or (ii)
the omission or alleged omission to state in any such Registration Statement,
Preliminary Prospectus or Prospectus, or amendment thereof or supplement
thereto, or Blue Sky Application a material fact required to be stated therein
or necessary to make the statements made therein not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against any such
loss,
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claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein or omitted
therefrom in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Holder specifically for use in connection
with the preparation thereof, and further provided, however, that the foregoing
indemnity with respect to any untrue statement, alleged untrue statement,
omission, or alleged omission contained in any Preliminary Prospectus shall not
inure to the benefit of any Holder from whom the person asserting any such loss,
claims any of, damage, or liability purchased any of the securities that are the
subject thereof (or to the benefit of any person who controls such Holder or
other Person), if a copy of the prospectus was not delivered to such person with
or prior to the written confirmation of the sale of such security to such
person. The indemnify provided for in this Section 8(a) shall remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party and shall survive any transfer of the Registrable Shares by
the indemnified party. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
(b) In connection with any registration statement filed by the Company
pursuant to Section 2(a) or 3 of these Registration Rights Provisions in which a
Holder has registered for sale Registrable Common Stock, each Holder or seller
of Registrable Common Stock shall, and hereby agrees to, indemnify and hold
harmless the Company and each of its directors, officers, employees and agents,
each other Person, if any, who controls the Company and each other seller and
such seller's directors, officers, stockholders, partners, employees, agents and
affiliates from and against any and all Losses to which they or any of them may
become subject under the Securities Act, the Exchange Act, or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, or any amendment
thereof, or in any Preliminary Prospectus or the Prospectus, or any amendment
thereof or supplement thereto, or in a Blue Sky Application, or (ii) the
omission or the alleged omission to state in any such Registration Statement,
Preliminary Prospectus or Prospectus, amendment thereof or supplement thereto,
or Blue Sky Application a material fact required to be stated therein or
necessary to make the statements made therein not misleading, in each case to
the extent, but only to the extent, that the same was made therein or omitted
therefrom in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder specifically for use in the
preparation thereof, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending against any such loss, claim, damage, liability or
action. The indemnify provided for in this Section 8(a) shall remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party and shall survive any transfer of the Registrable Shares by
the indemnified party. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
(c) Within five (5) business days after receipt by an indemnified party
under Section 8(a) or (b) of these Registration Rights Provisions of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; the failure so to notify the indemnifying party shall relieve the
indemnifying party from any liability under this Section 8 as to the particular
item for which indemnification is then being sought, unless such indemnifying
party has otherwise received actual notice of the action at least thirty (30)
days before any answer or response is required by the indemnifying party in its
defense of such action, but will not relieve it from any
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liability that it may have to any indemnified party otherwise than under this
Section 8. If any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof; provided, that if the defendants in any such action include
both the indemnified party and the indemnifying party and either (i) the
indemnifying party or parties agree, or (ii) in the opinion of counsel for the
indemnifying parties, representation of both the indemnifying party or parties
and the indemnified party or parties by the same counsel is inappropriate under
applicable standards of professional conduct because of actual or potential
conflicting interests between them, then the indemnified party or parties shall
have the right to select separate counsel to assume such legal defense and to
otherwise participate in the defense of such action. The indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (x) the indemnified party shall have employed
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel in each jurisdiction which counsel is approved by
indemnified parties (whether pursuant to this Agreement or other agreements if
the claim relates to the same or similar allegations) holding a majority of the
shares as to which indemnification is claimed), (ii) the indemnifying party
shall not have employed counsel to represent the indemnified party within a
reasonable time after notice of commencement of the action, or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall an
indemnifying party be liable under this Section 8 for any settlement, effected
without its written consent, which consent shall not be unreasonably withheld,
of any claim or action against an indemnified party.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to an indemnified party under Section 8(a) and (b) of
these Registration Rights Provisions in respect of any Losses, then, in lieu of
the amount paid or payable under said Section 8(a) or (b), the indemnified party
and the indemnifying party under said Section 8(a) or (b) shall contribute to
the aggregate Losses (including legal or other expenses reasonably incurred in
connection with investigating the same) (i) in such proportion as is appropriate
to reflect the relative fault of the Company and the prospective sellers of
Registrable Common Stock covered by the registration statement which resulted in
such Loss or action in respect thereof, with respect to the statements,
omissions or action which resulted in such Loss or action in respect thereof, as
well as any other relevant equitable considerations, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company, on the one hand, and such prospective sellers, on the other hand,
from their sale of Registrable Common Stock; provided, that, for purposes of
this clause (ii), the relative benefits received by any prospective sellers
shall be deemed not to exceed (and the amount to be contributed by any
prospective seller shall not exceed) the amount received by such seller. 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. The obligations, if
any, of the Selling Holders of Registrable Common Stock to contribute as
provided in this Section 8(d) are several in proportion to the relative value of
their respective Registrable Common Stock covered by such registration statement
and not joint. In addition, no Person shall be obligated to contribute hereunder
any amounts in payment for any settlement of any action or Losses effected
without such Person's consent.
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9. Registration Rights to Others. Nothing in these registration rights
provisions shall restrict the Company from granting registration rights to
others.
10. Amendments and Waivers. Any provision of these Registration Rights
Provisions may be amended, modified or waived if, but only if, the written
consent to such amendment, modification or waiver has been obtained from (i)
except as provided in clause (ii) below, the Holder or Holders of at least 66
2/3% of the shares of Registrable Common Stock affected by such amendment,
modification or waiver and (ii) in the case of any amendment, modification or
waiver of any provision of Section 4 of these Registration Rights Provisions or
this Section 10, or as to the percentages of Holders required for any amendment,
modification or waiver, or any amendment, modification or waiver which adversely
affects any right and/or obligation under these Registration Rights Provisions
of any Holder, the written consent of each Holder so affected.
11. Assignment. The provisions of these Registration Rights Provisions
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns. Any Holder may assign to any
Transferee of its Registrable Common Stock that is an Affiliate of the Holder,
its rights and obligations under these Registration Rights Provisions (except
with respect to shares of Registrable Common Stock sold pursuant to Rule 144
under the Securities Act, under any registration statement or otherwise in a
manner such that the shares are no longer subject to restrictions from further
public resale under the Securities Act without regard to volume limitations),
provided that the Company shall receive written notice of such transfer and that
such Transferee shall agree in writing with the parties hereto prior to the
assignment to be bound by these Registration Rights Provisions as if it were an
original party hereto, whereupon such assignee shall for all purposes be deemed
to be a Holder under these Registration Rights Provisions. Except as provided
above or otherwise permitted by these Registration Rights Provisions, neither
these Registration Rights Provisions nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any
Holder without the prior written consent of the Company.
12. Miscellaneous.
(a) Each of the parties hereto shall execute such documents and other
papers and perform such further acts as may be reasonably required or desirable
to carry out the provisions of these Registration Rights Provisions and the
transactions contemplated hereby.
(b) The headings in these Registration Rights Provisions are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions of these Registration Rights Provisions.
(c) Notwithstanding any provision of these Registration Rights Provisions,
neither the Company nor any other party hereto shall be required to take any
action which would be in violation of any applicable federal or state securities
law. The invalidity or unenforceability of any provision of these Registration
Rights Provisions in any jurisdiction shall not affect the validity, legality or
enforceability of any other provision of these Registration Rights Provisions in
such jurisdiction or the validity, legality or enforceability of these
Registration Rights Provisions, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
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