EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of __________________, 1998, among OEI International, Inc., a Delaware
corporation ("OEI"), and each person listed on the signature pages of this
Agreement under the caption "STOCKHOLDERS" (each a "STOCKHOLDER" and,
collectively, the "STOCKHOLDERS").
WHEREAS, pursuant to various acquisition agreements entered into with OEI
(collectively, the "ACQUISITION AGREEMENTS"), each of the Stockholders has
received on the date hereof shares of common stock, par value $.001 per share,
of OEI ("COMMON STOCK"); and
WHEREAS, in order to induce the Stockholders to enter into their
respective Acquisition Agreements, OEI has agreed to provide registration rights
on the terms set forth in this Agreement for the benefit of the Stockholders;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms shall have the meanings
assigned to them in this Section 1 or in the parts of this Agreement referred to
below:
ANNUAL DEMAND PERIOD: the period in any year after the second anniversary
of the date of this Agreement, which follows the date that is 91 days after the
end of OEI's immediately preceding fiscal year.
CODE: the Internal Revenue Code of 1986, as amended, and any successor
thereto.
COMMISSION: the Securities and Exchange Commission, and any successor
thereto.
DEMAND REGISTRATION: as defined in Section 3.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, and any
successor thereto, and the rules and regulations thereunder.
EXEMPT OFFERING: as defined in Section 2.
REGISTRABLE COMMON: shares of Common Stock that were issued to the
Stockholders pursuant to the Acquisition Agreements, and any additional shares
of Common Stock issued or distributed in respect of any other shares of
Registrable Common by way of a stock dividend or distribution or stock split or
in connection with a combination of shares, recapitalization,
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reorganization, merger, consolidation or otherwise. For purposes of this
Agreement, shares of Registrable Common will cease to be Registrable Common when
and to the extent that (i) a registration statement covering such shares has
been declared effective under the Securities Act and such shares have been
disposed of pursuant to such effective registration statement, (ii) such shares
are sold pursuant to Rule 144 or become saleable under Rule 144(k), or (iii)
such shares have been otherwise transferred to a person or entity that is not a
Stockholder, other than pursuant to Section 11.
REGISTRATION NOTICE: as defined in Section 2.
REQUESTING HOLDERS: as defined in Section 3.
RESTRICTED PERIOD: as defined in Section 3.
RULE 144: Securities Act Rule 144 (or any similar or successor provision
under the Securities Act).
SECURITIES ACT: the Securities Act of 1933, as amended, and any successor
thereto, and the rules and regulations thereunder.
SELLING STOCKHOLDER: as defined in Section 12.
2. PIGGYBACK REGISTRATION RIGHTS. At any time after the second anniversary
of the date of this Agreement and before December 31, 2002, whenever OEI
proposes to register any Common Stock for its own account under the Securities
Act for an underwritten public offering for cash, other than a registration
relating to the offering or issuance of shares in connection with (i) employee
compensation or benefit plans or (ii) one or more acquisition transactions under
a Registration Statement on Form S-4 or Form S-1 under the Securities Act (or a
successor to Form S-4 or Form S-1) (any such offering or issuance being an
"EXEMPT OFFERING"), OEI will give each Stockholder written notice of its intent
to do so (a "REGISTRATION NOTICE") at least 20 days prior to the filing of the
related registration statement with the Commission. Such notice shall specify
the approximate date on which OEI proposes to file such registration statement
and shall contain a statement that the Stockholders are entitled to participate
in such offering and shall set forth the number of shares of Registrable Common
that represents the best estimate of the lead managing underwriter (or if not
known, OEI) that will be available for sale by the holders of Registrable Common
in the proposed offering. If OEI shall have delivered a Registration Notice,
each Stockholder shall be entitled to participate on the same terms and
conditions as OEI in the public offering to which the Registration Notice
relates and to offer and sell shares of Registrable Common therein only to the
extent provided in this Section 2. Each Stockholder desiring to participate in
such offering shall notify OEI no later than ten days following receipt of the
Registration Notice of the aggregate number of shares of Registrable Common that
such Stockholder then desires to sell in the public offering. Each Stockholder
desiring to participate in the public offering may include shares of Registrable
Common in the registration statement relating to such offering, to the extent
that the inclusion of such shares shall not reduce the number of shares of
Common Stock to be offered and sold by OEI to be included
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therein. If the lead managing underwriter selected by OEI for a public offering
determines that marketing factors require a limitation on the number of shares
of Registrable Common to be offered and sold in such offering, there shall be
included in the offering only that number of shares of Registrable Common, if
any, requested to be included in the offering that such lead managing
underwriter reasonably and in good faith believes will not jeopardize the
success of the offering, PROVIDED, HOWEVER, that if the lead managing
underwriter determines that marketing factors require a limitation on the number
of shares of Registrable Common to be offered and sold as aforesaid and so
notifies OEI and any requesting Stockholder in writing, the number of shares of
Registrable Common to be offered and sold by holders desiring to participate in
the offering, shall be allocated among such holders on a PRO RATA basis based on
their holdings of Registrable Common. OEI shall have the right at any time to
reduce the number of shares requested by any Stockholder to be included in such
registration to the extent that OEI reasonably concludes that inclusion of such
shares is likely to jeopardize the non-recognition status under the Code of any
acquisition transaction consummated pursuant to any of the Acquisition
Agreements; PROVIDED, HOWEVER, that any determination to exclude shares from any
such registration pursuant to this provision shall be based on advice of tax
counsel to OEI or its independent accountants.
3. DEMAND REGISTRATION RIGHTS. At any time after the period ending on the
second anniversary of the date of this Agreement (the "RESTRICTED PERIOD") and
before December 31, 2002, the holders of at least 51% of the shares of
Registrable Common then outstanding may request (the Stockholders making such
request are herein referred to as the "REQUESTING HOLDERS") in writing that OEI
file a registration statement under the Securities Act covering the registration
of all or, if less than all, at least one million, of the shares of Registrable
Common then held by such Stockholders (a "DEMAND REGISTRATION"). Within ten days
of the receipt of such request, OEI shall give written notice of such request to
all other Stockholders and shall use its best efforts to effect as soon as
practicable the registration under the Securities Act in accordance with Section
4 hereof (including without limitation, the execution of an undertaking to file
post-effective amendments) of all shares of Registrable Common which the
Stockholders request be registered, PROVIDED, HOWEVER, that (i) OEI shall not be
obligated to cause a registration statement respecting a Demand Registration to
(a) be initially filed sooner than ten days prior to the beginning of an Annual
Demand Period, or (b) become effective under the Securities Act as of any time
that is not within, an Annual Demand Period, (ii) OEI shall not be obligated to
effect a Demand Registration if it is not eligible to use Form S-3 under the
Securities Act, and (iii) OEI shall be obligated to effect only one Demand
Registration pursuant to this Section 3. In connection with a Demand
Registration, the holders of a majority of shares of Registrable Common included
in such Demand Registration, in their sole discretion, shall determine whether
(a) to proceed with, withdraw from or terminate such offering, (b) to select,
subject to the approval of OEI (which approval shall not be unreasonably
withheld), a managing underwriter or underwriters to administer such offering,
(c) to enter into an underwriting agreement for such offering, and (d) to take
such actions as may be necessary to close the sale of Registrable Common
contemplated by such offering, including waiving any conditions to closing such
sale that may not have been fulfilled. If such holders exercise their discretion
under this paragraph to terminate a proposed Demand Registration, the terminated
Demand Registration shall not constitute the Demand Registration under this
Section 3, if the determination to terminate such Demand Registration (i)
follows the exercise by OEI of any of its rights provided by the last two
paragraphs of this Section 3
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or (ii) results from a material adverse change in the condition (financial or
other), results of operations, prospects or properties of the Company.
Notwithstanding the foregoing, a registration will not count as the Demand
Registration under this Section 3 until such registration has become effective
and unless either (i) the Requesting Holders are able to register and sell all
of the shares of Registrable Common requested by them to be included in such
registration or (ii) such registration statement has remained effective for at
least 90 days.
Notwithstanding the preceding paragraph, if OEI shall furnish to the
Requesting Holders a certificate signed by the President of OEI stating that, in
the good faith judgment of the Board of Directors of OEI, it would be
detrimental to OEI and its stockholders if such registration statement were to
be filed and it is therefore beneficial to defer the filing of such registration
statement, OEI shall have the right to defer such filing for a period of not
more than 90 days after receipt of the request of the Requesting Holders. OEI
shall promptly give notice to the holders of Registrable Common at the end of
any delay period under this paragraph.
Notwithstanding the preceding two paragraphs, if at the time of any
request by the Requesting Holders for a Demand Registration, OEI has fixed plans
to file within 90 days after such request for the sale of any of its securities
in a public offering under the Securities Act (other than an Exempt Offering),
no Demand Registration shall be initiated under this Section 3 until 90 days
after the effective date of such registration unless OEI is no longer proceeding
diligently to effect such registration; PROVIDED that OEI shall provide the
holders of Registrable Common the right to participate in such public offering
pursuant and subject to Section 2.
4. REGISTRATION PROCEDURES. In connection with registrations under
Sections 2 and 3, and subject to the terms and conditions contained therein, OEI
shall:
(a) use its best efforts to prepare and file with the Commission as
soon as reasonably practicable, a registration statement with respect to
the Registrable Common and use its best efforts to cause such registration
to promptly become and remain effective for a period of at least 120 days
(or such shorter period during which holders shall have sold all
Registrable Common which they requested to be registered or such shares
become saleable under Rule 144(k));
(b) prepare and file with the Commission such amendments (including
post-effective amendments) to such registration statement and supplements
to the related prospectus to reflect appropriately the plan of
distribution of the securities registered thereunder until the completion
of the distribution contemplated by such registration statement or for so
long thereafter as a dealer is required by law to deliver a prospectus in
connection with the offer and sale of the shares of Registrable Common
covered by such registration statement and/or as shall be necessary so
that neither such registration statement nor the related prospectus shall
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 and so that such registration statement
and the related prospectus will otherwise comply with applicable legal
requirements;
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(c) provide to any Stockholder requesting to include shares of
Registrable Common in such registration statement and a single counsel for
all holders of Registrable Common requesting to include shares of
Registrable Common in such registration statement, which counsel shall be
selected by the holders of a majority of shares of Registrable Common
requested to be included in such registration statement and shall be
reasonably satisfactory to OEI, an opportunity to review and provide
comments with respect to such registration statement (and any
post-effective amendment thereto) prior to such registration statement (or
post-effective amendment) becoming effective;
(d) use its best efforts to register and qualify the Registrable
Common covered by such registration statement under applicable securities
or "Blue Sky" laws of such jurisdictions as the holders shall reasonably
request for the distribution of the Registrable Common;
(e) take such other actions as are reasonable and necessary to
comply with the requirements of the Securities Act;
(f) furnish such number of prospectuses (including preliminary
prospectuses) and documents incident thereto as a Stockholder from time to
time may reasonably request;
(g) provide to any Stockholder requesting to include Registrable
Common in such registration statement and any managing underwriter
participating in any distribution thereof, and to any attorney, accountant
or other agent retained by such Stockholder or managing underwriter,
reasonable access to appropriate officers and directors of OEI to ask
questions and to obtain information reasonably requested by any such
Stockholder, managing underwriter, attorney, accountant or other agent in
connection with such registration statement or any amendment thereto;
PROVIDED, HOWEVER, that (i) in connection with any such access or request,
any such requesting persons shall cooperate to the extent reasonably
practicable to minimize any disruption to the operation by OEI of its
business and (ii) any records, information or documents shall be kept
confidential by such requesting persons, unless (A) such records,
information or documents are in the public domain or otherwise publicly
available or (B) disclosure of such records, information or documents is
required by court or administrative order or by applicable law (including,
without limitation, the Securities Act);
(h) notify each Stockholder and the managing underwriters
participating in the distribution pursuant to such registration statement
promptly (i) when OEI is informed that such registration statement or any
post-effective amendment to such registration statement becomes effective,
(ii) of any request by the Commission for an amendment or any supplement
to such registration statement or any related prospectus, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of such registration statement or of any order preventing or suspending
the use of any related prospectus or the initiation or threat of any
proceeding for that purpose, (iv) of the suspension of the qualification
of any shares of Registrable Common included in such registration
statement for sale in any
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jurisdiction or the initiation or threat of a proceeding for that purpose,
(v) of any determination by OEI that any event has occurred which makes
untrue any statement of a material fact made in such registration
statement or any related prospectus or which requires the making of a
change in such registration statement or any, related prospectus in order
that the same will 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, and (vi) of the completion
of the distribution contemplated by such registration statement if it
relates to an offering by OEI;
(i) in the event of the issuance of any stop order suspending the
effectiveness of such registration statement or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any shares of Registrable Common included in such
registration statement for sale in any jurisdiction, use its best efforts
to obtain its withdrawal;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than
fifteen months after the effective date of such registration statement, an
earnings statement covering the period of at least twelve months beginning
with the first full fiscal quarter after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11 (a) of the Securities Act;
(k) use reasonable diligence to cause all shares of Registrable
Common included in such registration statement to be listed on any
securities exchange (including, for this purpose, the Nasdaq National
Market) on which the Common Stock is then listed at the initiation of OEI;
(l) use reasonable diligence to obtain an opinion from legal counsel
(which may include the General Counsel of OEI) in customary form and
covering such matters of the type customarily covered by opinions as the
underwriters, if any, may reasonably request;
(m) provide a transfer agent and registrar for all such Registrable
Common not later than the effective date of such registration statement;
(n) enter into such customary agreements (including an underwriting
agreement in customary form) as the underwriters, if any, may reasonably
request in order to expedite or facilitate the disposition of such shares
of Registrable Common; and
(o) use reasonable diligence to obtain a "comfort letter" from OEI's
independent public accountants in customary form and covering such matters
of the type customarily covered by comfort letters as the underwriters, if
any, may reasonably request. As used in this Section 4 and elsewhere
herein, the term "underwriters" does not include any Stockholder.
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5. UNDERWRITING AGREEMENT. In connection with each registration pursuant
to Section 2 or 3 covering an underwritten registered public offering, OEI and
each participating Stockholder agree to enter into a written agreement with the
managing underwriter in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of OEI's size and investment stature, including
provisions for indemnification by OEI and each Selling Stockholder as more fully
described in Section 12.
6. AVAILABILITY OF RULE 144. Notwithstanding anything contained herein to
the contrary, (including Sections 2 and 3), OEI shall not be obligated to
register shares of Registrable Common or maintain effectiveness of any
registration statement covering Registrable Common held by any Stockholder when
the resale provisions of Rule 144(k) are available to such Stockholder or such
Stockholder is otherwise entitled to sell the shares of Registrable Common held
by him or her in a brokerage transaction without registration under the
Securities Act and without limitation as to volume or manner of sale or both.
7. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
shares of Registrable Common held by the Stockholders to the public without
registration, OEI agrees to:
(a) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times from and after 90 days
following the effective date of the registration statement;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of OEI under the
Securities Act and the Exchange Act at any time that it is subject to such
reporting requirements;
(c) so long as a Stockholder owns any shares of Registrable Common,
furnish to the Stockholder forthwith upon request a written statement by
OEI as to its compliance with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act (at any time that it is subject to
such reporting requirements), a copy of the most recent annual or
quarterly report of OEI, and such other reports and documents filed in
accordance with such reporting requirements as a Stockholder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Stockholder to sell any such securities without
registration; and
(d) if required by the transfer agent and registrar for the Common
Stock, use reasonable diligence to obtain an opinion from legal counsel
(which may include the General Counsel of OEI) addressed to such transfer
agent and registrar, with respect to any sale of shares of Registerable
Common pursuant to Rule 144 (or, at the option of OEI, pay the reasonable
fees and expenses of legal counsel retained by a Stockholder to provide
such an opinion).
8. MARKET STANDOFF.
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(a) In consideration of the granting to Stockholders of the
registration rights pursuant to this Agreement, each Stockholder agrees
that, for so long as such Stockholder holds shares of Registrable Common
which are not part of a registration as permitted by Sections 2 and 3,
such Stockholder will not sell, transfer or otherwise dispose of,
including without limitation through put or short sale arrangements, such
shares of Registrable Common in the ten days prior to the effectiveness of
any registration (other than relating to an Exempt Offering) of Common
Stock for sale to the public and for up to 90 days following the
effectiveness of such registration.
(b) Except for Exempt Offerings or in connection with the
acquisition by OEI of another company or business, OEI shall not offer to
sell or sell any shares of capital stock of OEI during the 90-day period
immediately following the commencement of an underwritten public offering
of shares of Registrable Common pursuant to a Demand Registration.
9. REGISTRATION EXPENSES. All expenses incurred in connection with any
registration, qualification and compliance under this Agreement (including,
without limitation, all registration, filing, qualification, legal, printing and
accounting fees, and including all reasonable fees of one counsel acting on
behalf of all holders of the securities being registered in such registration)
shall be borne by OEI. All underwriting commissions and discounts applicable to
shares of Registrable Common included in the registrations under this Agreement
shall be borne by the holders of the securities so registered PRO RATA on the
basis of the number of shares so registered. Subject to the foregoing, all
expenses incident to OEI's performance of or compliance with this Agreement,
including, without limitation, all filing fees, fees and expenses of compliance
with securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Common), printing expenses, messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
OEI's officers and employees performing legal or accounting duties), the fees
and expenses applicable to shares of Registrable Common included in connection
with the listing of the securities to be registered on each securities exchange
(including, for this purpose, the Nasdaq National Market) on which similar
securities issued by OEI are then listed at the initiation of OEI, registrar and
transfer agents' fees and fees and disbursements of counsel for OEI and its
independent certified public accountants, Securities Act liability insurance of
OEI and its officers and directors (if OEI elects to obtain such insurance), the
fees and expenses of any special experts retained by OEI in connection with such
registration and fees and expenses of other persons retained by OEI and incurred
in connection with each registration hereunder (but not including, without
limitation, any underwriting fees, discounts or commissions attributable to the
sale of Registrable Common, and transfer taxes, if any), will be borne by OEI.
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No holder of Registrable
Common may participate in any underwritten registration hereunder unless such
holder (a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, custody agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
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11. TRANSFER OF REGISTRATION RIGHTS; ADDITIONAL GRANTS OF REGISTRATION
RIGHTS. The registration rights provided to the holders of Registrable Common
under Sections 2 and 3 hereof may not be transferred to any other person or
entity, except to another Stockholder or pursuant to the laws of descent and
distribution; PROVIDED, HOWEVER, that such transferees are bound by and subject
to the terms and conditions contained herein. The Company may, without the prior
consent of the Stockholders, extend the registration rights provided for in this
Agreement to additional persons or entities who become holders of Common Stock
subsequent to the date of this Agreement by entering into one or more addenda to
this Agreement with any such stockholders, and, upon execution of any such
addenda, any stockholder that is a party thereto shall thereafter be a
"Stockholder" for purposes of this Agreement and any shares of Common Stock
referred to therein as such shall be shares of "Registrable Common" for purposes
of this Agreement. Nothing herein shall limit the ability of OEI to grant to any
person or entity any registration or similar rights in the future with respect
to Common Stock or other securities of OEI (whether pursuant to the foregoing
provision or otherwise).
12. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. To the extent permitted by law,
OEI agrees to indemnify and hold harmless each Stockholder who sells
shares of Registrable Common in a registered offering pursuant to either
Section 2 or Section 3 (a "SELLING STOCKHOLDER"), from and against any and
all losses, claims, damages, liabilities and expenses (including
reasonable legal expenses) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Common or
in any amendment or supplement thereto or in any related preliminary
prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of, or are
based upon, any such untrue statement or omission or allegation thereof
based upon information furnished in writing to OEI by such Selling
Stockholder or on such Selling Stockholder's behalf expressly for use
therein. Notwithstanding the foregoing, OEI's indemnification obligations
with respect to any preliminary prospectus shall not inure to the benefit
of any Selling Stockholder or underwriter with respect to any loss, claim,
damage, liability (or actions in respect thereof) or expense arising out
of or based on any untrue statement or alleged untrue statement or
omission or alleged omission to state a material fact in such preliminary
prospectus, in any case where (i) a copy of the prospectus used to confirm
sales of shares of Registrable Common was not sent or given to the person
asserting such loss, claim, damage or liability at or prior to the written
confirmation of the sale to such person and (ii) such untrue statement or
alleged untrue statement or omission or alleged omission was corrected in
such prospectus.
(b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt
by a Selling Stockholder of notice of any claim or the commencement of any
action or proceeding brought or asserted against such Selling Stockholder
in respect of which indemnity may be sought from OEI, such Selling
Stockholder shall notify OEI in writing of the claim or the commencement
of that action or proceeding; PROVIDED, HOWEVER, that the failure to so
notify
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OEI shall not relieve OEI from any liability that it may have to the
Selling Stockholder otherwise than pursuant to the indemnification
provisions of this Agreement. If any such claim or action or proceeding
shall be brought against a Selling Stockholder and such Selling
Stockholder shall have duly notified OEI thereof, OEI shall have the right
to assume the defense thereof, including the employment of counsel. Such
Selling Stockholder shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Selling
Stockholder unless (i) OEI has agreed to pay such fees and expenses or
(ii) the named parties to any such action or proceeding include both such
Selling Stockholder and OEI, and such Selling Stockholder shall have been
advised by counsel that there may be one or more legal defenses available
to such Selling Stockholder which are different from or additional to
those available to OEI, in which case, if such Selling Stockholder
notifies OEI in writing that it elects to employ separate counsel at the
expense of OEI, OEI shall not have the right to assume the defense of such
action or proceeding on behalf of such Selling Stockholder; it being
understood, however, that OEI shall not, in connection with any one such
action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all Selling Stockholders. OEI shall not be
liable for any settlement of any such action or proceeding effected
without OEI's written consent.
(c) INDEMNIFICATION BY HOLDERS OF REGISTRABLE COMMON. In connection
with any registration in which a Selling Stockholder is participating,
such Selling Stockholder will furnish to OEI in writing such information
and affidavits as OEI reasonably requests for use in connection with any
related registration statement or prospectus. To the extent permitted by
law, each Selling Stockholder agrees to indemnify and hold harmless OEI,
its directors and officers who sign the registration statement relating to
shares of Registrable Common offered by such Selling Stockholder and each
person, if any, who controls OEI within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from OEI to such Selling Stockholder, but only
with respect to information concerning such Selling Stockholder furnished
in writing by such Selling Stockholder or on such Selling Stockholder's
behalf expressly for use in any registration statement or prospectus
relating to shares of Registrable Common offered by such Selling
Stockholder, or any amendment or supplement thereto, or any related
preliminary prospectus. In case any action or proceeding shall be brought
against OEI or its directors or officers, or any such controlling person,
in respect of which indemnity may be sought against such Selling
Stockholder, such Selling Stockholder shall have the rights and duties
given to OEI, and OEI or its directors or officers or such controlling
persons shall have the rights and duties given to such Selling
Stockholder, by the preceding paragraph. Each Selling Stockholder also
agrees to indemnify and hold harmless any underwriters of the Registrable
Common, their partners, officers and directors and each person who
controls such underwriters (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) on substantially the
same basis as that of the indemnification of OEI provided in this Section
12(c). Notwithstanding anything to the contrary herein, in no event shall
the amount paid or
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payable by any Selling Stockholder under this Section 12(c) exceed the
amount of proceeds received by such Selling Stockholder from the offering
of the Registrable Common.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 12 is unavailable to any indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the
actions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnified party or indemnified parties and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. OEI and the Selling
Stockholders agree that it would not be just and equitable if contribution
pursuant to this Section 12(d) were determined by PRO RATA allocation or
by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 12(d). 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. If
indemnification is available under this Section 12, the indemnifying
parties shall indemnify each indemnified party to the full extent provided
in Sections 12(a) and (c) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 12(d).
13. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not
be given, unless OEI has obtained the written consent of holders of at
least 51% of the shares of Registrable Common then outstanding.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by telex or telecopy, or
registered or certified mail (return receipt requested), postage prepaid,
or courier to the parties at the following addresses (or at such other
address for any party as shall be specified by like notice), PROVIDED that
notices of a change of address shall be effective only upon receipt
thereof. Notices sent by mail shall be effective when answered back,
notices sent by telecopier shall be effective when receipt is
acknowledged, and notices sent by courier guaranteeing next day delivery
shall be effective
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on the next business day after timely delivery by the courier. Notices
shall be sent to the following addresses:
(i) if to a Stockholder, at the most current address given by
such Stockholder to OEI in a writing making specific reference to
this Agreement;
(ii) if to OEI, at the following address:
OEI International, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: X. X. Xxxxxx
Telecopy: (000) 000-0000
with copies to: Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Xx.
Telecopy: (000) 000-0000
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the heirs, executors, administrators,
successors and assigns of each of the parties.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) SECTION REFERENCES. Unless the context requires otherwise,
references in this Agreement to "Sections" are to Sections of this
Agreement.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
WHOLLY WITHIN THAT STATE.
(h) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be in any way
impaired
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thereby, it being intended that all the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.
(i) ENTIRE AGREEMENT; TERMINATION. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter. This Agreement, except the
provisions of Section 12 (which shall survive until the expiration of the
applicable statutes of limitations) and this Section 13, shall terminate
and be of no further force or effect on December 31, 2001.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OEI:
OEI INTERNATIONAL, INC.
By:_____________________________
X. X. Xxxxxx
Chief Executive Officer
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STOCKHOLDERS:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
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