EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
June 9, 1997 by and among Innovative Valve Technologies, Inc., a Delaware
corporation ("IVT"), the Holders listed on the signature pages hereof (the
"Initial Holders") and any Holder hereafter becoming a party hereto in
accordance with the provisions hereof.
WHEREAS, each Initial Holder has received, or will receive on the
IPO Closing Date (as hereinafter defined), shares of common stock, par value
$.001 per share, of IVT pursuant to an agreement with IVT, and IVT, in order to
induce that Initial Holder to enter into that agreement, has agreed to provide
registration rights on the terms set forth in this Agreement for the benefit of
that Initial Holder;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties to this Agreement agree as follows:
1. DEFINED TERMS. As used in this Agreement, the following terms
have the meanings assigned to them below:
"AFFILIATE" means, as to any specified Person, any other Person
that, directly or indirectly through one or more intermediaries or
otherwise, controls, is controlled by or is under common control with the
specified Person. As used in this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through
ownership of capital stock of that Person, by contract or otherwise).
"BLUE SKY LAW" has the meaning specified in Section 4(a).
"CLAIMS" has the meaning specified in Section 10(a).
"COMMON STOCK" means the common stock, par value $.001 per share, of
IVT.
"ELIGIBLE OFFERING" has the meaning specified in Section 3(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor thereto and the rules and regulations
thereunder.
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"EXEMPT OFFERING" means any offering by IVT of shares of Common
Stock (i) in connection with or pursuant to any benefit, compensation,
incentive or savings plan or program in which any of the officers,
directors, employees or independent contractors of IVT or any of its
subsidiaries participate, (ii) as consideration in any business
combination or other acquisition transaction, (iii) as the securities into
or for which other equity or debt securities are convertible or
exchangeable, or as the securities that may be acquired by the exercise of
options, warrants or other rights, in each case at a conversion, exchange
or exercise price representing a premium over the trading price of the
Common Stock at the time of the offering, (iv) made pursuant to Regulation
S under the Securities Act (or any similar provision then in force) or (v)
made only to existing holders of securities issued by IVT.
"HOLDER" means at any time any Person then owning Registrable Common
and having the rights and obligations of a Holder and which (i) is an
Initial Holder, (ii) has been assigned those rights and obligations
pursuant to Section 9(a) or (iii) has become a Holder pursuant to Section
9(b).
"INDEMNIFIED PARTY" has the meaning specified in Section 10(b).
"INITIAL HOLDER" has the meaning specified in the preamble hereto.
"IPO" means the first time a registration statement filed by IVT
under the Securities Act and respecting an underwritten primary offering
by IVT of shares of Common Stock is declared effective under the
Securities Act and any of those registered shares are issued and sold by
IVT (otherwise than pursuant to the exercise of any over-allotment
option).
"IPO CLOSING DATE" means the date on which IVT first receives
payment for shares of Common Stock it sells in the IPO.
"INSPECTOR" has the meaning specified in Section 4(a).
"LOCKUP PERIOD" has the meaning specified in Section 7.
"PERSON" means any natural person, sole proprietorship, corporation,
partnership, limited liability company, business trust, unincorporated
organization or association, estate or trust.
"PROCEEDING" has the meaning specified in Section 10(b).
"RECORDS" has the meaning specified in Section 4(a).
"RED XXXXXXX PROSPECTUS" means, as applied to any registration
statement IVT files under the Securities Act to register unissued shares
of Common Stock for a public offering
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by it of those shares (other than an Exempt Offering), the prospectus
included in that registration statement which is labeled "subject to
completion" and is first used in "roadshow" presentations by IVT to
potential investors in connection with that offering.
"REGISTRABLE COMMON" means (i) the Common Stock issued to the
Initial Holders on or before the IPO Closing Date and (ii) the Common
Stock designated by IVT in writing as Registrable Common and issued to
Persons who become Holders pursuant to Section 9(b). For purposes of this
Agreement, a share of Registrable Common will cease to be Registrable
Common when (i) a registration statement covering that share has been
filed and become effective under the Securities Act and its Holder
distributes it by means of that effective registration statement, (ii) its
Holder distributes it to the public pursuant to Rule 144 or (iii) it may
be distributed to the public in the United States without being registered
for resale under the Securities Act or subject to the volume limitations
of Rule 144.
"REGISTRATION NOTICE" has the meaning specified in Section 3(b).
"RELATED PARTY" means, as to any specified Person, any other Person
who is an officer, director or agent of the specified Person or who
controls the specified Person within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
"REQUESTING HOLDER" has the meaning specified in Section 3(d).
"REQUEST NOTICE" has the meaning specified in Section 3(c).
"RESTRICTED PERIOD" means (i) the period from and including the IPO
Closing Date through and including the second anniversary of the IPO
Closing Date and, as applied to Persons who become Holders pursuant to
Section 9(b), (ii) the period designated by Invatec in writing as their
"Restricted Period."
"RULE 144" means Rule 144 (or any similar or successor provision)
under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
any successor thereto and the rules and regulations thereunder.
"SEC" means the Securities and Exchange Commission and any successor
thereto as the agency administering the Securities Act.
"SELLING HOLDER" has the meaning specified in Section 4(a).
"SELLERS' REGISTRATION STATEMENT" means a registration statement
filed by IVT under the Securities Act to register shares of Registrable
Common for resale by Holders.
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2. OTHER DEFINITIONAL PROVISIONS. (a) When used in this Agreement,
the words "herein," "hereof," "hereto" and "hereunder" and words of similar
import refer to this Agreement as a whole and not to any provision of this
Agreement.
(b) Whenever the context so requires, the singular number includes
the plural and vice versa, and a reference to one gender includes the other
genders.
(c) The word "including" (and, with correlative meaning, the word
"include") means including with limiting the generality of any description
preceding that word, and the verbs "shall" and "will" are used interchangeably
and have the same meaning.
(d) The term "underwriter," as used herein, does not include any
Holder.
3. REGISTRATION RIGHTS. (a) If IVT proposes to register any shares
of Common Stock for its own account under the Securities Act at any time or
times after the Restricted Period and before December 31, 2002 for a public
offering, other than an Exempt Offering, in the United States, of those shares
for cash (each such public offering, other than an Exempt Offering, being an
"Eligible Offering"), then, at each of those times, each then Holder will,
subject to the terms and conditions hereof, be entitled to have such number of
shares of that Holder's Registrable Common as that Holder may request in
accordance with Section 3(c) registered under the Securities Act for disposition
by means of the registration statement relating to that Eligible Offering.
(b) In the case of each Eligible Offering, IVT will deliver to each
then Holder a written notice of that offering (a "Registration Notice") at least
15 days prior to its filing with the SEC of the registration statement, or the
amendment thereto, which includes the Red Xxxxxxx Prospectus for that offering.
IVT will briefly describe in each Registration Notice the Eligible Offering to
which that notice relates and inform the addressee that it has 10 days within
which to request to include shares of its Registrable Common in the registration
statement for that offering.
(c) Any Holder desiring to participate in any Eligible Offering must
deliver to IVT within 10 days after the Holder receives the Registration Notice
for that offering a written notice to that effect (a "Request Notice"),
specifying the number of shares of the Holder's Registrable Common the Holder
desires to have registered under the Securities Act for inclusion in that
offering. Any Holder that does not deliver a Request Notice for an Eligible
Offering within that 10-day period will be deemed to have waived its right to
participate in that offering unless IVT agrees otherwise in writing.
(d) Any holder that delivers a Request Notice relating to an
Eligible Offering on a timely basis, or as otherwise agreed by IVT, pursuant to
Section 3(c) (each such Holder being a "Requesting Holder") will be entitled to
offer and sell shares of its Registrable Common in that offering on the terms
and conditions on which IVT offers and sells shares of Common Stock in that
offering if the Requesting Holder complies with the applicable provisions of
Sections 4, 5 and 10; provided, however, that: (i) IVT may reserve to itself the
right to be the exclusive grantor of any
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underwriter's overallotment option; and (ii) the shares of Registrable Common
any Requesting Holder will be entitled to offer and sell will be subject to
reduction as provided in Section 3(e).
(e) IVT will have the right to determine the aggregate size of each
Eligible Offering and to limit the number of shares of Registrable Common to be
included in that offering without reducing the number of shares of Common Stock
to be offered by IVT in that offering, as follows: (i) if the lead managing
underwriter selected by IVT for an Eligible Offering (or, if that offering will
not be underwritten, a financial advisor to IVT) determines that marketing
factors render necessary or advisable a limitation on the number of shares of
Registrable Common to be included in that offering, IVT will be required to
include in that offering only such number of shares of Registrable Common, if
any, as that lead managing underwriter (or financial advisor, as the case may
be) believes (as evidenced by its written advice to IVT) will not jeopardize the
success of the primary offering by IVT; and (ii) if IVT limits the number of
shares of Registrable Common that Requesting Holders may have included in any
Eligible Offering pursuant to clause (i), but does not exclude all shares of
Registrable Common from that offering, the maximum number of shares of
Registrable Common to be included in that offering on behalf of each of those
Requesting Holders will be the product of (A) the number of shares of
Registrable Common that Requesting Holder has specified in its Request Notice
relating to that offering multiplied by (B) the fraction the numerator of which
is the number of shares of Registrable Common that Requesting Holder has
specified in its Request Notice relating to that offering and the denominator of
which is the aggregate number of shares of Registrable Common all those
Requesting Holders have specified in their Request Notices relating to that
offering. If IVT determines, on the basis of advice of its tax counsel or
independent accountants, that the inclusion of a Requesting Holder's shares of
Registrable Common in any Eligible Offering likely would jeopardize the
nonrecognition status under the Internal Revenue Code of 1986, as amended, of
any acquisition transaction effected by IVT, IVT will be entitled to limit the
number of shares that Requesting Holder may have included in that offering to
such number, if any, as IVT determines will not jeopardize that status.
4. REGISTRATION PROCEDURES. (a) Whenever IVT is required by Section
3 to include shares of Registrable Common in a registration statement relating
to an Eligible Offering, it will, subject to the applicable terms and conditions
hereof:
(i) cause those shares to be registered under the Securities Act by
means of a Seller's Registrable Statement, in either the original filing
thereof or in a pre-effective amendment to a previously filed registration
statement;
(ii) prior to the first to occur of (A) the sale by the Holders
thereof, by means of the Sellers' Registration Statement after it becomes
effective under the Securities Act, of all the shares of Registrable
Common covered by the Sellers' Registration Statement when it becomes
effective under the Securities Act and the elapse of the period in which a
dealer is required by the Securities Act to deliver a prospectus in
connection with its offer and sale of any of those shares and (B) the
withdrawal by IVT of the Sellers' Registration Statement pursuant to
Securities Act Rule 477, prepare and file with the SEC under the
Securities Act
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such amendments (including post-effective amendments) to the Sellers'
Registration Statement and supplements to the related prospectus as are
necessary (A) to reflect the plan of distribution contemplated by the
Sellers' Registration Statement and (B) so that (1) neither the Sellers'
Registration Statement nor that prospectus contains any untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (2)
both the Sellers' Registration Statement and that prospectus comply in all
material respects with all other applicable legal requirements;
(iii) provide to each Requesting Holder named as a selling
stockholder in the Sellers' Registration Statement (each a "Selling
Holder") such number of prospectuses (including preliminary prospectuses)
and other documents incident to the offering and sale of that Selling
Holder's Registrable Common by means of the Sellers' Registration
Statement as that Selling Holder from time to time reasonably may request;
(iv) prior to the time the Seller's Registration Statement or any
post-effective amendment thereto becomes effective under the Securities
Act, provide an opportunity to review and comment with respect to that
document to one counsel selected by Selling Holders holding a majority of
the shares of Registrable Common covered by that document and reasonably
satisfactory to IVT;
(v) provide to each Selling Holder, any managing underwriter
participating in the distribution of the shares of Registrable Common
covered by the Sellers' Registration Statement and any accountant, lawyer
or other professional retained by that Selling Holder or managing
underwriter (each an "Inspector") reasonable access to appropriate
officers and employees of IVT to ask questions and obtain information
reasonably requested by that Inspector in connection with that Sellers'
Registration Statement; provided, however, that in connection with any
such access or request, each Selling Holder will and will cause each of
its representative Inspectors to, and IVT may require each other Inspector
to, (A) cooperate to the extent reasonably practicable to minimize any
disruption in the operation by IVT of its business, (B) keep confidential
all records, documents and information IVT advises are confidential or of
a proprietary nature (collectively, the "Records") and (C) not use the
information it obtains from the Records as a basis for any market
transactions in the securities of IVT unless and until that information is
in the public domain or otherwise becomes publicly available;
(vi) use its good-faith efforts to register and qualify the
Registrable Common covered by the Sellers' Registration Statement under
the applicable securities or "blue sky" laws (collectively, "Blue Sky
Laws") of such jurisdictions as any Selling Holder reasonably may request;
provided that it will not be required to (A) qualify generally to do
business in any jurisdiction where it otherwise would not be required to
qualify but for this paragraph (vi), (B) subject itself to taxation in any
such jurisdiction or (C) consent to general service of process in any such
jurisdiction;
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(vii) notify each Selling Holder promptly (A) when it is informed
that the Sellers' Registration Statement or any post-effective amendment
thereto becomes effective under the Securities Act, (B) of any request by
the SEC for an amendment to the Sellers' Registration Statement or a
supplement to any related prospectus, (C) of the issuance by the SEC of
any stop order suspending the effectiveness of the Sellers' Registration
Statement or any order preventing or suspending the use of any related
prospectus or the initiation or threat by the SEC of any proceeding for
any of those purposes, (D) of the suspension of the qualification of any
shares of Registrable Common covered by the Sellers' Registration
Statement for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose and (E) of any determination by it that any
event has occurred or fact exists which makes untrue any statement of a
material fact included in the Sellers' Registration Statement or any
related then current prospectus or which requires the making of a change
in the Sellers' Registration Statement or that 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 contained therein or necessary to
make the statements therein not misleading;
(viii)if any order is issued which (A) suspends the effectiveness of
the Sellers' Registration Statement, (B) suspends or prevents the use of
any related then-current prospectus or (C) suspends the qualification of
any shares of Registrable Common covered by the Sellers' Registration
Statement for sale in any jurisdiction, use its reasonable best efforts to
obtain the withdrawal of that order;
(ix) if the Eligible Offering to which the Sellers' Registration
Statement relates is being underwritten by underwriters, (A) enter into
agreements customary at the time (including an underwriting or purchase
agreement in then-customary form) as those underwriters reasonably may
request in order to facilitate the disposition of the shares of
Registrable Common in that offering, (B) use reasonable diligence to
obtain an opinion of legal counsel (who may be its general counsel)
covering such matters as are then customarily covered by opinions
addressed to those underwriters by an issuer's counsel and (C) use
reasonable diligence to obtain a "comfort" letter or letters from its
independent public accountants in their customary form and covering such
matters of the type then customarily covered by "comfort" letters as those
underwriters reasonably may request; and
(x) otherwise use its good-faith efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings statement
that (A) covers a period of at least 12 months beginning within three
months after the effective date of the Sellers' Registration Statement and
(B) satisfies the provisions of Section 11(a) of the Securities Act.
(b) In connection with each Eligible Offering, IVT, in its sole
discretion, will determine whether to proceed with or terminate that offering
and to select any underwriter or underwriters to administer that offering.
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5. UNDERWRITING ARRANGEMENTS. No Holder will be permitted to
participate in any registration hereunder of securities being underwritten and
offered for resale by underwriters unless the Holder (i) agrees to sell the
Holder's Registrable Common on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve those
arrangements, (ii) enters into a written agreement with the managing underwriter
or the representative of the underwriters in such form and containing such
provisions as are then customary in the securities business for such an
arrangement between those underwriters and issuers of IVT's size and investment
stature and (iii) completes and executes all questionnaires, powers of attorney,
indemnities and other documents, and obtains such spousal or other consents, as
are reasonably required under the terms of those arrangements and this
Agreement. If a Selling Holder disapproves of the proposed terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the Sellers' Registration Statement is first declared effective under the
Securities Act.
6. RULE 144 REPORTING. IVT will:
(i) 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 IPO Closing Date;
(ii) use its good-faith efforts to file with the SEC in a timely
manner all reports and other documents Section 13 or 15(d) of the Exchange
Act, as applicable, requires it to file with the SEC; and
(iii) so long as a Holder owns shares of Registrable Common, deliver
to the Holder, on the Holder's request, a written statement as to whether
it is in compliance with the requirements referred to in clause (ii) above
(if it is then subject to those requirements).
7. MARKET STANDOFF. Each Holder agrees, to the extent permitted by
applicable law, that, for so long as the Holder holds shares of Registrable
Common, the Holder will not, except as permitted by Section 2, sell, transfer or
otherwise dispose of in a public transaction (including through put or
short-sale arrangements) shares of Common Stock in the period (i) beginning 10
days prior to the effectiveness under the Securities Act of any registration
statement covering shares of Common Stock being publicly offered in an Eligible
Offering or in an Exempt Offering of the type specified in clause (iii) of the
definition of Exempt Offering and (ii) ending 90 days following the date of that
effectiveness (each such period being a "Lockup Period"). IVT will provide each
Holder written notice of any Lockup Period.
8. REGISTRATION EXPENSES. (a) Except as provided in Section 8(b),
IVT will pay or otherwise bear all the expense attributable to the registration
of Registrable Common under the Securities Act for sale pursuant to Section 2,
including all the following: (i) registration and filing fees payable under the
Securities Act or Blue Sky Laws; (ii) fees and expenses incurred in complying
with Blue Sky Laws, including the reasonable fees and disbursements of counsel
incurred in that connection; (iii) printing expenses; (iv) messenger and
delivery expenses; (v) the Company's
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internal expenses, including the salaries and expenses of its employees; (vi)
fees and expenses attributable to the listing of the Registrable Common on each
securities exchange (including, for this purpose, the NASDAQ national market) on
which the Common Stock is then listed at IVT's initiation; (vii) registrar and
transfer agents' fees; (viii) fees and disbursements of IVT's counsel and
independent certified public accountants; (ix) securities act liability
insurance premiums (if IVT elects to obtain that insurance); and (x) fees and
expenses of any special experts or other Persons retained by IVT in connection
with its compliance with this Agreement.
(b) Each Selling Holder will pay or otherwise bear all underwriting
commissions and discounts and transfer taxes attributable to that Selling
Holder's sale or other disposition of shares of Registrable Common, and each
Holder will pay or otherwise bear (i) the fees and expenses of that Holder's
counsel and any other special experts or Persons retained by that Holder in
connection with any Seller's Registration Statement or the sale or other
disposition of that Holder's Registrable Common and (ii) that Holder's internal
expenses, including the salaries and expenses of that Holder's employees.
9. TRANSFERS AND ADDITIONAL GRANTS OF REGISTRATION RIGHTS. (a) A
Holder may not transfer the registration rights this Agreement affords the
Holder to any other Person except as provided in this Section 9: (i) a Holder
who is a natural person may transfer those rights to a member of his immediate
family or a trust for the benefit of one or more members of his immediate
family; (ii) a Holder that is a corporation or other entity may transfer those
rights to an Affiliate of the Holder which also is a corporation or other
entity; and (iii) a Holder may transfer those rights to any other Holder;
provided, that any such transfer will be permitted only if the transferee
executes an addendum to this Agreement, in a form satisfactory to IVT, in which
that transferee agrees to comply with and otherwise be bound by all the terms
and conditions hereof.
(b) IVT may, without the consent of any Holder, extend the
registration rights this Agreement provides to additional Persons who become
holders of Common Stock after the date hereof by entering into one more addenda
to this Agreement with those Persons pursuant to which, for all purposes hereof,
those Persons will become Holders and any shares of Common Stock referred to in
those addenda will become Registrable Common. Nothing herein will limit or
otherwise restrict the ability or right of IVT to grant to any Person any
registration or similar rights in the future respecting shares of Common Stock
or any other securities IVT may issue, whether pursuant to the provisions of
this Section 9 or otherwise.
10. INDEMNIFICATION; CONTRIBUTION. (a) INDEMNIFICATION BY IVT. IVT
will, to the extent permitted by applicable law, indemnify each Selling Holder
who sells shares of Registrable Common by means of a Sellers' Registration
Statement and each of that Selling Holder's Related Parties against, and hold
each of those Persons harmless from and in respect of, any and all claims,
damages, losses, liabilities and expenses (including reasonable legal expenses)
whatsoever (collectively, "Claims") that arise from or are based on any untrue
statement or alleged untrue statement of a material fact contained in that
Sellers' Registration Statement or any prospectus (including any preliminary
prospectus) forming a part thereof, or any amendment thereof or
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supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, except insofar as those Claims arise out of or are based on any such
untrue statement or omission or allegation thereof based on information
furnished in writing to IVT by or on behalf of that Selling Holder expressly for
use therein. In connection with any underwritten offering of shares of
Registrable Common, IVT will indemnify and hold harmless each participating
underwriter and each of that underwriter's Related Parties on either (i)
substantially the same basis on which it will indemnify each Selling Holder and
that Selling Holder's Related Parties pursuant to this Section 10(a) or (ii)
such other basis as is customarily obtained by underwriters from issuers at the
time of that offering. Notwithstanding the foregoing, IVT's obligations to
indemnify and hold harmless pursuant to this Section 10(a) with respect to any
Claim (or action or proceeding in respect thereof) that arises from or is based
on any untrue or alleged untrue statement contained in, or any omission or
alleged omission from, any preliminary prospectus will not inure to the benefit
of any Selling Holder or underwriter or its Related Parties if it is determined
that (i) a copy of the prospectus used to confirm the sale of shares of
Registrable Common to the Person asserting that claim was not sent or given to
that Person at or prior to the written confirmation of that sale, (ii) the
untrue statement or alleged untrue statement or the omission or alleged omission
was corrected by that prospectus and (iii) it was the responsibility of that
Selling Holder or that underwriter (or any dealer acquiring those shares
directly or indirectly from that underwriter) to send or give that prospectus to
that Person.
(b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Each Person claiming
indemnification from IVT pursuant to this Section 10 (an "Indemnified Party")
will, promptly after that Indemnified Party becomes aware of any assertion or
commencement of any action or proceeding against that Indemnified Party in
respect of which indemnity may be sought from IVT (a "Proceeding"), promptly
notify IVT in writing of the Proceeding; provided, that an Indemnified Party's
failure to so notify IVT will not relieve IVT from any liability it may have to
that Indemnified Party otherwise than pursuant to the provisions of this Section
10. If any Proceeding is brought against any Indemnified Party and that
Indemnified Party duly notifies IVT thereof: (i) IVT will have the right, at its
expense, to assume the defense thereof, including the employment of counsel; and
(ii) the Indemnified Party will have the right to employ separate counsel in the
Proceeding and participate in the defense thereof, but the Indemnified Party
will pay the fees and expenses of that separate counsel unless (A) IVT has
agreed in writing to pay those fees and expenses or (B) the named parties to the
Proceeding (including any impleaded parties) include both the Indemnified Party
and IVT, and counsel advises the Indemnified Party in writing that one or more
legal defenses may be available to the Indemnified Party which is or are
different from or additional to those available to IVT (in which case, if the
Indemnified Party notifies IVT in writing that the Indemnified Party elects to
employ separate counsel at the expense of IVT, IVT will not have the right to
assume the defense of the Proceeding on behalf of the Indemnified Party; it
being understood, however, that IVT will not, in connection with any one
Proceeding or separate but substantially similar or related Proceedings in the
same jurisdiction and arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate law
firm (together with appropriate local counsel) at any time for all Indemnified
Parties). IVT will
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not be liable for any settlement of any Proceeding which any Indemnified Party
effects without IVT's written consent.
(c) INDEMNIFICATION BY SELLING HOLDERS. Each Selling Holder will, to
the extent permitted by applicable law, indemnify IVT and each of its Related
Parties against, and hold each of those Persons harmless from and in respect of,
Claims to the same extent as the indemnity from IVT to that Selling Holder in
Section 10(a), but only with respect to information that is furnished by or on
behalf of that Selling Holder expressly for use in a Sellers' Registration
Statement or any prospectus (including any preliminary prospectus) forming a
part thereof, or any amendment thereof or supplement thereto. If any action or
proceeding is brought against IVT or any of its Related Parties in respect of
which any of those Persons may seek indemnity from a Selling Holder pursuant to
this Section 10(c), that Selling Holder will have the rights and duties given to
IVT, and each of those Persons will have the rights and duties given to that
Selling Holder and that Selling Holder's Related Parties, by Section 10(b). Each
Selling Holder also will, to the extent permitted by applicable law, indemnify
and hold harmless the underwriters of the shares of Registrable Common offered
by that Selling Holder on substantially the same basis on which IVT will
indemnify and hold harmless those Persons pursuant to Section 10(a).
(d) CONTRIBUTION. If the indemnification this Section 10 provides
for is unavailable to any party intended to be indemnified pursuant to this
Section 10 in respect of any Claims referred to herein, the parties who would
have indemnified that party in the contemplation of this Section 10 will, in
lieu of providing that indemnification, contribute to the amount paid or payable
by that party as a result of those Claims, as follows:
(i) as between IVT and the Selling Holders, on the one hand, and the
underwriters of shares of Registrable Common, on the other hand, (A) in
such proportion as is appropriate to reflect the relative benefits
received by IVT and the Selling Holders and by those underwriters from the
offering of those shares or, if that allocation is not permitted by
applicable law, (B) in such proportion as is appropriate to reflect not
only those relative benefits, but also the relative faults of IVT and the
Selling Holders and of those underwriters in connection with the
statements or omissions that resulted in those Claims, as well as any
other relevant equitable considerations; and
(ii) as between IVT, on the one hand, and each Selling Holder, on
the other hand, in such proportion as is appropriate to reflect the
relative faults of IVT and of that Selling Holder in connection with those
statements or omissions, as well as any other relevant equitable
considerations.
The relative benefits received by IVT and the Selling Holders, on the one hand,
and the underwriters participating in the underwritten offering of shares of
Registrable Common, on the other hand, will be deemed to be in the same
proportion as the total proceeds from that offering (including shares of Common
Stock being offered by IVT), net of underwriting discounts and commissions, but
before deducting expenses, bear to the total amount of underwriting discounts
and commissions received
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by those underwriters in that offering, while (i) relative faults of IVT and the
Selling Holders and of those underwriters will be determined by reference to,
among other facts, whether the statements or omissions that resulted in the
Claims in respect of which contribution is being made are or relate to
information supplied by IVT and the Selling Holders or by those underwriters and
(ii) the relative faults of IVT and of the Selling Holders will be determined by
reference to, among other facts, (A) whether those statements or omissions are
or relate to information supplied by IVT or by the Selling Holders and (B) those
Persons' relative intent, knowledge, access to information and opportunity to
correct those statements or omissions or prevent them from being made. IVT and
the Selling Holders agree it would not be just or equitable if contribution
pursuant to this Section 10(d) were to be determined by pro rata allocation
(even if the underwriters, if any, were to be treated as one entity for this
purpose) or by any other allocation method that does not take into account the
equitable considerations referred to in this Section 10(d).
(e) LIMITATIONS ON CONTRIBUTION. No underwriter will be required to
contribute to IVT or the Selling Holders, pursuant to Section 10(d) or
otherwise, any amount in excess of the amount by which (i) the total price at
which the shares of Registrable Common underwritten by it and distributed to the
public were offered to the public exceeds (ii) the amount of any damages it
otherwise has been required to pay by reason of the statements or omissions that
resulted in the Claims in respect of which contribution is being made, and no
Selling Holder will be required to contribute to IVT or any underwriter,
pursuant to Section 10(d) or otherwise, any amount in excess of the amount by
which (i) the total price at which that Selling Holder's shares of Registrable
Common were offered to the public exceeds (ii) the amount of any damages that
Selling Holder otherwise has been required to pay by reason of those statements
or omissions. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 10, the indemnifying parties
will indemnify each indemnified party to the full extent provided in Sections
10(a) and (c) without regard to the relative fault of any Person or any other
equitable consideration referred to in Section 10(d).
11. 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 IVT 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 must be in writing and will be deemed delivered and received
(i) if personally delivered or if delivered by telex, telegram, facsimile or
courier service, when actually received by the party to whom the notice or
communication is sent, or (ii) if delivered by mail (whether actually received
or not), at the close of business on the third Houston, Texas business day next
following the day when placed in the mail, postage prepaid, certified or
registered, addressed to the appropriate party or parties at the address of that
party set forth or referred to below (or at such other address as that party may
designate by written notice to each other party in accordance herewith):
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(A) if to a Holder, at the most current address given by that Holder
to IVT in a writing making specific reference to this Agreement, with a
copy (which will not constitute notice for purposes of this Agreement) to
such legal counsel, if any, as that Holder may designate in that writing;
and
(B) if to IVT, at the following address:
Innovative Valve Technologies, Inc.
00000 Xxxxxxx Xxxxx, Xxxxx X-000
Xxxxxxx, Xxxxx 00000
Attn: Corporate Secretary
Telecopy: (000) 000-0000
with copies to: Xxxxx & Xxxxx, L.L.P.
0000 Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Leader, Esq.
Telecopy: (000) 000-0000
(c) SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit
of and be binding on the heirs, executors, administrators, successors and
assigns of each of the parties hereto.
(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 will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
(e) HEADINGS AND REFERENCES. The headings in this Agreement are for
convenience of reference only and will not limit or otherwise affect the meaning
hereof. References herein to "Sections" are to Sections of this Agreement unless
otherwise indicated.
(f) 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.
(g) 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 that provision in every other respect and of the remaining
provisions contained herein will not be in any way impaired thereby, it being
intended by each party hereto that all the rights and privileges of all parties
hereto will be enforceable to the fullest extent permitted by law.
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(h) ENTIRE AGREEMENT; TERMINATION. The parties hereto intend that
this Agreement will be considered for all purposes as the final expression, and
a complete and exclusive statement, of their mutual agreement and understanding
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties to this Agreement with
respect to that subject matter. This Agreement, except the provisions of
Sections 1 and 10 (which will survive until the expiration of the applicable
statutes of limitations) and this Section 11, will terminate and be of no
further force or effect on December 31, 2002; provided, that if IVT delivers a
Registration Notice relating to an Eligible Offering that is pending on December
31, 2002, all the provisions of this Agreement will survive until that Eligible
Offering is closed or abandoned by IVT.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INNOVATIVE VALVE TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
HOLDERS:
ALLWASTE, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title:
ALLWASTE ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title:
/s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
/s/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
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