EXHIBIT 10.2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made and entered
into this 16th day of January, 1996, by and among THE
XXXXX CORPORATION, a Delaware corporation ("Xxxxx"),
and SATTEL TECHNOLOGIES, INC., a California corporation
("Sattel").
BACKGROUND
Xxxxx owns five hundred (500) and Sattel owns
five hundred (500) shares of common stock, without par
value of Sattel Communications Corp. (the "Company").
Xxxxx wishes to acquire, in exchange solely for its own
voting stock, an additional 300 shares of the stock of
the Company, the result of which will be that Xxxxx
will immediately after the acquisition have control of
the Company (within the meaning of Section 368(c)(1) of
the Internal Revenue Code of 1986, as amended).
Accordingly, Xxxxx and Xxxxxx desire to exchange (the
"Exchange") three hundred (300) shares of common stock
of the Company (the "Subject Shares") held by Sattel
for three hundred fifty thousand (350,000) shares of
common stock, $1.00 par value per share, of Xxxxx (the
"Xxxxx Shares") pursuant to the terms and conditions
hereinafter set forth. In connection with the
Exchange, Xxxxx has agreed to undertake certain
obligations to register the Xxxxx Shares and to xxxxx
Xxxxxx certain registration rights with respect thereto
as more specifically set forth herein.
NOW, THEREFORE, in consideration of the
mutual covenants contained herein, and for other good
and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Sattel and Xxxxx agree
as follows:
1. Exchange of Stock. At the Closing (as
_________________
hereinafter defined) subject to the terms and
conditions set forth herein, Sattel shall transfer,
assign and convey to Xxxxx all of Sattel's right, title
and interest in the Subject Shares, free and clear of
all liens, claims, encumbrances and restrictions. In
exchange for the Subject Shares, at the Closing, Xxxxx
shall transfer, assign and convey to Sattel all of
Diana's right, title and interest in the Xxxxx Shares,
free and clear of all liens, claims, encumbrances and
restrictions.
2. Closing. The Closing of the Exchange
_______
(the "Closing") shall occur concurrently with the
execution and delivery of this Agreement. At the
Closing, the following shall occur, all of which
actions shall be deemed to have occurred
simultaneously:
(a) Sattel shall deliver to Xxxxx a
certificate or certificates representing the
Subject Shares duly
endorsed or endorsed in blank or accompanied by
validly executed stock powers.
(b) Xxxxx shall deliver to Sattel a
certificate or certificates representing the Xxxxx
Shares registered in the name of Sattel.
3. Representations and Warranties of Sattel.
________________________________________
Sattel hereby represents and warrants to Xxxxx as
follows, which representations and warranties shall
survive the Closing.
3.1. Title to Subject Shares. Sattel owns
_______________________
and at the Closing will deliver to Xxxxx good, valid
and marketable title to the Subject Shares, free and
clear of all liens, encumbrances, agreements, charges,
options, security interests, pledges, claims or
restrictions of any nature whatsoever, except for
restrictions of applicable state and federal securities
laws.
3.2. Authority. The execution, delivery and
_________
performance of this Agreement by Sattel have been duly
authorized by all necessary corporate proceedings on
the part of Sattel, and this Agreement constitutes the
valid and legally binding obligation of Sattel,
enforceable in accordance with its terms, except to the
extent limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by general
equitable principles.
3.3. Investment Representations and
______________________________
Covenants.
_________
(a) Sattel is acquiring the Xxxxx
Shares for investment, for Sattel's own account
and not with a view to or for resale,
fractionalization, or division, in connection with
any distribution thereof in violation of the
Securities Act of 1933, as amended, or the
applicable rules and regulations adopted
thereunder (collectively, the "Securities Act"),
except for distributions through the Registration
Rights Agreement in compliance with the Securities
Act. Sattel understands that the offer and sale
of the Xxxxx Shares to Sattel have not been
registered under the Securities Act or under any
state securities laws, by reason of exemptions
from the registration provisions of the Securities
Act, and the applicable state securities laws, but
will be registered in accordance with the
Registration Rights Agreement. Accordingly, the
Xxxxx Shares are "restricted securities" under the
Securities Act and Sattel acknowledges and agrees
that the Xxxxx Shares must be held indefinitely
unless they are subsequently registered under the
Securities Act, as required under the Registration
Rights Agreement, and any applicable state
securities laws, or an exemption from such
registration is available, as determined by Xxxxx
in its sole discretion.
(b) Sattel is familiar with, and Sattel
has been given full access by Xxxxx to, all
information concerning the business and
financial condition, properties, operations
and prospects of Xxxxx that Sattel has deemed
relevant for purposes of acquiring the Xxxxx
Shares. Sattel has had full opportunity to
discuss with Xxxxx its business, financial
condition, properties, operations, and
prospects, and all such other matters as
Sattel has deemed appropriate in connection
with acquiring the Xxxxx Shares. Sattel has
reviewed, among other things, a copy of
Diana's most recent Form 10-K, Form 10-Q,
Annual Report to Stockholders, and Proxy
Statement.
(c) Sattel is able to bear the economic
risk of making the investment in the Xxxxx Shares,
including, without limiting the generality of the
foregoing, the risk of losing part of or all
Sattel's investment and the possible inability to
sell or transfer the Xxxxx Shares for an
indefinite period of time.
(d) By reason of Sattel's knowledge and
experience in financial and business matters in
general, Sattel is capable of evaluating the
merits and risks of acquiring the Xxxxx Shares.
(e) The Xxxxx Shares and each
certificate evidencing the Xxxxx Shares (or
interests therein) shall (unless the transfer of
the securities evidenced by such certificate shall
have been registered under the Securities Act and
applicable state securities laws) be stamped or
otherwise imprinted with a legend in substantially
the following form (in addition to any legend
required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAW, OR (ii) AN APPLICABLE EXEMPTION
THEREFROM AND IN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE XXXXX CORPORATION IS FURNISHED
TO THE EFFECT THAT SUCH EXEMPTION IS AVAILABLE.
(f) Sattel will comply with all
applicable federal and state securities laws in
connection with any sale or transfer of the Xxxxx
Shares including, without limitation, Rules 10b-5
and 10b-6 under the Securities Exchange Act of
1934, as amended, and Section 5 of the Securities
Act.
4. Representations and Warranties of Xxxxx.
_______________________________________
Xxxxx hereby represents and warrants to Sattel as
follow, which representations and warranties shall
survive the Closing.
4.1. Title to Subject Shares. Xxxxx owns or
_______________________
will newly issue the Xxxxx Shares and at the Closing
will deliver to Sattel good, valid and marketable title
to the Xxxxx Shares, free and clear of all liens,
encumbrances, agreements, charges, options, security
interests, pledges, claims or restrictions of any
nature whatsoever except for restrictions of applicable
state and federal securities laws.
4.2. Authority. The execution, delivery and
_________
performance of this Agreement by Xxxxx have been duly
authorized by all necessary corporate proceedings on
the part of Xxxxx, and this Agreement constitutes the
valid and legally binding obligation of Xxxxx,
enforceable in accordance with its terms, except to the
extent limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by general
equitable principles.
4.3. Investment Representations and
______________________________
Covenants.
_________
(a) Xxxxx is acquiring the Subject
Shares for investment, for Diana's own account and
not with a view to or for resale,
fractionalization, or division, in connection with
any distribution thereof in violation of the
Securities Act. Xxxxx understands that the offer
and sale of the Subject Shares to Xxxxx have not
been registered under the Securities Act or under
any state securities laws, by reason of exemptions
from the registration provisions of the Securities
Act, and the applicable state securities laws.
Accordingly, the Subject Shares are "restricted
securities" under the Securities Act and Xxxxx
acknowledges and agrees that the Subject Shares
must be held indefinitely unless they are
subsequently registered under the Securities Act,
and any applicable state securities laws, or an
exemption from such registration is available, as
determined by the Company in its sole discretion.
(b) Xxxxx is familiar with, and Xxxxx
has been given full access to, all information
concerning the business and financial condition,
properties, operations and prospects of the
Company that Xxxxx has deemed relevant for
purposes of acquiring the Subject Shares. Xxxxx
has had full opportunity to discuss with the
Company and Sattel the Company's business,
financial condition, properties, operations, and
prospects, and all such other matters as Xxxxx has
deemed appropriate in connection with acquiring
the Subject Shares. Notwithstanding the
foregoing, nothing contained herein shall relieve
Sattel of its obligations pursuant to specific
representations and warranties made to Xxxxx in
this Agreement.
(c) Xxxxx is able to bear the economic
risk of making the investment in the Subject
Shares, including, without limiting the generality
of the foregoing, the risk of losing part of or
all Diana's investment and the possible inability
to sell or transfer the Subject Shares for an
indefinite period of time.
(d) By reason of Diana's knowledge and
experience in financial and business matters
concerning the Company (and in the prior Joint
Venture), Xxxxx is capable of evaluating the
merits and risks of acquiring the Subject Shares.
5. Registration Rights. Xxxxx hereby grants
___________________
to Sattel the registration rights set forth on Exhibit
_______
A, attached hereto and incorporated herein, with
__
respect to the Xxxxx Shares (the "Registration
Rights").
6. Miscellaneous.
_____________
6.1. Successors and Assigns. This Agreement
______________________
shall be binding upon and inure to the benefit of the
parties and each of their respective successors and
assigns.
6.2. Severability. If any provision of this
____________
Agreement is held for any reason to be unenforceable by
a court of competent jurisdiction, the remainder of
this Agreement shall, nevertheless, remain in full
force and effect in such jurisdiction.
6.3. Use of Words. The use of the plural
____________
shall, when appropriate, include the singular and vice
versa. Section headings are for reference purposes
only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof.
6.4. Governing Law. This Agreement. shall
_____________
be governed by and construed in accordance with the
laws of Nevada without regard to the principles of
conflicts of law thereunder.
6.5. Entire Agreement. This Agreement and
________________
the documents and instruments delivered in connection
with this Agreement constitute the entire agreement
among the parties and all prior agreements,
correspondence, discussions and understandings of the
parties are merged and made a part of this Agreement.
6.6. Notices. Any notice required or
_______
permitted to be given or made by either party to the
other hereunder shall be deemed delivered if hand
delivered, five (5) days after mailed postage prepaid,
one (1) business day after being sent by prepaid
express or courier delivery service or one (1) business
day after being sent by facsimile transmission and
actually received by receiving equipment to the parties
at their respective addresses set forth opposite the
signatures hereto or to such changed address as either
party shall designate by proper notice to the other.
6.7. Counterparts. This Agreement may be
____________
executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall
constitute one and the same instrument.
6.8. Reorganization. It is anticipated that
______________
the exchange of Subject Shares for the Xxxxx Shares
will qualify as a "reorganization" under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended. However, each party has made its own
determination, with advice of its counsel, regarding
how the transaction will be treated for tax purposes
and is not relying upon the other party or its counsel
with respect to such treatment. Both Xxxxx and Xxxxxx
agree to report the transaction as a reorganization
under section 368(a)(i)(b) for income tax purposes.
6.9. Tax Returns. It is understood that the
___________
Company will report its income, or loss, for the period
ending on the date of Closing as a separate taxpayer,
but thereafter will become a member of the Xxxxx
consolidated group.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first above
written.
Address for Notice: THE XXXXX CORPORATION
0000 X. Xxxxx Xxxx Xx.
Xxxxxxxxx, XX 00000
Fax No. (000) 000-0000
By: /s/ Xxxxxxx X. Xxxxxx
______________________
Xxxxxxx X. Xxxxxx,
Chairman
With a copy to:
Xxxxxxx & Xxxx, S.C.
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax No. (000) 000-0000
Address for Notice: SATTEL TECHNOLOGIES, INC.
0000 Xxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
By: /s/ Xxxxxx X. Xxxxxxxxxx
________________________
Xxxxxx Xxxxxxxxxx,
Chairman
With a copy to:
Fulbright & Xxxxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxx
Fax No. (000) 000-0000
EXHIBIT A
TO
EXCHANGE AGREEMENT
REGISTRATION RIGHTS
___________________
1. Initial Registration. Promptly (but in
____________________
no event later than twenty (20) days) after the
closing, Xxxxx shall file with the Securities and
Exchange commission (the "commission") and use its
reasonable best efforts to cause to become effective a
Registration Statement (the "Registration Statement")
on a proper form to be selected by Xxxxx under and
complying with the Securities Act of 1933 as amended
(the "Securities Act") with respect to the offering by
Sattel of the three hundred fifty thousand (350,000)
Xxxxx Shares. Xxxxx shall keep the Registration
Statement effective until the earlier of the date on
which Sattel has transferred all of the Xxxxx Shares or
January 11, 1998. Sattel shall be permitted to sell
under the Registration Statement, up to fifty thousand
(50,000) Xxxxx Shares at any time following the date on
which the Registration Statement becomes effective, an
additional one hundred fifty thousand (150,000) Xxxxx
Shares at any time after twelve (12) months following
the Closing, and the remaining one hundred fifty
thousand (150,000) Xxxxx Shares at any time after
eighteen (18) months following the Closing; provided
that if the closing price on the New York Stock
Exchange ("NYSE") of a Xxxxx Share shall on any date be
equal or greater than 125% of the closing price on the
NYSE of a Xxxxx Share on the date of the Closing, then
Sattel shall thereafter be permitted to sell all of its
Xxxxx Shares. Notwithstanding the foregoing, Sattel
shall notify Xxxxx of, and obtain confirmation from
Xxxxx prior to, any offers or sales by Sattel of Xxxxx
Shares of no Blackout Condition. If Xxxxx determines,
in its reasonable good faith judgement, that because of
the existence of, or in anticipation of, any
acquisition or financing activity, the unavailability
of any required financial statements as the result of
an actual, or proposed, acquisition, or the existence
of any other material non-public information (a
"Blackout Condition"), it would be materially adverse
to Xxxxx for the registration of the Xxxxx Shares to be
maintained effective, or to be filed and become
effective, or for the Xxxxx Shares to be sold under the
Registration Statement, then Xxxxx shall be entitled,
until such Blackout Condition no longer exists, or is
terminated or provided herein, to (i) if required by
law, cause the Registration Statement to be withdrawn
and the effectiveness of the Registration Statement to
be delayed or terminated; (ii) direct that Sattel not
make any public sales of Xxxxx Shares; or (iii) in the
event the Registration Statement has not yet been
filed, to delay or not file the Registration
Statement; provided that, unless Xxxxx notifies Sattel of a
Blackout Condition, Sattel may sell 50,000 Xxxxx Shares
within the first sixty (60) days following the
effective date of the Registration Statement without
further notice. Xxxxx shall have one (1) business day
after the receipt of notice from Sattel to declare the
existence of a Blackout Condition. Diana's response
shall be communicated via personal delivery, telecopy
or overnight courier. If no timely response is
received by Sattel from Xxxxx, Xxxxx shall be deemed to
have permitted such sale. In the event Xxxxx causes
the Registration Statement to be withdrawn or delayed
and terminated pursuant to clause (i), or clause (iii),
of the preceding sentence as a result of a Blackout
Condition, Xxxxx shall file and use its reasonable best
efforts to cause the Registration Statement to become
effective promptly after a Blackout Condition ceases to
exist. For purposes hereof, a Blackout Condition other
than the unavailability of any required financial
statements shall be deemed to terminate on the earlier
of (i) the date such Blackout Condition ceases to exist
or (ii) thirty (30) days after Diana's determination
thereof, and a Blackout Condition which is the
unavailability of any required financial statements as
the result of an actual or proposed acquisition shall
be deemed to terminate on the earlier of (i) the date
such Blackout condition ceases to exist or (ii)
seventy-five (75) days after the closing date of such
acquisition. Sattel shall not to make any offers or
sales of Xxxxx Shares to the public until the Blackout
Condition no longer exists or is terminated and shall
comply with any prospectus delivery requirements in
connection with Sattel's offer and sale of Xxxxx Shares
under the Registration Statement. Sattel shall offer
and sell the Xxxxx Shares only in accordance with the
plan of distribution described in the Registration
Statement.
2. Registration Procedures. Promptly after
_______________________
the Closing, Xxxxx shall:
(a) prepare and file with the
Commission the Registration Statement, and use its
reasonable best efforts to cause such Registration
Statement to become and remain effective all as
set forth in paragraph 1;
(b) prepare and file with the
Commission such amendments to such Registration
Statement and supplements to the prospectus
contained therein as may be necessary to keep such
Registration Statement effective for such period
as may be reasonably necessary to effect the sale
of such securities;
(c) furnish to Sattel and to the
underwriters of the securities being registered
such reasonable number of
copies of the Registration Statement, preliminary
prospectus, final prospectus and such other documents
as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(d) use its best efforts to register or
qualify the securities covered by such
Registration Statement under such state securities
or blue sky laws of such jurisdictions as Sattel
may reasonably request in writing except that
Xxxxx shall not for any purpose be required to
execute a general consent to service of process or
to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so
qualified;
(e) notify Sattel promptly after it
shall receive notice thereof, of the time when
such Registration Statement has become effective
or a supplement to any prospectus forming a part
of such Registration Statement has been filed;
(f) notify Sattel promptly of any
request by the Commission for the amending or
supplementing of such Registration Statement or
prospectus or for additional information;
(g) prepare and file with the
Commission, promptly upon the request of Sattel
any amendments or supplements to such Registration
Statement or prospectus which, in the opinion of
counsel for Sattel is required under the
Securities Act or the rules and regulations
thereunder in connection with the distribution of
the Xxxxx Shares by Sattel;
(h) prepare and promptly file with the
Commission and promptly notify Sattel of the
filing of such amendment or supplement to such
Registration Statement or prospectus as may be
necessary to correct any statements or omissions
if, at the time when a prospectus relating to such
securities is required to be delivered under the
Securities Act, any event shall have occurred as
the result of which any such prospectus or any
other prospectus as then in effect would include
an untrue statement of a material fact or omit to
state any material fact necessary to make the
statements therein, in the light of the
circumstances in which they were made, not
misleading;
(i) advise Sattel promptly after it
shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the
Commission suspending the effectiveness of
such Registration Statement or the initiation or
threatening of any proceeding for that purpose and
promptly use its reasonable best efforts to
prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be
issued;
(j) not file any amendment or
supplement to such Registration Statement or
prospectus to which Sattel shall have reasonably
objected on the grounds that such amendment or
supplement does not comply in all material
respects with the requirements of the Securities
Act or the rules and regulations thereunder, after
having been furnished with a copy thereof at least
five business days prior to the filing thereof,
unless in the opinion of counsel for Xxxxx the
filing of such amendment or supplement is
reasonably necessary to protect Xxxxx from any
liabilities under any applicable federal or state
law and such filing will not violate applicable
law; and
(k) at the request of Sattel, in
connection with an underwritten offering of Xxxxx
Shares, furnish: (i) an opinion, dated as of the
closing date, of the counsel representing Xxxxx
for the purposes of such registration, addressed
to the underwriters, and to Sattel, covering such
matters as such underwriters and Sattel may
reasonably request; and (ii) letters dated as of
the effective date of the Registration Statement
and as of the closing date, from the independent
certified public accountants of Xxxxx, addressed
to the underwriters, and to Sattel, covering such
matters as such underwriters and holder or holders
may reasonably request.
3. Expenses. With respect to the
________
registration of the Xxxxx Shares pursuant to the
Registration Statement, Xxxxx shall bear the following
fees, costs and expenses: all registration, filing and
NASD fees, printing expenses, fees and disbursements of
counsel and accountants for Xxxxx, all internal Xxxxx
expenses, all legal fees and disbursements and other
expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be
offered are to be registered or qualified, and the
premiums and other costs of policies of insurance
against liability (if any) arising out of such public
offering. Fees and disbursements of counsel and
accountants for Sattel, underwriting discounts and
commissions and transfer taxes relating to Xxxxx
Shares, fees and disbursements of counsel for the
underwriter or underwriters of such securities (if
selling securityholders are required to bear such fees
and disbursements) and any other expenses incurred by
Sattel not expressly included above, shall be borne by
Sattel.
4. Indemnification. Pursuant to the
_______________
registration of the Xxxxx Shares hereunder:
(a) Xxxxx will indemnify and hold
harmless Sattel, its directors and officers, and
any underwriter (as defined in the Securities Act)
for Sattel and each person, if any, who controls
Sattel or such underwriter within the meaning of
the Securities Act, from and against, and will
reimburse Sattel and each such underwriter and
controlling person with respect to, any and all
loss, damage, liability, cost and expense to which
Sattel or any such underwriter or controlling
person may become subject under the Securities Act
or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any
untrue statement or alleged untrue statement of
any material fact contained in such Registration
Statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission
to state therein a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances in which
they were made, not misleading; provided, however,
that Xxxxx will not be liable in any such case to
the extent that any such loss, damage, liability,
cost or expense arises out of or is based upon an
untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity
with information furnished by Sattel, such
underwriter or such controlling person in writing
specifically for use in the preparation thereof;
provided, however, that the foregoing indemnity
with respect to any preliminary prospectus shall
not inure to the benefit of any underwriter from
whom the person asserting any such loss, damage,
liability, cost or expense purchased Xxxxx Shares,
or any persons controlling such underwriter, if a
copy of the prospectus (as then amended or
supplemented if Xxxxx shall have furnished any
amendments or supplements thereto) was not sent or
given by or on behalf of such underwriter to such
person at or prior to the written confirmation of
the sale of Xxxxx Shares to such person and if the
prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss,
damage, liability, cost or expense.
(b) Sattel will indemnify and hold
harmless Xxxxx, its directors and officers, any
controlling person and any underwriter from and
against, and will reimburse Xxxxx, its directors
and officers, any controlling person and any
underwriter with respect to, any and all loss,
damage, liability, cost or expense to which Xxxxx
or any controlling person and/or any underwriter
may become subject
under the Securities Act or otherwise, insofar as
such losses damages, liabilities, costs or expenses
are caused by any untrue or alleged untrue statement
of any material fact contained in such Registration
Statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission
to state therein a material fact required to be stated
therein or necessary to make the statements
therein, in light of the circumstances in which
they were made, not misleading, in each case to
the extent, but only to the extent, that such
untrue statement or alleged untrue statement or
omission or alleged omission was so made in
reliance upon written information furnished by
Sattel specifically for use in the preparation
thereof.
(c) Promptly after receipt by an
indemnified party pursuant to the provisions of
paragraph (a) or (b) of this paragraph 4 of notice
of the commencement of any action involving the
subject matter of the foregoing indemnity
provisions such indemnified party will, if a claim
thereof is to be made against the indemnifying
party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party
of the commencement thereof; but the omission to
so notify the indemnifying party will not relieve
it from any liability which it may have to any
indemnified party otherwise than hereunder. In
case such action is brought against any
indemnified party and it notifies the indemnifying
party of the commencement thereof, the
indemnifying party shall have the right to
participate in, and, to the extent that it may
wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such
indemnified party, provided, however, if the
defendants in any action include both the
indemnified party and the indemnifying party and
if there is a conflict of interest which would
prevent counsel for the indemnifying party from
also representing the indemnified party, the
indemnified party or parties shall have the right
to select separate counsel to participate in the
defense of such action on behalf of such
indemnified party or parties, but in no event
shall the indemnifying parties be responsible for
more than one such additional firm for all
indemnified parties. After notice from the
indemnifying party to such indemnified party of
its election so to assume the defense thereof, the
indemnifying party will not be liable to such
indemnified party pursuant to the provisions of
said paragraph (a) or (b) for any legal or other
expense subsequently incurred by such indemnified
party in connection with the defense thereof other
than reasonable costs of investigation, unless
(i) the indemnified party shall have employed counsel
in accordance with the proviso of the preceding
sentence, (ii) the indemnifying party shall not
have employed counsel satisfactory to the
indemnified party to represent the indemnified
party within a reasonable time after the notice of
the 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.
(d) If the indemnification provided for
in this paragraph 4 is unavailable or insufficient
to hold harmless an indemnified party under
paragraph (a) or (b) above, then each indemnifying
party shall contribute to the amount paid or
payable by such indemnified party as a result of
the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) above, in such
proportion as is in such proportion as is
appropriate to reflect the relative fault of
Xxxxx, the selling stockholders and the
underwriters in connection with the statements or
omissions that resulted in such losses, claims,
damages or liabilities, as well as any other
relevant equitable considerations. The relative
fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue
statement of a material fact or the omission or
alleged omission to state a material fact relates
to information supplied by Xxxxx, the selling
stockholders or the underwriters and the parties'
relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue
statement or omission. Xxxxx, the selling
stockholders and the underwriters shall agree that
it would not be just and equitable if
contributions pursuant to this paragraph (d) were
to be determined by pro rata allocation (even if
the underwriters were treated as one entity for
such purpose) or by any other method of allocation
which does not take account of the equitable
considerations referred to in the first sentence
of this paragraph (d). The amount paid by an
indemnified party as a result of the losses,
claims, damages or liabilities referred to in the
first sentence of this paragraph (d) shall be
deemed to include any legal or other expenses
reasonably incurred by such indemnified party in
connection with investigating or defending against
any action or claim which is the subject of this
paragraph (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.
5. Sattel Cooperation. Xxxxx may require
__________________
Sattel to xxxxxxx Xxxxx in a timely manner such
information with respect to
Sattel and the distribution of Xxxxx Stock as Xxxxx may
from time to time reasonably request. In connection with
the registration of Xxxxx Stock, Sattel will (a) cooperate
with Xxxxx and the underwriter, if any, in preparing
the Registration Statement, (b) promptly supply Xxxxx
and the underwriter with all information and documents
as the underwriter or Xxxxx may xxxx reasonably
necessary, (c) discontinue sales of Xxxxx Stock upon
notification of any stop order or suspension of the
effectiveness of the Registration Statement, (d) notify
Xxxxx immediately upon any change in the plan of
distribution or other information concerning Sattel
described in the prospectus, (e) discontinue use of any
prospectus following notification by Xxxxx that the
prospectus must be amended or supplemented, (f) comply
with the applicable requirements of Rules 10b-5 and
10b-6 under the Securities Exchange Act of 1934, as
amended, (g) not use any prospectus other than the most
recent prospectus included in the Registration
Statement, and (h) otherwise comply with the prospectus
delivery requirements under the Securities Act.
6. Defined Terms. Terms with initial
_____________
capital letters not otherwise defined herein shall have
the meaning assigned in the Exchange Agreement to which
these Registration Rights are an exhibit.
7. Assignment. Sattel's rights under this
__________
agreement may be assigned, in whole or in part, to any
subsequent transferee of Xxxxxx'x Xxxxx shares,
including, without limitation, any pledgee of such
Xxxxx Shares.
8. Notices. All notices hereunder shall be
_______
in writing and shall be deemed to have been duly given
upon delivery if delivered personally, twenty-four (24)
hours after transmission by telecopy with answerback,
12:00 p.m. (noon) of the next business day after being
sent via overnight courier, and five (5) days after
being mailed, certified return receipt requested.
Actual notice, however given, shall always be
effective.
