EXHIBIT 10.43
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made by and
among Probex Corp., a Colorado corporation (the "Corporation"), and
_______________, a ______________________ ("Selling Shareholder"), who hereby
agree as follows:
1. Certain Definitions. As used in this Agreement:
(i) The term "Commission" shall mean the Securities and Exchange
Commission and any successor agency.
(ii) The term "Common Stock" shall mean any stock of any class of the
Corporation which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation and which is not subject to redemption by the
Corporation (whether or not shares of such class have voting rights).
(iii) The term "Common Equity Securities" shall mean Common Stock and
any option, warrant or right to subscribe for, acquire or purchase any such
Common Stock, whether or not currently exercisable, and any security redeemable
into Common Stock, whether or not currently redeemable.
(iv) The term "Effective Date" shall mean the [FIRST ANNIVERSARY OF THE
DATE HEREOF].
(v) The term "Qualified Registrable Securities" shall mean the shares
of Common Stock issuable to Selling Shareholder upon conversion of the Preferred
Shares currently held by Selling Shareholder. As to any particular Qualified
Registrable Securities, once issued, such securities shall cease to be Qualified
Registrable Securities when (a) a registration statement with respect to such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) such securities shall have ceased to be outstanding, (c) such
securities shall have been sold pursuant to Rule 144 (or any successor
provision) under the Securities Act or (d) at the time of determination of
whether such securities are Qualified Registrable Securities, such securities
may be sold by Selling Shareholder publicly without registration under the
Securities Act and free of contractual restrictions with the Corporation,
including the provisions of Section 8 hereof.
(vi) The term "Qualified Registration" shall mean a registration
statement of the Corporation under the Securities Act on a form which permits
the sale of Qualified Registrable Securities (other than a registration
statement (a) on Form S-4 or S-8 or any successor or similar form then in
effect, (b) relating to warrants, options or shares of capital stock granted or
to be granted or sold primarily to employees, directors or officers of the
Corporation, (c) filed in connection with a transaction described in Rule 145
under the Securities Act or any successor rule, (d) relating to employee benefit
plans or interests therein, or (e) relating primarily
to preferred stock or other securities issued in connection with any financing
by the Corporation which is principally debt or preferred stock financing).
(vii) The term "Preferred Stock" shall mean the 10% Cumulative
Convertible Preferred Stock, Series A, with each Preferred Share being
convertible into 5.33333 shares of Common Stock or, in certain other
circumstances at the Corporation's option, cash.
(viii) The term "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ix) The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
2. Registrations.
2.1 Piggyback Registration. After the [EFFECTIVE DATE], whenever the
Corporation proposes to register any of its Common Equity Securities in a
Qualified Registration whether or not for sale for its own account, the
Corporation will give prompt written notice ("Piggyback Notice") to Selling
Shareholder of its intention to effect such a registration at least thirty (30)
days prior to the filing thereof. Upon written request of Selling Shareholder
made within 20 days after delivery of any Piggyback Notice (which request shall
specify the Qualified Registrable Securities requested to be included in such
Qualified Registration by Selling Shareholder), the Corporation will, subject to
subsections 2.2 and 2.3 below, use its reasonable efforts to include in such
Qualified Registration all Qualified Registrable Securities of Selling
Shareholder to permit the disposition by Selling Shareholder of such securities;
provided, however, that (i) if, at any time after giving written notice of its
intention to register any such Common Equity Securities (other than Qualified
Registrable Securities requested to be included therein pursuant to this
subsection 2.1) in such Qualified Registration and prior to the effective date
of the registration statement filed in connection with such Qualified
Registration, the Corporation shall determine for any reason not to register
such Common Equity Securities, the Corporation may, at its election, give
written notice of such determination to Selling Shareholder and, thereupon,
shall be relieved of its obligation to register any Qualified Registrable
Securities in connection with such registration, without prejudice, however, to
the future rights of Selling Shareholder under this Section, (ii) in case of a
determination by the Corporation to delay such registration of the Common Equity
Securities (other than Qualified Registrable Securities requested to be included
therein pursuant to this subsection 2.1), the Corporation shall be permitted to
delay the registration of such Qualified Registrable Securities for the same
period as the delay in registering such other Common Equity Securities, and
(iii) the Corporation shall not be required to effect any registration pursuant
to this subsection 2.1 unless it shall have received reasonable assurances that
Selling Shareholder will pay any expenses required to be paid by it as provided
in subsection 4.1. The registrations requested pursuant to this subsection 2.1
are referred to herein as the "Piggyback Registrations."
2.2 Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten registration and the managing underwriter(s) for the offering
advises the Corporation in writing that in its opinion the number of shares of
Qualified Registrable Securities requested or proposed to be included in such
registration exceeds the number which can be sold
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in such offering without materially affecting the offering price of the
securities proposed to be included therein, the Corporation will include in such
registration (i) first, to the extent such securities of the Corporation may be
included in such Qualified Registration without materially Registration
affecting the offering price thereof, in the opinion of such managing
underwriter(s), (a) if such registration is initiated by the Corporation
proposing to register any of its Common Equity Securities, such Common Equity
Securities proposed to be sold by the Corporation, and (b) the securities of
holders of securities of the Corporation (other than Selling Shareholder, with
respect to such Qualified Registrable Securities) who otherwise have
preferential registration rights to include such securities in such Piggyback
Registration in preference to Selling Shareholder, in each case in accordance
with the agreement(s) with respect to such registration rights between the
Corporation and such holders; (ii) second, to the extent such Qualified
Registrable Securities may be included in such Qualified Registration without
materially affecting the offering price of the securities referred to in clause
(i), in the opinion of such managing underwriter(s), the Qualified Registrable
Securities granted to each of the holders entitled to the benefits of
registration rights previously granted to HSB Group, Inc., if the holder has
requested inclusion of their Qualified Registrable Securities, and then on a pro
rata basis based on the total number of Qualified Registrable Securities of HSB
Group, Inc. then held by each such holder, and (iii) third, to the extent such
Qualified Registrable Securities may be included in such Qualified Registration
without materially affecting the offering price of the securities referred to in
clause (i), in the opinion of such managing underwriter(s), the Qualified
Registrable Securities requested by Selling Shareholder to be included in such
Piggyback Registration pursuant to subsection 2.1 and any other securities of
the Corporation held by persons other than Selling Shareholder having rights to
participate in such Piggyback Registration which are non-preferential to Selling
Shareholder, pro rata among all such holders on the basis of the total number of
shares of securities of the Corporation, including Qualified Registrable
Securities, requested by each such holder to be included therein. The managing
underwriter shall have the right to exclude up to all Qualified Registrable
Securities that are in excess of 15% of the aggregate number of shares to be
included in such offering from the registration.
2.3 Selection of Underwriters. Except as otherwise provided in any
registration rights agreement with respect to any other securities of the
Corporation, the Corporation will have the sole right to select the managing
underwriter(s) of any underwritten offering.
2.4 Limitations on Saleable Amounts. During any consecutive [THREE MONTH
PERIOD], Selling Shareholder is prohibited, unless the Corporation shall
otherwise consent thereto in writing, from selling more than [3%] of the
outstanding shares of Common Stock of the Corporation except in an underwritten
public offering.
2.5 Relative Rights With Other Holders. The rights of Selling Shareholder
with respect to Piggyback Registrations shall be pari passu with the piggyback
registration rights granted to APS Financial Corporation (the "Agent") with
respect to the Common Stock purchasable by the Agent pursuant to warrants
granted to it.
3. Registration Procedures. If and whenever the Corporation is required by the
provisions of this Agreement to use its reasonable efforts to effect the
registration of any Qualified Registrable Securities as provided hereby:
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3.1 Covenants by Corporation. The Corporation shall, as expeditiously
as reasonably practicable:
(i) Prepare and file with the Commission under the Securities Act a
registration statement with respect to such Qualified Registrable Securities,
which registration statement will state that the Qualified Registrable
Securities are covered thereby, and use its reasonable efforts to cause such
registration statement to become effective and to remain effective as provided
herein; provided, however, that the Corporation may discontinue any registration
of securities that is being effected pursuant to subsection 2.1 at any time
prior to the effective date of the registration statement relating thereto.
(ii) Prepare and file with the Commission such amendments and
supplements, if any, to such registration statement and the prospectus used in
connection therewith as may be necessary to (a) keep the registration statement
effective until the earlier of 90 days after the effectiveness thereof or the
completion of the distribution under such registration statement, and (b) comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all Qualified Registrable Securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by Selling Shareholder.
(iii) Furnish to Selling Shareholder and its underwriter, if any,
such number of copies of such registration statement (including exhibits), each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and of each amendment and
supplement thereto as Selling Shareholder and such underwriter may reasonably
request in order to facilitate the public disposition of the Qualified
Registrable Securities owned by Selling Shareholder and included in such
registration statement.
(iv) Use its reasonable efforts to (a) register or qualify such
Qualified Registrable Securities under such securities or blue sky laws of such
jurisdictions as Selling Shareholder or its underwriter reasonably requests, (b)
keep such registration and qualification in effect for so long as such
registration statement is in effect, and (c) do any and all other acts and
things which may be reasonably necessary or advisable to enable Selling
Shareholder to consummate the disposition in such jurisdictions of the relevant
Qualified Registrable Securities (provided that the Corporation will not for any
such purpose be required to (1) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for the requirements of this subsection; (2) subject itself to
taxation in any such jurisdiction; (3) consent to general service of process in
any such jurisdiction; or (4) register or qualify Qualified Registrable
Securities or take any other action under the state securities or "Blue Sky"
laws of any jurisdiction if, in the judgment of the Board of Directors of the
Corporation, the consequences of such registration, qualification or other
action would be unduly burdensome to the Corporation).
(v) At any time when a prospectus relating thereto is required to
be delivered under the Securities Act, notify Selling Shareholder when it
becomes aware of the happening of any event as a result of which the prospectus
(as then amended or supplemented) contains any untrue statement of a material
fact or omits any fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, and, at the request
of Selling Shareholder, as promptly as practicable thereafter, prepare in
sufficient quantities and
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furnish to Selling Shareholder and its underwriter a reasonable number of copies
of a prospectus supplemented or amended so that, as thereafter delivered to the
offerees or purchasers of such Qualified Registrable Securities, such prospectus
will not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein in light of the circumstances then
existing not misleading.
(vi) Comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve consecutive months beginning with the first day of the Corporation's
first calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11 (a) of the
Securities Act and Rule 158 thereunder.
(vii) Use its reasonable efforts to cause all such Qualified
Registrable Securities covered by such registration statement to be listed on
any securities exchange, if any, on which similar securities issued by the
Corporation are then listed, if the listing of such Qualified Registrable
Securities is then permitted under the rules of such exchange.
(viii) Enter into customary agreements relating to the registration
(including an underwriting agreement in customary form).
(ix) Subject to the execution of confidentiality agreements in a
form satisfactory to the Corporation, make reasonably available for inspection
by Selling Shareholder, any underwriter participating in any disposition
pursuant to such registration statement and any legal counsel, accountant or
other agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Corporation, and cause the
Corporation's officers, directors, employees, counsel and independent public
accountants to supply all information reasonably requested by, and to respond to
inquiries from, Selling Shareholder, any such underwriter, legal counsel,
attorney, accountant or agent in connection with such registration statement, in
each case, to the extent such information is reasonably necessary to satisfy any
of its obligations under applicable law.
(x) Use reasonable efforts to obtain an appropriate opinion from
counsel for the Corporation and a "cold comfort" letter from the Corporation's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions of counsel and cold comfort letters
in similar registrations; provided, however, that failure to provide such
opinion or letter, or the provision of any such opinion or letter in a form not
satisfactory to Selling Shareholder, notwithstanding the Corporation's
reasonable efforts, shall not give rise to any action, at law or in equity, for
damages or injunctive or other relief, but rather shall only entitle Selling
Shareholder to withdraw its Qualified Registrable Securities from such
registration statement, pursuant to subsection 3.3 below.
(xi) Provide (a) Selling Shareholder, (b) its underwriter or
underwriters (which term, for purposes of this Agreement, shall include any
person deemed to be an underwriter within the meaning of Section 2(11) of the
Securities Act), if any, of the securities being sold, and (c) counsel of such
underwriters the opportunity to participate in the preparation of such
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registration statement, each prospectus included therein or filed with the
Commission, and each amendment or supplement thereto.
(xii) Promptly notify Selling Shareholder and its underwriter, if
any, and (if requested by any such person) confirm such advice in writing, (a)
when such registration statement, the prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment thereto, when the same has become
effective, (b) of the issuance by the Commission of any stop order suspending
the effectiveness of such registration statement or the initiation of any
proceedings for that purpose, or (c) of the receipt by the Corporation of any
notification with respect to the suspension of the qualification of the
Qualified Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
(xiii) Use its reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement hereunder or any
post-effective amendment thereto at the earliest practicable date.
(xiv) Notify in writing Selling Shareholder of any proposal by the
Corporation to amend or waive any provision of this Agreement pursuant to
subsections 9.2 and 9.3 hereof and of any amendment or waiver effected pursuant
thereto, each of which notices shall contain the text of the amendment or waiver
proposed or effected, as the case may be.
3.2 Certain Agreements by Selling Shareholder.
(i) Selling Shareholder agrees that upon receipt of any notice from
the Corporation of the happening of any event of the kind described in
subsection 3.1(v), Selling Shareholder will forthwith discontinue its
disposition of Qualified Registrable Securities pursuant to the registration
statement covering its Qualified Registrable Securities until its receipt of the
copies of the supplemented or amended prospectus contemplated by subsection
3.1(v) and, if so directed by the Corporation, will deliver to the Corporation
(at the Corporation's expense) all copies, other than permanent file copies,
then in its possession of the prospectus covering such Qualified Registrable
Securities that was in effect at the time of receipt of such notice. In the
event the Corporation shall give any such notice, the period mentioned in
subsection 3.1(ii)(a)(1) shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including
the date when Selling Shareholder shall have received the copies of the
supplemented or amended prospectus contemplated by subsection 3.1(v).
(ii) Selling Shareholder agrees that upon receipt of a notice from
the Corporation that it has filed and caused to become effective a registration
statement which includes an offering of Common Equity Securities for sale by the
Corporation to the public in an underwritten public offering, if Selling
Shareholder was given the opportunity to include its Qualified Registrable
Securities for sale in such public offering, Selling Shareholder shall enter
into agreements with the underwriters of such public offering, substantially in
the same form as agreements entered into by the officers and directors of the
Corporation, precluding the sale of Common Stock by the Selling Shareholder for
a period not to exceed 180 days following such notice.
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3.3 Withdrawal. If Selling Shareholder disapproves of the terms of any
offering, Selling Shareholder's sole remedy shall be, at its sole discretion, to
withdraw its Qualified Registrable Securities and other securities of the
Corporation therefrom by written notice to the Corporation and the underwriter
(if any); and Selling Shareholder's Qualified Registrable Securities and other
securities of the Corporation so withdrawn from the offering will also be
withdrawn from registration. If Selling Shareholder withdraws all Qualified
Registrable Securities from the offering, the Corporation may withdraw the
registration.
3.4 Information. The Corporation may require Selling Shareholder to
furnish the Corporation such information regarding Selling Shareholder and the
distribution of its securities as the Corporation may from time to time
reasonably request in writing for purposes of preparation of the registration
statement, to the extent that such information is required in order to comply
with applicable legal requirements. If any such registration statement refers to
Selling Shareholder by name or otherwise as the holder of any securities of the
Corporation, then Selling Shareholder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to Selling
Shareholder, to the effect that the holding by Selling Shareholder of such
securities is not to be construed as a recommendation by Selling Shareholder of
the investment quality of the Corporation's securities covered thereby and that
such holding does not imply that Selling Shareholder will assist in meeting any
future financial requirements of the Corporation, or (ii) in the event that such
reference to Selling Shareholder by name or otherwise is not in the judgment of
the Corporation, as advised by counsel, required by the Securities Act or any
similar federal statute or any state "blue sky" or securities law then in force,
the deletion of such reference to Selling Shareholder.
4. Registration Expenses.
4.1 Responsibility for Payment. Whether or not any registration
pursuant to this Agreement shall become effective, all expenses incident to the
Corporation's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, National Association of
Securities Dealers' fees, fees and expenses of compliance with state securities
or blue sky laws, printing and engraving expenses and fees and disbursements of
counsel for the Corporation and the independent certified public accountants for
the Corporation, underwriters (excluding discounts, commissions and transfer
taxes and amounts to be borne by such underwriters) and other persons retained
by the Corporation (all such expenses being herein called "Registration
Expenses"), will be borne by the Corporation; provided, however, that (i) if
Selling Shareholder is required to pay any Registration Expenses as provided in
subsection 4.2, then Selling Shareholder shall pay such Registration Expenses in
the proportion to (a) the number of shares of Qualified Registrable Securities
requested to be registered by Selling Shareholder in such registration statement
if such registration does not become effective, or (b) the number of shares of
Qualified Registrable Securities of Selling Shareholder included in such
registration statement, if such registration statement becomes effective, unless
in either case another basis of sharing such Registration Expenses is required
under applicable laws, rules or regulations, in which case such other method
shall apply; and (ii) Selling Shareholder shall pay any underwriting discounts
and selling commissions and transfer taxes applicable to Qualified Registrable
Securities sold by Selling Shareholder as aforesaid.
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4.2 Legal Requirements. Notwithstanding anything herein to the
contrary, Selling Shareholder shall pay the Registration Expenses to the extent
required by applicable law.
5. Indemnification.
5.1 Indemnification by the Corporation. The Corporation will, and
hereby does indemnify and hold harmless, with respect to any registration
statement filed by it that covers Selling Shareholder's Qualified Registrable
Securities, to the full extent permitted by law, Selling Shareholder, its
officers, directors, employees and agents (and the directors, officers,
employees and agents thereof) and each other person or entity who controls
Selling Shareholder within the meaning of the Securities Act (collectively, the
"Selling Shareholder Indemnitees" and individually a "Selling Shareholder
Indemnitee") against all losses, claims, damages, liabilities and expenses,
joint or several (including reasonable fees of counsel and any amounts paid in
settlement effected with the Corporation's consent, which consent shall not be
unreasonably withheld), to which any such Selling Shareholder Indemnitee may
become subject under the Securities Act, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof), are caused by
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which such Qualified Registrable
Securities were included as contemplated hereby or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Corporation
shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein in the light of the circumstances under which they were made not
misleading, or (iii) any violation by the Corporation of any federal, state or
common law rule or regulation applicable to the Corporation and relating to
action of or inaction by the Corporation in connection with any such
registration; and in each such case the Corporation will reimburse each such
Selling Shareholder Indemnitee for any reasonable legal or any other expenses
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability, expense, action or proceeding; provided, that
the Corporation shall not be liable to any such Selling Shareholder Indemnitee
in any such case to the extent that any such loss, claim, damage, liability or
expense (or action or proceeding, whether commenced or threatened, in respect
thereof) arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
amendment thereof or supplement thereto or in any such preliminary, final or
summary prospectus in reliance upon and in conformity with written information
furnished to the Corporation by or on behalf of Selling Shareholder relating to
Selling Shareholder for use in the preparation thereof; and provided further
that the Corporation shall not be liable to any such Selling Shareholder
Indemnitee with respect to any preliminary prospectus to the extent that any
such loss, claim, damage, liability or expense of Selling Shareholder Indemnitee
results from the fact that Selling Shareholder sold Qualified Registrable
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Corporation has
previously furnished copies thereof to Selling Shareholder in compliance
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with Section 3 of this Agreement and the loss, claim, damage, liability or
expense of such Selling Shareholder Indemnitee results from an untrue statement
or omission of a material fact contained in such preliminary prospectus which
was corrected in the prospectus (or the prospectus as amended or supplemented).
Such indemnity and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of Selling
Shareholder and shall survive the transfer of such securities by Selling
Shareholder.
5.2 Indemnification by Selling Shareholder. Selling Shareholder will,
and hereby does indemnify and hold harmless, to the fullest extent permitted by
law, the Corporation, its directors, officers, employees and agents and each
Person who controls the Corporation (within the meaning of the Securities Act)
(collectively, the "Corporation Indemnitees" and individually a "Corporation
Indemnitee") against all losses, claims, damages, liabilities and expenses,
joint or several (including reasonable fees of counsel and any amounts paid in
settlement effected with Selling Shareholder's consent, which consent shall not
be unreasonably withheld) to which any Corporation Indemnitee may become subject
under the Securities Act, at common law or otherwise insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings, whether
commenced or threatened, in respect thereof) are caused by (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement in which any of the Qualified Registrable Securities were
included or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary, final or summary prospectus, together with
the documents incorporated by reference therein (as amended or supplemented if
the Corporation shall have filed with the Commission any amendment thereof or
supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein in the light of the circumstances under which they were made
not misleading to the extent, but only to the extent, in the cases described in
clauses (i) and (ii), that such untrue statement or omission is contained in any
information furnished in writing by Selling Shareholder relating to Selling
Shareholder for use in the preparation thereof and if the Corporation does not
know, at the time such information is included in the registration statement,
prospectus, preliminary prospectus, amendment or supplement, that such
information is false or misleading, (iii) any violation by Selling Shareholder
of any federal, state or common law, rule or regulation applicable to Selling
Shareholder and relating to action of or inaction by Selling Shareholder in
connection with any such registration, and (iv) with respect to any preliminary
prospectus, the fact that Selling Shareholder sold Qualified Registrable
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if (a) the Corporation has
previously furnished copies thereof to Selling Shareholder in compliance with
Section 3 of this Agreement and (b) the loss, claim, damage, liability or
expense of such Corporation Indemnitee results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the prospectus (or the prospectus as amended or supplemented). Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Corporation (except as provided above) or Selling
Shareholder and shall survive the transfer of such securities by Selling
Shareholder.
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5.3 Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party under subsection 5.1 or 5.2 above of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for indemnification may be made
pursuant to this Section 5, such indemnified party shall, if a claim in respect
thereto is to be made against an indemnifying party, give written notice to the
indemnifying party of the threat or commencement thereof; but the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
claim or action referred to under subsections 5.1 or 5.2 shall be brought
against any indemnified party and it shall notify the indemnifying party of the
threat or commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party). After notice from the indemnifying party to such indemnified party of
its election so to assume the defense of any such claim or action, the
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of counsel or any other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation unless the indemnifying party has failed
to assume the defense of such claim or action or to employ counsel reasonably
satisfactory to such indemnified party. The indemnifying party shall not be
required to indemnify the indemnified party with respect to any amounts paid in
settlement of any action, proceeding or investigation entered into without the
written consent of the indemnifying party which consent shall not be
unreasonably withheld. No indemnifying party will consent to the entry of any
judgment or enter into any settlement without the consent of the indemnified
party, unless (i) such judgment or settlement does not impose any obligation or
liability upon the indemnified party other than the execution, delivery or
approval thereof, and (ii) such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim for
all persons that may be entitled to or obligated to provide indemnification or
contribution under this Section 5.
5.4 Additional Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 5 (with appropriate
modifications) shall be given by the Corporation and Selling Shareholder with
respect to any required registration or other qualification of securities under
any state securities or blue sky laws.
5.5 Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsections 5.1 or 5.2 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, liabilities or expenses (or actions in respect thereof)
referred to in subsections 5.1 or 5.2 in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements, omissions,
actions or inactions which resulted in such losses, claims, damages, liabilities
or expenses. The relative fault of the indemnifying party and of the indemnified
party 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 the
indemnifying party or by the indemnified party, any
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action or inaction by any such party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement, omission, action or inaction. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above in this subsection
5.5 shall be deemed to include any reasonable legal or other expenses incurred
by such indemnified party in connection with investigating or defending any such
action or claim (which shall be limited as provided in subsection 5.3 if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which is the subject of this subsection 5.5. 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. Promptly after receipt by an
indemnified party under this subsection 5.5 of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for contribution may be made
against an indemnifying party under this subsection 5.5, such indemnified party
shall, if a claim for contribution in respect thereto is to be made against an
indemnifying party, give written notice to the indemnifying party in writing of
the commencement thereof (if the notice specified in subsection 5.3 has not been
given with respect to such action); but the failure to so to notify the
indemnifying party shall not relieve it from any obligation to provide
contribution which it may have to any indemnified party under this subsection
5.5 except to the extent that the indemnifying party is actually prejudiced by
the failure to give notice. Notwithstanding anything in this subsection 5.5 to
the contrary, no indemnifying party (other than the Corporation) shall be
required pursuant to this subsection 5.5 to contribute any amount which exceeds
the amount by which the dollar amount of the proceeds received by such
indemnifying party from the sale of Qualified Registrable Securities and other
securities of the Corporation (after deducting any underwriting commissions,
discounts and transfer taxes applicable thereto) in the offering to which the
losses, claims, damages, liabilities or expenses of the indemnified parties
relate exceeds the amount of any losses, claims, damages, liabilities and
expenses which such indemnifying party has otherwise been required to pay as
indemnity or contribution hereunder by reason of such losses, claims, damages,
liabilities or expenses.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this subsection 5.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
If indemnification is available under this Section 5, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
subsections 5.1 and 5.2 without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this subsection 5.5. The provisions of this subsection 5.5 shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the transfer of securities by any such
party.
5.6 Indemnification and Contribution of Underwriters. In connection
with any underwritten offering contemplated by this Agreement which includes
Selling Shareholder's Qualified Registrable Securities, the Corporation and
Selling Shareholder will agree to
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customary provisions for indemnification and contribution (consistent with the
other provisions of this Section 5) in respect of losses, claims, damages,
liabilities and expenses of the underwriters of such offering.
6. Participation in Underwritten Registrations. In the case of a registration
hereunder, if the Corporation has determined to enter into an underwriting
agreement in connection therewith, all shares of Qualified Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement which shall be in customary form and contain such terms
as are customarily contained in such agreements, and Selling Shareholder may not
participate in any such registration unless Selling Shareholder (a) agrees to
sell its securities on the basis provided in any underwriting arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
7. Rights to Withdraw From Registration. If, as a result of the proration
provisions of subsection 2.2, Selling Shareholder shall not be entitled to
include all Qualified Registrable Securities in a registration that Selling
Shareholder has requested to be included, after the delivery to Selling
Shareholder of notice thereof from the Corporation, Selling Shareholder may
elect to withdraw its request to include Qualified Registrable Securities in
such registration (a "Withdrawal Election"); provided, however, that a
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, Selling Shareholder shall no longer have any right to include
Qualified Registrable Securities in the registration as to which such Withdrawal
Election was made.
8. Limitations on Sale or Distribution of Other Securities. If requested in
writing by (A) the Corporation or (B) the managing underwriter, if any, of the
first underwritten registration contemplated by subsection 2.1 hereof declared
effective after the Effective Date (the "Subsequent Registration"), Selling
Shareholder hereby agrees not to effect any public offering, sale or
distribution (including any sale pursuant to Rule 144 under the Securities Act)
of any Qualified Registrable Security or any other Common Equity Security, or
any other security of the Corporation (other than as part of such underwritten
public offering) within 45 days after the effective date of the Subsequent
Registration, if Selling Shareholder was given the opportunity to include in the
Subsequent Registration any Qualified Registrable Securities or any other Common
Equity Security, or any other security of the Corporation held by Selling
Shareholder. The Corporation may, at its sole discretion, waive, as to Selling
Shareholder, the restrictions contained in this Section 8 as they apply to a
Subsequent Registration.
9. Miscellaneous.
9.1 Termination. This Agreement and all rights and obligations hereunder
with respect to any Qualified Registrable Securities (except for the
indemnification and contribution rights provided in Section 5 hereof which shall
survive forever) will terminate on the [FIFTH ANNIVERSARY] of the date hereof.
9.2 Waivers. None of the rights of either party hereto may be waived except
in writing.
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9.3 Amendments. Except as otherwise provided herein, this Agreement may
be amended only with the written consent of the Corporation and Selling
Shareholder.
9.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective permitted (as
provided in subsection 9.5(i)) successors and assigns of the parties hereto,
whether so expressed or not.
9.5 Subsequent Holders; After-Acquired Qualified Registrable
Securities.
(i) All rights hereunder shall be assignable by Selling
Shareholder, together with any Qualified Registrable Securities of Selling
Shareholder upon assignment of such securities by Selling Shareholder. Any such
transferee, in order to have the benefits of this Agreement, must become a party
hereto within 60 days after such transfer (unless waived in writing by the
Corporation) by executing (and causing such transferee's spouse, if any, to
execute) a counterpart of this Agreement and such permitted transferee must
become a record holder of such Qualified Registrable Securities.
(ii) Notwithstanding the foregoing, no rights hereunder shall inure
to the benefit of, or be exercisable by, any transferee or assignee acquiring
Qualified Registrable Securities in a public sale or public distribution.
9.6 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
9.7 Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement.
9.8 Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and shall not limit or otherwise affect the
meaning hereof.
9.9 Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement and the exhibits and schedules hereto will
be governed by the internal law, and not the law of conflicts, of Colorado.
9.10 Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when actually delivered to the
recipient by special courier or personal delivery, or mailed by certified or
registered mail, return receipt requested and postage prepaid, to the recipient
three days after such mailing. Such notices, demands and other communications
will be sent to Selling Shareholder and the Corporation at their respective
addresses indicated below:
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If to the Corporation:
Xx. Xxxxxx Xxxxxxxx
Mr. Xxxxx Xxxx
Probex Corp.
0000 XxXxx, Xxx. 000
Xxxxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xx. Xxxxxx X. Xxxxxxx
Jenkens & Xxxxxxxxx, P.C.
0000 Xxxxxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Selling Shareholder:
-----------------------
-----------------------
-----------------------
-----------------------
Telephone: ( )
--- ---------
Facsimile: ( )
--- ---------
with copies to:
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
Telephone: ( )
--- ---------
Facsimile: ( )
--- ---------
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
9.11 Benefit of Agreement. No person not a party to this Agreement
shall have rights under this Agreement as a third party beneficiary or
otherwise.
9.12 Changes in Outstanding Securities. The provisions of this
Agreement regarding Common Equity Securities and Qualified Registrable
Securities shall apply to securities of the
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Corporation or any successor or assign of the Corporation (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of, or
by reason of any stock dividend, stock split, stock issuance, reverse stock
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise. Upon the occurrence of any of such events, the definitions of Common
Equity Securities and Qualified Registrable Securities shall be appropriately
modified by the Board of Directors of the Corporation.
9.13 Exchange Act Reports. The Corporation covenants that it will
timely file the reports required to be filed by it under the Securities Act or
the Exchange Act (including but not limited to the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act) to the extent required from time to time to enable Selling
Shareholder to sell the Qualified Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 under the Securities Act. Upon the request of Selling Shareholder, the
Corporation will deliver to Selling Shareholder a written statement as to
whether it has complied with the requirements of this Section.
9.14 Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto as to the subject matter hereof and supersedes all
previous agreements among all or some of the parties hereto, whether written,
oral or otherwise.
9.15 Specific Performance. The parties to this Agreement acknowledge
that there may be no adequate remedy at law if any party fails to perform any of
its obligations under this Agreement, and accordingly agree that each party in
addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of any other
party under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.
9.16 Inspection. For so long as this Agreement shall be in effect, a
complete list of the names and addresses of all the holders who have
registration rights similar to those set forth in subsection 2.1 of this
Agreement shall be made available for inspection and copying on any business day
by Selling Shareholder at the offices of the Corporation at the address thereof
set forth in subsection 9.10 above.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the _____ day of ________________, 199__.
PROBEX CORP.
a Colorado corporation
By:
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Xxxxxx X. Xxxxxx, Senior Vice President
-----------------------------------------
a
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By:
---------------------------------------
Name:
-------------------------------------
Title:
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