EXHIBIT 4.2
FORM
OF
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of
______________________, 1999 (the "Effective Date"), is made by and among
XxxxxXxxxxxxx.xxx Company, a Delaware corporation (the "Corporation"), and each
of the persons that are deemed to be bound by this Agreement as described in the
Recitals below (collectively, the "Stockholders").
RECITALS
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X. Xxxxx Mountain Energy Resource L.L.C., a Delaware limited liability
company (the "LLC"), and the Corporation have entered into an Agreement and Plan
of Merger, dated as of ______________________________________, 1999 (the "Merger
Agreement"), pursuant to which the LLC will be merged with and into the
Corporation.
B. In accordance with the terms of the Merger Agreement, the Corporation
desires to provide for the registration of the sale by the Stockholders of the
Registrable Securities (as defined below) from time to time, on the terms and
subject to conditions set forth below.
C. As a result of the Merger Agreement and the transactions contemplated
thereby, each of the Stockholders has become the Beneficial Owner (as defined
below) of shares of common stock, par value $0.01 per share, of the Company
("Common Shares").
D. Each person surrendering certificates representing common units in the
LLC in exchange for Common Shares as contemplated by the Merger Agreement, by
delivery to the Corporation of a properly completed and duly executed Letter of
Transmittal, together with such certificates, will be deemed to be bound by the
terms of this Agreement as if such person had executed a copy hereof.
AGREEMENTS
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NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Definitions
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1.1. Definitions. For purposes of this Agreement, the following terms have
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the following meanings:
(a) Affiliate: As defined in Rule 12b-2 under the Exchange Act.
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(b) Agreement: As defined in the introductory paragraph hereof.
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(c) Beneficial Owner or Beneficial Ownership: As defined in Rule 13d-
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3 under the Exchange Act.
(d) Common Shares: As defined in Recital C.
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(e) Corporation: As defined in the introductory paragraph hereof.
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(f) Effective Date: As defined in the introductory paragraph hereof.
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(g) Exchange Act: The Securities Exchange Act of 1934, as amended.
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(h) Indemnified Party: As defined in Section 5.3.
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(i) Indemnifying Party: As defined in Section 5.3.
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(j) LLC: As defined in Recital B.
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(k) Losses: As defined in Section 5.1.
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(l) Merger Agreement: As defined in Recital A.
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(m) NASDAQ: As defined in Section 4.1(l).
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(n) Other Equity Securities: Any shares of capital stock of the
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Corporation and any other securities issued by the Corporation in respect of any
Owned Common Shares.
(o) Other Stockholders: As defined in Section 2.2.
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(p) Owned Common Shares: Outstanding Common Shares Beneficially Owned
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by a Stockholder, whether acquired on or after the Effective Date, including
without limitation those that are acquired by a Stockholder as contemplated by
the Merger Agreement.
(q) Permitted Assignee: With respect to any Stockholder, means (i) an
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Affiliate of such Stockholder, (ii) any Person who acquires, in a single
transaction, from such Stockholder all of such Stockholder's Owned Common
Shares, and (iii) any Person who acquires from such Stockholder outstanding
Common Shares by means of a pro rata distribution by such Stockholder to holders
of its equity interests of all of such Stockholder's Owned Common Shares.
(r) Person (or person): Any individual, corporation, general or
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limited partnership, limited liability company, joint venture, trust or other
entity or association, including without limitation any governmental authority.
(s) Piggyback Notice: As defined in Section 2.1.
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(t) Piggyback Registration: As defined in Section 2.1.
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(u) Prospectus: With respect to any Registration Statement: if Rule
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434 under the Securities Act is relied on, the term sheet that is first filed
pursuant to Rule 424(b)(7) under
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the Securities Act, together with the preliminary prospectus identified therein
that such term sheet supplements; if Rule 434 under the Securities Act is not
relied on, the prospectus first filed with the SEC pursuant to Section 424(b)
under the Securities Act; and if Rule 434 under the Securities Act is not relied
on and no prospectus is required to be filed pursuant to Rule 424(b) under the
Securities Act, the prospectus included in such Registration Statement at the
time when it is or was declared effective; in each case, as amended or
supplemented by any prospectus supplement, all other amendments and supplements
to such prospectus (including post-effective amendments), and all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such prospectus.
(v) Registrable Securities: The Owned Common Shares and the Other
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Equity Securities; provided, however, that as to any Registrable Securities,
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such securities will cease to constitute "Registrable Securities" for purposes
of this Agreement if and when (i) a Registration Statement with respect to the
sale of such securities has been declared effective by the Commission and such
securities have been sold pursuant thereto in accordance with the intended plan
and method of distribution therefor set forth in the final Prospectus forming
part of such Registration Statement, (ii) such securities have been sold in
satisfaction of all applicable resale provisions of Rule 144 under the
Securities Act, (iii) such securities have been transferred to any person or
entity other than a Permitted Assignee, or (iv) such securities may be freely
sold publicly without either (A) registration under the Securities Act or (B)
compliance with any restrictions (including without limitation restrictions as
to volume or manner of sale) under Rule 144 of the Securities Act.
(w) Registration Expenses: As defined in Section 4.4.
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(x) Registration Statement: Any registration statement of the
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Corporation under the Securities Act that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement
(including post-effective amendments), and all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
(y) Rule 144: Rule 144 promulgated under the Securities Act, as such
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Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(z) SEC: The Securities and Exchange Commission.
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(aa) Securities Act: The Securities Act of 1933, as amended.
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(bb) Stockholder: As defined in the introductory paragraph hereof.
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(cc) Underwritten Registration or Underwritten Offering: A
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registration in which securities of the Corporation are sold to an underwriter
for reoffering to the public.
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II. Piggyback Registration
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2.1. Right to Piggyback. If at any time the Corporation proposes to file a
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registration statement under the Securities Act with respect to an offering of
any class of equity securities (other than a registration statement (i) on Form
X-0, X-0 or any successor form thereto or (ii) filed solely in connection with
(A) an initial public offering of securities by the Corporation or (B) an
offering made solely to employees of the Corporation), whether or not for its
own account, then the Corporation will give written notice (the "Piggyback
Notice") of such proposed filing to the Stockholders at least 30 calendar days
before the anticipated filing date. Such notice will offer the Stockholders the
opportunity to register such amount of Registrable Securities as each
Stockholder may request (a "Piggyback Registration"). Subject to Section 2.2
hereof, the Corporation will include in each such Piggyback Registration all
Registrable Securities with respect to which the Corporation has received
written requests for inclusion therein within 15 calendar days after delivery of
the Piggyback Notice. The Stockholders will be permitted to withdraw all or
part of the Registrable Securities from a Piggyback Registration at any time
prior to the third calendar day immediately preceding the effective date of such
Piggyback Registration.
2.2. Priority on Piggyback Registrations. The Corporation will cause the
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managing underwriter or underwriters of a proposed Underwritten Offering to
permit the Stockholders that have requested Registrable Securities to be
included in the Piggyback Registration for such offering to include all such
Registrable Securities on the same terms and conditions as any similar
securities, if any, of the Corporation included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such Underwritten
Offering advises the Corporation and the selling Stockholder or Stockholders
that the total amount of securities that the Corporation, such Stockholders and
any other persons having rights to participate in such Piggyback Registration
("Other Stockholders") propose to include in such offering is such as to
materially and adversely affect the success of such Underwritten Offering, then:
(a) if such Piggyback Registration is a primary registration by the
Corporation for its own account, the Corporation will include in such Piggyback
Registration: (i) first, all securities to be offered by the Corporation and
(ii) second, up to the full amount of securities requested to be included in
such Piggyback Registration by the Stockholders and Other Stockholders having
rights to participate in such Piggyback Registration (allocated pro rata among
such Stockholders and Other Stockholders on the basis of the amount of
securities requested to be included therein by each such Stockholder or Other
Stockholder) so that the total amount of securities to be included in such
Underwritten Offering is the full amount that, in the opinion of such managing
underwriter or underwriters, can be sold without materially and adversely
affecting the success of such Underwritten Offering; and
(b) if such Piggyback Registration is an underwritten secondary
registration for the account of holders of securities of the Corporation, the
Corporation will include in such registration: (i) first, all securities of the
persons exercising "demand" registration rights requested to be included therein
(including without limitation the person who demands registration and any
persons who are entitled to participate in such Piggyback Registration pursuant
to the same agreement as the person demanding such registration) and (ii)
second, up to the full amount of securities requested to be included in such
Piggyback Registration by the Stockholders and Other
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Stockholders having rights to participate in such Piggyback Registration
(allocated pro rata among such Stockholders and Other Stockholders on the basis
of the amount of securities requested to be included therein by each such
Stockholder or Other Stockholder) so that the total amount of securities to be
included in such Underwritten Offering is the full amount that, in the written
opinion of such managing underwriter or underwriters, can be sold without
materially and adversely affecting the success of such Underwritten Offering.
III. Restrictions on Sale
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Each Stockholder whose Registrable Securities are covered by a Registration
Statement filed pursuant to Article II hereof agrees that, if such Stockholder
is so requested (pursuant to a timely written notice) by the managing
underwriter or underwriters in any Underwritten Offering by the Corporation for
its own account, not to effect any public or private sale or distribution of any
Registrable Securities (except as part of such Underwritten Offering), including
a sale pursuant to Rule 144, during the 10 calendar day period prior to, and
during the 180 calendar day period beginning on, the closing date of such
Underwritten Offering. In the event of such a request, the Corporation may
impose, during such period, appropriate stop-transfer instructions with respect
to the Registrable Securities subject to such restrictions.
IV. Procedures and Expenses
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4.1. Registration Procedures. In connection with the Corporation's
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registration obligations pursuant to Article II, the Corporation will effect
such registrations to permit the sale of Registrable Securities by a Stockholder
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Corporation will as promptly as reasonably practicable:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on an appropriate form under the Securities Act
available for the sale of the Registrable Securities by the selling Stockholder
in accordance with the intended method or methods of distribution thereof,
provided, however, that the Corporation (i) will, before filing, furnish to the
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selling Stockholder, its counsel and the managing underwriter or underwriters,
if any, copies of the Registration Statement or Prospectus proposed to be filed,
which documents will be subject to the review of such Stockholder, its counsel
and such underwriters, (ii) will provide such Persons with a reasonable
opportunity to review and comment on such Registration Statement or Prospectus,
and (iii) will not file any such Registration Statement or Prospectus to which
the selling Stockholder, its counsel or such underwriter, if any, shall
reasonably object on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provision then in
force) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended
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methods of disposition by the selling Stockholder set forth in such Registration
Statement as so amended, or in such Prospectus as so supplemented.
(c) Promptly notify the selling Stockholder, its counsel and the
managing underwriter or underwriters, if any, orally (with subsequent written
confirmation) (i) when a Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Corporation of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of any event which makes any statement made in
such Registration Statement or Prospectus untrue in any material respect or
which requires the making of any changes in a Registration Statement or
Prospectus or other documents so that, (A) in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (vi) of the Corporation's reasonable determination that a post-
effective amendment to a Registration Statement would be appropriate.
(d) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable
date.
(e) If requested by the managing underwriter or underwriters, if any,
or the selling Stockholder, (i) promptly incorporate in a Prospectus supplement
or post-effective amendment such information as the managing underwriter or
underwriters, if any, and such selling Stockholder agree should be included
therein under applicable law and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after the Corporation has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Corporation will not be required to take any actions
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under this Section 4.1(e) that are not, in the opinion of counsel for the
Corporation, in compliance with applicable law.
(f) Furnish to the selling Stockholder, its counsel and each managing
underwriter, if any, at least one conformed copy of the Registration Statement
and any post-effective amendment thereto, including financial statements (but
excluding schedules, all documents incorporated or deemed incorporated therein
by reference and all exhibits).
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(g) Deliver to the selling Stockholder, its counsel and the
underwriter or underwriters, if any, as many copies of the Prospectus relating
to such Registrable Securities (including each preliminary Prospectus) and any
amendment or supplement thereto as such persons may reasonably request and, by
such delivery, the Corporation will be deemed to have consented to the use of
such Prospectus or such amendment or supplement thereto by the selling
Stockholder and the underwriter or underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify, or cooperate with the selling Stockholder, the underwriter
or underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of, such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
the selling Stockholder or underwriter or underwriters reasonably request in
writing; keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective; and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, however, that the
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Corporation will not be required to (i) qualify generally to do business in any
jurisdiction in which it is not then so qualified or (ii) take any action that
would subject it to general service of process in any jurisdiction in which it
is not then so subject.
(i) Cooperate with the selling Stockholder and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates will not bear any restrictive legends; and cause such certificates
to be in such denominations and registered in such names as the managing
underwriters, if any, shall request at least two business days prior to any sale
of Registrable Securities to the underwriters.
(j) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, including such as
may be required solely as a consequence of the nature of the selling
Stockholder's business.
(k) As promptly as practicable upon the occurrence of any event
contemplated by Section 4.1(c)(v) or 4.1(c)(vi) hereof, prepare a supplement or
post-effective amendment to each Registration Statement or a supplement to the
related Prospectus, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(l) Use its best efforts to cause all Registrable Securities covered
by such Registration Statement to be (i) listed on each securities exchange, if
any, on which similar securities issued by the Corporation are then listed or
(ii) authorized to be quoted on The Nasdaq
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Stock Market ("NASDAQ") and on the Nasdaq National Market of NASDAQ if the
securities qualify to be so quoted; in each case, if requested by the managing
underwriter or underwriters, if any.
(m) Engage an appropriate transfer agent and provide such transfer
agent with printed certificates for the Registrable Securities in a form
eligible for deposit with The Depository Trust Company, and provide a CUSIP
number for the Registrable Securities.
(n) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by the selling
Stockholder or, in the event of an Underwritten Offering, those reasonably
requested by the managing underwriter or underwriters) reasonably necessary or
desirable to expedite or facilitate the disposition of such Registrable
Securities, and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, (i) make such representations and warranties to the selling
Stockholder and the underwriter or underwriters, if any, with respect to the
business of the Corporation and its subsidiaries, the Registration Statement or
Prospectus, in each case, in form, substance and scope as are customarily made
by issuers to underwriters in Underwritten Offerings and confirm the same if and
when requested, (ii) obtain opinions of counsel to the Corporation and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriter or underwriters, if any, and
the selling Stockholder) addressed to the selling Stockholder and the
underwriter or underwriters, if any, covering the matters customarily covered in
opinions requested in Underwritten Offerings and such other matters as may be
reasonably requested by the selling Stockholder and underwriter or underwriters,
if any, including without limitation the matters referred to in clause (i)
above, (iii) use its best efforts to obtain "comfort" letters and updates
thereof from the independent certified public accountants of the Corporation
(and, if necessary, any other certified public accountants of any subsidiary of
the Corporation or of any business acquired by the Corporation for which
financial statements and financial data is, or is required to be, included in
the Registration Statement), addressed to the selling Stockholder and each of
the underwriter or underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in "comfort" letters in
connection with Underwritten Offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the selling Stockholder, its
counsel or the managing underwriter or underwriters, if any, to evidence the
continued validity of the representations and warranties of the Corporation and
its subsidiaries made pursuant to clause (i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or similar
agreement entered into by the Corporation. The foregoing actions will be taken
in connection with each closing under such underwriting or similar agreement as
and to the extent required thereunder.
(o) Make available for inspection by a representative of the selling
Stockholder, any underwriter and any attorney or accountant retained by such
selling Stockholder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Corporation and its subsidiaries, and
cause the officers, directors and employees of the Corporation and its
subsidiaries to supply all information reasonably requested by any such
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representative, underwriter, attorney or accountant in connection with such
Registration Statement; provided, however, that any records, information or
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documents that are designated by the Corporation in writing as confidential at
the time of delivery of such records, information or documents will be kept
confidential by such persons unless (i) such records, information or documents
are in the public domain or otherwise publicly available (other than by reason
of breach of this confidentiality provision), (ii) disclosure of such records,
information or documents is required by court or administrative order or is
necessary to respond to inquires of regulatory authorities, or (iii) disclosure
of such records, information or documents, in the opinion of counsel to such
person, is otherwise required by law or regulation (including without limitation
pursuant to the requirements of the Securities Act or regulations promulgated
thereunder); provided, however, that, in the case of subsections (ii) and (iii)
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hereof, prior to making such disclosure the Stockholder will advise and consult
with the Corporation and its counsel as to such disclosure and the nature and
wording of such disclosure and will use its reasonable best efforts to obtain
confidential treatment therefor.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
calendar days after the end of any 12-month period (or 90 calendar days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts Underwritten Offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Corporation, after the effective date of a
Registration Statement, which statements shall cover such 12-month period.
4.2. Information from Stockholder. (a) The Corporation may require each
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selling Stockholder that has requested inclusion of its Registrable Securities
in any Registration Statement to furnish to the Corporation such information
regarding the Stockholder and its plan and method of distribution of such
Registrable Securities as the Corporation may, from time to time, reasonably
request in writing. The Corporation may refuse to proceed with the registration
of such selling Stockholder's Registrable Securities if such selling Stockholder
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
(b) Each selling Stockholder will as expeditiously as possible (i)
notify the Corporation of the occurrence of any event that makes any statement
made in a Registration Statement or Prospectus regarding such selling
Stockholder untrue in any material respect or that requires the making of any
changes in a Registration Statement or Prospectus so that, in such regard, (A)
in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) in the case of a Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) provide the Corporation with such
information as may be required to enable the Corporation to prepare a supplement
or post-effective amendment to any such Registration Statement or a supplement
to such Prospectus as contemplated by Section 4.1(k).
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(c) With respect to any Registration Statement for an Underwritten
Offering, the inclusion of a Stockholder's Registrable Securities therein will
be conditioned upon such Stockholder's participation in such Underwritten
Offering and the execution and delivery by such Stockholder of an underwriting
agreement in form, scope and substance as is customary in Underwritten
Offerings.
4.3. Suspension of Disposition. Each selling Stockholder will be deemed to
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have agreed that, upon receipt of any notice from the Corporation of the
occurrence of any event of the kind described in Section 4.1(c)(ii),
4.1(c)(iii), 4.1(c)(iv), 4.1(c)(v) or 4.1(c)(vi) hereof, such Stockholder will
discontinue disposition of Registrable Securities covered by a Registration
Statement or Prospectus until such Stockholder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 4.1(k) hereof or
until it is advised in writing by the Corporation that the use of the applicable
Prospectus may be resumed and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
4.4. Registration Expenses. (a) All fees and expenses incurred by the
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Corporation in complying with Articles II and III hereof ("Registration
Expenses") will be borne by the Corporation. Such fees and expenses will
include, without limitation, (i) all registration and filing fees (including
without limitation fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with securities or blue sky laws (including without limitation
reasonable fees and disbursements of counsel for the underwriters and selling
Stockholder in connection with blue sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the managing underwriter
or underwriters, if any, or the selling Stockholder may designate)), (ii)
printing expenses (including without limitation the expenses of printing
certificates for securities in a form eligible for deposit with The Depository
Trust Company and of printing prospectuses if the printing of prospectuses is
requested by the selling Stockholder), (iii) messenger, telephone and delivery
expenses, (iv) reasonable fees and disbursements of counsel for the Corporation,
(v) reasonable fees and disbursements of one counsel for all selling
Stockholders collectively (which counsel will be selected by Stockholders
holding a majority of the Registrable Securities sought to be included in the
Registration Statement), (vi) reasonable fees and disbursements of all
independent certified public accountants referred to in Section 4.1(n)(iii)
hereof (including the expenses of any special audit and "comfort" letters
required by or incident to such performance), (vii) reasonable fees and expenses
of any "qualified independent underwriter" or other independent appraiser
participating in an offering pursuant to Section 2720(c) of the Conduct Rules of
the National Association of Securities Dealers, Inc., and (viii) reasonable fees
and expenses of all other persons retained by the Corporation. In addition, the
Corporation will pay its internal expenses (including without limitation all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange, if any, on which similar securities issued by the
Corporation are then listed or the quotation of such securities on NASDAQ.
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(b) Notwithstanding anything to the contrary herein contained, all
underwriting fees, discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities will be borne by the
Stockholder owning such Registrable Securities.
(c) Notwithstanding anything to the contrary herein contained, each
selling Stockholder may have its own separate counsel in connection with the
registration of any of its Registrable Securities, which counsel may participate
therein to the full extent provided herein; provided, however, that all fees and
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expenses of such separate counsel will be paid for by such selling Stockholder.
V. Indemnification
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5.1. Indemnification by the Corporation. The Corporation will indemnify
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and hold harmless, to the fullest extent permitted by law, each Stockholder
owning Registrable Securities registered pursuant to this Agreement, its
officers, directors, trustees, agents and employees, each person who controls
such Stockholder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, trustees, agents
and employees of any such controlling person, from and against all losses,
claims, damages, liabilities, costs (including without limitation the costs of
investigation and attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based solely upon information furnished in writing to the Corporation
by or on behalf of such Stockholder expressly for use therein; provided,
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however, that the Corporation will not be liable to any Stockholder to the
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extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if either (i) (A) such Stockholder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such Stockholder of a Registrable Security to the
person asserting the claim from which such Losses arise and (B) the Prospectus
would have completely corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (ii) such untrue statement or
alleged untrue statement or such omission or alleged omission is completely
corrected in an amendment or supplement to the Prospectus previously furnished
by or on behalf of the Corporation, such Stockholder was furnished with copies
of the Prospectus as so amended or supplemented, and such Stockholder thereafter
failed to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the person asserting the
claim from which such Losses arise.
5.2. Indemnification by Stockholders. Each Stockholder will indemnify and
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hold harmless, to the fullest extent permitted by law, the Corporation, its
officers, directors, agents and employees, each person who controls the
Corporation (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), and the directors, officers, agents and employees of
any such controlling person, from and against all Losses, as incurred, arising
out of or based upon any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus, or arising out of
or based upon any omission of a material
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fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or omission was made in reliance upon and in conformity with
information so furnished in writing by or on behalf of such Stockholder to the
Corporation expressly for use in such Registration Statement, Prospectus or
preliminary prospectus. In no event will the liability of any Stockholder
hereunder be greater in amount than the dollar amount of the proceeds received
by such Stockholder upon the sale of the Registrable Securities giving rise to
such indemnification obligation.
5.3. Conduct of Indemnification Proceedings. If any person shall become
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entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party
will give prompt notice to the party from which such indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any action or
proceeding with respect to which such Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the failure to so notify
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the Indemnifying Party will not relieve the Indemnifying Party from any
obligation or liability except to the extent that the Indemnifying Party has
been prejudiced materially by such failure. If such an action or proceeding is
brought against the Indemnified Party, the Indemnifying Party will be entitled
to participate therein and, to the extent it may elect by written notice
delivered to the Indemnified Party promptly after receiving the notice referred
to in the immediately preceding sentence, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. Notwithstanding the
foregoing, the Indemnified Party will have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless (i) the employment of such counsel shall
have been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party shall not have employed counsel (reasonably satisfactory to the
Indemnified Party) to take charge of such action or proceeding within a
reasonable time after notice of commencement thereof, or (iii) the Indemnified
Party reasonably shall have concluded that there may be defenses available to it
which are different from or additional to those available to the Indemnifying
Party which, if the Indemnifying Party and the Indemnified Party were to be
represented by the same counsel, could result in a conflict of interest for such
counsel or materially prejudice the prosecution of defenses available to the
Indemnified Party. If any of the events specified in clause (i), (ii) or (iii)
of the immediately preceding sentence are applicable, then the fees and expenses
of separate counsel for the Indemnified Party shall be borne by the Indemnifying
Party. If, in any case, the Indemnified Party employs separate counsel, the
Indemnifying Party will not have the right to direct the defense of such action
or proceeding on behalf of the Indemnified Party. All fees and expenses
required to be paid to the Indemnified Party pursuant to this Article V will be
paid periodically during the course of the investigation or defense, as and when
reasonably itemized bills therefor are delivered to the Indemnifying Party in
respect of any particular Loss that is incurred. Notwithstanding anything to
the contrary contained in this Section 5.3, an Indemnifying Party will not be
liable for the settlement of any action or proceeding effected without its prior
written consent. The Indemnifying Party will not consent to entry of any
judgment or enter into any settlement or otherwise seek to terminate any action
or proceeding in which any Indemnified Party is or could be a party and as to
which indemnification or contribution could be sought by such Indemnified Party
under this Article V, unless such judgment, settlement or other termination
provides solely for the payment of money and includes as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release, in form and substance satisfactory to the Indemnified Party, from
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all liability in respect of such claim or litigation for which such Indemnified
Party would be entitled to indemnification hereunder.
5.4. Contribution, Etc. (a) If the indemnification provided for in this
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Article V is unavailable to an Indemnified Party under Section 5.1 or 5.2 hereof
in respect of any Losses or is insufficient to hold such Indemnified Party
harmless, then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, will, jointly and severally, contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party or
Indemnifying Parties, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party or Indemnifying Parties, on the one
hand, and such Indemnified Party, on the other hand, will be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or related to
information supplied by, such Indemnifying Party or Indemnifying Parties or such
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses will
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any action or proceeding.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.4 were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding anything contained in this Section 5.4 to the contrary, an
Indemnifying Party that is a selling Stockholder will not be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities were sold by such selling Stockholder to the public
exceeds the amount of any damages which such selling Stockholder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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.
(c) The provisions of this Article V will survive indefinitely,
notwithstanding any transfer of the Registrable Securities by any Stockholder.
VI. Rule 144
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The Corporation will file all reports required to be filed by it under
the Securities Act and the Exchange Act, and will cooperate with any Stockholder
(including without limitation by making such representations as any such
Stockholder may reasonably request), all to the extent required from time to
time to enable such Stockholder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemptions
provided by Rule 144. Upon the request of any Stockholder, the Corporation will
deliver to such Stockholder a written statement as to whether it has complied
with such filing requirements.
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VII. Miscellaneous
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7.1. Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given or made by
delivery in person, by courier service, by facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
7.1):
(a) If to the Corporation:
XxxxxXxxxxxxx.xxx Company
00 Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax No.: (000) 000-0000
(b) If to a Stockholder, to the then-current address thereof contained
in the stock records of the Corporation.
All such notices and communications will be deemed to have been delivered or
given: upon delivery, if personally delivered; one business day after being
dispatched, if dispatched by same-day or next-day courier guaranteeing timely
delivery; when receipt acknowledged, if sent by facsimile transmission; and five
business days after being deposited in the mail, if mailed.
7.2. Assignment. Neither this Agreement nor the rights and obligations
----------
hereunder may be assigned by operation of law or otherwise (except that this
Agreement and rights and obligations hereunder may be assigned by any
Stockholder to a Permitted Assignee thereof, which Permitted Assignee shall be
deemed to be a Stockholder and a party hereto for all purposes of this Agreement
upon receipt by the Corporation of such Permitted Assigner's written agreement
to be bound by the terms hereof). Notwithstanding the foregoing, nothing herein
contained shall restrict the right of any Stockholder to transfer securities of
the Corporation held by it.
7.3. No Third-Party Beneficiaries. This Agreement will be binding upon and
----------------------------
inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
7.4. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof.
7.5. No Inconsistent Agreements. The Corporation does not have, as of the
--------------------------
Effective Date, and will not, on or after the Effective Date, enter into, any
agreement with respect to its securities which is inconsistent with the rights
granted to the Stockholders in this Agreement or otherwise conflicts with the
provisions hereof.
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7.6. Amendment and Waiver. This Agreement may not be amended or modified
--------------------
or any provision hereof waived except by an instrument in writing signed by the
Corporation and holders of a majority of the then-outstanding Registrable
Securities. Notwithstanding anything contained herein to the contrary, a waiver
that does not adversely affect all of the parties hereto may be executed by only
the adversely affected party or parties.
7.7. Headings. The descriptive headings contained in this Agreement are
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for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.8. Certain Interpretative Matters and Definitions. Unless the context
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otherwise requires, (i) all references to Articles, Sections, or Schedules are
to Articles, Sections, or Schedules of this Agreement, (ii) each term defined in
this Agreement has the meaning assigned to it, (iii) all uses of "herein,"
"hereto," "hereof" and words similar thereto in this Agreement refer to this
Agreement in its entirety, and not solely to the Article, Section, or provision
in which it appears, (iv) "or" is disjunctive but not necessarily exclusive, and
(v) words in the singular include the plural and vice versa.
---- -----
7.9. Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced under any law or public policy,
all other terms and provisions of this Agreement will nevertheless remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner.
7.10. Governing Law. This Agreement will be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
7.11. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties will be
entitled to specify performance of the terms hereof, in addition to any other
remedy at law or equity.
7.12. Attorneys' Fees. In any action or proceeding brought to enforce any
---------------
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party will be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.
7.13. Further Assurances. The parties hereto will do such further acts and
------------------
things necessary to ensure that the terms of this Agreement are carried out and
observed.
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IN WITNESS WHEREOF, the Corporation has executed this Agreement as of
the date first written above.
XXXXXXXXXXXXX.XXX COMPANY
By:
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Name:
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Title:
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