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EXHIBIT D
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FORM OF
REGISTRATION RIGHTS AGREEMENT
by and between
INPUT/OUTPUT, INC.
and
SCF-IV, L.P.
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into this ____ day of ____________, by and between Input/Output Inc., a
Delaware corporation (the "Company") and SCF-IV, L.P., a Delaware limited
partnership (the "Purchaser").
RECITALS:
This Agreement is made pursuant to the Purchase Agreement, dated April
21, 1999 between the Company and the Purchaser (the "Purchase Agreement"). In
order to induce the Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
AGREEMENT:
The parties hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms will have the
following meanings:
"Demand Registration" has the meaning set forth in Section 3(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Initial Registration Date" has the meaning set forth in Section 3(a).
"Majority" means 51% or more.
"Person" means any individual, partnership, corporation, limited
liability company, trust or unincorporated organization or association, or a
government or agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 4(a).
"Registration Expenses" has the meaning set forth in Section 8(a).
"Registrable Securities" means the Underlying Shares and any other
securities issued or issuable with respect to the Underlying Shares by way of
stock dividend or stock split or in connection with a combination of shares,
reclassification, recapitalization, merger, consolidation or other
reorganization; provided, however, that a Registrable Security shall cease to
be a Registrable Security to the extent provided in Section 2(a).
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"Rule 144" means Rule 144 under the Securities Act (or any similar
provisions then in force).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Series B Preferred Stock" means shares of the Company's Series B
Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" means shares of the Company's Series C
Preferred Stock, par value $.01 per share.
"Shares" means all shares of Series B Preferred Stock or Series C
Preferred Stock that are issued and sold pursuant to the Purchase Agreement.
"Shelf Registration" has the meaning set forth in Section 5.
"Underlying Shares" means all Underlying Shares (as defined in the
Purchase Agreement) issuable upon conversion of the Shares.
"Underwritten registration" or "underwritten offering" means any
registration in which securities of the Company are sold pursuant to a firm
commitment underwriting.
(b) All undefined capitalized terms used herein shall have the meaning
set forth in the Purchase Agreement.
2. SECURITIES SUBJECT TO THIS AGREEMENT.
(a) Registrable Securities. The securities entitled to the benefits of
this Agreement are the Registrable Securities but, with respect to any
particular Registrable Security, only so long as such security continues to be
a Registrable Security. A Registrable Security shall cease to be a Registrable
Security when (i) it has been disposed of in a transaction effectively
registered under the Securities Act, (ii) has been sold pursuant to Rule 144,
(iii) it is held by a Person not entitled to the benefits of registration
rights under this Agreement by virtue of Section 12(f) hereof, (iv) if the
holder thereof is an "affiliate" of the Company within the meaning of Rule 144,
at such time as the Registrable Securities held by such holder constitute less
than 1% of the then outstanding shares of Common Stock of the Company and such
Registrable Securities could be sold without registration pursuant to Rule 144,
(v) if the holder thereof is not an "affiliate" of the Company within the
meaning of Rule 144, at such time as the Registrable Securities held by such
holder constitute less than 4% of the then outstanding shares of Common Stock
of the Company and such Registrable Securities could be sold freely pursuant to
paragraph (k) of Rule 144, or (vi) it has otherwise been transferred and a new
certificate or other evidence of ownership for it not bearing the legend set
forth in Section 5.8(a) of the Purchase Agreement (or other legend of similar
import) has been delivered
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(not subject to any stop transfer order) by or on behalf of the Company and no
other restriction on transfer exists.
(b) Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns Registrable
Securities or has the right to acquire such Registrable Securities (whether
upon conversion, exercise or exchange of other securities or otherwise),
disregarding any legal restrictions upon the exercise of such right, whether or
not such acquisition has actually been effected.
3. DEMAND REGISTRATION.
(a) Requests for Registration. Subject to the provisions of Section
3(b), at any time on or after the earlier of (i) the Initial Conversion Date as
defined in the Certificate of Designation for the Series B Preferred Stock, or
(ii) the date 60 days prior to the third anniversary of the date of the
original issuance of the Series B Preferred Stock pursuant to the Purchase
Agreement (such earlier date being referred to herein as the "Initial
Registration Date"), any holder or holders of at least 25% of the then
outstanding Registrable Securities may request at any time a registration by
the Company under the Securities Act of all or part of their Registrable
Securities (a "Demand Registration"); provided, however that the number of
Registrable Securities to be included in such Demand Registration must be at
least 1,000,000 (such number of shares to be appropriately adjusted in the
event of any stock dividend or stock split or in connection with a combination
of shares, recapitalization, reclassification, merger, consolidation or other
reorganization) or such lesser number of Registrable Securities as have an
aggregate Market Price (as defined in the Certificate of Designation for the
Series B Preferred Stock) of at least $10,000,000 as of the date of such
request. Within ten days after receipt of such request, the Company will serve
written notice by overnight courier of such registration request to all holders
of Registrable Securities and will, subject to the provisions of Section 3(b),
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15
business days after distribution to the applicable holder of the Company's
notice. All requests made pursuant to this Section 3(a) will specify the amount
of Registrable Securities to be registered and will also specify the intended
method of disposition thereof; provided, however, that such method of
disposition will be limited to an underwritten offering if requested by the
holders of a Majority of the Registrable Securities requested to be included in
such registration.
(b) Number of Registrations. The holders of Registrable Securities
will be entitled to request an aggregate of two Demand Registrations. A
registration initiated as a Demand Registration will not constitute a Demand
Registration for the purposes of the foregoing (i) unless such registration has
been declared effective by the SEC and remains effective for the period set
forth in Section 7(a)(iii); provided, however, that, if more than 15% of the
Registrable Securities requested to be included in a Demand Registration which
is an underwritten registration can be excluded therefrom by reason of the
provisions of Section 3(e), the holders of Registrable Securities will be
entitled to one additional Demand Registration or (ii) if after such
registration has been declared effective by the SEC it is subject to any stop
order, injunction or other adverse order or action of the SEC or other
governmental authority.
(c) Intentionally Omitted.
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(d) No Rights of Company or Other Securityholders to Piggyback on
Demand Registrations. Neither the Company nor any of its securityholders (other
than the holders of Registrable Securities in such capacity) has any right to
include any of the Company's securities in a registration statement initiated
as a Demand Registration under this Section 3, unless (i) such securities are
of the same class as the Registrable Securities being registered, (ii) the
holders of a Majority of the Registrable Securities being registered in such
registration consent to such inclusion in writing, subject to Section 3(e),
(iii) if such Demand Registration is an underwritten offering, the managing
underwriters agree that some or all of such securities can be included without
adversely affecting such offering or offering price and (iv) the Company or the
selling securityholders, as applicable, agree to sell their securities on the
same terms and conditions as apply to Registrable Securities and the holders of
such Registrable Securities. If any securityholders of the Company (other than
the holders of Registrable Securities in such capacity) register securities of
the Company pursuant to a Demand Registration hereunder in accordance with the
provisions of this Section 3(d), such securityholders will pay the fees and
expenses of counsel to such securityholders and their pro rata share of the
Registration Expenses if such pro rata share of the Registration Expenses for
such registration are not paid by the Company for any reason.
(e) Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company and the
selling holders of the Registrable Securities in writing that in their opinion
the number of Registrable Securities requested to be included exceeds the
number of securities which can be sold in such offering without adversely
affecting the proposed offering or the offering price, the Company will include
in such registration the number of Registrable Securities which in the opinion
of such underwriters can be sold without adversely affecting the proposed
offering or the offering price, and such securities will be allocated pro rata
among the holders of Registrable Securities on the basis of the number of the
Registrable Securities requested to be included in such registration by their
respective holders. If securities (other than Registrable Securities) are
proposed to be included by the Company or its other securityholders in a Demand
Registration which is an underwritten offering (subject to and in accordance
with the provisions of Section 3(d)) and the managing underwriters advise the
Company and the selling holders of Registrable Securities in writing that fewer
than all of said other securities can be sold, in addition to all of the
Registrable Securities being registered, without adversely affecting the
proposed offering or the offering price in such underwritten offering, those
other securities which are permitted to be included will be allocated among the
Company and the other securityholders in such proportions as such
securityholders and the Company may agree.
(f) Selection of Underwriters. If any Demand Registration is an
underwritten offering, or a best efforts underwritten offering, the investment
banker or investment bankers and manager or managers that will administer the
offering will be selected by the Company; provided, however, such investment
bankers and managers must be reasonably satisfactory to the holders of a
Majority of the Registrable Securities requested to be included in such
offering.
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(g) Other Registration Rights Agreements. Without the prior written
consent of the holders of a Majority of the Registrable Securities, the Company
will not enter into any new registration rights agreements that affect in any
material respect the rights of the holders of the Registrable Securities.
4. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. On or after the Initial Registration Date,
whenever the Company proposes to register any securities under the Securities
Act (excluding registrations on Form S-4 or S-8 or equivalent forms), other
than pursuant to a Demand Registration under Section 3 (a "Piggyback
Registration"), the Company will give written notice to all holders of
Registrable Securities of its intention to effect such a registration not later
than the earlier to occur of (i) the tenth day following receipt by the Company
of notice of exercise of other demand registration rights or (ii) 30 days prior
to the anticipated filing date. Subject to the provisions of Sections 4(c) and
(d), the Company will include in such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten business days after the receipt by the applicable
holder of Registrable Securities of the Company's notice. The holders of
Registrable Securities will be permitted to withdraw all or any part of such
holder's Registrable Securities from a Piggyback Registration at any time prior
to the date such Piggyback Registration becomes effective with the SEC,
provided that, in the case of an underwritten offering, such withdrawal is
consistent with customary and reasonable restrictions agreed upon by the
managing underwriter. If a Piggyback Registration is an underwritten offering
effected under (i) Section 4(c), all Persons whose securities are included in
the Piggyback Registration will be obligated to sell their securities on the
same terms and conditions as apply to the securities being issued and sold by
the Company or (ii) Section 4(d), all Persons whose securities are included in
the Piggyback Registration will be obligated to sell their securities on the
same terms and conditions as apply to the securities being sold by the Person
or Persons who initiated the Piggyback Registration under Section 4(d).
Notwithstanding the foregoing, if, at any time after giving written notice of a
Piggyback Registration but prior to the effective date of the registration
statement filed in connection therewith, the Company shall determine for any
reason not to register such securities, the Company may, at its election give
written notice of such determination to the holders of Registrable Securities
and thereupon shall be relieved of its obligation to register any Registrable
Securities in such registration.
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities included in a Piggyback Registration will be paid by the
Company.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the total
number or dollar amount of securities requested to be included in such
registration exceeds the number or dollar amount of securities which can be
sold in such offering without adversely affecting the offering or the offering
price, the Company will include in such registration: (i) first, all securities
the Company proposes to sell, (ii) second, up to the full number or dollar
amount of Registrable Securities requested to be included in such registration
in excess of the number or dollar amount of securities the Company proposes to
sell which, in the opinion of such underwriters, can be sold without adversely
affecting the offering or the offering price (allocated pro rata among the
holders of such Registrable Securities on the basis of the dollar
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amount or number of Securities requested to be included therein by each such
holder) and (iii) third, such other securities (provided such securities are of
the same class as the securities being sold by the Company) as are requested to
be included in such registration equal to the balance, if any, allocated among
the holders of such securities in such proportions as the Company and such
holders may agree.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities (other holders of Registrable Securities in their capacity as such),
and the managing underwriters advise the Company in writing that in their
opinion the dollar amount or number of securities requested to be included in
such registration exceeds the dollar amount or number of securities which can
be sold in such offering without adversely affecting the offering or the
offering price, the Company will include in such registration (i) first, the
number or dollar amount of securities which in the opinion of such underwriters
can be sold without adversely affecting the offering or the offering price of
the securities intended to be included therein on behalf of the other holders
of the Company's securities, allocated among the holders of such securities in
such proportions as the Company and such holders may agree, and (ii) to the
extent of the balance, if any, the Registrable Securities requested to be
included in such registration, allocated pro rata among the holders of such
Registrable Securities on the basis of the dollar amount or number of
securities requested to be included therein by each such holder.
(e) Underwritten Offering of Different Classes of Securities.
Notwithstanding anything to the contrary in this Section 4, if a Piggyback
Registration is an underwritten offering of a class of securities of the
Company different from the Registrable Securities proposed to be included in
such offering and the managing underwriters advise that in their opinion
Registrable Securities of a different class cannot be included in such offering
without adversely affecting the offering or the offering price, then the
holders of the Registrable Securities shall not be entitled to include
Registrable Securities in such registration.
(f) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, as between the Company and the holders of Registrable
Securities, the Company will have the right to select the investment banker or
investment bankers and manager or managers to administer the offering.
5. SHELF REGISTRATION.
On or prior to the 60th day prior to the fifth anniversary of the date
of original issuance of the Series B Preferred Stock pursuant to the Purchase
Agreement, the Company shall file a registration statement on Form S-3 (or any
similar short form registration), if the Company and the transaction then
qualify for the use of such short form registration, to register for resale
from time to time pursuant to Rule 415 under the Securities Act (or any similar
or successor rule) (the "Shelf Registration") all then outstanding Registrable
Securities (unless any holder thereof instructs the Company otherwise with
respect to his Registrable Securities) and shall use its reasonable best
efforts to cause such Shelf Registration to become effective as soon as
practicable after such filing and to maintain the effectiveness of such Shelf
Registration until the first anniversary of the Mandatory Conversion Date as
defined in the Certificate of Designation for the Series B Preferred
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Stock or such earlier date when all the Registrable Securities covered by such
registration statement are sold or cease to be Registrable Securities. All
Registration Expenses in connection with the Shelf Registration shall be borne
by the Company. The Company and other holders of securities of the Company may
not register securities under a registration statement filed pursuant to this
Section 5, without the consent of at least a Majority of the Registrable
Securities included in such Shelf Registration.
6. DEFERRAL OF FILING; SUSPENSION OF SHELF REGISTRATION STATEMENT.
Notwithstanding anything to the contrary in this Agreement:
(a) The Company may defer the filing (but not the preparation) of a
registration statement required by Section 3 or Section 5 until a date not
later than 60 days (less the number of days during the previous twelve months
that the use of a prospectus was suspended pursuant to this Section 6 or
Section 12(a)) after the date of receipt by the Company of a request for a
Demand Registration (or after the required filing date in the case of a
registration required to be filed pursuant to Section 5) if at the time the
Company receives such request it is engaged in confidential negotiations or
other confidential business activities, disclosure of which would be required
in such registration statement (but would not be required if such registration
statement were not filed) and the Company determines in good faith that such
disclosure would be materially detrimental to the Company and its shareholders.
Any registration statement the filing of which is deferred pursuant to the
foregoing shall be filed forthwith if the negotiations or other activities are
disclosed or terminated. In order to defer the filing of a registration
statement pursuant to this Section 6, the Company shall promptly, upon
determining to seek such deferral, deliver to each requesting holder (or, in
the case of a registration pursuant to Section 5, each holder) a certificate
signed by the President or Chief Financial Officer of the Company stating that
the Company is deferring such filing in accordance with this Section 6(a).
Within 20 days after receiving such certificate, the requesting holder may
withdraw such request by giving notice to the Company, and, if withdrawn, the
request for a Demand Registration shall be deemed not to have been made for all
purposes of this Agreement, provided that the Company may defer the filing of a
registration statement pursuant to the foregoing not more than once during any
twelve month period; and
(b) If the Company has effected the Shelf Registration pursuant to
Section 5, the Company may, at any time following the 30th day after the
effectiveness thereof and subject to the last sentence of this Section 6, give
notice to the holders of Registrable Securities directing that all sales under
such shelf registration statement must be deferred and not made for up to 30
days (less the number of days during the previous twelve months that the use of
a prospectus was suspended pursuant to this Section 6 or Section 12(a)) if at
the time the Company gives such notice, the Company is engaged in confidential
negotiations or other confidential business activities, disclosure of which
would be required to be made in the prospectus included in such shelf
registration statement (but would not be required if such sale were not made)
in order to prevent such prospectus from containing any untrue statement of a
material fact or omitting to state any material fact necessary to make the
statements therein not misleading and the Company determines in good faith that
such disclosure would be materially detrimental to the Company. Any such notice
given pursuant to this Section 6(b) shall be accompanied by a certificate
signed by the President or Chief Financial Officer of the Company stating that
the Company is deferring such filing in accordance
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with this Section 6(b). A suspension of the Shelf Registration pursuant to this
Section 6(b) shall be lifted immediately if the negotiations or other
activities are disclosed or terminated. The Company may suspend the use of the
Shelf Registration pursuant to this Section 6(b) not more than once during any
twelve month period.
7. REGISTRATION PROCEDURES.
(a) Whenever the Company is obligated to register any Registrable
Securities in accordance with the terms and conditions of this Agreement, the
Company will use its best efforts to effect the registration and to permit the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(i) prepare and file with the SEC, not later than 60 days after
receipt of a request to file a registration statement with respect to
such Registrable Securities (or on or prior to the required filing
date specified in Section 5 with respect to the Shelf Registration), a
registration statement with respect to such Registrable Securities,
and use its best efforts to cause such registration statement to
become effective; provided, however, that before filing a registration
statement or prospectus or any amendments or supplements thereto, the
Company will furnish to the counsel selected by the holders of a
Majority of the Registrable Securities being registered in such
registration statement copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel;
each such registration statement will be on a form for which the
Company then qualifies, which is available for the sale of the
Registrable Securities in accordance with the intended method of
disposition thereof and which is reasonably satisfactory to the
holders of a Majority of the Registrable Securities being registered
(or the managing underwriters in the case of a firm or best efforts
underwriting offering);
(ii) notify each seller of Registrable Securities of any stop
order issued by the SEC and take all reasonable actions required to
prevent the entry of such stop order or to remove it at the earliest
possible time if entered;
(iii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 90 days, or such
shorter period as may be required if all Registrable Securities
covered by such registration statement are sold prior to the
expiration of such 90-day period (except in connection with an
underwritten offering, in which case such registration statement shall
be kept effective as long as the underwriters reasonably request in
the underwriting agreement and except in the case of the Shelf
Registration, which shall be kept effective for the applicable period
specified in Section 5), and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
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(iv) furnish to each seller of Registrable Securities such number
of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(v) use all commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky
laws of such jurisdictions as any seller reasonably requests and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller;
provided, however, that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 7(a)(v),
(ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(vi) use all commercially reasonable efforts to cause the
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(vii) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement or any
document incorporated therein by reference contains an untrue
statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading, and prepare
and file promptly with the SEC a supplement or amendment to such
prospectus or any such document incorporated therein by reference so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(viii) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company
are then listed;
(ix) provide a transfer agent and registrar for all Registrable
Securities and a CUSIP number for all such Registrable Securities, in
each case not later than the effective date of such registration
statement;
(x) enter into such customary agreements (including an
underwriting agreement in customary form with customary lock-up
provisions not to exceed 180 days) and take all such other actions in
connection therewith as the holders of a Majority of the Registrable
Securities being registered or the managing underwriters, if any,
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
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(xi) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement;
(xii) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the
type customarily covered by cold comfort letters as the holders of a
Majority of the Registrable Securities being registered or the
managing underwriters reasonably request; and
(xiii) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month after the
effective date of the Registration Statement, which earnings statement
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities as the Company may
from time to time reasonably request.
8. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger, telephone and delivery expenses, and
fees and disbursements of counsel for the Company and of all independent
certified public accountants (including the expenses of any special audit or
"cold comfort" letters required by or incident to such performance), fees and
expenses of underwriters customarily paid by the issuer of securities
(excluding discounts and commissions), the reasonable fees and expenses of any
special experts retained by the Company or at the request of the managing
underwriters in connection with such registration and fees and expenses of
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne by the Company; provided; however, that
all out of pocket Registration Expenses incurred by the Company pursuant to
Section 3 shall be borne by the Sellers of Registrable Securities and other
persons (including the Company) selling Common Stock pursuant to the applicable
registration statement on a pro rata basis based on the number of shares of
Common Stock to be sold pursuant to such registration statement. (b) In
connection with each registration hereunder, the holders of the Registrable
Securities included therein shall be responsible for all fees and expenses of
their counsel and for all underwriting discounts and commissions payable in
respect of any sales of Registrable Securities.
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9. INDEMNIFICATION; CONTRIBUTION.
(a) Indemnification by Company. In the event of any registration of
Registrable Securities hereunder, the Company agrees to indemnify to the full
extent permitted by law, each holder of Registrable Securities, its officers,
directors and partners and each Person who controls such holder (within the
meaning of the Securities Act and the Exchange Act) against all losses, claims,
damages, liabilities and expenses (or actions in respect thereof) 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
relating to the registration of such Registrable Securities or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are contained in any information furnished in writing to the Company
by such holder expressly for use therein. The Company will reimburse each
holder of Registrable Securities, its officers, directors, constituent partners
and controlling Persons for any legal and other expenses as incurred in
connection with investigating or defending any such losses, claims, damages,
liabilities, expenses or actions. In connection with a firm commitment or best
efforts underwritten offering, the Company will indemnify the underwriters or
agents, their officers, directors, partners and each Person who controls such
underwriters (within the meaning of the Securities Act and the Exchange Act) or
agents to the same extent as provided above (or such greater extent as may be
customarily required by the managing underwriters) with respect to the
indemnification of the holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. In connection
with any registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and agrees to
indemnify, to the extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act and the Exchange Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of a material fact or any omission or alleged omission of a material fact
required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any written information or affidavit
furnished by such holder specifically for such registration statement and then
only to the extent of the net proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement in reliance upon
such information. The holders of Registrable Securities will reimburse, to the
extent of the net proceeds received by the holders of Registrable Securities,
the Company, its officers, directors and controlling persons for any legal and
other expenses as incurred in connection with investigation or defending any
such losses, claims, damages, liabilities, expenses or actions.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification (but omission of
such notice shall not relieve the indemnifying party from liability hereunder
except to the extent such indemnifying party is actually prejudiced by such
failure to give notice) and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is not assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for any settlement
made without its consent (but such
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consent will not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of an unconditional release from all liability in respect to
such claim or litigation. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless an actual conflict of
interest exists between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party will be obligated to pay the fees and expenses of such additional counsel
or counsels.
(d) Contribution. If the indemnification provided for in Section 9(a)
is unavailable or insufficient to hold harmless each of the indemnified parties
against any losses, claims, damages, liabilities and expenses (or actions in
respect thereof) to which such persons may become subject under the Securities
Act, then the indemnifying party shall, in lieu of indemnifying each party
entitled to indemnification hereunder, contribute to the amount paid or payable
by such party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and such indemnified persons on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses. The relative fault of such persons shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact, or omission or alleged omission to state a material fact,
relates to information supplied by or concerning the indemnifying party on the
one hand, or by such indemnified person on the other, and such person's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 9(d) were
determined by pro rata allocation or by any other allocation that does not take
into account the equitable considerations referred to in this Section 9(d). No
person guilty of fraudulent misrepresentation within the meaning of the Act
shall be entitled to contribution from any person that is not guilty of such
fraudulent misrepresentation.
10. RULE 144.
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required
to file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available such information), and it will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement that it has complied with such requirements.
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11. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS; LOCKUP.
No Person may participate in any underwritten registration hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
customary questionnaires, powers of attorney, underwriting agreements and other
documents required under the terms of such underwriting arrangements. If a
holder of Registrable Securities is participating in a Piggyback Registration
that is an underwritten registration, such holder will (if requested by the
managing underwriter) enter into an agreement not to sell or otherwise transfer
or dispose of any Registrable Securities or other securities of the Company
held by such holder for a specified period of time (not to exceed 120 days)
following the effective date of the registration statement. Such agreement
shall be in writing in a form reasonably satisfactory to the holder, the
Company and the managing underwriter. The Company may impose stop transfer
instructions with respect to the Registrable Securities or other securities
subject to the foregoing restriction until the end of the lock-up period.
12. MISCELLANEOUS.
(a) Right to Suspend. The Company may, by notice in writing to each
holder of Registrable Securities, require the holder of Registrable Securities
to suspend use of any prospectus included in a registration statement filed
hereunder if the Company reasonably determines that it contains an untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein not misleading or that any transaction in which the
Company is engaged or proposes to engage would require an amendment to such
registration statement or a supplement to such prospectus (including any such
amendment or supplement made through incorporation by reference to a report
filed under Section 13 of the Exchange Act). Each holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in this Section 12(a), such holder
will forthwith discontinue disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until such
holder's receipt of the copies of a properly supplemented or amended
prospectus, and, if so directed by the Company, such holder will deliver to the
Company all copies, other than permanent file copies, then in such holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company gives any such
notice, the time period mentioned in Section 7(a)(iii), if applicable, will 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 each seller of
Registrable Securities covered by such registration statement has received the
copies of such supplemented or amended prospectus. The Company agrees to use
its reasonable best efforts to cause any suspension of use of any prospectus
pursuant to this paragraph to be as short a period of time as possible.
(b) Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of at least a Majority of the outstanding Registrable
Securities.
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(d) Registrable Securities Held by the Company or its Affiliates.
Whenever the consent or approval of holders of all or any specified percentage
of Registrable Securities is required hereunder, Registrable Securities held by
the Company or any of its affiliates (other than a Purchaser if it is such an
affiliate) will not be counted in determining whether such consent or approval
was given by such holders.
(e) Notices. All notices hereunder shall be in writing and shall be
effective (a) on the day on which delivered if delivered personally or
transmitted by telex or telegram or telecopier with evidence of receipt, (b)
one business day after the date on which the same is delivered to a nationally
recognized overnight courier service with evidence of receipt, or (c) five
business days after the date on which the same is deposited, postage prepaid,
in the U.S. mail, sent by certified or registered mail, return receipt
requested, and addressed to the party to be notified at the address set forth
in the Purchase Agreement for the Company, or at the address for the holder of
the Registrable Securities set forth in a registry maintained by the Company,
or at such other address and/or telecopy or telex number and/or to the
attention of such other person as the Company or the holder of the Registrable
Securities may designate by ten-day advance written notice.
(f) Successors and Assigns; Transfer of Registration Rights. This
Agreement will inure to the benefit of and be binding upon the successors and
assigns of each of the parties; provided however that the registration rights
granted by this Agreement may be transferred only (i) by operation of law, or
(ii) to any Person to whom the Purchaser sells or otherwise transfers
Registrable Securities who (x) upon such transfer, will hold 1,000,000 or more
Registrable Securities (such number of shares to be appropriately adjusted in
the event of any stock dividend or stock split or in connection with a
combination of shares, recapitalization, reclassification, merger,
consolidation or other reorganization) and (y) agrees to be bound by the terms
and conditions of this Agreement and signs an addendum to this Agreement to
such effect.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and will not limit or otherwise affect the meaning hereof.
(i) Governing Law; Jurisdiction. This Agreement will be governed by
and construed in accordance with the laws of the State of Texas, without giving
effect to conflict of law principles. Any holder of Registrable Securities may
bring any action or proceeding to enforce or arising out of this Agreement or
in the instruments and agreements annexed hereto in any court of competent
jurisdiction.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein will not be affected or impaired thereby.
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(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(l) Attorney's Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof or thereof is
validly asserted as a defense, the successful party will be entitled to recover
reasonable attorney's fees in addition to any other available remedy.
(m) Exchange Securities. If any securities are issued in exchange for
the Shares pursuant to the provisions of Section 5.11 of the Purchase
Agreement, this Agreement shall be interpreted to provide for registration
rights equivalent to those provided hereunder with respect to any shares of
common stock (or any securities into which such common stock is exchanged,
converted, reclassified or recapitalized) of the Company issuable upon
conversion, exercise or exchange of such securities.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INPUT/OUTPUT INC.
By:
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Name:
Title:
SCF-IV, L.P.
By: SCF-IV, G.P., Limited Partnership,
its General Partner
By: X. X. Xxxxxxx & Associates,
Incorporated, its General Partner
By:
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