Exhibit 10.9
FORM OF REGISTRATION RIGHTS AGREEMENT
between
HVOLT Enterprises, Inc.
a Delaware corporation
and
Westar Industries, Inc.
a Kansas corporation
Dated as of [ ], 200_
TABLE OF CONTENTS
ARTICLE I Certain Definitions........................................ 1
Section 1.1 Defined Terms.......................................... 1
Section 1.2 General................................................ 3
Section 1.3 Headings............................................... 3
ARTICLE II Representations and Warranties............................ 3
Section 2.1 Representations and Warranties of the Stockholder...... 3
Section 2.2 Representations and Warranties of the Company.......... 4
ARTICLE III Registration Rights...................................... 4
Section 3.1 Demand Registrations................................... 4
Section 3.2 "Piggy-Back" Registrations............................. 7
Section 3.3 Additional Agreements.................................. 8
Section 3.4 Registration Procedures................................ 8
Section 3.5 Registration Expenses.................................. 15
Section 3.6 Indemnification; Contribution.......................... 15
Section 3.7 Underwriters........................................... 18
Section 3.8 Exchange Act Filings; Rule 144; Rule 144A.............. 18
Section 3.9 Agreement of the Stockholder........................... 19
Section 3.10 Legends................................................ 19
Section 3.11 Treatment of Convertible Preferred Stock............... 20
Section 3.12 Other Registration Rights Agreements................... 20
ARTICLE IV Miscellaneous............................................. 20
Section 4.1 Term of Agreement, Termination......................... 20
Section 4.2 Recapitalizations, Exchanges, Etc. Affecting
the Shares............................................. 20
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Section 4.3 Other Company Securities............................... 20
Section 4.4 Amendment; Conflict.................................... 20
Section 4.5 Notices................................................ 21
Section 4.6 Integration............................................ 22
Section 4.7 Binding Effect; Benefit................................ 22
Section 4.8 Assignability.......................................... 22
Section 4.9 Counterparts........................................... 22
Section 4.10 Applicable Law......................................... 22
Section 4.11 Stockholder Agreement.................................. 22
Section 4.12 Severability........................................... 22
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of [
], 200_ is entered into between Westar Industries, Inc., a Kansas corporation
(the "Stockholder"), and HVOLT Enterprises, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Company, Western Resources, Inc., Kansas corporation
("WRI"), Public Service Company of New Mexico, a New Mexico corporation ("PNM"),
HVK, Inc., a Kansas corporation and a wholly owned subsidiary of the Company
("Merger Sub-1") and HVNM, Inc., a New Mexico corporation and a wholly owned
subsidiary the Company ("Merger Sub-2") have entered into an Agreement and Plan
of Restructuring and Merger, dated as of November 8, 2000, (the "Merger
Agreement"), pursuant to which the Stockholder will become a wholly owned
subsidiary of the Company (the "Merger") and pursuant to which, in connection
with the transactions contemplated thereby, the Stockholder has acquired
beneficial ownership of 55,000,000 shares of common stock of the Company, par
value $.001 per share (the "Common Stock") and up to [ ] shares of Series
Convertible Preferred Stock of the Company, par value $.001 per share the
"Convertible Preferred Stock");
WHEREAS, the parties each desire to make certain covenants and
agreements concerning, among other things, the registration from time to time of
the Stockholder's shares of Common Stock, Common Stock obtainable upon
conversion of Convertible Preferred Stock, and Convertible Preferred Stock (the
"Shares") under the Securities Act of 1933, as amended (the "Securities Act");
and
WHEREAS, concurrently with the execution and delivery hereof, the
Stockholder and Parent have entered into an agreement with respect to the
Stockholder's investment in the Company (the "Stockholder Agreement").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
Company and the Stockholder hereby agree as follows:
ARTICLE I
Certain Definitions
-------------------
Defined Terms. In addition to other terms defined elsewhere in this
Agreement, as used in this Agreement, the following capitalized terms have the
respective meanings set forth below
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person. For the purposes of
this definition, "control" when used with respect to any particular person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blackout Period" shall have the meaning assigned to such term in
Section 3.6(a).
"Claims" shall have the meaning assigned to such term in Section
3.6(a).
"Company Maximum Number" shall have the meaning assigned to such term
in Section 3.2(b).
"Demand Period" shall have the meaning assigned to such term in
Section 3.1(a).
"Demand Registration" shall have the meaning assigned to such term in
Section 3.1(a).
"Demand Request" shall have the meaning assigned to such term in
Section 3.1(a).
"Effective Period" shall have the meaning assigned to such term in
Section 3.4(a)(iii).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation by
reference of substantial information by reference to other documents filed by
the Company with the SEC.
"Holder" shall mean, with respect to any shares of Common Stock, the
signatory to this Agreement; and the terms "hold", "held" and "holding" shall
have meanings correlative to the foregoing.
"Inspectors" shall have the meaning assigned to such term in Section
3.4(a)(iv).
"Other Holder" shall have the meaning assigned to such term in Section
3.2(b).
"person" shall mean any individual, corporation, company, partnership,
joint venture, trust, group (as such term is used in Rule 13d-5 under the
Exchange Act), business association, government or political subdivision
thereof, governmental body or other entity.
"Piggy-Back Registration" shall have the meaning assigned to such term
in Section 3.2(a).
"Piggy-Back Request" shall have the meaning assigned to such term in
Section 3.2(a).
"Records" shall have the meaning assigned to such term in Section
3.4(a)(iv).
"Registered Shares" shall have the meaning assigned to such term in
Section 3.4(a)(xviii).
"Registration" shall have the meaning assigned to such term in Section
3.2(a).
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"Registration Expenses" shall have the meaning assigned to such term
in Section 3.5.
"SEC" shall mean the United States Securities and Exchange Commission
or any other United States federal agency at the time administering the
Securities Act or the Exchange Act, as applicable, whichever is the relevant
statute.
"Stockholder Group" shall mean the Stockholder, any Stockholder
Affiliate and any Person with whom any Stockholder or any Affiliate of any
Stockholder is part of a 13D Group.
"Stockholder Maximum Number" shall have the meaning assigned to such
term in Section 3.1(e).
"13D Group" shall mean any group of Persons acquiring, holding, voting
or disposing of any Shares which would be required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder to file a statement on
Schedule 13D with the Commission as a "person" within the meaning of Section
13(d)(3) of the Exchange Act.
General. Unless the context otherwise requires, references in this
Agreement to any "section" or "article" shall mean a section or article of this
Agreement, as the case may be, and the terms "hereof," "hereunder" and "hereto"
and words of similar meaning shall mean this Agreement in its entirety and not
any particular provisions of this Agreement. Unless the context otherwise
requires, the terms defined herein include the singular as well as the plural.
Unless the context otherwise requires, each reference herein to the
Securities Act, the Exchange Act or Rule 144 (or any other rule, regulation or
form promulgated under either such statute) shall be deemed to mean, as of any
time, such statute, rule, regulation or form as then in effect, after all
amendments thereto, or, if not then in effect, any successor statute, rule,
regulation or form as then in effect, after all amendments thereto.
Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
ARTICLE II
Representations and Warranties
------------------------------
Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Company (i) that it has been duly
organized and is an existing corporation in good standing as a corporation under
the laws of the state of its incorporation, (ii) that it has all requisite
corporate power and authority and has received all requisite approvals
(including any necessary approval of its board of directors) to complete the
transactions contemplated hereby, and (iii) that this Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a valid
and binding agreement of the Stockholder enforceable against the Stockholder in
accordance with its terms.
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Representations and Warranties of the Company. The Company hereby
represents and warrants to the Stockholder (i) that it has been duly organized
and is an existing corporation in good standing under the laws of the state of
its incorporation, (ii) that it has all requisite corporate power and authority,
and has received all requisite approvals (including any necessary approval of
its Board of Directors) to complete the transactions contemplated hereby and
(iii) this Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement enforceable against the
Company in accordance with its terms.
ARTICLE III
Registration Rights
-------------------
Demand Registrations(a) . (a) At any time following the date hereof
and prior to the date on which the Company shall have obtained a written opinion
of legal counsel reasonably satisfactory to the Stockholder and addressed to the
Company and the Stockholder to the effect that the Shares may be publicly
offered for sale in the United States by the Stockholder without restriction as
to manner of sale and amount of securities sold and without registration under
the Securities Act (such period, the "Demand Period"), the Stockholder shall
have the right on three (3) occasions to require the Company to file a
registration statement under the Securities Act in respect of all or a portion
of the Shares (so long as such request covers at least 25,000 shares), by
delivering to the Company written notice stating that such right is being
exercised, specifying the number of the Shares to be included in such
registration and describing the intended method of distribution thereof (a
"Demand Request"). As promptly as practicable, but in no event later than thirty
(30) days after the Company receives a Demand Request, the Company shall file
with the SEC and thereafter use its best efforts to cause to be declared
effective promptly a registration statement (including, without limitation, by
means of a shelf registration pursuant to Rule 415 under the Securities Act if
so requested and if the Company is then eligible to use such a registration) (a
"Demand Registration") providing for the registration of such number of Shares
the Stockholder shall have demanded be registered for distribution in accordance
with such intended method of distribution. Notwithstanding anything to the
contrary in this Section 3.1, if the Company is eligible to register the Shares
on Form S-3, the Stockholder shall have the right to require up to two (2) such
registrations per calendar year, each of which registrations shall be a "Demand
Registration" for all purposes of this Agreement, except that such registrations
shall not count as one or more of the three (3) Demand Registrations which the
Stockholder has the right to require pursuant to the first sentence of this
Section 3.1(a). The Stockholder agrees that if a registration on Form S-3 is
available, and if the Stockholder has not yet requested two (2) registrations on
Form S-3 within that calendar year, the Stockholder will not request a
registration on any other form.
(b) Anything in this Agreement to the contrary notwithstanding, the
Company shall be entitled to postpone and delay, for a reasonable period of
time, not to exceed one hundred twenty (120) days in the case of clauses (i) and
(ii) below, or sixty (60) days in the case of clause (iii) below (each, a
"Blackout Period"), the filing of any Demand Registration if the Company shall
determine that any such filing or the offering of any Shares would (i) in the
good faith judgment of the Board of Directors of the Company, unreasonably
impede, delay or otherwise interfere with any pending or contemplated financing,
acquisition, corporate
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reorganization or other similar transaction involving the Company, (ii) based
upon advice from the Company's investment banker or financial advisor, adversely
affect any pending or contemplated offering or sale of any class of securities
by the Company, or (iii) in good faith judgment of the Board require disclosure
of material non-public information (other than information relating to an event
described in clause (i) or (ii) of this subsection (b)) which, if disclosed at
such time, would be materially harmful to the interests of the Company and its
stockholders; provided, however, that in the case of a Blackout Period pursuant
to clause (i) or (ii) above, the Blackout Period shall earlier terminate upon
the completion or abandonment of the relevant securities offering or sale,
financing, acquisition, corporate reorganization or other similar transaction;
and provided, further, that in the case of a Blackout Period pursuant to clause
(iii) above, the Company shall give written notice of its determination to
postpone or delay the filing of any Demand Registration and in the case of
clause (iii) above, the Blackout Period shall earlier terminate upon public
disclosure by the Company or public admission by the Company of such material
non-public information or such time as such material non-public information
shall be publicly disclosed without breach of the last sentence of this
subsection (b), and provided, further, that in the case of a Blackout Period
pursuant to clause (i), (ii) or (iii) above, the Company shall furnish to the
Stockholder a certificate of an executive officer of the Company to the effect
that an event permitting a Blackout Period has occurred. Notwithstanding
anything herein to the contrary, the Company shall not exercise pursuant to
Clause (i), (ii) or (iii) of the preceding sentence the right to postpone or
delay the filing of any Demand Registration more than twice in any twelve (12)
month period. Upon notice by the Company to the Stockholder of any such
determination, the Stockholder covenants that it shall keep the fact of any such
notice strictly confidential, and, in the case of a Blackout Period pursuant to
clause (iii) above or Section 3.1(c) below, promptly halt any offer, sale,
trading or transfer by it or any of its Affiliates of any Common Stock for the
duration of the Blackout Period set forth in such notice (or until such Blackout
Period shall be earlier terminated in writing by the Company) and promptly halt
any use, publication, dissemination or distribution of the Demand Registration,
each prospectus included therein, and any amendment or supplement thereto by it
and any of its Affiliates for the duration of the Blackout Period set forth in
such notice (or until such Blackout Period shall be earlier terminated in
writing, by the Company) and, if so directed by the Company, will deliver to the
Company any copies then in such Stockholder's possession of the prospectus
covering such Shares, that was in effect at the time of receipt of such notice.
After the expiration of any Blackout Period and without further request from the
Stockholder, the Company shall effect the filing of the relevant Demand
Registration and shall use its best efforts to cause any such Demand
Registration to be declared effective as promptly as practicable unless the
Stockholder shall have, prior to the effective date of such Demand Registration,
withdrawn in writing its initial request, in which case such withdrawn request
shall not constitute a Demand Registration for purposes of determining the
number of Demand Registrations to which the Stockholder is entitled under this
Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, in
case a Demand Registration has been filed, if a transaction of the type
specified in Section 3.1(b)(i) has not resulted from actions taken by the
Company, the Company may cause such Demand Registration to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such Demand
Registration for a reasonable period of time, not to exceed the Blackout Period
applicable to Section 3.1(b)(i); provided, however, that in no event shall a
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Demand Registration so withdrawn count as one of the Demand Registrations which
the Stockholder is entitled to make pursuant to Section 3.1(a) hereof.
(d) The Stockholder may withdraw a Demand Request in circumstances
including, but not limited to, the following: if (i) the Company is in material
breach of its obligation hereunder and has not cured such breach after having
received notice thereof and a reasonable opportunity to do so or (ii) the
withdrawal occurs during a Blackout Period. Any Demand Request withdrawn prior
to such Demand Registration becoming effective pursuant to this subsection (d)
shall not constitute a Demand Registration for the purposes of determining the
number of Demand Registrations to which the Stockholder is entitled but only if
such withdrawal is the first such withdrawal to occur in the calendar year in
question.
(e) The Company may elect to include in any registration statement
filed pursuant to this Section 3.1 any Common Stock to be issued by it or held
by any of its subsidiaries or by any other stockholders only to the extent such
Common Stock is offered and sold pursuant to, and on the terms and subject to
the conditions of, any underwriting agreement or distribution arrangements
entered into or effected by the Stockholder. In the event that the Company
elects to include in any such registration statement any Common Stock to be
issued by it or held by any of its subsidiaries or by any other stockholders and
a nationally recognized independent investment banking firm selected by the
Company to act as managing underwriter thereof reasonably and in goof faith
shall have advised the Stockholder or the Company in writing that, in its
opinion, the inclusion in the registration statement of some or all of the
Shares sought to be registered by the Company or any other holder of Common
Stock intending to register Common Stock in such registration statement (other
than the Stockholder) creates a substantial risk that the price per share of
Common Stock that the Stockholder will derive from such registration will be
materially and adversely affected or that the number of shares of Common Stock
sought to be registered is a greater number that can reasonably be sold, the
Company shall include in such registration statement such number of shares of
Common Stock as the Company, any such other holder and the Stockholder are so
advised can be sold in such offering without such an effect (the "Stockholder
Maximum Number") as follows and in the following order of priority: (A) first,
such number of shares of Common Stock as the Stockholder intended to be
registered and sold by the Stockholder and (B) second, and to the extent that
the number of shares of Common Stock to be registered under clause (A) is less
than the Stockholder Maximum Number, such number of shares of Common Stock as
the Company and any other holder of Common Stock intending to register Common
Stock in such registration statement (other than the Stockholder) shall have
intended to register which, when added to the number of shares of Common Stock
to be registered under clause (A), is less than or equal to the Stockholder
Maximum Number; provided that if such number exceeds the Stockholder Maximum
Number, the shares of Common Stock of the Company and any other holder of Common
Stock intending to register Common Stock in such registration statement (other
than the Stockholder) will be excluded on a pro rata basis according to the
total number of Shares and shares of Common Stock requested to be registered by
such person.
(f) The managing underwriter for any Demand Registration shall be
selected by the party or parties making the demand for such registration,
provide that such underwriter shall be reasonably satisfactory to the Company.
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"Piggy-Back" Registrations(a) . (a) If, at any time following the
effective time of the Merger, the Company proposes to register any Common Stock
under the Securities Act on a registration statement on Form S-1, Form S-2 or
Form S-3 (or any equivalent general registration form then in effect other than
pursuant to a Demand Registration under Section 3.1) for purposes of a primary
offering, secondary offering or combined offering of such Common Stock, the
Company shall give prompt written notice to the Stockholder of its intention to
do so. Such notice shall specify, at a minimum, the number of shares of Common
Stock so proposed to be registered, the proposed date of filing of such
registration statement, any proposed means of distribution of such Common Stock,
any proposed managing underwriter or underwriters of such offering and a good
faith estimate by the Company of the proposed maximum offering price thereof, as
such price is proposed to appear on the facing page of such registration
statement. Upon the written direction of the Stockholder (a "Piggy-Back
Request"), given within fifteen (15) business days following the receipt by the
Stockholder of any such written notice (which direction shall specify the number
of the Shares intended to be disposed of by the Stockholder), the Company shall
include in such registration statement (a "Piggy-Back Registration" and,
collectively with a Demand Registration, a "Registration"), subject to the
provisions of Section 3.2 hereof, such numbers of the Shares owned by the
Stockholder as shall be set forth in such Piggy-Back Request.
(b) In the event that the Company proposes to register Common Stock in
connection with an underwritten offering and a nationally recognized independent
investment banking firm selected by the Company to act as managing underwriter
thereof reasonably and in goof faith shall have advised the Company, any holder
of Common Stock intending to offer such Common Stock in a secondary offering or
combined offering (each, an "Other Holder") or the Stockholder in writing that,
in its opinion, the inclusion in the registration statement of some or all of
the Shares sought to be registered by the Stockholder creates a substantial risk
that the price per share of Common Stock that the Company or any Other Holder
will derive from such registration will be materially and adversely affected or
that the number of shares of Common Stock sought to be registered (including any
shares of Common Stock sought to be registered at the request of the Company and
any Other Holder and those sought to be registered by the Stockholder) is a
greater number that can reasonably be sold, the Company shall include in such
registration statement such number of shares of Common Stock as the Company, any
Other Holder and the Stockholder are so advised can be sold in such offering
without such an effect (the "Company Maximum Number") as follows and in the
following order of priority: (A) first, such number of shares of Common Stock as
the Company intended to be registered and sold by the Company and (B) second, in
the case of a secondary offering or a combined offering and if and to the extent
that the number of shares of Common Stock to be registered under clause (A) is
less than the Company Maximum Number, such number of shares of Common Stock as
the Stockholder and any Other Holder shall have intended to register which, when
added to the number of shares of Common Stock to be registered under clause(A),
is less than or equal to the Company Maximum Number; provided that if such
number exceeds the Company Maximum Number, the shares of Common Stock of the
Stockholder and such Other Holders will be excluded on a pro rata basis
according to the total number of Shares and shares of Common Stock requested to
be registered by such persons.
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(c) No Piggy-Back Registration effected under this Section 3.2 shall
be deemed to have been effected pursuant to Section 3.1 hereof or shall release
the Company of its obligations to effect any Demand Registration upon request as
provided under Section 3.1 hereof
(d) Notwithstanding any request under this Section 3.2, a selling
Holder may elect in writing to withdraw its request for inclusion of its Shares
in any registration statement; provided, however, that (i) such request must be
made in writing prior to the earlier of the execution of the underwriting
agreement or the execution of the custody agreement with respect to such
registration and (ii) such withdrawal shall be irrevocable and, after making
such withdrawal, a Holder shall no longer have any right to include Shares in
the registration as to which such withdrawal was made.
(e) If, at any time after giving written notice of its intention to
register any Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such Common
Stock, the Company may, at its election, give written notice of such
determination to all Holders of record of Shares and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Shares in connection with such abandoned registration, without prejudice,
however, to the rights of Holders under Section 3.1 and (ii) in the case of a
determination to delay such registration of the Company's Common Stock, shall be
permitted to delay the registration of such Shares for the same period as the
delay in registering such other Common Stock.
(f) If, as a result of the proration provisions of this Section 3.2,
any Holder shall not be entitled to include all Shares in a registration that
such Holder has requested to be included, such Holder may elect to withdraw his
request to include Shares in such registration or may reduce the number
requested to be included, provided that the same limitations in subsection (c)
shall apply.
Additional Agreements. Anything in this Agreement to the contrary
notwithstanding, if at any time the Company shall obtain a written opinion of
legal counsel reasonably satisfactory to the Stockholder and addressed to the
Company and the Stockholder to the effect that the Shares may be publicly
offered for sale in the United States by the Stockholder without restriction as
to manner of sale and amount of securities sold and without registration under
the Securities Act, the Company shall no longer be obligated to file or maintain
a registration statement with respect to the Shares pursuant to this Agreement.
In such case, the Company shall issue to the Stockholder certificates
representing the Shares without any legend restricting transfer and shall remove
all stop transfer orders relating to the Shares.
Registration Procedures(a) . (a) In connection with each registration
statement prepared pursuant to this Agreement, and in accordance with the
intended method or methods of distribution of the Shares as described in such
registration statement, the Company shall, as soon as reasonably practicable
(and, in any event, subject to the terms of this Agreement, including, without
limitation, Section 3.1(a), at or before the time required by applicable laws
and regulations):
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(i) Prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC, with respect to such Shares,
which form shall be selected by the Company with the Stockholder's
reasonable consent, and use its best efforts to cause such registration
statement to become and remain effective promptly; provided that before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the Stockholder, one
counsel selected by the Stockholder, the sales or placement agent or
agents, if any, for the Shares and the managing underwriter or
underwriters, if any, draft copies of all such documents proposed to be
filed at least seven (7) days prior to such filing, which documents will be
subject to the reasonable review of the Stockholder, the sales or placement
agent or agents, if any, for the Shares and the managing underwriter or
underwriters, if any, and their respective agents and representatives and
(x) the Company will not include in any registration statement information
concerning or relating to the Stockholder to which the Stockholder shall
reasonably object in writing (unless the inclusion of such information is
required by applicable law or the regulations of any securities exchange to
which the Company may be subject), and (y) the Company will not file any
Demand Registration or amendment thereto or any prospectus or any
supplement thereto to which the Stockholder shall reasonably object in
writing;
(ii) Furnish without charge to the Stockholder, the sales or
placement agent or agents, if any, and the managing underwriter or
underwriters, if any, such number of copies of such registration statement
and of each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the summary, preliminary, final,
amended or supplemented prospectus included in such registration statement
in conformity with the requirements of the Securities Act and any
regulations promulgated thereunder and (upon the reasonable request by the
Stockholder) any documents incorporated therein by reference and such other
documents as the Stockholder may reasonably request in order to facilitate
the public sale or other disposition of such Shares (the Company hereby
consenting to the use in accordance with all applicable law of the
prospectus or any amendment or supplement thereto by the Stockholder in
connection with the offering and sale of the Shares covered by the
prospectus or any amendment or supplement thereto);
(iii) Use its reasonable best efforts to keep such registration
statement effective (the "Effective Period"), prepare and file with the SEC
such amendments, post-effective amendments and supplements to the
registration statement and the prospectus as may be necessary to maintain
the effectiveness of the registration for the Effective Period and to cause
the prospectus (and any amendments or supplements thereto) to be filed
pursuant to Rules 424 and 430A under the Securities Act and/or any
successor rules that may be adopted by the SEC, as such rules may be
amended from time to time; and comply with the provisions of the Securities
Act with respect to the disposition of all Shares covered by such
registration statement during the applicable period in accordance with the
intended method or methods of distribution thereof, as specified in writing
by the Stockholder;
(iv) Except during any Blackout Period, make available for inspection
by the Stockholder or by any underwriter, attorney, accountant or other
agent retained by the
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Stockholder (collectively, the "Inspectors") financial and other records
and pertinent corporate documents of the Company (collectively, the
"Records"), provide the Inspectors with opportunities to discuss the
business of the Company with its officers and provide opportunities to
discuss the business of the Company with the independent public accountants
who have certified its most recent annual financial statements, in each
case to the extent customary for transactions of the size and type
intended, as specified by the Stockholder, but only to the extent
reasonably necessary to enable the Stockholder or any underwriter retained
by the Stockholder to conduct a "reasonable investigation" for purposes of
Section 11(a) of the Securities Act; provided, however, the Company may
require as a condition to making Records available and providing such
opportunities that the Stockholder execute and deliver a confidentiality
agreement customary for underwritten offerings. Records which the Company
determines, in good faith, to be confidential and which it notifies the
inspectors are confidential shall not be disclosed by the Inspector unless
(A) the disclosure of such Records is necessary to avoid or correct a
misstatement of a material fact or omission to state a material fact in the
Registration, (B) the disclosure of such Records is required by any court
or governmental body with jurisdiction over the Stockholder or Inspector or
(C) all of the information contained in such Records has been made
generally available to the public. The Stockholder agrees that it will,
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction or by any governmental body, promptly give prior
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of those Records deemed
confidential;
(v) If requested by the Stockholder, promptly incorporate in a
prospectus, prospectus supplement or post-effective amendment such
information as the Stockholder reasonably specifies should be included
therein, including, without limitation, information relating to the planned
distribution of Shares, the number of Shares being sold by the Stockholder,
the name and description of the Stockholder, the offering price of such
Shares and any discount, commission or other compensation payable in
respect of the Shares being sold, the purchase price being paid therefor to
the Stockholder and information with respect to any other terms of the
underwriting offering of the Shares to be sold in such offering, except to
the extent that the Company is advised in a written opinion of outside
counsel that the inclusion of such information is reasonably likely to
violate applicable Securities laws; and make all required filings of such
prospectus, prospectus supplement or post-effective amendment promptly
after notification of the matters to be incorporated in such prospectus,
prospectus supplement or post-effective amendment;
(vi) If requested by the Stockholder, and with respect to not more
than three Demand Registrations effected pursuant to Section 3.1, cause its
senior management to participate in road shows and other customary
marketing efforts in connection with the offering and sale of Shares
pursuant to such registration statement, at such times and in such manner
as the Company and the Stockholder mutually may determine (and as do not
unreasonably interfere with the Company's operations); provided that such
senior management shall not be obligated to devote in excess of six (6)
days per calendar year to such road shows and other customary marketing
efforts;
-10-
(vii) Use its best efforts to register or qualify the Shares covered
by such registration statement under such other securities or "blue sky"
laws of such jurisdictions in the United States as the Stockholder shall
reasonably request, keep such registrations or qualifications in effect for
so long as the registration statement remains in effect, and do any and all
other acts and things which may be reasonably necessary to enable the
Stockholder or any underwriter to consummate the public sale or other
disposition of the Shares in such jurisdictions; provided, however, that in
no event shall the Company be required to qualify to do business as a
foreign corporation in any jurisdiction where it is not so qualified; to
execute or file any general consent to service of process under the laws of
any jurisdiction; to take any action that would subject it to service of
process in suits other than those arising out of the offer and sale of the
Shares covered by the registration statement; or to subject itself to
taxation in any jurisdiction where it would not otherwise be obligated to
do so, but for this paragraph (vii);
(viii) Use its best efforts to cause the Shares to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to enable the Stockholder to consummate the public sale or other
disposition of the Shares;
(ix) Use its best efforts to cause all Shares covered by such
registration statement to be approved for trading on a national interdealer
quotation system or listed on the securities exchanges on which similar
securities issued by the Company are then listed or traded;
(x) Promptly notify the Stockholder, at any time when a prospectus
relating to any of the Shares covered by such registration statement is
required to be delivered under the Securities Act, of the Company's
becoming aware that the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, and, at the request of the Stockholder,
promptly prepare and furnish to the Stockholder a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(xi) Promptly notify the Stockholder, the sales or placement agent
or agents, if any, for the Shares and the managing underwriter or
underwriters, if any, thereof, after becoming aware thereof, when the
registration statement or any related prospectus or any amendment or
supplement has been filed, and, with respect to the registration statement
or any post-effective amendment, when the same has become effective, (A) of
any request by the SEC for amendments or supplements to the registration
Statement or the related prospectus or for additional information, (B) of
the issuance by the SEC of any stop order suspending the effectiveness of
the registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose or (D)
within the
-11-
Effective Period of the happening of any event which makes any statement in
the registration Statement or any post-effective amendment thereto,
prospectus or any amendment or supplement thereto, or any document
incorporated therein by reference untrue in any material respect or which
requires the making of any changes in the registration statement or post-
effective amendment thereto or any prospectus or amendment or supplement
thereto so that they 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) nor misleading;
(xii) During the Effective Period, use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of the
registration statement or any post-effective amendment thereto;
(xiii) Permit the Stockholder if, in its sole judgment exercised in
good faith, it believes it might be deemed to be a controlling person of
the Company, to participate in the preparation of such registration
statement and all discussions between the Company and the SEC or its staff
with respect to such registration statement, and to require the insertion
therein of material, furnished to the Company in writing, which in the
reasonable judgment of the Stockholder should be included,
(xiv) Deliver promptly to the Stockholder, upon the Stockholder's
request, copies of all correspondence between the SEC and the Company, its
counsel or auditors and all memoranda relating to discussions with the SEC
or its staff with respect to the registration statement and permit the
Stockholder to do such investigation, with respect to information contained
in or omitted from the registration statement, as it deems reasonably
necessary. The Stockholder agrees that it will use its best efforts not to
interfere unreasonably with the Company's business when conducting any such
investigation;
(xv) Provide a transfer agent and registrar for all such Shares
covered by such registration statement not later than the effective date of
such registration statement, which transfer agent and registrar may be the
Company, subject to any applicable law or regulations;
(xvi) Cooperate with the Stockholder and the managing underwriter or
underwriters, if any, to facsimile the timely preparation and delivery of
certificates representing such Shares to be sold under the registration
Statement, which certificates shall not bear any restrictive legends except
as required by law; and, in the case of an underwritten offering, enable
such Shares to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, may request in writing at
least two (2) business days prior to any sale of the Shares to the
underwriters;
(xvii) Enter into such agreements (including, if the offering is an
underwritten offering, an underwriting agreement) as are customary in
transactions of such kind and take such other actions as are reasonably
necessary in connection therewith in order to expedite or facilitate the
disposition of such Shares; and (A) make such representations
-12-
and warranties with respect to the registration statement, post-effective
amendment or supplement thereto, prospectus or any amendment or supplement
thereto, and documents incorporated by reference, if any, to the managing
underwriter or underwriters, if any, of the Shares and, at the option of
the Stockholder, make to and for the benefit of such Stockholder the
representations, warranties and covenants of the Company which are being
made to the underwriters, in form, substance and scope as are customarily
made by the Company in connection with offerings of Shares in transactions
of such kind (representation and warranties by the participating holders
shall also be made as are customary in agreements of that type); provided
that the Company shall not be required to make any representations or
warranties with respect to information specifically provided by a Holder
for inclusion in the registration documents, (B) obtain an opinion of
counsel to the Company (which counsel may be internal counsel for the
Company unless the managing underwriter or underwriters shall otherwise
reasonably request) in customary form and covering matters of the type
customarily covered by such an opinion, addressed to such managing
underwriter or underwriters, if any, and to the Stockholder and dated the
date of the closing of the sale of the Shares relating thereto; (C) obtain
a "comfort" letter or letters from the independent certified public
accountants who have certified the Company's audited financial statements
that are incorporated by reference in the registration statement which is
addressed to the Stockholder and the managing underwriter or underwriters,
if any, and is dated the date of the prospectus used in connection with the
offering of such Shares and/or the date of the closing of the sale of such
Shares relating thereto, such letter or letters to be in customary form and
covering such matters of the type customarily covered by "comfort" letters
of such type; (D) deliver such documents and certificates as may be
reasonably requested by the Stockholder and the managing underwriter or
underwriters, if any, of the Shares to evidence compliance with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company; and (E) undertake such obligations
relating to expense reimbursement, indemnification and contribution as
provided in Sections 3.5 and 3.6 hereof, and
(xviii) Comply with all applicable rules and regulations of the SEC
and generally make available to its security holders an earnings statement
(which need not be audited), as soon as reasonably practicable but in no
event later than ninety (90) days after the end of the period of twelve
(12) months commencing on the first day of any fiscal quarter next
succeeding each sale by the Stockholder of Shares which have been
registered pursuant to this Agreement (the "Registered Shares") after the
date hereof, which earnings statement shall cover such twelve (12) month
period and shall satisfy the provisions of Section 11(a) of the Securities
Act and may be prepared in accordance with Rule 158 under the Securities
Act.
(b) In the event that the Company would be required, pursuant to
Section 3.4(a)(xi)(D) above, to notify the Stockholder, the sales or placement
agent or agents, if any, for the Shares and the managing underwriter or
underwriters, if any, thereof, the Company shall, subject to the provisions of
Section 3.1(b) hereof, as promptly as practicable, prepare and furnish to the
Stockholder, to each placement or sales agent, if any, and to each underwriter,
if any, a reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of Registered Shares, such
prospectus shall not contain an
-13-
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, the Stockholder
agrees that, upon receipt of any notice from the Company pursuant to Section
3.4(a)(xi)(D) hereof, the Stockholder shall, and shall use its best efforts to
cause any sales or placement agent or agents for the Shares and the
underwriters, if any, thereof, to forthwith discontinue disposition of the
Shares until such person shall have received copies of such amended or
supplemented prospectus and, if so directed by the Company, to destroy or to
deliver to the Company all copies, other than permanent file copies, then in its
possession of the prospectus (prior to such amendment or supplement) covering
such Shares as soon as practicable after the Stockholder's receipt of such
notice.
(c) The Stockholder shall furnish to the Company in writing such
information regarding the Stockholder and its intended method of distribution of
the Shares as the Company may from time to time reasonably request in writing,
but only to the extent that such information is required in order for the
Company to comply with its obligations under all applicable securities and other
laws and to ensure that the prospectus relating to such Shares conforms to the
applicable requirements of the Securities Act and the rules and regulations
thereunder. The Stockholder shall notify the Company as promptly as practicable
of any inaccuracy or change in information previously furnished by the
Stockholder to the Company or of the occurrence of any event, in either case as
a result of which any prospectus relating to the Shares contains or would
contain an untrue statement of a material fact regarding the Stockholder or its
intended method of distribution of such Shares or omits to state any material
fact regarding the Stockholder or its intended method of distribution of such
Shares 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 promptly furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain, with respect to the Stockholder or
the distribution of the Shares, an untrue statement of a material fact or omit
to state a 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.
(d) Each Holder agrees not to effect any public sale or distribution
of any Shares, including any sale pursuant to Rule 144 under the Securities Act,
and not to effect any such public sale or distribution of any other equity
security of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (in each case, other than as
part of such underwritten public offering) during the ten (10) days prior to,
and during the ninety (90) day period (or such longer period as each Holder
agrees with the underwriter of such offering) beginning on, the consummation of
any underwritten public offering of the Shares covered by a registration
statement referred to in Section 3.2 to the extent such Holder's Registered
Shares are being sold thereunder.
(e) In the case of any registration under Section 3.1 pursuant to an
underwritten offering, or in the case of a registration under Section 3.2 if the
Company has determined to enter into an underwriting agreement in connection
therewith, all Shares to be included in such registration shall be subject to an
underwriting agreement and no person may participate in such registration unless
such person agrees to sell such person's securities on the basis provided
therein and completes and executes all questionnaires, indemnities, underwriting
agreements and other documents (other than powers of attorney) which must be
executed in connection
-14-
therewith, and provides such other information to the Company or the underwriter
as may be necessary to register such Holder's Shares, provided, however, that
any requirement to execute any indemnity pursuant to this Section 3.4(e) shall
be limited to a requirement to execute an indemnity with respect to solely the
information provided by such person to the Company or the underwriter for use in
connection with such registration.
Registration Expenses. All expenses incident to any registration to be
effected hereunder (whether or not the Registration Statement is filed or
declared effective) and 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, printing
expenses, messenger and delivery expenses, National Association of Securities
Dealers, Inc., stock exchange and qualification fees, fees and disbursements of
the Stockholder's counsel and of independent certified public accountants of the
Stockholder, all such expenses being herein called "Registration Expenses," will
be borne by the Stockholder and the Company in the following manner: The
Stockholder shall be responsible for a portion of the Registration Expenses
equal to (i) the total amount of such Registration Expenses multiplied by a
fraction, the numerator of which is the number of Shares being sold by the
Stockholder pursuant to the registration statement at issue, and the denominator
of which is the total number of Shares being sold by all parties selling Shares
pursuant to such registration statement, multiplied by (ii) fifty percent (50%).
The Company shall be responsible for all other Registration Expenses not the
responsibility of the Stockholder pursuant to the immediately preceding
sentence. For the purpose of clarification, any expenses of any special or
extraordinary accounting or audit services required in connection with or
incident to the Company's performance of this Agreement shall not be deemed
"Registration Expenses". In the event that expenses relating to underwriters and
their counsel are not paid by the underwriters, the parties shall agree on
whether or not such expenses are Registration Expenses before the Stockholder or
the Company will reach agreement with the underwriters that such expenses will
not be paid (without right to reimbursement) by the underwriters. To the extent
that any Registration Expenses due to be paid by the Company pursuant to this
Section 3.5 are incurred, assumed or paid by the Stockholder, any sales or
placement agent or agents for the Shares and the underwriters, if any, thereof,
the Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefore. Each Holder of the Shares being registered shall pay all underwriting
discounts and commissions and any capital gains, income or Transfer taxes, if
any, attributable to the sale of such Shares.
Indemnification; Contribution. (a) (a) Indemnification by the
Company. The Company shall, and it hereby agrees to, indemnify and hold harmless
the Stockholder, its officers, directors, partners, employees and agents and
each person who controls the Stockholder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, partners, employees and agents of such controlling person and each
person who participates as a placement or sales agent or as an underwriter in
any offering or sale of the Shares, against any losses, claims, damages or
liabilities to which the Stockholder or such agent or underwriter may become
subject, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) (collectively, "Claims") arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
curtained in any registration statement, or any preliminary or final prospectus
contained therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are
-15-
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, in
light of the circumstances in which they were made, not misleading, and the
Company shall, and it hereby agrees to, reimburse the Stockholder or any such
officer, director, partner, employee, agent or underwriter for any legal or
other out-of-pocket expenses reasonably incurred by them in connection with
investigating or defending any such Claims; provided, however, that the Company
shall not be liable to any such person in any such case to the extent that any
such Claims arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
or preliminary or final prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by the Stockholder or any agent, underwriter, officer, director, partner
or employee of the Stockholder expressly for use therein, or by the
Stockholder's failure to furnish the Company, upon request, with the information
with respect to the Stockholder, or any agent, underwriter or officer, director,
partner or employee of the Stockholder, or the Stockholder's intended method of
distribution, that is the subject of the untrue statement or omission or if the
Company shall sustain the burden of proving that the Stockholder or such agent,
officer, director, partner or employee or underwriter sold securities to the
person alleging such Claims without sending or giving, at or prior to the
written confirmation of such sale, a copy of the applicable prospectus
(excluding any documents incorporated by reference therein) or of the applicable
prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein), if the Company had previously furnished
copies thereof to the Stockholder or such agent, officer, director, partner or
employee or underwriter, and such prospectus corrected such untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement.
(b) Indemnification by the Stockholder and Any Agents or Underwriters.
The Stockholder shall, and hereby agrees, severally and not jointly, to (i)
indemnify and hold harmless the Company, its directors, officers, employees and
controlling persons, if any, and each underwriter, its partners, officers,
directors, employees and controlling persons, if any, in any offering or sale of
Shares, against any Claims to which the Company, its directors, officers,
employees and controlling persons, if any, may become subject, insofar as such
Claims (including any amounts paid in settlement as provided herein), or actions
or proceedings in respect thereof, arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are 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, in each case only to
the extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Stockholder or such agent or
underwriter (as the case may be) expressly for use therein, and (ii) reimburse
the Company for any legal or other out-of-pocket expenses reasonably incurred by
the Company in connection with investigating or defending any such Claim.
(c) Notice of Claims Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action or proceeding for which indemnification under subsection (a) or (b)
may be requested, such indemnified parry
-16-
shall, without regard to whether a claim in respect thereof is to be made
against an indemnifying parry pursuant to the indemnification provisions of, or
as contemplated by, this Section 3.6, notify such indemnifying party and the
underwriter in writing of the commencement of such action or proceeding, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party in respect of such action
or proceeding on account of the indemnification provisions of or contemplated by
Section 3.6(a) or 3.6(b) hereof unless the indemnifying party was materially
prejudiced by such failure of the indemnified party to give such notice, and in
no event shall such omission relieve the indemnifying parry from any other
liability it may have to such indemnified party. In case any such action or
proceeding shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, unless in the reasonable opinion
of outside counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall determine, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
or any other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation
(unless such indemnified party reasonably objects to such assumption on the
grounds that there may be defenses available to it which are different from or
in addition to the defenses available to such indemnifying party, in which event
the indemnified party shall have the right to control its defense and shall be
reimbursed by the indemnifying party for the expenses incurred in connection
with retaining one separate counsel). If the indemnifying party is not entitled
to, or elects not to, assume the defense of a claim, it will not be obligated to
pay the fees and expenses of more than one counsel for each indemnified party
with respect to such claim. The indemnifying party will not be subject to any
liability for any settlement made without its consent, which consent shall not
be unreasonably withheld or delayed. No indemnifying party shall, without the
prior written consent of the indemnified party, compromise or consent to entry
of any judgment or enter into any settlement agreement with respect to any
action or proceeding in respect of which indemnification is sought under Section
3.6(a) or (b) (whether or not the indemnified party is an actual or potential
party thereto), unless such compromise, consent or settlement includes an
unconditional term thereof the giving by the claimant or plaintiff to the
indemnified party of a release from all liability in respect of such claim or
litigation and does not subject the indemnified party to any injunctive relief
or other equitable remedy.
(d) Contribution. The Stockholder and the Company agree that if, for
any reason, the indemnification provisions contemplated by Sections 3.6(a) or
3.6(b) hereof are unavailable to or are insufficient to hold harmless an
indemnified party in respect of any Claims referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of, and benefits derived by, the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party 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
such indemnifying party or by such indemnified
-17-
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The relative
benefit derived by the parties shall be determined by reference to the fact that
the Company entered into this Agreement to induce the Stockholder to engage in
the Transaction in which the Shares were acquired. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section
3.6(d) were determined (1) by pro rata allocation (even if the Stockholder or
any agents for, or underwriters of, the Shares, or all of them, were treated as
one entity for such purpose); or (ii) by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section 3.6(d). The amount paid or payable by an indemnified party as a result
of the Claims referred to above shall be deemed to include (subject to the
limitations set forth in Section 3.6(c) hereof) any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) Payments. The indemnification and contribution required by this
Section 3.6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) Beneficiaries of Indemnification. The obligations of the Company
under this Section 3.6 shall be in addition to any liability that it may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director and partner of the Stockholder and each agent and underwriter
of the Shares and each person, if any, who controls the Stockholder or any such
agent or underwriter within the meaning of the Securities Act; and the
obligations of the Stockholder and any agents or underwriters contemplated by
this Section 3.6, shall be in addition to any liability that the Stockholder or
its respective agent or underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the Company
(including any person who, with his consent, is named in any registration
statement as about to become a director of the Company) and to each person, if
any, who controls the Company within the meaning of the Securities Act.
(g) Survival. The indemnity and contribution agreements contained in
this Section 3.6 shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Stockholder, its officers, directors,
partners, attorneys, agents or any person, if any, who controls the Stockholder
as aforesaid, and shall survive the transfer of such Securities by the
Stockholder.
Underwriters. If any of the Shares are to be sold pursuant to an
underwritten offering, the investment banker or bankers and the managing
underwriter or underwriters thereof shall be selected by the Company except in
the case of a Demand Registration, in which the managing underwriter or
underwriters shall be selected in accordance with Section 3.1(f) hereof.
Exchange Act Filings; Rule 144; Rule 144A(a) . (a) The Company
covenants to and with the Stockholder that to the extent it shall be required to
do so under the Exchange Act, the Company shall timely file the reports required
to be filed by it under the Exchange Act or the Securities Act (including, but
not limited to, the reports under Sections 13
-18-
and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the SEC under the Securities Act and the rules and regulations
adopted by the SEC thereunder) and shall take such further action as the
Stockholder may reasonably request, all to the extent required from time to time
to enable the Stockholder to sell Shares without registration under the
Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such Rule may be amended from time to rime, or any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the
Stockholder, the Company shall deliver to the Stockholder a written statement as
to whether it has complied with such requirements.
(b) If at any time the Company is not subject to Section 13 or 15(d)
of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b)
under the Exchange Act, the Company agrees, upon the request of the Stockholder
seeking to transfer Shares in conformity with Rule 144A under the Securities
Act, to furnish to the Stockholder or prospective purchasers of the Shares from
the Stockholder the information required by Rule 144A(d)(4)(i) under the
Securities Act in the manner and at the times contemplated by such Rule.
(c) The Company covenants to make available "adequate current public
information" concerning the Company within the meaning of Rule 144(c) under the
Securities Act.
Agreement of the Stockholder. The Stockholder agrees not to, and it
shall cause its subsidiaries nor to, make any sale, transfer or other
disposition of Shares of Company Common Stock except in compliance with the
registration requirements of the Securities Act and the rules and regulations
thereunder, including any exemptions from such registration requirements, or in
accordance with the Terms of this Agreement.
Legends(a) . (a) Stop Transfer restrictions will be given to the
Company's Transfer agent(s) with respect to the Shares and there will be placed
on the certificates or instruments representing the Shares, and on any
certificate instrument delivered in substitution therefor, a legend stating in
substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO SUCH REGISTRATION OR IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(b) The Company hereby agrees that it will cause stop transfer
restrictions to be released with respect to any Shares that are transferred (i)
pursuant to an effective registration statement under the Securities Act, (ii)
pursuant to Rule 144 or 145 under the Securities Act, (iii) in accordance with
the requirements of Rule 903 or 904 of Regulation S under the Securities Act, or
(iv) pursuant to another exemption from the registration requirements of the
Securities Act; provided, however, that in the case of any transfer pursuant to
clause (ii), (iii) or (iv) above, the request for transfer is accompanied by a
written statement signed by the Stockholder confirming
-19-
compliance with the requirements of the relevant exemption from registration;
and provided, further, that in the case of any transfer pursuant to clause (iv)
above, other than any transfer by the Stockholder to one or more of its direct
or indirect subsidiaries, or among such subsidiaries, or by any such subsidiary
to the Stockholder, the Company shall have received a written opinion of counsel
reasonably satisfactory to the Company, the Company further agrees that it will
cause the legend described in subsection (a) of this Section 3.10 to be removed
in the event of any transfer as provided in clause (i), (ii) or (iii) above.
Treatment of Convertible Preferred Stock. Shares of Convertible
Preferred Stock owned by the Stockholder shall be treated in all respects in the
same manner as shares of Common Stock owned by the Stockholder for the purposes
of this Agreement. The Company and the Stockholder agree that the Stockholder
shall convert shares of Convertible Preferred Stock registered and sold pursuant
to this Agreement into shares of Common Stock contemporaneously with the closing
of any such sale.
Other Registration Rights Agreements. The Company will not enter into
any agreement offering registration rights to any person which contains terms
which are materially adverse to, or materially adversely affect the rights of,
the Stockholder under this Agreement unless, prior to entering into such
agreement, it shall offer registration rights on substantially similar terms to
the Stockholder.
ARTICLE IV
Miscellaneous
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Term of Agreement, Termination. The term of this Agreement shall
commence on the date hereof and such term and this Agreement shall terminate
upon the expiration of the Demand Period; provided, however, that the Company's
obligations hereunder with respect to the Stockholder (and any Transferee who is
a member of the Stockholder Group) under this Agreement shall be suspended at
the option of the Company during any period of material breach by the
Stockholder of the Stockholder Agreement.
Recapitalizations, Exchanges, Etc. Affecting the Shares. The
provisions of this Agreement shall apply to any and all shares of capital stock
of the Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution of the Shares, by reason of a stock
dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation of otherwise. Upon the
occurrence of any such event, amounts hereunder shall be appropriately adjusted.
Other Company Securities. The provisions of this Agreement shall apply
mutatis mutandis to any publicly traded security of the Company other than the
Common Stock which may be owned by the Stockholder from time to time during the
Demand Period.
Amendment; Conflict. This Agreement may not be amended except by a
written instrument, duly executed by the Company and the Stockholder. In the
event of a conflict
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between this Agreement and the Stockholder Agreement, the terms and provisions
of the Stockholder Agreement shall take precedence and shall control the
resolution of the conflict.
Notices. Except as otherwise provided in this Agreement, all notices,
requests, claims, demands, waivers and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered by hand,
when delivered personally or by courier, three days after being deposited in the
mail (registered or certified mail, postage prepaid, return receipt requested),
or when received by facsimile transmission if promptly confirmed by one of the
foregoing means, as follows:
If to the Company or PNM:
Public Service Company or New Mexico and
HVOLT Enterprises, Inc.
Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx Xxx, Esq.
Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Stockholder or WRI:
Westar Industries, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
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Xxxxxxxx X. Xxxxx, Xxx.
Fax: (000) 000-0000
Integration. This Agreement and the other writings referred to herein
or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to its
subject matter other than those expressly set forth or referred to herein.
Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto, and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Assignability(a) . This Agreement shall not be assignable by any
parry hereto, whether by voluntary act, operation of law or otherwise, except
that the Stockholder may assign this Agreement in whole or in part to up to two
(2) Transferees (as defined in the Stockholder Agreement) who acquire any Shares
pursuant to Section 3.4 of the Stockholder Agreement.
Counterparts. This Agreement may be executed by the parties hereto in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Delaware without giving effect
to principles of conflicts of law.
Stockholder Agreement. This Agreement shall remain in effect in
accordance with its terms notwithstanding the termination or lapse in
effectiveness of any other agreement between the Stockholder and the Company,
including, but not limited to, the Stockholder Agreement.
Severability. In the event 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 shall not be affected or impaired, and such unreasonable, unlawful or
unenforceable provision shall be interpreted, revised or applied in the manner
that renders it lawful and enforceable to the fullest extent possible under law.
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IN WITNESS WHEREOF, the parties named below have hereto set their
hands as the day and year first above written.
HVOLT ENTERPRISES, INC.
By:
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Name:
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Title:
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WESTAR INDUSTRIES, INC.
By:
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Name:
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Title:
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