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EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July 17, 1998 (this
"Agreement"), by and between THE UNIMARK GROUP, INC., a Texas corporation (the
"Company"), and M & M Nominee L.L.C., a Delaware limited liability company (the
"Investor").
1. Background. The Company and the Investor have entered into a Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"). In order to
induce the Investor to enter into and consummate the transactions contemplated
by the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Registration Rights Agreement is a condition to the execution and delivery of,
and Closing under, the Purchase Agreement.
2. Definitions. Capitalized terms used but not defined herein shall have
the respective meanings given to them in the Purchase Agreement. As used herein,
unless the context otherwise requires, the following terms have the following
respective meanings:
"Option Shares" means the shares of Common Stock or other equity
securities issued or issuable upon exercise of either the First Option or the
Second Option.
"Incidental Registration" is defined in Section 3.2.
"Participating Holders" means the holders of Registrable Securities
participating in the particular registration.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 3, including, without limitation, all
registration, filing and applicable fees of the Commission, stock exchange or
NASD registration and filing fees and all listing fees and fees with respect to
the inclusion of securities in NASDAQ (as defined in Section 3.3(j)), all fees
and expenses of complying with state securities or blue sky laws (including fees
and disbursements of counsel to the underwriters or the Participating Holders in
connection with "blue sky" qualification of the Registrable Securities and
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determination of their eligibility for investment under the laws of the various
jurisdictions), all word processing, duplicating and printing expenses, all
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants including the expenses of
"cold comfort" letters required by or incident to such registration, all fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, all transfer taxes, and the fees and expenses of one counsel to the
Participating Holders (selected by the Requisite Percentage of Participating
Holders); provided, however, that Registration Expenses shall exclude and the
Participating Holders shall pay underwriters' fees and underwriting discounts
and commissions in respect of the Registrable Securities being registered.
"Registrable Securities" means (i) any Primary Shares, (ii) any Option
Shares and (iii) any shares purchased from certain executives of the Company
pursuant to the Shareholders Agreement, dated as of the date hereof, by and
among the Investor, Xxxxxx Xxxxxxx Xxxxx and Xxxxxxxx Xxxxxxx Xxxxx. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities (a) when a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) when such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer under
the Securities Act shall have been delivered by the Company and subsequent
public distribution of them shall not require registration of them under the
Securities Act, (c) when such securities are sold pursuant to Rule 144 (or
similar rule adopted by the Commission) under the Securities Act, or (d) when
such securities cease to be outstanding.
"Requested Registration" is defined in Section 3.1(a).
"Requisite Percentage of Outstanding Holders" mean the holders of
Registrable Securities who hold 33% or more of the total Option Shares and
Primary Shares (counted as a single group) that are then outstanding (assuming
that the then exercisable portion of the First Option (if any) and the then
exercisable portion of the Second Option (if any) had been exercised for Option
Shares).
"Requisite Percentage of Participating Holders" means Participating
Holders of Registrable Securities who hold a majority of the total Option Shares
and Primary Shares (counted as a single group) that are then be held by all
Participating Holders (assuming that the then exercisable portion of the First
Option (if any) and the then exercisable portion of the Second Option (if any)
had been exercised for Option Shares).
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3. Registration Under Securities Act, etc.
3.1 Requested Registrations.
(a) Request for Registration. Subject to the limitations imposed
by Sections 3.1(c), at any time and from time to time, one or more holders of
Registrable Securities representing the Requisite Percentage of Outstanding
Holders shall have the right to require the Company to file a registration
statement under the Securities Act covering all or any part of their respective
Registrable Securities, by delivering a written request therefor to the Company
specifying the number and amount of Registrable Securities and the intended
method of distribution thereof. Any such request pursuant to this Section 3.1(a)
is referred to herein as a "Requested Registration." The Company shall give
prompt written notice of each Requested Registration to all other holders of
record of Registrable Securities, and thereupon the Company shall use its best
efforts to effect the registration under the Securities Act so as to permit
promptly the sale, in accordance with the intended method of distribution, of
the Registrable Securities which the Company has been so requested to register
in the Requested Registration and all other Registrable Securities which the
Company has been requested to register by the holders thereof by written request
given to the Company within 30 days after the giving of such written notice by
the Company.
(b) Registration of Other Securities. Whenever the Company shall
effect a registration pursuant to this Section 3.1 in connection with an
underwritten offering by one or more Participating Holders of Registrable
Securities, no securities other than Registrable Securities shall be included
among the securities covered by such registration unless (i) Participating
Holders representing the Requisite Percentage of Participating Holders shall
have consented in writing to the inclusion therein of such other securities and
(ii) such inclusion shall be permitted only to the extent that it is pursuant to
and subject to the terms of the underwriting agreement or arrangements and the
inclusion of such securities will not have a material adverse effect on the
offering (including, without limitation, on the pricing of the offering).
(c) Limitations on Requested Registrations; Expenses. The rights
of holders of Registrable Securities to request Requested Registrations pursuant
to Section 3.1(a) are subject to the following limitations: (i) the Company
shall not be obligated to effect a Requested Registration having an aggregate
anticipated offering price of less than U.S.$2,000,000 unless such offering
shall cover all remaining Registrable Securities; (ii) the offering of
Registrable Securities requested to be registered pursuant to Section 3.1(a)
shall be pursuant to a firm commitment underwritten offering; (iii) the Company
shall not be obligated to effect a Requested Registration within six months
after the effective date of any other registration of securities (other than
pursuant to a registration on Form S-8 or any successor or similar form which is
then in effect); and (iv) the Company will pay all Registration Expenses only in
connection with the first three Requested Registrations of Registrable
Securities pursuant to this Section 3.1 that have become effective under the
Securities Act.
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(d) Registration Statement Form. Registrations under this Section
3.1 shall be on Form S-3 or any successor form, if permitted, or such
appropriate registration form of the Commission as shall be selected by the
Company and as shall be reasonably acceptable to the Requisite Percentage of
Participating Holders. The Company agrees to include in any such registration
statement all information which, in the opinion of counsel to the Participating
Holders and counsel to the Company, is required to be included.
(e) Effective Registration Statement. A registration requested
pursuant to this Section 3.1 shall not be deemed to have been effected
(including for purposes of paragraph (c) of this Section 3.1) (i) unless a
registration statement with respect thereto has become effective and has been
kept continuously effective for a period of at least 90 days (or such shorter
period which shall terminate when all the Registrable Securities covered by such
registration statement have been sold pursuant thereto), (ii) if, after it has
become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other Governmental
Authority or court for any reason not attributable to the Participating Holders
and has not thereafter become effective, or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of the Participating Holders.
(f) Selection of Underwriters. The managing underwriter or
underwriters of each underwritten offering of the Registrable Securities so to
be registered shall be selected by the Requisite Percentage of Participating
Holders (and shall be reasonably acceptable to the Company).
(g) Cutbacks in Requested Registration. If the managing
underwriter of any underwritten offering shall advise the Participating Holders
in such offering that the Registrable Securities covered by the registration
statement cannot be sold in such offering within a price range acceptable to the
Requisite Percentage of Participating Holders, then the Participating Holders
representing the Requisite Percentage of Participating Holders shall have the
right to notify the Company in writing that they have determined that the
registration statement be abandoned or withdrawn, in which event the Company
shall abandon or withdraw such registration statement (and, at the option of the
Requisite Percentage of Participating Holders, the Participating Holders shall
either (i) reimburse the Company for its expenses incurred in connection with
such abandoned or withdrawn registration statement or (ii) allow the Company to
count such abandoned or withdrawn registration statement as one of the three
Requested Registrations under Section 3.1(c)(iv)). If the managing underwriter
of any underwritten offering shall advise the Company in writing (with a copy to
each Participating Holder) that, in its opinion, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering within a price range acceptable to the Requisite
Percentage of Participating Holders, the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, Registrable Securities requested to be included in such
registration, pro rata among the Participating Holders requesting such
registration in accordance with the number of Primary Shares and Option Shares
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held by (or issuable to) each such Participating Holder so requested to be
registered, and any securities of the Company included in such registration
pursuant to Section 3.1(b) shall be reduced proportionately.
(h) Postponement. The Company shall be entitled once in any
six-month period to postpone for a reasonable period of time (but not exceeding
90 days) the filing of any registration statement required to be prepared and
filed by it pursuant to this Section 3.1 if the Company determines, in its
reasonable judgment, that such registration and offering would interfere with
any financing, corporate reorganization or other material transaction or
development involving the Company or any subsidiary or would require premature
disclosure thereof, and promptly gives the holders of Registrable Securities
requesting registration thereof pursuant to this Section 3.1 written notice of
such determination, containing a statement of the reasons for such postponement
and an approximation of the anticipated delay. If the Company shall so postpone
the filing of a registration statement, the Participating Holders representing
the Requisite Percentage of Participating Holders shall have the right to
withdraw the request for registration by giving written notice to the Company
within 20 days after receipt of the notice of postponement and, in the event of
such withdrawal, such request shall not be counted toward the number of
Requested Registrations (including for purposes of paragraph (c) of this Section
3.1).
3.2 Incidental Registration.
(a) Incidental Registration. If, at any time, the Company
proposes or is required to register any of its equity securities or securities
convertible into or exchangeable for equity securities under the Securities Act
(other than pursuant to registrations on such form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan) (an "Incidental Registration"), the Company will
give prompt written notice to all holders of record of Registrable Securities of
its intention to so register its securities and of such holders' rights under
this Section 3.2. Upon the written request of any holder of Registrable
Securities made within 20 days following the receipt of any such written notice
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such holder and the intended method of
distribution thereof), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the holders thereof together with
any other securities the Company is obligated to register pursuant to incidental
registration rights of other security holders of the Company. No registration
effected under this Section 3.2 shall relieve the Company of its obligation to
effect any Requested Registration under Section 3.1.
(b) Abandonment or Delay. If, at any time after the Company has
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
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registration, the Company shall determine not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination and its reasons therefor to all holders of record
of Registrable Securities and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the Registration Expenses in connection therewith) , without
prejudice, however, to the rights of any holder or holders of Registrable
Securities entitled to do so to request that such registration be effected as a
registration under Section 3.1, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities.
(c) Holder's Right to Withdraw. Each holder of Registrable
Securities shall have the right to withdraw its request for inclusion of its
Registrable Securities in any registration statement pursuant to this Section
3.2 at any time by giving written notice to the Company of its request to
withdraw.
(d) Unlimited Number of Registrations; Expenses. There is no
limitation on the number of Incidental Registrations which the Company is
obligated to effect pursuant to this Section 3.2. The Company will pay all
Registration Expenses in connection with any registration of Registrable
Securities requested pursuant to this Section 3.2.
(e) Underwriters' Cutback in Incidental Registrations. If the
managing underwriter of any underwritten offering shall inform the Company by
letter of its belief that the number of Registrable Securities requested to be
included in such registration would materially adversely affect such offering,
then the Company will include in such registration, first, the securities
proposed by the Company to be sold for its own account and, second, the
Registrable Securities and all other securities of the Company to be included in
such registration to the extent of the number and type which the Company is so
advised can be sold in (or during the time of) such offering, pro rata among the
Participating Holders and such other holders requesting such registration in
accordance with the number of Primary Shares and Option Shares held by (or
issuable to) each Participating Holder and each such other holder so requested
to be registered.
(f) Plan of Distribution. Any participation by holders of
Registrable Securities in a registration by the Company shall be in accordance
with the Company's plan of distribution.
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3.3 Registration Procedures. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 3.1 or 3.2 hereof, the Company
will as expeditiously as possible:
(a) prepare and file with the Commission as soon as practicable
the requisite registration statement to effect such registration (and
shall include all financial statements required by the Commission to
be filed therewith) and thereafter use its best efforts to cause such
registration statement to become effective; provided, however, that
before filing such registration statement (including all exhibits) or
any amendment or supplement thereto or comparable statements under
securities or blue sky laws of any jurisdiction, the Company shall
furnish such documents to the Participating Holders, their counsel,
and each underwriter, if any, participating in the offering of the
Registrable Securities and its counsel; and provided, further,
however, that the Company may discontinue any registration of its
securities which are not Registrable Securities at any time prior to
the effective date of the registration statement relating thereto;
(b) notify each Participating Holder of the Commission's requests
for amending or supplementing the registration statement and the
prospectus, and prepare and file with the Commission 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 and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement for such period as
shall be required for the disposition of all of such Registrable
Securities, provided, that such period need not exceed 90 days;
(c) furnish, without charge, to each Participating Holder such
number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such Participating Holder
may reasonably request;
(d) use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such securities or blue sky laws of such
States of the United States of America where an exemption is not
available and as the Participating Holders shall reasonably request,
(ii) to keep such registration or qualification in effect for so long
as such registration statement remains in effect, and (iii) to take
any other action which may be reasonably necessary or advisable to
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enable such Participating Holders to consummate the disposition in
such jurisdictions of the securities to be sold by such Participating
Holders, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subsection (d) be obligated to be so qualified or to consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other federal or state or foreign governmental
agencies or authorities as may be necessary in the opinion of counsel
to the Company and counsel to the Participating Holders to consummate
the disposition of such Registrable Securities;
(f) furnish to each Participating Holder and each underwriter, if
any, participating in the offering of the securities covered by such
registration statement, a signed counterpart of
(i) an opinion of outside counsel (or inside counsel if
satisfactory to each underwriter) for the Company, and
(ii) a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements
included or incorporated by reference in such registration
statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates
such opinions and comfort letters are customarily dated) and, in
the case of the legal opinion, such other legal matters, and, in
the case of the accountants' comfort letter, such other financial
matters, as the Requisite Percentage of Participating Holders, or
the underwriters, may reasonably request;
(g) promptly notify each Participating Holder and each managing
underwriter, if any, participating in the offering of the securities
covered by such registration statement (i) when such registration
statement, any pre-effective amendment, the prospectus or any
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prospectus supplement related thereto or post- effective amendment to
such registration statement has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective; (ii) of any request by the Commission for
amendments or supplements to such registration statement or the
prospectus related thereto or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of any of the Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation of any proceeding
for such purpose; (v) at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, 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
under which they were made, and in the case of this clause (v), at the
request of any Participating Holder, promptly prepare and furnish to
it and each managing underwriter, if any, participating in the
offering of the Registrable Securities a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, 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 under which they were made; and (vi) at
any time when the representations and warranties of the Company
contemplated by Section 3.4(a) hereof cease to be true and correct;
(h) otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of
at least twelve months beginning with the first full calendar month
after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 promulgated thereunder, and promptly
furnish to each such Participating Holder a copy of any amendment or
supplement to such registration statement or prospectus;
(i) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all
Registrable Securities covered by such registration statement from and
after a date not later than the effective date of such registration;
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(j) use its best efforts to cause all Registrable Securities
covered by such registration statement to be listed on a national
securities exchange or to secure designation of all such Registrable
Securities as a National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") "national market system
security" within the meaning of Rule 11Aa2-1 of the Commission, in
each case to the extent the shares of the Company's Common Stock are
so listed or designated;
(k) deliver promptly to counsel to the Participating Holders and
each underwriter, if any, participating in the offering of the
Registrable Securities, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda
relating to discussions with the Commission or its staff with respect
to such registration statement;
(1) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, no
later than the effective date of the registration statement; and
(n) make available its employees and personnel and otherwise
provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses) in their marketing of
Registrable Securities.
The Company may require each Participating Holder as to the Registrable
Securities of whom any registration is being effected to furnish the Company
such information regarding such holder and the distribution of such securities
as the Company may from time to time reasonably request in writing.
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
subsection (g) (iii) or (v) of this Section 3.3, the Participating Holder will
forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until, in the case of subsection (g)(iii) of this Section 3.3, such stop order
is removed or proceedings therefor terminated, and, in the case of subsection
(g)(v) of this Section 3.3, such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (g)(v) of this
Section 3.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
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such holder's possession, of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
3.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by Participating Holders pursuant to
a registration requested under Section 3.1, the Company will use its best
efforts to enter into an underwriting agreement with such underwriters for such
offering, such agreement to be reasonably satisfactory in substance and form to
the Company, each such holder and the underwriters and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 3.6 hereof. The
Participating Holders will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the reasonable suggestions
of the Company regarding the form thereof. The Participating Holders shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of the Participating Holders and that any or all
of the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the
Participating Holders. No Participating Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's ownership of and title to the Registrable Securities, such
holder's intended method of distribution and any other representations required
by law, and any liability of the Participating Holder to any underwriter or
other person under such underwriting agreement shall be limited to liability
arising from misstatements in or omissions from its representations and
warranties and shall be limited to an amount equal to the net proceeds that the
Participating Holder derives from such registration.
(b) Incidental Underwritten Offerings. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
Section 3.2 hereof and such securities are to be distributed by or through one
or more underwriters, the Company will, if requested by any Participating
Holder, use its best efforts to arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such Participating Holder among
the securities of the Company to be distributed by such underwriters. The
Participating Holders shall be parties to the underwriting agreement between the
Company and such underwriters and may, at their option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such Participating Holders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holders. No Participating Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
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holder, such holder's ownership of and title to the Registrable Securities, such
holder's intended method of distribution and any other representations required
by law, and any liability of the Participating Holder to any underwriter or
other person under such underwriting agreement shall be limited to liability
arising from misstatements in or omissions from its representations and
warranties and shall be limited to an amount equal to the net proceeds that the
Participating Holder derives from such registration.
3.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Participating Holders,
their underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and, to the
extent practicable, each amendment thereof or supplement thereto, and give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and employees and the independent
public accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
3.6 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless, to the fullest
extent permitting by law, each Participating Holder, its directors, officers,
partners, agents and affiliates or general and limited partners (and the
directors, officers, employees, stockholders and affiliates thereof), and each
other Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Participating Holder
or any such underwriter within the meaning of the Securities Act, against any
losses, claims, damages, or liabilities, joint or several (or actions or
proceedings, whether commenced or threatened) to which such Participating Holder
or any such director, officer, partner, agent or affiliate or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities, joint or several (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, together with the documents incorporated by reference
therein, or 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 will reimburse such Participating Holder and each such director,
officer, partner, agent or affiliate, or general or limited partner, underwriter
and controlling Person for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
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liability, action or proceeding; provided, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by or on behalf of such Participating Holder or
underwriter, as the case may be, specifically stating that it is for use in the
preparation thereof; and provided, further, that the Company shall not be liable
to any Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
regardless of any investigation made by or on behalf of such Participating
Holder or any such director, officer, partner, agent or affiliate or controlling
Person and shall survive the transfer of such securities by such Participating
Holder.
(b) Indemnification by the Participating Holders. As a condition
to including any Registrable Securities in any registration statement, the
Company shall have received an undertaking satisfactory to it from the
Participating Holders to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subsection (a) of this Section 3.6) the Company,
each director and officer of the Company, and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, but only
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such Participating Holder
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, that the liability of such
indemnifying party under this Section 3.6(b) shall be limited to the amount of
net proceeds received by such indemnifying party in the offering giving rise to
such liability. Such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by the Participating Holder.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subsections of this Section 3.6,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action or proceeding; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
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Page 74 of 87 Pages
indemnifying party of its obligations under the preceding subsections of this
Section 3.6, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 3.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the 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, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are different from or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties, provided, further, that the indemnifying party shall be obligated to
pay for only one counsel for all indemnified parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation (unless the first proviso
in the preceding sentence shall be applicable). No indemnifying party shall be
liable for any settlement of any action or proceeding effected without its
written consent. No indemnifying party shall, without the consent of the
indemnified party, 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 a release from all liability
in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in this
Section 3.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the Company and the Participating Holders which resulted in such loss, claim,
damage or liability, or action in respect thereof, with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect not only the relative fault but also the relative benefits received by
the Company and the Participating Holders from the offering of the securities
covered by such registration statement as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 3.6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. 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
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Page 75 of 87 Pages
guilty of such fraudulent misrepresentation. The Participating Holders'
obligations to contribute as provided in this subsection (d) are several and not
joint in proportion to the relative value of their respective Registrable
Securities covered by such registration statement. In addition, no Person shall
be obligated to contribute hereunder any amounts in payment for any settlement
of any action or claim effected without such Person's consent, which consent
shall not be unreasonably withheld. Notwithstanding anything in this subsection
(d) to the contrary, no indemnifying party (other than the Company) shall be
required to contribute any amount in excess of the net proceeds received by such
party from the sale of the Registrable Securities in the offering to which the
losses, claims, damages or liabilities of the indemnified parties relate.
(e) Other Indemnification. Indemnification and contribution
similar to that specified in the preceding subsections of this Section 3.6 (with
appropriate modifications) shall be given by the Company and each Participating
Holder with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act. The indemnification agreements
contained in this Section 3.6 shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to
law or contract and shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the transfer of any of the Registrable Securities by any of
the Participating Holders.
(f) Indemnification 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.
3.7 Certain Rights of the Investor If Named in a Registration
Statement. If any statement contained in a registration statement under the
Securities Act or in any filing under the state securities laws of any
jurisdiction refers to the Investor by name or otherwise as the holder of any
securities of the Company, then the Investor shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to the
Investor, to the effect that the holding by the Investor of such securities does
not necessarily make the Investor a "controlling person" of the Company within
the meaning of the Securities Act and is not to be construed as a recommendation
by the Investor of the investment quality of the Company's debt or equity
securities covered thereby and that such holding does not imply that the
Investor will assist in meeting any future financial requirements of the Company
or (ii) in the event that such reference to the Investor by name or otherwise is
not, in the reasonable judgment of the Investor as advised by its counsel,
required by the Securities Act or any of the rules and regulations promulgated
thereunder, or any state securities laws of any jurisdiction, the deletion of
the reference to such Investor.
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Page 76 of 87 Pages
3.8 Unlegended Certificates. In connection with the offering of any
Registrable Securities registered pursuant to this Article 3, the Company shall
(i) facilitate the timely preparation and delivery to Participating Holders and
the underwriters, if any, participating in such offering, of unlegended
certificates representing ownership of such Registrable Securities being sold in
such denominations and registered in such names as requested by such
Participating Holders or such underwriters and (ii) instruct any transfer agent
and registrar of such Registrable Securities to release any stop transfer orders
with respect to any such Registrable Securities.
3.9 Limitation on Sale or Distribution of Other Securities. The
Company hereby agrees that, if it shall previously have received a request for
registration pursuant to Section 3.1 or 3.2 hereof, and if such previous
registration shall not have been withdrawn or abandoned, (i) the Company shall
not effect any public or private offer, sale or other distribution of its
securities or effect any registration of any of its equity securities under the
Securities Act (subject to the provisions of Section 3.2 hereof) (other than a
registration on Form S-8 or any successor or similar form which is then in
effect), whether or not for sale for its own account, until a period of 90 days
(or such shorter period as the Requisite Majority of Participating Holders shall
agree) shall have elapsed from the effective date of such previous registration
(and the Company shall so provide in any registration rights agreements
hereafter entered into with respect to any of its securities); and (ii) the
Company shall use its best efforts to cause each holder of its equity securities
purchased from the Company at any time after the date of this Agreement other
than in a public offering to agree not to effect any public sale or distribution
of any such securities during such period, including a sale pursuant to Rule 144
under the Securities Act.
3.10 No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Participating Holder to sell
any Registrable Securities pursuant to any effective registration statement.
4. Rule 144. The Company shall take all actions reasonably necessary to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, or (b) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended with the consent
of (i) the Company and (ii) the holders of at least 51% of the outstanding
Primary Shares and Option Shares, as a group (assuming that the exercisable
portion (if any) of the First Option and the exercisable portion (if any) of the
Second Option are converted into Option Shares but excluding any Primary Shares
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Page 77 of 87 Pages
or Option Shares that are no longer Registerable Securities). The Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, in each case only if the Company shall have obtained the
written consent to such action or omission to act, of holders of at least 51% of
the outstanding Primary Shares and Option Shares, as a group (assuming that the
exercisable portion (if any) of the First Option and the exercisable portion (if
any) of the Second Option are converted into Option Shares but excluding any
Primary Shares or Option Shares that are no longer Registerable Securities).
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 5, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company (accompanied by a written acknowledgment of, and consent to, such
election by such nominee), be treated as the holder of such Registrable
Securities for purposes of any request or other action by any holder or holders
of Registrable Securities pursuant to this Agreement or any determination of any
number or percentage of shares of Registrable Securities held by any holder or
holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects to be treated as the
holder of such Registrable Securities, the Company may require assurances
reasonably satisfactory to it of such owner's beneficial ownership of such
Registrable Securities.
7. Notices. All communications provided for hereunder shall be personally
delivered or sent by telecopier (and confirmed by telephone) or by a reputable
overnight courier, and shall be addressed as follows:
(a) if to the Investor, addressed to it in the manner set forth in the
Purchase Agreement, or at such other address as it shall have furnished to the
Company in writing;
(b) if to any other holder of Registrable Securities, at the address
that such holder shall have furnished to the Company in writing, or, until any
such other holder so furnishes to the Company an address, then to and at the
address of the last holder of such Registrable Securities who has furnished an
address to the Company; or
(c) if to the Company, addressed to it in the manner set forth in the
Purchase Agreement, or at such other address as the Company shall have furnished
to each holder of Registrable Securities at the time outstanding.
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Page 78 of 87 Pages
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by the
Company. This Agreement and/or the registration and other rights contained
herein (including these assignment rights) may be assigned by the Investor to
any one or more transferees or distributees of all or part of such Investor's
Registrable Securities. A holder of Registrable Securities shall be permitted,
in connection with a transfer or disposition of Registrable Securities, to
impose conditions or constraints on the ability of the transferee, as a holder
of Registrable Securities, to request a registration pursuant to Section 3.1 and
shall provide the Company with copies of such conditions or constraints and the
identity of such transferees. Notwithstanding the foregoing, this Agreement
and/or the registration and other rights contained herein may not be assigned to
a transferee or distributee who, immediately following such transfer or
distribution, owns less than one percent of the Company's outstanding Common
Stock.
9. Remedies. Each holder of Registrable Securities, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate. In any
action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
10. No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The Company
has not previously entered into any agreement with respect to its securities
granting any registration rights to any Person other than the registration
rights granted pursuant to this Agreement. The rights granted to the holders of
Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with any other agreements to which the Company is a party or by
which it is bound. The Company further agrees that if any other registration
rights agreement entered into after the date of this Agreement with respect to
any of its securities contains terms which are more favorable to, or less
restrictive on, the other party thereto than the terms and conditions contained
in this Agreement are (insofar as they are applicable) to the Investor, then the
terms and conditions of this Agreement shall immediately be deemed to have been
amended without further action by the Company or any of the holders of
Registrable Securities so that such holders shall be entitled to the benefit of
any such more favorable or less restrictive terms or conditions.
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Page 79 of 87 Pages
11. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
12. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of Delaware, without
regard to the conflicts of laws principles thereof. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of Delaware and the United States of
America located in Wilmington, Delaware for any action or proceeding arising out
of or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any action or proceeding relating thereto except in such
courts). Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any action or proceeding arising
out of this Agreement or the transactions contemplated hereby in the courts of
the State of Delaware or the United States of America located in Wilmington,
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. The Company
hereby waives any right it may have to a trial by jury in respect of any action,
proceeding or litigation directly or indirectly arising out of, under or in
connection with, this Agreement.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
THE UNIMARK GROUP, INC.
By:/s/ Xxxxxx Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxx
Title: President, Chief Executive Officer
and Chief Operating Officer
M & M NOMINEE L.L.C.
By:/s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Manager
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