Exhibit 10.1
XXXXX BROTHERS, INC.
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SHARE PURCHASE AGREEMENT
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XXXXX BROTHERS, INC., a Delaware corporation (the "COMPANY"), having a
principal office at 0000 Xxxxx Xx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, agrees
with you, the undersigned subscriber, as follows:
1. TRANSACTION
The Company, by due action of its Board of Directors, has authorized the
offer and sale to you under this Agreement and to other purchasers under similar
Share Purchase Agreements ("OTHER PURCHASERS") of 586,855 shares (the "SHARES")
of the Company's common stock, par value $0.01 per share (the "COMMON STOCK"),
at an offering price of $2.13 per Share. The minimum subscription under this
Agreement is 100,000 Shares.
2. PURCHASE AND SALE
2.1 SHARES. Subject to all of the terms and conditions of this Agreement,
and upon acceptance of this Agreement by the Company, the Company will issue and
sell to you (sometimes referred to as a "Holder") the number of Shares shown on
the signature page hereof and you will purchase the same from the Company;
PROVIDED, that an aggregate of at least 586,855 Shares have been subscribed and
paid for by you and the Other Purchasers and all other terms and conditions set
forth in this Agreement are satisfied.
2.2 CLOSING SUBJECT TO MINIMUM SUBSCRIPTION. The amounts tendered by you
pursuant to this Agreement will be deposited in a bank account established by
the Company (the "ACCOUNT") and will be returned to you without interest or
deduction for expenses, if: (a) your subscription for the purchase of Shares
pursuant to this Agreement is not accepted by the Company or (b) if Share
Purchase Agreements properly completed and duly endorsed for an aggregate of at
least 586,855 Shares have not been received by the Company or the full amount of
the purchase price therefor has not been deposited in the Account before the
close of business on December 31, 2001, which date may be extended for a period
of up to sixty (60) days in the discretion of the Company (the "TERMINATION
DATE"). It is understood and agreed that if this Agreement is accepted by the
Company, and the payment in full for at least 586,855 Shares is received and
accepted by the Company before the close of business on the Termination Date,
then at the Closing (as defined below) with respect to the Shares subscribed for
by you, the amount tendered herewith shall be delivered to the Company in
payment for the Shares subscribed for by you, or such lesser amount as may be
allocated to you by the Company. If you are allocated less than the full amount
of the Shares subscribed for by you and the full amount of the Shares subscribed
for has been timely paid in full by you, the Company shall remit the overpayment
of the amount paid, without interest or deduction, to you within fifteen (15)
days after such partial acceptance of this Agreement. The Shares are being
offered by the Company subject to the right of the Company to reject, in its
sole discretion, any subscription, in whole or in part, for any reason, and to
accept subscriptions notwithstanding the order in which they are received.
2.3 CLOSING. The purchase by and sale to you and Other Purchasers of the
Shares (the "CLOSING") shall take place at the principal office of the Company,
located at 0000 Xxxxx Xx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, at such date and
time, or at such other place, as the Company shall designate (such date being
hereinafter called the "CLOSING DATE"). Promptly after the Closing, the Company
shall deliver to you instruments evidencing the Shares being purchased by you.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
As an inducement to you to enter into this Agreement, the Company
represents, warrants and agrees that:
3.1 ORGANIZATION AND GOOD STANDING. The Company and each of its
subsidiaries have been duly organized in accordance with the laws of their
respective jurisdictions of incorporation and exist in good standing under such
laws with full power and authority to conduct their businesses as described in
the Company's Private Offering Memorandum dated December 21, 2001 (the
"MEMORANDUM") and all attachments and exhibits annexed thereto (such Memorandum,
attachments and exhibits annexed thereto are hereinafter collectively referred
to as the "DISCLOSURE DOCUMENTS", which term shall include any additions or
supplements thereto), and are duly qualified and in good standing in each other
jurisdiction in which such qualification is required except where the failure to
so qualify, both individually and in the aggregate, does not have a material
adverse effect on the condition (financial or otherwise), business or prospects
of the Company or on its properties or assets.
3.2 DISCLOSURE DOCUMENTS. When read as one document, the Disclosure
Documents do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein to make the statements
contained therein not misleading.
3.3 DESCRIPTION OF SECURITIES. The Shares are not subject to preemptive or
other rights of any shareholder of the Company and when issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
nonassessable.
3.4 AUTHORITY FOR AGREEMENT. The Company has full corporate power and
authority to enter into this Agreement and all other documents (collectively,
the "TRANSACTION DOCUMENTS") required to be entered into by the Company pursuant
hereto and to consummate the transactions contemplated hereby and by the
Disclosure Documents. This Agreement has been duly authorized by all necessary
corporate action of the Company and, when executed and delivered, will be a
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms except to the extent that the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity, and except to
the extent that the indemnification provisions of the Agreement may be held to
be violative of public policy under either federal or state laws in the context
of the offer or sale of securities.
3.5 NO VIOLATION. The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions herein contemplated will
not result in a breach or violation of any of the terms and provisions of the
Certificate of Incorporation or By-laws of the Company as in effect on the date
hereof, and will not constitute a material default under any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Company is a party or by which the Company is bound, and will not violate or
contravene (i) any governmental statute, rule or regulation applicable to the
Company or (ii) any order, writ, judgment, injunction, decree, determination or
award which has been entered against the Company, the violation or contravention
of which would materially and adversely affect the Company, its assets,
financial condition or operations.
3.6. SEC FILINGS. The Company has timely filed with the SEC all documents
required to be filed by the Company under the Securities Exchange Act of 1934,
as amended (the "1934 ACT"). On their respective dates of filing, all such
documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC.
3.7. COMPANY NOT INVESTMENT COMPANY. The Company is not now, and after the
sale of Shares under this Agreement and the application of the net proceeds from
the sale of Shares will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
3.8. EXEMPT STATUS OF OFFERING. Subject to the accuracy of your
representations and warranties contained in this Agreement, as well as the
information provided by you in your completed Confidential Purchaser
Questionnaire, the offer, sale and issuance of the Shares in conformity with the
terms of this Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended (the "1933
Act") and from the registration or qualification requirements of the laws of any
applicable state or United States jurisdiction.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF YOU
You hereby represent, warrant and agree that:
4.1 AUTHORITY; ENFORCEABILITY. If you are a partnership, limited liability
company, corporation, trust, estate or other entity: (i) you have the full legal
right and power and all authority and approval required (a) to execute and
deliver, or authorize execution and delivery of, this Agreement and all other
agreements, instruments and other documents executed and delivered by you or on
your behalf in connection with the purchase of the Shares, (b) to delegate
authority pursuant to a power of attorney, and (c) to purchase and hold such
Shares; (ii) the signature of the person signing on your behalf is binding upon
you; and (iii) you have not been formed for the specific purpose of acquiring
the Shares, unless each of your beneficial owners is qualified as an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC")
Regulation D ("REGULATION D") promulgated under the 1933 Act, and has submitted
information substantiating such individual qualification. This Agreement
constitutes your legal, valid and binding obligation, enforceable in accordance
with its terms.
4.2 PURCHASE FOR OWN ACCOUNT. You are acquiring the Shares for your own
account, for investment purposes and not for resale or with a view to any
distribution, or in connection with any distribution thereof. You do not have
any contract, undertaking, agreement or arrangement, written or oral, with any
other person to sell, transfer or grant participation in any Shares. You are
able to: (i) bear the economic risk of your investment in the Company; (ii) hold
the Shares for an indefinite period of time; and (iii) afford a complete loss of
your investment.
4.3 EXPERIENCE. You have the requisite knowledge and experience in
investment, financial, tax and business matters, including with respect to
investments of this type, to be capable of evaluating the merits and risks of an
investment in the Shares and of making an informed investment decision with
respect thereto.
4.4 INVESTMENT RISKS. You recognize that an investment in the Shares
involves substantial risks. You further recognize that no federal or state
regulatory agencies have passed upon the offering of Shares or made any finding
or determination as to the fairness of an investment by any person in the
Shares.
4.5 RECEIPT OF INFORMATION; RELIANCE UPON DISCLOSURE DOCUMENTS. You have
received, read carefully, considered and fully understood the Disclosure
Documents and you have received from the Company all of the information and
additional documentation concerning the Company that you consider to be material
in making your investment decision, which information has been requested by you
if not already furnished by the Company. You have had full access to the books
and records of the Company and to its officers, directors and accountants for
the purpose of obtaining and verifying such information and you have had an
opportunity to ask questions and receive answers from the officers of the
Company regarding the terms and conditions of this transaction and the Company's
business and financial condition.
Except as expressly set forth herein, no representations or warranties,
oral or otherwise, have been made to you, including without limitation, any
representations concerning the future prospects of the Company, by the Company
or any agent, employee or affiliate of the Company, or by any other person
whether or not associated with this transaction, and in entering into this
transaction you are not relying upon any information, other than that contained
in the Disclosure Documents, and the results of your own independent
investigation. You have obtained sufficient information to evaluate the merits
and risks of an investment in the Shares and to make an informed investment
decision.
4.6 RESTRICTED SECURITIES. You understand and acknowledge that the Shares
you are purchasing hereunder are "restricted securities" under federal and state
securities laws insofar as they have not been registered under the 1933 Act or
the securities laws of any other jurisdiction, that they may not be resold or
transferred without compliance with the registration or qualification provisions
of the 1933 Act or applicable federal and state securities laws of any state or
other jurisdiction or an opinion of counsel that an exemption from such
registration and qualification requirements is available. You are familiar with
SEC Rule 144 ("RULE 144") promulgated under the 1933 Act, as presently in
effect, and the resale limitations imposed thereby and by the 1933 Act.
4.7 LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, you agree not to make any disposition of all or
any portion of the Shares unless and until: (i) there is then in effect a
registration statement under the 1933 Act covering such proposed disposition and
such disposition is made in accordance with such registration statement; or
(ii)(A) you shall have notified the Company of the proposed disposition, and (B)
upon the request of the Company, you shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the 1933 Act
and applicable state securities laws.
You understand that the Company will issue stop transfer instructions to
its transfer agent with respect to the Shares and intends to place a restrictive
legend on every Share certificate as provided in Section 8.4 hereof; PROVIDED,
HOWEVER, that such stop transfer instructions will be retracted, and such
restrictive legend will be removed with respect to Shares at such time, if any,
as such Shares have been registered pursuant to Section 5 of the 1933 Act or
such shares become transferable pursuant to SEC Rule 144(k) promulgated under
the 1933 Act.
4.8 ILLIQUID INVESTMENTS. Your overall commitment to investments that are
not readily marketable is not disproportionate to your net worth and your
investment in the Shares will not cause such overall commitment to become
excessive. You have adequate means of providing for your current needs and
personal contingencies.
4.9 SUITABLE INVESTOR. You are an "accredited investor" as such term is
defined in SEC Rule 501(a) of Regulation D promulgated under the 0000 Xxx.
4.10 COMPANY RELIANCE ON REPRESENTATIONS AND WARRANTIES AND QUESTIONNAIRE.
You understand, acknowledge and agree that the Company is relying on the
accuracy of the representations and warranties made by you pursuant to this
Agreement and the responses by you in the Confidential Purchaser Questionnaire
heretofore delivered by you to the Company, which representations, warranties
and responses you warrant to be true, complete and correct.
4.11 NO BROKERS. No person or entity acting on your behalf, or under your
authority, is or will be entitled to any broker's, finder's or similar fee or
commission in connection with the purchase of Shares by you.
4.12 CONFIDENTIALITY. You acknowledge that the information furnished in
this Agreement by the Company to you or your advisors in connection with the
Offering is confidential and nonpublic, and you agree that all such written
information which is material and not yet publicly disseminated by the Company
shall be kept in confidence by you and neither used by you for your personal
benefit (other than in connection with the purchase of Shares by you pursuant to
this Agreement), nor disclosed to any third party, except your legal and other
advisers who shall be advised of the confidential nature of such information,
for any reason; PROVIDED, HOWEVER, that this obligation shall not apply to any
such information that (i) is part of the public knowledge or literature and
readily accessible at the date hereof, (ii) becomes a part of the public
knowledge or literature and readily accessible by publication (except as a
result of a breach of this provision), or (iii) is received from third parties
(except third parties who disclose such information in violation of any
confidentiality agreements or obligations).
5. CONDITIONS TO YOUR OBLIGATIONS
Your obligations to purchase the Shares under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 3 hereof shall be true as of the Closing Date.
5.2 COMPANY'S PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement,
which performance or compliance is required on or before the Closing.
5.3 TRANSACTION DOCUMENTS. Each of the Transaction Documents shall have
been fully executed and delivered by the parties thereto, and shall be in full
force and effect.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company to sell and issue the Shares to you are
subject to the fulfillment on or before the Closing of each of the following
conditions by you:
6.1 REPRESENTATIONS AND WARRANTIES. Your representations and warranties
contained in Section 4 shall be true on and as of the Closing Date with the same
effect as though made on and as of the date thereof.
6.2 PAYMENT. You shall have delivered into the Account the full amount of
the purchase price of the Shares being purchased by you.
6.3 TRANSACTION DOCUMENTS. Each of the Transaction Documents shall have
been fully executed and delivered by the parties thereto, and shall be in full
force and effect. You shall have delivered to the Company an executed
Confidential Purchaser Questionnaire and any other documents required to by
executed by you and delivered to the Company pursuant to this Agreement
7. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
7.1 DEFINITIONS. For purposes of this Section 7:
(a) The term "HOLDER" means you or any Other Purchaser owning
Registrable Securities (as defined below).
(b) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act, and such registration
statement or document becoming effective.
(c) The term "REGISTRABLE SECURITIES" means (i) the Shares and (ii)
any shares of Common Stock issued to you as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of
the Shares; PROVIDED, HOWEVER, that any such securities shall cease to be
Registrable Securities when (x) one or more registration statements with respect
to the sale of such securities shall have become effective under the 1933 Act
and all such securities shall have been disposed of in accordance with the plan
of distribution set forth therein; (y) such securities shall have been disposed
of in accordance with Rule 144, or any successor rule or regulation thereto; or
(z) such securities may otherwise be sold to the public in a transaction not
requiring registration under the 1933 Act.
(d) The number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING"
shall be equal to the sum of the number of shares of Common Stock outstanding
which are Registrable Securities.
(e) The term "REGISTRATION EXPENSES" means all registration,
qualification and filing fees, printing expenses, escrow fees and blue sky fees,
fees and disbursements of counsel for the Company and of the Company's
independent certified public accountants, in each case incident to or required
by a registration pursuant to this Section 7, and any other fees and expenses of
the Company under this Agreement which are not Selling Expenses.
(f) The term "SELLING EXPENSES" means all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders, and any other fees and expenses incurred by the
Holders (including, without limitation, legal fees and expenses) in connection
with a registration pursuant to this Section 7.
(g) All other capitalized terms used in this Section 7 that are not
defined herein shall have the meaning otherwise given in this Agreement.
7.2 REQUIRED REGISTRATION.
(a) Subject to paragraph 7.2(c) hereof, the Company shall use its best
efforts to file with the SEC, within one hundred and twenty days (120) after the
Closing Date, a registration statement under the 1933 Act for the purpose of
registering the Registrable Securities. The Company will include in such
registration (and any related qualification under blue sky or other state
securities laws) all of your Registrable Securities.
(b) The Company is obligated to effect only one (1) registration
pursuant to this paragraph 7.2.
(c) If the registration required by this Section 7.2 has not been
declared effective by the SEC within ninety (90) days of the initial date of
filing of the registration statement with the SEC, then on or before the last
calendar day of each month thereafter (commencing with the month in which such
ninety (90) day period expires) until the month immediately preceding the month
in which the registration becomes effective, the Company shall issue to you, as
liquidated damages, additional shares of Common Stock equal in number to two and
one-half percent (2.5%) of the total number of shares of Common Stock purchased
by you in the Offering.
7.3 PIGGYBACK REGISTRATION RIGHTS.
(a) If, at any time or from time to time, the Company shall determine
to register any of its Common Stock, either for its own account or for the
account of a security holder or holders, other than (i) a registration relating
solely to stock option or employee benefit plans, (ii) a registration relating
solely to a transaction covered by Rule 145 under the 1933 Act, or other
registration involving the filing with the SEC of a registration statement on
Form S-4, or (iii) a registration governed by Section 7.2 hereof, the Company
will (x) promptly give each Holder written notice thereof, and (y) include in
such registration (and any related qualification under blue sky or other state
securities laws), and in any underwriting involved therein, all of the
Registrable Securities specified in a written request or requests made by any
Holder within twenty (20) days after receipt of such written notice from the
Company.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the written notice given pursuant to Section
7.3(a). In such event, the right of any Holder to registration pursuant to this
Section 7.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of Registrable Securities owned by the Holder in
the underwriting to the extent provided under this Section 7.3. All Holders
proposing to distribute their Registrable Securities through such underwriting
shall (together with the Company and any other holders of securities of the
Company distributing their securities through such underwriting) enter into an
underwriting agreement with the managing or lead managing underwriter selected
by the Company in the form customarily used by such underwriter with such
changes thereto as the parties thereto shall agree. Notwithstanding any other
provision of this Section 7.3, if the managing or lead managing underwriter
determines that market factors require that the number of Registrable Securities
and other securities requested to be included in the registration be limited,
the managing or lead managing underwriter may reduce the number of Registrable
Securities and securities of any other holder of securities to be included in
the registration. If the registration includes an underwritten primary
registration on behalf of the Company, the reduction shall be taken: (i) first
from and to the extent of the securities requested to be included in such
registration by the Holders and the holders of any other securities PRO RATA
according to the number of securities requested by the Holders and such holders
to be included in the registration; and (ii) thereafter from the securities to
be registered on behalf of the Company. If the registration consists only of an
underwritten secondary registration on behalf of holders of securities of the
Company, the reduction shall be taken: (i) first from and to the extent of the
securities requested to be included in the registration by the Holders and any
other holders of securities included in the registration other than pursuant to
demand registration rights PRO RATA according to the number of securities
requested by the Holders and such holders to be included in the registration;
and (ii) thereafter from securities, if any, to be registered on behalf of
holders of securities included in the registration pursuant to demand
registration rights. The Company shall advise all Holders and other holders
participating in such underwriting as to any such limitation and the number of
shares that may be included in the registration and underwriting. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing or lead
underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Notwithstanding any other provision of this Agreement, the Company
may withdraw a registration for which registration rights have been exercised
pursuant to this Section 7.3 at any time prior to the time that it becomes
effective.
7.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with a registration pursuant to this Section 7 shall be borne by the
Company. All Selling Expenses relating to the Registrable Securities registered
on behalf of the Holders shall be borne by the Holders of such Registrable
Securities PRO RATA based upon the total number of Registrable Securities
included in the registration or, if such Selling Expenses are specifically
allocable to Registrable Securities held by specific Holders, by such Holders.
7.5 REGISTRATION PROCEDURES.
(a) In connection with the registration of Registrable Securities
required pursuant to this Section 7, the Company shall as expeditiously as is
reasonable:
(i) prepare and file with the SEC on any appropriate form a
registration statement with respect to such Registrable Securities and use its
reasonable efforts to cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments (including
post-effective 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 1933
Act with respect to the disposition of all Registrable Securities and other
securities covered by such registration statement until the Holder or Holders
have completed the distribution described in such registration statement or the
Registrable Securities have ceased to be Registrable Securities (within the
meaning of Section 7.1(c) hereof), whichever occurs first;
(iii) furnish to each seller of such Registrable Securities such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the 1933 Act, such documents incorporated by
reference in such registration statement or prospectus, and such other
documents, as such seller may reasonably request in order to facilitate the sale
or disposition of such Registrable Securities;
(iv) use its reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or "blue sky" laws of such jurisdictions
(not to exceed five) as the underwriter or such sellers shall reasonably
request, and do any and all other acts and things as may be reasonably necessary
to consummate the disposition in such jurisdictions of the Registrable
Securities covered by such registration statement, 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 is not so qualified, or to
subject itself to taxation in respect of doing business in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(v) immediately notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, of 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
then existing or if it is necessary, in the opinion of counsel to the Company,
to amend or supplement such prospectus to comply with law, and at the request of
any such seller prepare and furnish to such seller 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 Registrable 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 then
existing and shall otherwise comply in all material respects with law and so
that such prospectus, as amended or supplemented, will comply with law.
(vi) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, beginning with the first month of the
first fiscal quarter after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
1933 Act;
(vii) use reasonable efforts to list such securities on any
securities exchange or over-the-counter market on which shares of Common Stock
are then listed, if such securities are not already so listed and if such
listing is then permitted under the rules of such exchange; and
(viii) issue to any underwriter to which any holder of
Registrable Securities may sell such Registrable Securities in connection with
any such registration (and to any direct or indirect transferee of any such
underwriter) certificates evidencing shares of Common Stock without restrictive
legends.
(b) If requested by the managing or lead managing underwriter for any
underwritten offering of Registrable Securities on behalf of Holders of
Registrable Securities, the Company will enter into an underwriting agreement
with the underwriters of such offering, such agreement to contain such
representations and warranties by the Company and each such Holder and such
other terms and conditions as are contained in underwriting agreements
customarily used by such managing or lead managing underwriter with such changes
as the parties thereto shall agree, including, without limitation, provisions
relating to indemnification and contribution in lieu thereof.
(c) The Holders of Registrable Securities included in the registration
shall furnish to the Company such information and agreements (e.g. distribution
restrictions) regarding such Holders, the Registrable Securities held by them
and the distribution proposed by such Holders as the Company may from time to
time reasonably request and as shall be reasonably required in connection with
any registration, qualification or compliance referred to in this Agreement.
(d) The Holders of Registrable Securities included in any registration
shall, upon request by the Company and the managing or lead managing
underwriter, if applicable, execute and deliver custodian agreements and powers
of attorney in form and substance reasonably satisfactory to the Company and
such Holders or Holders and as shall be reasonably necessary to consummate the
offering.
7.6 INDEMNIFICATION.
(a) The Company will indemnify each Holder with respect to which
registration has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter within the meaning of
Section 15 of the 1933 Act, against any and all losses, claims, damages,
liabilities or expenses (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement or prospectus, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, or any violation by the Company of the 1933 Act or any
rule or regulation promulgated under the 1933 Act applicable to the Company in
connection with any such registration, and the Company will reimburse each such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and other expenses reasonably incurred, as such expenses are
incurred, in connection with investigating, preparing or defending any such
claims, loss, damage, liability or action; PROVIDED, HOWEVER, that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Holder or underwriter and stated to be specifically for
use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration is being effected,
indemnify the Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the 1933 Act and each other such Holder against any and all
losses, claims, damages, liabilities and expenses (or actions in respect
thereof), arising out of or based on any untrue statements (or alleged untrue
statement) of a material fact contained in any such registration statement or
prospectus, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement therein,
in the light of the circumstances under which they were made, not misleading,
and will reimburse the Company, such Holders, underwriters or control persons
for any legal or any other expenses reasonably incurred, as such expenses are
incurred, in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in reliance upon
and in conformity with written information furnished to the Company by such
Holder.
(c) Each party entitled to indemnification under this Section 7.6 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claims or any
litigation resulting therefrom; PROVIDED, HOWEVER, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (which approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such Indemnified Party's expense; PROVIDED, HOWEVER, that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action. Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense for matters as to which there is, in the
opinion of counsel to the Indemnifying Party, a conflict of interest or separate
and different defenses. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each 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 of such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and the litigation resulting therefrom.
7.7 CONTRIBUTION.
(a) If the indemnification provided for in Section 7.6 hereof is
unavailable to an Indemnified Party in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to therein,
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other in connection with the statement or omission which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue statement (or alleged untrue statement), of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 7.7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above in this Section shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim.
(b) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7.8. EXCHANGE ACT REGISTRATION. The Company covenants and agrees that until
such time as there shall be no Registrable Securities outstanding:
(a) it will, if required by law, maintain an effective registration
statement (containing such information and documents as the SEC shall specify)
with respect to the Common Stock under Section 12(g) of the 1934 Act and will
file in a timely manner such information, documents and reports as the SEC may
require or prescribe for companies whose stock has been registered pursuant to
said Section 12(g); and
(b) it will, if a registration statement with respect to the Common
Stock under Section 12(b) or Section 12(g) of the 1934 Act is effective, make
whatever filings with the SEC or otherwise make generally available to the
public such financial and other information as may be necessary in order to
enable the Holders to sell shares of Common Stock pursuant to the provisions of
Rule 144, or any successor rule or regulation thereto or any statute hereafter
adopted to replace or to establish the exemption that is now covered by said
Rule 144.
The Company represents and warrants that such registration statement or any
information, documents or report filed with the SEC in connection therewith or
any information so made public shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not misleading. The
Company agrees to indemnify and hold harmless (or to the extent the same is not
enforceable, make contribution to) the Holders, their partners, advisory
committee members, officers, directors and employees acting for any Holder in
connection with any offering or sale by such Holder of Registrable Securities or
any person, firm or corporation controlling (within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act) such Holder from and
against any and all losses, claims, damages, liabilities or expenses (or actions
in respect thereof) arising out of or resulting from any breach of the foregoing
representation or warranty, all on terms and conditions comparable to those set
forth in Section 7.6; PROVIDED, HOWEVER, that the Company shall be given written
notice and an opportunity to assume on terms and conditions comparable to those
set forth in Section 7.6 the defense thereof.
7.9 DELAY OF REGISTRATION. No holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 7.
7.10 AMENDMENTS AND WAIVERS. Any term or provision of the registration
rights stated in this Agreement may be amended and the observance of any term of
such rights may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the holders of at least fifty-one percent (51%) of the Registrable
Securities Then Outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder of any Registrable Securities
then outstanding, each future Holder of all such Registrable Securities, and the
Company.
8. FURTHER AGREEMENTS
You agree that:
8.1 NO TRANSFER OR ASSIGNMENT. You will not transfer or assign this
Agreement or any of your interest herein except as provided in Section 4.7.
8.2 SUCCESSORS AND ASSIGNS. You may not cancel, terminate or revoke this
Agreement and this Agreement shall be binding upon your successors and assigns,
except as provided by certain state laws.
8.3 INDEMNIFICATION. You shall indemnify, hold harmless and defend the
Company and its affiliates and agents with respect to any and all loss, damage,
expense, claim, action or liability any of them may incur as a result of the
breach or untruth of any representations or warranties made by you herein or in
the Confidential Purchaser Questionnaire completed by you, and you agree that in
the event of any breach or untruth of any representations or warranties made by
you herein or in the Confidential Purchaser Questionnaire completed by you, the
Company may, at its option, forthwith rescind the sale of the Shares to you.
8.4 LEGEND. You acknowledge and understand that any certificate or
certificates representing the Shares that are issued by the Company to you will
bear the following legend or a legend similar thereto:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND
NOT WITH A VIEW TO THE DISTRIBUTION THEREOF. SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND COMPLIANCE WITH
THE REQUIREMENTS OF ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION AND/OR COMPLIANCE
IS NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN TRANSFER RESTRICTIONS PURSUANT TO A SHARE PURCHASE AGREEMENT
DATED DECEMBER ___, 2001."
9. GENERAL AND MISCELLANEOUS
9.1 SURVIVAL OF WARRANTIES. The warranties, representations and covenants
of the parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.
9.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties, and no party shall be liable or bound to any other party in any
manner by any warranties, representations, guarantees or covenants except as
specifically set forth in this Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 GOVERNING LAW. This Agreement shall be governed by and construed under
the internal laws of the State of Arizona without regard to conflicts of law.
9.4. COUNTERPARTS. This Agreement may be executed 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.
9.5 NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the fifth day after the date of mailing if mailed to the party to
whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed as follows: if to you, at the address
indicated in your Confidential Purchaser Questionnaire; and if to the Company,
at its principal office. Any party may change its address for purposes of this
paragraph by giving the other party written notice of the new address in the
manner set forth above.
9.6 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provisions were so excluded and shall be enforceable in accordance with its
terms.
9.7 AMENDMENT/MODIFICATION. Neither this Agreement, nor any term or
provision hereof, may be changed, waived, discharged, amended, modified or
terminated orally, or in any manner other than by an instrument in writing
signed by each of the parties hereto.
If the foregoing conforms to your understanding of our agreement, please so
indicate by signing two copies of this Agreement and returning it to the
Company, whereupon it shall become a binding agreement between and among us.
Date: Amount of shares:
---------------------------------- ----------------------
Total purchase price: $1,250,000.00.
------------------
BFS US Special Opportunities Trust PLC X
---------------------------------------- ----------------------------------------
(Print your name.) (Your signature)
----------------------------------------
(Print name and title of authorized
signatory, if you are not a natural
person)
---------------------------------------- ----------------------------------------
(Print name of joint purchaser, if any.) (Signature of joint purchaser, if any)
ACCEPTED AND AGREED:
XXXXX BROTHERS, INC.
Date: By:
---------------------------------- ------------------------------------
Name:
Title:
MANNER IN WHICH SHARES ARE TO BE HELD:
____ Individual ownership ____ Partnership
____ Tenants-in-common ____ Trust (other than an employee benefit
plan trust or individual retirement
account trust)
____ Joint tenants with rights ____ Employee benefit plan trust (other
of survivorship than an individual retirement account
trust)
____ Community property ____ Individual retirement account trust
____ Community property with ____ Corporation
right of survivorship
____ Other (please indicate): _________________________________________________
